Exhibit 10.3
 

--------------------------------------------------------------------------------

 

SECOND AMENDED AND RESTATED
CREDIT AGREEMENT

between

THE MONARCH CEMENT COMPANY
BEAVER LAKE CONCRETE, INC.
CAPITOL CONCRETE PRODUCTS COMPANY, INC.
CITY WIDE CONSTRUCTION PRODUCTS CO.
CONCRETE ENTERPRISES, INC.
CONCRETE MATERIALS, INC.
DODGE CITY CONCRETE, INC.
JOPLIN CONCRETE COMPANY, INC.
KANSAS SAND AND CONCRETE, INC.
KAY CONCRETE MATERIALS CO.
MONARCH CEMENT OF IOWA, INC.
SALINA CONCRETE PRODUCTS, INCORPORATED
SPRINGFIELD READY MIX CO. and
TULSA DYNASPAN, INC.
as Borrowers

and

BOKF, NA dba BANK OF OKLAHOMA
as Lender

December 31, 2012

 
 

--------------------------------------------------------------------------------

 
 
TABLE OF CONTENTS
 

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS    1    1.01  Defined
Terms                                  1    1.02 Other Interpretive
Provisions                                                        17    1.03
Accounting Terms                                  17    1.04
Rounding                        18    1.05 Times of
Day                                  18    1.06 Letter of Credit
Amounts                                             18         ARTICLE II LOANS
AND LETTERS OF CREDIT   19    2.01 Loans             19    2.02 Use of
Proceeds                                 19    2.03 Advances of Revolving Loans;
Advances under Advancing Term Loan                                              
20    2.04 Letters of Credit                     21    2.05 Interest 22    2.06
Required Payments 23    2.07 Prepayments 24    2.08 Late Fees 25    2.09
Evidence of Debt  25    2.10  Payments Generally 25    2.11 Collateral  25  
 2.12 Concerning Joint and Several Liability 26    2.13 Increased Costs 27      
  ARTICLE III REPRESENTATIONS AND WARRANTIES 27    3.01 Existence, Qualification
and Power  27    3.02 Authorization; No Contravention 27    3.03 Governmental
Authorization; Other Consents 28    3.04 Binding Effect 28    3.05 Financial
Statements; No Material Adverse Effect 28    3.06 Litigation 29    3.07 No
Default 29    3.08 Ownership of Property; Liens 29    3.09 Environmental
Compliance 29    3.10 Insurance 29    3.11 Taxes 30    3.12 ERISA Compliance 30
   3.13 Subsidiaries 30    3.14 Disclosure 30    3.15 Compliance with Laws 31  
 3.16 Investment Company Act 31    3.17 Solvency 31    3.18 Business Locations
31    3.19 Labor Matters 31              

 
i
 
 

--------------------------------------------------------------------------------

  ARTICLE IV AFFIRMATIVE COVENANTS 31    4.01 Financial Statements 32    4.02
Certificates; Other Information 32    4.03 Notices 33    4.04 Payment of
Obligations 34    4.05 Preservation of Existence and Rights 34    4.06
Maintenance of Properties 34    4.07 Maintenance of Insurance 34    4.08
Compliance with Laws 35    4.09 Books and Records 36    4.10 Inspection Rights
36    4.11 Use of Proceeds 36    4.12 Additional Subsidiaries 36    4.13 ERISA
Compliance 37    4.14 Perfection and Preservation of Collateral 37        
ARTICLE V NEGATIVE COVENANTS 37    5.01 Liens 37    5.02 Investments 38    5.03
Indebtedness 38    5.04 Mergers; Fundamental Changes 39    5.05 Acquisitions 40
   5.06 Dispositions 40    5.07 Restricted Payments 40    5.08 Transactions with
Affiliates and Insiders 40    5.09 Burdensome Agreements 41    5.10 Prepayment
of Other Indebtedness, Etc. 41    5.11 Organizational Documents; Fiscal Year,
Legal Name, State of Incorporation or Formation and Form of Entity 41    5.12
Sale Leasebacks 41    5.13 Foreign Subsidiaries 42         ARTICLE VI FINANCIAL
COVENANTS 42    6.01 Minimum Tangible Net Worth Before Other Comprehensive
Income 42    6.02 Minimum Tangible Net Worth After Other Comprehensive Income 42
        ARTICLE VII CONDITIONS PRECEDENT 42    7.01 Conditions to Closing 42  
 7.02 Conditions to all Credit Extensions 44         ARTICLE VIII EVENTS OF
DEFAULT 44    8.01 Events of Default 44    8.02 Remedies Upon Event of Default
47    8.03 Application of Funds 47    8.04 Marshalling; Waivers 48        
ARTICLE IX EXPENSES AND INDEMNITY 48

 
ii
 
 

--------------------------------------------------------------------------------

 

   9.01 Cost and Expenses 48    9.02 Indemnification 49    9.03  Increased Cost
and Reduced Return; Capital Adequacy 49    9.04 Taxes 49    9.05 Matters
Applicable to all Requests for Compensation 50    9.06 Payments 51    9.07
Survival  51         ARTICLE X [INTENTIONALLY OMITTED.]  51         ARTICLE XI
MISCELLANEOUS 51    11.01 Amendments 51    11.02 Notices and Other
Communications; Facsimile Copies 51    11.03 No Waiver; Cumulative Remedies 52  
 11.04 Right of Setoff  52    11.05 Successors and Assigns 52    11.06
Participations 52    11.07 Confidential Information 53    11.08 Set-off  53  
 11.09 Waiver of Consequential and Punitive Damages 54    11.10 Counterparts;
Integration; Effectiveness; Amendment and Restatement 54    11.11 Survival of
Representations and Warranties 54    11.12 Severability 54    11.13 GOVERNING
LAW; JURISDICTION; ETC 54    11.14 WAIVER OF RIGHT TO TRIAL BY JURY 55    11.15
Borrower Representative 55    11.16 Release 55    11.17 Ratification and
Affirmation 55    11.18 USA PATRIOT Act Notice 56

 
 
iii
 
 

--------------------------------------------------------------------------------

 
 
 

 SCHEDULES            Schedule 3.10   Insurance  Schedule 3.18(a)   Locations of
Inventory  Schedule 3.18(b)   Location of Chief Executive Office, Etc.  Schedule
3.18(c)   Changes in Legal Names, State of Formation and Structure  Schedule
5.01   Existing Liens  Schedule 5.02   Existing Investments  Schedule 5.03  
Existing Indebtedness              EXHIBITS            Exhibit A   Form of Loan
Notice  Exhibit B   Form of Term Note  Exhibit C    Form of Revolving Note
 Exhibit D    Form of Advancing Term Note  Exhibit E   Form of Compliance
Certificate  Exhibit F   Form of Joinder Agreement  Exhibit G   Form of Pledge
Agreement

 
 
 
 
 
iv
 
 

--------------------------------------------------------------------------------

 
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
 
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT is made and entered into on
December 31, 2012, by and between THE MONARCH CEMENT COMPANY, a Kansas
corporation ("Monarch"), BEAVER LAKE CONCRETE, INC., an Arkansas corporation,
CAPITOL CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation, CITY WIDE
CONSTRUCTION PRODUCTS CO., a Missouri corporation, CONCRETE ENTERPRISES, INC., a
Kansas corporation, CONCRETE MATERIALS, INC., a Kansas corporation, DODGE CITY
CONCRETE, INC., a Kansas corporation, JOPLIN CONCRETE COMPANY, INC., a Missouri
corporation, KANSAS SAND AND CONCRETE, INC., a Kansas corporation, KAY CONCRETE
MATERIALS CO., a Missouri corporation, MONARCH CEMENT OF IOWA, INC., an Iowa
corporation, SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation,
SPRINGFIELD READY MIX CO., a Missouri corporation, and TULSA DYNASPAN, INC., an
Oklahoma corporation (collectively, the "Borrowers"), and BOKF, NA DBA BANK OF
OKLAHOMA (the "Lender").
 
RECITALS
 
A.           The Borrowers and the Lender are parties to that certain Amended
and Restated Credit Agreement dated as of February 3, 2012 (the "Existing Credit
Agreement"), pursuant to which the Lender made a term loan to the Borrowers in
the initial principal amount of $9,043,690.18 and established a revolving line
of credit in the maximum principal amount of $15,000,000.
 
B.           Monarch has requested that the term loan and the revolving line of
credit under the Existing Credit Agreement be renewed and extended, and that the
Lender establish a new advancing term loan, and the Lender has agreed to such
requests on the terms and conditions set forth in this Agreement.
 
C.           The Borrowers and the Lender desire to amend and restate the
Existing Credit Agreement in its entirety in accordance with the terms and
provisions of this Agreement.
 
NOW, THEREFORE, in consideration of the above recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
 
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
 
1.01 Defined Terms.  As used in this Agreement, the following terms shall have
the meanings set forth below:
 
"Acceptable Security Interest" in any Property of a Borrower means a Lien which
(a) exists in favor of the Lender; (b) is valid; (c) has been duly perfected and
is enforceable against such Borrower and the Property covered thereby in
preference to any rights of any Person therein, other than Excepted Liens; (d)
is superior to all other Liens except Excepted Liens; and (e) secures the
Obligations.
 
 
 
1
 
 

--------------------------------------------------------------------------------

 
"Account" means any account, account receivable, payment intangible or other
right to the payment of money.
 
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which any Borrower (a) acquires
all or substantially all of any going business or all or substantially all of
the assets of any firm, corporation, partnership or limited liability company,
or any division thereof, whether through purchase of assets, merger or otherwise
or (b) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the Equity Interests of a corporation which have ordinary voting power
for the election of directors (other than Equity Interests having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding Equity Interests of a partnership or limited
liability company.
 
"Advancing Term Loan" has the meaning specified in Section 2.01(c).
 
"Advancing Term Loan Maturity Date" means December 31, 2015.
 
"Advancing Term Note" means that certain promissory note, in the form attached
hereto as Exhibit D, to be executed by the Borrowers in favor of the Lender.
 
"Affiliate" means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.
 
"Agreement" means this Amended and Restated Credit Agreement, as it may be
amended, modified, supplemented or restated from time to time.
 
"Attributable Indebtedness" means, on any date, in respect of any Capital Lease
of any Person, the capitalized amount thereof that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP.
 
"Audited Financial Statements" means the audited consolidated balance sheet of
the Borrowers for the fiscal year ended December 31, 2011, and the related
statements of income or operations, shareholders' equity and cash flows for such
fiscal year, including the notes thereto.
 
"Business Day" means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state of Oklahoma.
 
"CAPEX Budget" has the meaning specified in Section 2.02(a).
 
"Capital Expenditure" means any payment for fixed assets or improvements and any
other capital expenditure as such term is defined in accordance with GAAP.  The
term "Capital Expenditure" includes the purchase price for the acquisition of
Equity Interests of another Person as a method of acquiring any fixed assets or
improvements, but does not include (i) any payments made for repairs or
maintenance to the extent such payments are expensed, or (ii) expenditures made
with proceeds of any Involuntary Disposition to the extent such expenditures
 
 
2
 
 

--------------------------------------------------------------------------------

 
are used to purchase property that is the same as or similar to the property
subject to such Involuntary Disposition.
 
"Capital Lease" means, as applied to any Person, any lease of any property by
that Person as lessee which, in accordance with GAAP, is required to be
accounted for as a capital lease on the balance sheet of that Person.
 
"Cash Collateralize" has the meaning specified in Section 2.04(e).
 
"Cash Equivalents" means, as at any date, (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (b) Dollar denominated time deposits and
certificates of deposit of (i) the Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000, (iii)
any bank whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof, or (iv) to the extent covered by FDIC insurance, any other domestic
commercial bank (any such bank, other than a bank described in clause (iii),
being an "Approved Bank"), in each case with maturities of not more than 270
days from the date of acquisition, (c) commercial paper and variable or fixed
rate notes issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic corporation rated
A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing within six months of the date of
acquisition, (d) repurchase agreements entered into by any Person with a bank or
trust company (including the Lender) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States in which such Person shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least 100% of
the amount of the repurchase obligations and (e) Investments, classified in
accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940 which are administered by
reputable financial institutions having capital of at least $500,000,000 and the
portfolios of which are limited to Investments of the character described in the
foregoing clauses (a) through (d).
 
"Cash Management Account" means the operating account to be established and
maintained by Monarch with the Lender (together with any additional or successor
deposit accounts maintained by Monarch with the Lender) to facilitate the
treasury management services to be provided by the Lender and into which the
proceeds of Revolving Loans and advances under the Advancing Term Loan will be
deposited.
 
"Change in Law" means, the adoption or taking effect of, or any change in, any
Law, or any change in the interpretation, administration or application of any
Law by any Governmental Authority, central bank or comparable agency charged
with the interpretation, administration or application thereof, or compliance by
any Lender with any request, guideline or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency occurring
after the Effective Date, provided, however, that notwithstanding anything
herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all
 
 
 
3
 
 

--------------------------------------------------------------------------------

 
requests, rules, guidelines or directives thereunder or issued in connection
therewith and all requests, rules, guidelines or directives promulgated by the
Bank for International Settlements, the Basel Committee on Banking Supervision
(or any successor or similar authority) or the United States regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a "Change in Law" regardless of the date enacted, adopted or issued.
 
"Change of Control" means (a) any Person or group of persons within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934 shall acquire, after
the Effective Date, directly or indirectly, beneficial ownership of Equity
Interests of Monarch which, in the aggregate, have at least 35% of the voting
power of all Equity Interests of Monarch then outstanding (taking into
consideration that different classes of Equity Interests may have different
voting powers) to elect directors to the board of directors of Monarch (provided
that such acquiring Person or group or persons shall not include any Person who
acquired Equity Interests of Monarch as the result of the death of a
pre-Effective Date holder of Monarch's Equity Interests or as a result of a gift
or similar estate planning transfer by any such pre-Effective Date holder), (b)
individuals who constitute the Continuing Directors cease for any reason to
constitute at least a majority of the board of directors of Monarch, or (c)
Monarch shall cease to own and control, directly or indirectly, of record and
beneficially, 100% of each class of outstanding Equity Interests of each other
Borrower free and clear of all Liens (other than Liens created by the Collateral
Documents), except for any cessation of ownership or control resulting from a
dissolution or liquidation permitted by Section 5.4.
 
"Collateral" means, collectively, (i) the Personal Property Collateral, (ii) the
Pledged Account, and (iii) any other Property in which the Lender is at any time
granted a Lien as security for the Obligations.
 
"Collateral Documents" means, collectively, the Security Agreement, the Pledge
Agreement and other security documents as may be executed and delivered by any
of the Borrowers pursuant to the terms of Section 2.11.
 
"Compliance Certificate" means a certificate substantially in the form of
Exhibit E.
 
"Continuing Directors" means the directors of Monarch on the Effective Date and
each other director, if in each case, such other director's nomination for
election to the board of directors of Monarch is recommended by at least a
majority of the Continuing Directors.
 
"Contractual Obligation" means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its Property is bound.
 
"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto. Without
limiting the generality of the foregoing, a Person shall be deemed to be
Controlled by another Person if such other Person possesses, directly or
indirectly, power to vote 10% or more of the Equity Interests having ordinary
voting power for the election of directors, managing general partners or the
equivalent.
 
 
 
4

 
 

--------------------------------------------------------------------------------

 
"Credit Extension" means (a) the funding of any Revolving Loan or (b) the making
or extension of any Letter of Credit.
 
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.
 
"Default" means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.
 
"Default Rate" means an interest rate equal to the rate in effect plus 2% per
annum.
 
"Disposition" or "Dispose" means the sale, transfer, license, lease or other
disposition (including any Sale and Leaseback Transaction) of any property by
any Borrower, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith, but excluding any Involuntary Disposition.
 
"Dollar" and "$" mean lawful money of the United States.
 
"Effective Date" means December 31, 2012, or such later date as the parties may
mutually agree, provided that all of the conditions precedent set forth in
Sections 7.01 and 7.02 have been satisfied.
 
"Eligible Assets" means Property that is used or useful in the same or a similar
line of business as the Borrowers were engaged in on the Effective Date.
 
"Environmental Laws" means any and all Federal, state, local, foreign and other
applicable statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
 
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Borrower directly or indirectly resulting from
or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
 
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership
 
 
 
5
 
 

--------------------------------------------------------------------------------

 
or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.
 
"ERISA" means the Employee Retirement Income Security Act of 1974.
 
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with any Borrower within the meaning of Section 414(b) or
(c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal
Revenue Code for purposes of provisions relating to Section 412 of the Internal
Revenue Code).
 
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by any Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrowers
or any ERISA Affiliate.
 
"Event of Default" has the meaning specified in Section 8.01.
 
"Excepted Liens" means the following Liens against Properties of the Borrowers:
(i) pledges or deposits to secure payment of worker's compensation, unemployment
insurance and other similar benefits; (ii) Liens for property taxes not yet due
or the validity or amount of which are being contested in good faith by
appropriate proceedings and against which adequate reserves have been
established in conformity with GAAP; (iii) statutory Liens which (A) are being
contested in good faith by appropriate legal proceedings and against which
adequate reserves have been established in conformity with GAAP or (B) arise in
the ordinary course of business and secure obligations which are not yet due and
not in default; (iv) Liens to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, performance bonds, purchase, construction, government or
sales contracts and other similar obligations or otherwise to satisfy statutory
or legal obligations, provided that in each such case such Liens (A) were not
incurred or made in connection with the incurrence or maintenance of the
borrowing of money or similar Funded Indebtedness, and (B) do not in the
aggregate materially detract from the value of the Property so encumbered or
materially impair the use thereof in the operation of its business; (v) title
defects, title irregularities, easements, zoning restrictions, rights-of-way,
encroachments, encumbrances on
 
 
 
6
 
 

--------------------------------------------------------------------------------

 
real property imposed by law or arising in the ordinary course of business and
other title matters of a minor nature that in each case do not secure any
monetary obligations and do not materially detract from the value of the
affected Property or materially impair or interfere with the use thereof in the
ordinary course of business; and (vi) attachment, judgment and other similar
Liens arising in connection with court proceedings, provided, however, that such
Liens are in existence for less than 30 days after the entry thereof or the
execution or other enforcement thereof is effectively stayed, but only if the
claims secured thereby are being contested in good faith by appropriate legal
proceedings and adequate reserves have been established in conformity with GAAP
for such claims.
 
"FRB" means the Board of Governors of the Federal Reserve System of the United
States.
 
"Funded Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
 
(a) all obligations for borrowed money, whether current or long-term and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
 
(b) the principal portion of all obligations under conditional sale or other
title retention agreements relating to Property purchased by the Borrowers
(other than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business);
 
(c) all obligations arising under letters of credit (including standby and
commercial), bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
 
(d) all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business
and, in each case, not past due for more than 60 days after the date on which
such trade account payable was created);
 
(e) the Attributable Indebtedness of Capital Leases;
 
(f) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interests in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends;
 
(g) all Funded Indebtedness of others secured by (or for which the holder of
such Funded Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed;
 
 
 
7

 
 

--------------------------------------------------------------------------------

 
(h) all Guarantees with respect to Funded Indebtedness of the types specified in
clauses (a) through (g) above of another Person; and
 
(i) all Funded Indebtedness of the types referred to in clauses (a) through (h)
above of any partnership or joint venture (other than a joint venture that is
itself a corporation or limited liability company) in which such Person is a
general partner or joint venturer, except to the extent that Funded Indebtedness
is expressly made non-recourse to such Person.
 
For purposes hereof, the amount of any direct obligation arising under letters
of credit (including standby and commercial), bankers' acceptances, bank
guaranties, surety bonds and similar instruments shall be the maximum amount
available to be drawn thereunder.
 
"GAAP" means generally accepted accounting principles in the United States set
forth 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, consistently applied
and as in effect from time to time.
 
"Governmental Authority" means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
 
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
 
 
 
8
 
 

--------------------------------------------------------------------------------

 

"Hazardous Materials" means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
 
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
 
(a) all Funded Indebtedness;
 
(b) the Swap Termination Value of any Swap Contract;
 
(c) redemption obligations in respect of mandatorily redeemable Equity
Interests;
 
(d) the amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA);
 
(e) obligations under acceptance facilities;
 
(f) all obligations secured by any Liens (other than Excepted Liens) on any
Properties of such Person,  whether or not the obligations have been assumed;
 
(g) all Guarantees with respect to outstanding Indebtedness of the types
specified in clauses (a) through (f) above of any other Person; and
 
(h) all Indebtedness of the types referred to in clauses (a) through (f) above
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.
 
"Indemnitee" has the meaning specified in Section 9.02.
 
"Information" has the meaning specified in Section 11.07.
 
"Interim Financial Statements" has the meaning set forth in Section 7.01(f)(ii).
 
"Internal Revenue Code" means the Internal Revenue Code of 1986.
 
"Inventory" means all inventory, merchandise, supplies, materials, goods and
other items of personal property now or hereafter owned by the Borrowers which
are held for sale or lease or are furnished or are to be furnished under a
contract of service or which constitute raw materials, work in process or
materials used or consumed or to be used or consumed in any Borrower's business
or the processing, packaging, delivery or shipping of the same, and all finished
goods.
 
"Investment" means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of
 
 
 
9

 
 

--------------------------------------------------------------------------------

 
another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or
equity participation or interest in, another Person, including any partnership
or joint venture interest in such other Person and any arrangement pursuant to
which the investor Guarantees Indebtedness of such other Person, or (c) an
Acquisition by such Person.
 
"Involuntary Disposition" means any loss of, damage to or destruction of, or any
condemnation or other taking for public use of, any property of any Borrower.
 
"IRS" means the United States Internal Revenue Service or any successor thereto.
 
"Issuer Documents" means with respect to any Letter of Credit, the Notice of LC
Credit Event and any other document, agreement and instrument entered into by
the Lender and any Borrower or in favor the Lender and relating to any such
Letter of Credit
 
"Joinder Agreement" means a joinder agreement substantially in the form of
Exhibit F executed and delivered by a newly formed or acquired Borrower in
accordance with the provisions of Section 4.12.
 
"Laws" means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
 
"LC Borrowing" means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Loan.
 
"LC Issuer" means the Lender or one or more banks, trust companies or other
Persons in each case expressly identified by the Lender from time to time, in
its sole discretion, as an LC Issuer for purposes of issuing one or more Letters
of Credit hereunder.  Without limitation of the Lender's discretion to identify
any Person as an LC Issuer, no Person shall be designated as an LC Issuer unless
such Person maintains reporting systems acceptable to the Lender with respect to
letter of credit exposure and agrees to provide regular reporting to the Lender
satisfactory to it with respect to such exposure.
 
"Lender Letter of Credit" means a Letter of Credit issued by an LC Issuer that
is also, at the time of issuance of such Letter of Credit, the Lender.
 
"Letter of Credit" means a standby or documentary (trade) letter of credit
issued for the account of any Borrower by the LC Issuer which expires by its
terms within one year after the date of issuance and in any event at least 30
days prior to the Revolving Credit Maturity Date.  Notwithstanding the
foregoing, a Letter of Credit may provide for automatic extensions of its expiry
date for one or more successive one-year periods provided that the LC Issuer
that issued such Letter of Credit has the right to terminate such Letter of
Credit on each such annual
 
 
10
 
 

--------------------------------------------------------------------------------

 
expiration date and no renewal term may extend the term of the Letter of Credit
to a date that is later than the thirtieth (30th) day prior to the Revolving
Credit Maturity Date.
 
"Letter of Credit Liabilities" means, at any time of calculation, the sum of
(i) without duplication, the amount then available for drawing under all
outstanding Letters of Credit, in each case without regard to whether any
conditions to drawing thereunder can then be met plus (ii) without duplication,
the aggregate unpaid amount of all reimbursement obligations in respect of
previous drawings made under all Letters of Credit.
 
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
 
"Loan" means the Term Loan, any Revolving Loan or the Advancing Term Loan.
 
"Loan Documents" means this Agreement, each Note, each Notice of LC Credit Event
Document, each Joinder Agreement, the Collateral Documents and all other
agreements and documents executed and delivered pursuant to or in connection
with this Agreement or the Credit Extensions contemplated hereby.
 
"Loan Notice" means a notice of a borrowing of a Revolving Loan pursuant to
Section 2.03(a), which, if in writing, shall be substantially in the form of
Exhibit A.
 
"Material Adverse Effect" means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), condition (financial or otherwise) of the Borrowers taken as a
whole or the Collateral; (b) a material impairment of the ability of any
Borrower to perform its obligations under any Loan Document to which it is a
party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Borrower of any Loan Document to which it
is a party.
 
"Moody's" means Moody's Investors Service, Inc. and any successor thereto.
 
"Multiemployer Plan" means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.
 
"Net Cash Proceeds" means the aggregate cash or Cash Equivalents proceeds
received by any Borrower in respect of any Disposition or Involuntary
Disposition, net of (a) direct costs incurred in connection therewith (including
legal, accounting and investment banking fees, and sales commissions), (b) taxes
paid or payable as a result thereof and (c) in the case of any Disposition, the
amount necessary to retire any Indebtedness secured by a Permitted Lien (ranking
senior to any Lien of the Lender) on the related property; it being understood
that "Net Cash Proceeds" shall include, without limitation, any cash or Cash
Equivalents received upon the

 
11

 
 

--------------------------------------------------------------------------------

 
sale or other disposition of any non-cash consideration received by any Borrower
in any Disposition or Involuntary Disposition.
 
"Notes" means the Term Note, the Revolving Note and the Advancing Term Note,
collectively, and "Note" means any of the foregoing promissory notes.
 
"Notice of LC Credit Event" means a notice from a Responsible Officer of the
Borrowers to the Lender with respect to any issuance, increase or extension of a
Letter of Credit specifying (i) the date of issuance or increase of a Letter of
Credit, (ii) the identity of LC Issuer with respect to such Letter of Credit,
(iii) the expiry date of such Letter of Credit, (iv) the proposed terms of such
Letter of Credit, including the face amount; and (v) the transactions that are
to be supported or financed with such Letter of Credit or increase thereof.
 
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, the Borrowers arising under any Loan Document or
otherwise with respect to the Term Loan, any Revolving Loan, any Letter of
Credit or any other loan or other extension of credit made by the Lender to any
Borrower, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against
any Borrower or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding. The foregoing
shall also include (a) all obligations under any Swap Contract between any
Borrower and the Lender (or any Affiliate of the Lender), (b) all obligations
under any Treasury Management Agreement between any Borrower and the Lender (or
any Affiliate of the Lender), and (c) all obligations under any Capital Lease
between any Borrower and the Lender (or any Affiliate of the Lender).
 
"Organizational Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
 
"Outstanding Amount" means (i) with respect to the Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of any Loans occurring on such date;
and (ii) with respect to any Letter of Credit Liabilities on any date, the
amount of such Letter of Credit Liabilities on such date after giving effect to
any extension occurring on such date and any other changes in the aggregate
amount of the Letter of Credit Liabilities as of such date, including as a
result of any reimbursements by the Borrowers of any unreimbursed amounts.
 
"Participant" has the meaning specified in Section 11.06.
 
 
 
12

 
 

--------------------------------------------------------------------------------

 
"PBGC" means the Pension Benefit Guaranty Corporation or any successor thereto.
 
"Pension Plan" means any "employee pension benefit plan (as such term is defined
in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by any Borrower or any ERISA
Affiliate or to which any Borrower or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.
 
"Permitted Liens" means, at any time, Liens in respect of Property of any
Borrower permitted to exist at such time pursuant to the terms of Section 5.01.
 
"Permitted Transfers" means (a) Dispositions of inventory in the ordinary course
of business; (b) Dispositions of machinery and equipment no longer used or
useful in the conduct of businesses of any Borrower that are Disposed of in the
ordinary course of business; (c) Dispositions of Property to any Borrower;
provided, that if the transferor of such Property is a Borrower, (i) the
transferee thereof must be a Borrower or (ii) to the extent such transaction
constitutes an Investment, such transaction is permitted under Section 5.02; (d)
Dispositions of Accounts in connection with the collection or compromise
thereof; (e) licenses, sublicenses, leases or subleases granted to others not
interfering in any material respect with the businesses of any Borrower; (f) the
sale or disposition of Cash Equivalents for fair market value; (g) the payment
of cash for goods or services of equivalent value in the ordinary course of
business; (h) the sale or other transfer of investment property or other assets
provided that the net proceeds thereof are credited to the Pledged Account; and
(i) to the extent constituting Dispositions, transactions permitted by Sections
5.01, 5.02, 5.04, 5.07, 5.08.
 
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
"Personal Property Collateral" means the "Collateral" referred to in the
Security Agreement.
 
"Plan" means any "employee benefit plan" (as such term is defined in Section
3(3) of ERISA) established by any Borrower or, with respect to any such plan
that is subject to Section 412 of the Internal Revenue Code or Title IV of
ERISA, any ERISA Affiliate of a Borrower.
 
"Pledge Agreement" means that certain Second Amended and Restated Securities
Pledge and Collateral Maintenance Agreement, in the form attached hereto as
Exhibit G, to be executed by Monarch and the Lender.
 
"Pledged Account" means the securities account (investment account) maintained
by Monarch with BOSC, Inc. and currently identified as Account # 4NC-632631 (or
any successor securities account into which the securities, security
entitlements, financial assets, investment property, cash, cash equivalents or
other items from time to time held or carried in or credited to the Pledged
Account may be transferred).
 
"Property" means any asset or property, whether real, personal or mixed,
tangible or intangible, which is now or at any time hereafter owned, operated or
leased by any Borrower.
 
 
 
13

 
 

--------------------------------------------------------------------------------

 
"Related Parties" means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.
 
"Reportable Event" means any of the events set forth in Section 4043(c) of ERISA
or in regulations of the PBGC issued thereunder, other than events for which the
30 day notice period has been waived, based on Section 4043 of ERISA, and
accompanying regulations issued by the Pension Benefit Guaranty Corporation,
that were in effect as of the Effective Date.
 
"Responsible Officer" means, with respect to any Borrower, its chief executive
officer, president, chief financial officer, treasurer, assistant treasurer,
secretary or assistant secretary. Any document delivered hereunder that is
signed by a Responsible Officer of a Borrowers shall be conclusively presumed to
have been authorized by all necessary corporate, partnership and/or other action
on the part of the Borrowers and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Borrowers.
 
"Restricted Payment" means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests of the
Borrowers, or any other payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests or on account of any return of capital to stockholders,
partners or members (or the equivalent Person thereof), or any setting apart of
funds or property for any of the foregoing.
 
"Revolving Commitment" means the obligation of the Lender to make Revolving
Loans to the Borrowers pursuant to Section 2.01(b) and to issue Letters of
Credit from time to time for the account of the Borrowers pursuant to Section
2.04 in an aggregate principal amount at any one time outstanding not to exceed
$15,000,000.
 
"Revolving Credit Availability Period" means the period from and including the
Effective Date to the earlier of (a) the Revolving Credit Maturity Date, and (b)
the date of any termination of the Revolving Commitment.
 
"Revolving Credit Maturity Date" means December 31, 2015, or such later date as
may from time to time be established by the Lender in its sole discretion as the
Revolving Credit Maturity Date.
 
"Revolving Loan" has the meaning specified in Section 2.01.
 
"Revolving Note" means that certain promissory note, in the form attached hereto
as Exhibit C, to be executed by the Borrowers in favor of the Lender.
 
"Related Parties" means with respect to any Person, such Person's Affiliates and
the directors, officers, employees, partners, agents, trustees, administrators,
managers, advisors and representatives of it and its Affiliates.
 
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

 
 
14

 
 

--------------------------------------------------------------------------------

 
"Sale and Leaseback Transaction" means, with respect to any Person (the
"transferor"), any arrangement, directly or indirectly, with any other Person
whereby the transferor shall sell or transfer any property used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property that it intends to use for substantially the
same purpose or purposes as the property being sold or transferred.
 
"Security Agreement" means that certain Security Agreement dated as of February
3, 2012, executed by each of the Borrowers in favor of the Lender.
 
"Solvent" or "Solvency" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
ordinary course of business, (b) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which such Person's property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is to
engage, (d) the fair value of the property of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person
and (e) the present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing the amount
of contingent liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
 
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of Voting Stock is at the time beneficially owned, or the management of
which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of a Borrower.
 
"Support Agreement" has the meaning specified in Section 2.04(a).
 
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules,

 
 
15

 
 

--------------------------------------------------------------------------------

 
a "Master Agreement"), including any such obligations or liabilities under any
Master Agreement.
 
"Swap Termination Value" means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s) and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Lender or any Affiliate of
the Lender).
 
"Term Loan" means the term loan to be continued pursuant to Section 2.01(a).
 
"Term Loan Maturity Date" means December 31, 2017.
 
"Term Note" means that certain promissory note, in the form attached hereto as
Exhibit B, to be executed by the Borrowers in favor of the Lender.
 
"Total Revolving Credit Exposure" means the aggregate Outstanding Amount of all
Revolving Loans and all Letter of Credit Liabilities.
 
"Treasury Management Agreement" means any agreement governing the provision of
treasury or cash management services, including deposit accounts, funds
transfer, automated clearinghouse, zero balance accounts, returned check
concentration, controlled disbursement, lockbox, account reconciliation and
reporting and trade finance services.
 
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding that Pension Plan pursuant to Sections 412 and 430 of the Internal
Revenue Code for the applicable plan year.
 
"United States" and "U.S." mean the United States of America.
 
"Voting Stock" means, with respect to any Person, Equity Interests issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
 
"WSJ Prime Rate" means that rate of interest regularly published by the Wall
Street Journal and designated as the U.S. Prime Rate.
 
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such Person of
which Equity Interests representing 100% of the Equity Interests are, at the
time any determination is being made, owned, controlled or held by such Person
or one or more Wholly-Owned Subsidiaries of such Person or by such Person and
one or more Wholly-Owned Subsidiaries of such Person.

 
 
16

 
 

--------------------------------------------------------------------------------

 
 
1.02 Other Interpretive Provisions.  With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:
 
(a) Certain References.  The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." The word "will" shall be
construed to have the same meaning and effect as the word "shall." Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including any Organizational Document) shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be
construed to include such Person's successors and assigns, (iii) the words
"herein," "hereof" and "hereunder," and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law shall
include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all real and personal property and tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
 
(b) References to Borrowers.  Unless the context otherwise expressly requires,
all references herein to the "Borrowers" shall be construed to mean "the
Borrowers, jointly and several, and each of the Borrowers individually."
 
(c) Computation of Time.  In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including;" the
words "to" and "until" each mean "to but excluding;" and the word "through"
means "to and including."
 
(d) Section Headings. Section headings herein and in the other Loan Documents
are included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
 
1.03 Accounting Terms.
 
(a) Generally. Except as otherwise specifically prescribed herein, all
accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in

 
17

 
 

--------------------------------------------------------------------------------

 
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements. For purposes of determining compliance with the financial
covenants contained in this Agreement, any election by the Borrowers to measure
an item of Indebtedness owing by a Borrower using fair value (as permitted by
Statement of Financial Accounting Standards No. 159 or any similar accounting
standard) shall be disregarded and such determination shall be made as if such
election had not been made.
 
(b) References to Consolidated Financial Statements. All references to
"consolidated" with respect to the financial statements of the Borrowers and
financial calculations hereunder mean the consolidation of the accounts of the
Borrowers in accordance with GAAP, including principles of consolidation,
consistent with those applied in the preparation of the Audited Financial
Statements.
 
(c) Changes in GAAP. The Borrowers shall provide a written summary of material
changes in GAAP that affect the Borrowers' financial statements and in the
consistent application thereof with each annual and quarterly Compliance
Certificate delivered in accordance with Section 4.02(a). If at any time any
Accounting Change (as defined below) would affect the computation of any
financial ratio or other financial calculation set forth in this Agreement, (i)
such ratio or calculation shall continue to be made in accordance with GAAP as
in effect on January 1, 2011, and (ii) the Borrowers shall provide to the Lender
a reconciliation between such ratio or calculation made before and after giving
effect to such Accounting Change.  For purposes of this Section 1.03(c), an
"Accounting Change" means (A) any change in accounting principles required by
GAAP and implemented by any Borrower, (B) any change in accounting principles
recommended by the Borrowers' independent accountants and implemented by any
Borrower, and (C) any change in carrying value of any Borrower's assets,
liabilities or equity accounts resulting from any adjustments that, in each
case, were applicable to, but not included in, the Audited Financial Statements.
 
1.04 Rounding.  Any financial ratios required to be maintained by the Borrowers
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).
 
1.05 Times of Day.  Unless otherwise specified, all references herein to times
of day shall be references to Central time (daylight or standard, as
applicable).
 
1.06 Letter of Credit Amounts.  Unless otherwise specified herein, the amount of
a Letter of Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.
 
 
 
18
 
 

--------------------------------------------------------------------------------

 
ARTICLE II
LOANS AND LETTERS OF CREDIT
 
2.01 Loans.
 
(a) Term Loan.  The Borrowers and the Lender acknowledge and agree that the
Outstanding Amount of the Term Loan as of the Effective Date is
$6,865,435.13.  The Lender agrees that on the Effective Date it will make an
advance under the Term Loan in an amount that would cause the total principal
amount outstanding under the Term Loan to be $10,000,000.  The Borrowers hereby
reaffirm their continuing joint and several liability for payment of the Term
Loan.
 
(b) Revolving Loans. Subject to the terms and conditions set forth herein, the
Lender agrees to make loans (each such loan, a "Revolving Loan") to the
Borrowers from time to time on any Business Day during the Revolving Credit
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Revolving Commitment; provided, however, that after giving
effect to the making of any Revolving Loan, the Total Revolving Credit Exposure
shall not exceed the Revolving Commitment.  Within the limits of the Revolving
Commitment, and subject to the other terms and conditions hereof, the Borrowers
may borrow under this Section 2.01, prepay under Section 2.07, and reborrow
under this Section 2.01.
 
(c) Advancing Term Loan.  Subject to the terms and conditions set forth herein,
the Lender agrees to establish an advancing term loan facility in favor of the
Borrowers (the "Advancing Term Loan") and to make advances thereunder from time
to time in an aggregate amount not to exceed $10,000,000.
 
2.02 Use of Proceeds.
 
(a) Term Loan.  Proceeds of the additional advance under the Term Loan as of the
Effective Date will be used to repay existing Indebtedness and to finance
Capital Expenditures in accordance with the Capital Expenditure budget
previously provided to the Lender (the "CAPEX Budget").
 
(b) Revolving Loans.  Proceeds of the Revolving Loans shall be used for working
capital and general corporate purposes.  Proceeds of Revolving Loans may also be
used to purchase securities (which may include margin stock within the meaning
of Regulation U of the FRB) to be held in the Pledged Account.
 
(c) Advancing Term Loan.  Proceeds of advances under the Advancing Term Loan
shall be used to finance or reimburse amounts paid for Capital Expenditures in
accordance with the CAPEX Budget.
 
(d) Limitation.  No part of the proceeds of the Term Loan or any advance under
the Advancing Term Loan will be used, and no part of any Indebtedness repaid or
to be repaid with the proceeds of any such Loans was or will be used, directly
or indirectly, for the purpose of purchasing or carrying margin stock.  No part
of the proceeds of any Revolving Loan may be used, directly or indirectly, for
the purpose of
 
 
 
19
 
 

--------------------------------------------------------------------------------

purchasing or carrying margin stock unless the applicable requirements of
Regulation U have been satisfied.  On the Effective Date and from time to time
thereafter upon the request of the Lender, the Borrowers will complete, execute
and deliver to the Lender a "Purpose Statement" (Form U-1) pursuant to
Regulation U of the FRB.
 
2.03 Advances of Revolving Loans; Advances under Advancing Term Loan.
 
(a) Loan Notices.  Except as provided in Section 2.03(c), each Revolving Loan
shall be made upon the Borrowers' irrevocable notice to the Lender, which may be
given by telephone. Each such notice must be received by the Lender not later
than 11:00 a.m. on the requested date of the funding of any Revolving Loan.  Any
such notice received by the Lender after 11:00 a.m. on any Business Day shall be
deemed to have been received on the next following Business Day. Each telephonic
notice by the Borrowers pursuant to this Section 2.03(a) must be confirmed
promptly by delivery to the Lender of a written Loan Notice, appropriately
completed and signed by a Responsible Officer of Monarch.  Except as provided in
Section 2.03(c), each Revolving Loan shall be in a principal amount of $100,000
or a whole multiple of $100,000 in excess thereof.  Each Loan Notice (whether
telephonic or written) shall specify (i) the requested date of the Revolving
Loan (which shall be a Business Day), and (ii) the principal amount of the
Revolving Loan to be borrowed.
 
(b) Funding of Loans.  Upon satisfaction of the applicable conditions set forth
in Section 7.02 (and, if such Revolving Loan is the initial Credit Extension,
Section 7.01), the Lender shall make all funds requested in any Loan Notice
available to the Borrowers in immediately available funds either by (i)
crediting the Cash Management Account with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to
(and reasonably acceptable to) the Lender by the Borrowers, provided, however,
that if, on the funding date of a Revolving Loan, there are LC Borrowings
outstanding, then the proceeds of such Revolving Loan first, shall be applied to
the payment in full of any such LC Borrowings and second, shall be made
available to the Borrowers as provided above.
 
(c) Automatic Funding.  On each Business Day, the Lender will review the
collected balance of the Cash Management Account, taking into account the checks
and other items presented that day against the Borrowers' accounts. If the
collected balance of the Cash Management Account is less than zero Dollars, a
Revolving Loan will automatically be made and deposited into the Cash Management
Account in order to bring the collected balance to not less than zero Dollars;
provided, however, that the Lender will not be obligated to make any such
Revolving Loan if all applicable conditions precedent set forth in Section 7.02
are not satisfied. The provisions of this Section 2.03(c) shall apply only if
the Borrowers are utilizing the Lender's "Loan Manager" service.
 
(d) Requests for Advances under the Advancing Term Loan.  The Borrowers will
make each request for an advance under the Advancing Term Loan by delivering to
the Lender a disbursement request in writing at least two Business Days prior to
the requested date of disbursement.  Unless the Lender otherwise agrees, not
more than two
 
 
 
20
 
 

--------------------------------------------------------------------------------

 
disbursement requests shall be submitted per month.  The amount requested in
each disbursement request shall be used solely for the purposes of financing or
reimbursing payments for Capital Expenditures as set forth in the CAPEX
Budget.  Each such disbursement request must specify with particularity the
Capital Expenditures to be financed or reimbursed with the proceeds of such
advance.
 
2.04 Letters of Credit.
 
(a) Letter of Credit.  On the terms and subject to the conditions set forth
herein, the Revolving Commitment may be used by the Borrowers, in addition to
the making of Revolving Loans hereunder, for the issuance, prior to the
Revolving Credit Maturity Date, by (i) the Lender, of letters of credit,
guarantees or other agreements or arrangements (each, a "Support Agreement") to
induce the LC Issuer to issue or increase the amount of, or extend the expiry
date of, one or more Letters of Credit and (ii)  the LC Issuer, of one or more
Letters of Credit, so long as, in each case: the Lender shall have received a
Notice of LC Credit Event at least two Business Days before the relevant date of
issuance, increase or extension; and after giving effect to such issuance,
increase or extension, (x) the aggregate Letter of Credit Liabilities under all
Letters of Credit do not exceed the Revolving Commitment and (y) the Total
Revolving Credit Exposure does not exceed the Revolving Commitment.
 
(b) Letter of Credit Fee.  The Borrowers shall pay to the Lender a letter of
credit fee with respect to the Letter of Credit Liabilities for each Letter of
Credit, computed for each day from the date of issuance of such Letter of Credit
to the date that is the last day a drawing is available under such Letter of
Credit, at a rate equal to 1.50% per annum.  Such fee shall be payable in
arrears on the last day of each calendar quarter prior to the Revolving Credit
Maturity Date and on such date.  In addition, the Borrowers agree to pay
promptly to the LC Issuer any fronting or other fees that it may charge in
connection with any Letter of Credit.
 
(c) Reimbursement Obligations of Borrower.  If either (x) the Lender shall make
a payment to an LC Issuer pursuant to a Support Agreement, or (y)  the Lender
shall honor any draw request under, and make payment in respect of, a Lender
Letter of Credit, (i) the Borrowers shall reimburse the Lender for the amount of
such payment no later than 4:30 p.m. central time on the date of such payment
and (ii) the Borrowers shall be deemed to have immediately requested that the
Lender make a Revolving Loan in a principal amount equal to the amount of such
payment (but solely to the extent the Borrowers shall have failed to directly
reimburse the Lender or, with respect to Supported Letters of Credit, the
applicable LC Issuer, for the amount of such payment).  The Borrowers shall pay
interest, on demand, on all amounts so paid by the Lender for each day until the
Borrowers reimburse the Lender therefor at a rate equal to the then current
interest rate applicable to Revolving Loans for such day.
 
(d) Reimbursement and Other Payments by Borrower.  The obligations of the
Borrowers to reimburse the Lender and/or the applicable LC Issuer pursuant to
Section 2.04(c) shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever,
 
 
 
21
 
 

--------------------------------------------------------------------------------

 
including the following:  any lack of validity or enforceability of, or any
amendment or waiver of or any consent to departure from, any Letter of Credit or
any related document; the existence of any claim, set-off, defense or other
right which the Borrowers may have at any time against the beneficiary of any
Letter of Credit, the LC Issuer (including any claim for improper payment), the
Lender, or any other Person, whether in connection with any Loan Document or any
unrelated transaction, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim; any statement or
any other document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever; any affiliation between
the LC Issuer and the Lender; or to the extent permitted under applicable law,
any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing.
 
(e) Deposit Obligations of Borrower.  In the event any Letters of Credit are
outstanding at the time that the Borrowers prepay or are required to repay the
Obligations or the Revolving Commitment is terminated, the Borrowers shall
(i) deposit with the Lender cash in an amount equal to one hundred and five
percent (105%) of the aggregate outstanding Letter of Credit Liability to be
available to the Lender to reimburse payments of drafts drawn under such Letters
of Credit and pay any fees and expenses related thereto ("Cash Collateralize")
and (ii) prepay the fee payable under Section 2.04(c) with respect to such
Letters of Credit for the full remaining terms of such Letters of Credit.  Upon
termination of any such Letter of Credit and provided no Event of Default then
exists, the unearned portion of such prepaid fee attributable to such Letter of
Credit shall be refunded to the Borrowers, together with the deposit described
in the preceding clause (i) attributable to such Letter of Credit, but only to
the extent not previously applied by Lender in the manner described herein.
 
2.05 Interest.
 
(a) Rates of Interest Prior to Default.  The Term Loan shall bear interest at a
fluctuating rate per annum rate equal to the WSJ Prime Rate less 1.25%, but in
any event not less than 1.75% per annum.  The Revolving Loans shall bear
interest at a fluctuating rate per annum rate equal to the WSJ Prime Rate less
1.50%, but in any event not less than 1.50% per annum.  The Advancing Term Loan
and all other Obligations (other than the Term Loan or any Revolving Loan) shall
bear interest at a fluctuating rate per annum rate equal to the WSJ Prime Rate
less 1.50%, but in any event not less than 1.50% per annum.
 
(b) Default Rate.  Notwithstanding the foregoing, from and after an Event of
Default, whether at stated maturity, upon acceleration or otherwise, the Term
Loan, the Revolving Loans and all other amounts included in the Obligations
shall bear interest, before as well as after judgment, at a fluctuating rate per
annum equal to the Default Rate.
 
(c) Computation of Interest.  All interest and fees under each Loan Document
shall be calculated on the basis of a 360-day year for the actual number of days
elapsed.  The date of funding of a Revolving Loan shall be included in the
calculation of interest.
 
 
 
22
 
 

--------------------------------------------------------------------------------

 
The date of payment of a Revolving Loan shall be excluded from the calculation
of interest.  Interest on all Loans is payable in arrears on the last day of
each calendar quarter and on the maturity of such Loans, whether by acceleration
or otherwise.
 
(d) Maximum Rate of Interest.  Notwithstanding anything to the contrary
contained in any Loan Document or the Notes, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Lender shall
receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied, at the Lender's discretion, to the principal of the Loans or,
if it exceeds such unpaid principal, refunded to the Borrowers. In determining
whether the interest contracted for, charged, or received by the Lender exceeds
the Maximum Rate, the Lender may, to the extent permitted by applicable Law, (a)
characterize any payment that is not principal as an expense, fee, or premium
rather than interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations
hereunder.
 
(e) Inability to Determine Index Rate.  In the event the Lender shall determine
that adequate and reasonable methods do not exist for ascertaining the WSJ Prime
Rate, the Lender shall select a replacement index and promptly provide notice of
such determination to the Borrowers (which shall be conclusive and binding on
the Borrowers).
 
2.06 Required Payments.
 
(a) Term Loan.  Beginning March 31, 2013, and continuing on the last day of each
calendar quarter thereafter prior to the Term Loan Maturity Date, the principal
balance of the Term Loan will be payable in consecutive installments, with each
installment (except the final installment due on the Term Loan Maturity Date)
being in the amount of $357,142.86.  Payment of each such principal installment
shall be accompanied by payment of the unpaid interest accrued on the Term
Loan.  The entire unpaid principal balance of the Term Loan (which the Borrowers
acknowledge will be balloon payment), together with all unpaid interest accrued
thereon, will be due and payable by the Borrowers on the Term Loan Maturity
Date.
 
(b) Revolving Loans.  Interest only on the Outstanding Amount of all Revolving
Loans shall be due and payable on the last day of each calendar quarter
beginning March 31, 2013.  The aggregate Outstanding Amount of all Revolving
Loans, together with all unpaid interest accrued thereon, shall be due and
payable in full on the Revolving Credit Maturity Date.
 
(c) Advancing Term Loan.  Interest only on the Outstanding Amount of all
advances under the Advancing Term Loan shall be due and payable on the last day
of each calendar quarter beginning March 31, 2013.  The aggregate Outstanding
Amount of all advances under the Advancing Term Loan, together with all unpaid
interest accrued thereon, shall be due and payable in full on the Advancing Term
Loan Maturity Date.
 
 
 
23
 
 

--------------------------------------------------------------------------------

 
2.07 Prepayments.
 
(a) Voluntary Prepayments of Loans.  The Borrowers may, upon notice to the
Lender, at any time or from time to time, voluntarily prepay the Outstanding
Amount of the Term Loan, the Advancing Term Loan (but only after any obligation
to make advances thereunder has terminated) the Revolving Loans, in whole or in
part, without premium or penalty; provided that (A) such notice must be received
by the Lender not later than 11:00 a.m. on the date of prepayment; (B) any
prepayment shall be in a principal amount of $100,000 or a whole multiple of
$100,000 in excess thereof (or, if less, the entire principal amount thereof
then outstanding); and (C) any prepayment of the Term Loan shall be applied to
the remaining installments in inverse order of maturity. Each such notice shall
specify the date and amount of such prepayment and the Loans to be prepaid. If
such notice is given by the Borrowers, the Borrowers shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein.
 
(b) Automatic Prepayments.  If the collected balance of the Cash Management
Account as of the close of business on any Business Day is greater than zero
Dollars, the Lender will automatically debit the Cash Management Account for the
amount of the excess and apply such excess as a prepayment on the Outstanding
Amount of the Revolving Loans. The provisions of this Section 2.07(b) shall
apply only if the Borrowers are utilizing the Lender's "Loan Manager" service.
 
(c) Mandatory Prepayments of Loans.
 
(i) Revolving Loans. If for any reason the Total Revolving Credit Exposure at
any time exceed the Revolving Commitment, the Borrowers shall immediately prepay
Revolving Loans and/or Cash Collateralize the Letter of Credit Liabilities in an
aggregate amount equal to such excess.
 
(ii) Dispositions and Involuntary Dispositions.  The Borrowers shall prepay the
Loans as hereafter provided in an aggregate amount equal to 100% of the Net Cash
Proceeds of all (A) Dispositions (other than Permitted Transfers) and (B)
Involuntary Dispositions to the extent such Net Cash Proceeds (or any amount
equal thereto) are not reinvested in Eligible Assets within 90 days of the date
of such Involuntary Disposition, or such later date as the Borrowers may request
and the Lender may consent to in writing, provided that the Borrowers have
initiated actions to reinvest such Net Cash Proceeds (or any amount equal
thereto) in Eligible Assets. Any prepayment pursuant to this clause (ii) shall
be applied as set forth in clause (iii) below.
 
(iii) Application of Mandatory Prepayments.  All amounts required to be paid
pursuant to this Section 2.07(c) shall be applied as follows:
 
(A) with respect to all amounts prepaid pursuant to Section 2.07(c)(i), to
Revolving Loans and (after all Revolving Loans have been repaid) to Cash
Collateralize Letter of Credit Liabilities; and
 
 
 
24
 
 

--------------------------------------------------------------------------------

 
(B) with respect to all amounts prepaid pursuant to Section 2.07(c)(ii), to the
Term Loan (to the remaining installments in inverse order of maturity), and then
to the Advancing Term Loan.
 
All prepayments under this Section 2.07(c) shall be subject to Section 3.04, but
otherwise without premium or penalty, and shall be accompanied by interest on
the principal amount prepaid through the date of prepayment.
 
2.08 Late Fees.  To the extent any principal and interest due under any Loan
Document is not paid within 10 calendar days of the due date therefor, and, to
the extent that the following described fee is deemed to constitute interest,
subject to Section 2.05(d), in addition to any interest or other fees and
charges due hereunder or under the applicable Loan Document, the Borrowers shall
pay a late fee equal to 5% of the amount of the payment that was to have been
made.  The Borrowers agree that the charges set forth herein are reasonable
compensation to the Lender for the acceptance and handling of such late
payments.
 
2.09 Evidence of Debt.  The Credit Extensions and advances under the Advancing
Term Loan made by the Lender shall be evidenced by one or more accounts or
records maintained by the Lender in the ordinary course of business. The
accounts or records maintained by the Lender shall be conclusive, absent
manifest error, of the amount of the Credit Extensions and advances under the
Advancing Term Loan made by the Lender to the Borrowers and the interest and
payments thereon. Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrowers to pay any
amounts owing with respect to the Obligations. The Borrowers shall also jointly
and severally make, execute and deliver the Term Note to evidence the Term Loan,
the Revolving Note to evidence the Revolving Loans and the Advancing Term Note
to evidence the Advancing Term Loan.  The Lender may attach schedules to the
Notes and endorse thereon the date, amount and maturity of the Loans and the
payments made with respect thereto.
 
2.10 Payments Generally.  All payments to be made by the Borrowers shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. The Borrowers hereby authorizes the Lender to automatically debit the
Cash Management Account for each payment due hereunder.  If any payment to be
made by the Borrowers hereunder shall come due on a day other than a Business
Day, such automatic debit shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be.
 
2.11 Collateral.
 
(a) Grant of Liens.  At all times until the Obligations have paid in full and
the Revolving Commitment has been terminated, (i) the Borrowers agrees to grant
and maintain, or cause to be granted and maintained, in favor of the Lender an
Acceptable Security Interest in the Personal Property Collateral, and (ii)
Monarch agree to grant, maintain and continue an Acceptable Security Interest in
the Pledged Account.
 
(b) Additional Borrowers.  Within 30 days after any Person becomes a Subsidiary
of any Borrower after the Effective Date (other than a Person which is
 
 
 
25
 
 

--------------------------------------------------------------------------------

 
acquired or formed pursuant to an Investment permitted by Section 5.02(g) and
which is not a Wholly-Owned Subsidiary), the Borrowers shall cause such
Subsidiary to execute such Collateral Documents as the Lender may reasonably
request to grant an Acceptable Security Interest in all Personal Property
Collateral owned by it to secure the Obligations and to join as an additional
Borrower hereunder.
 
(c) Further Assurances.  Each of the Borrowers shall, at its sole expense, upon
the request of the Lender, execute and deliver or cause to be executed and
delivered to the Lender, in due form for filing or recording, such additional
security agreements, instruments, agreements, assignments, financing statements,
lien entry forms and other Collateral Documents, and do such other acts and
things with respect to the Collateral, as the Lender may reasonably deem
necessary or advisable in order to perfect, maintain and protect its Liens in
the Collateral. Without limiting the generality of the foregoing, each of the
Borrowers, at its sole expense, shall deliver or cause to be delivered to the
Lender, in due form for transfer, all proceeds of Collateral consisting of
promissory notes, instruments, chattel paper, documents, securities or the like.
 
(d) Cross-Collateralization.  The Borrowers acknowledge that all of the
Collateral is granted to the Lender as security for the repayment of all of the
Obligations.  If either of the Notes is paid in full or satisfied, but any
portion of the Obligations remains unsatisfied, the Lender will retain its Liens
in all of the Collateral until the remaining Obligations are paid in full.
 
2.12 Concerning Joint and Several Liability.  Each of the Borrowers hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with each of the other Borrowers with
respect to the payment and performance of all of the Loans and other Obligations
arising under this Agreement and the other Loan Documents, it being the
intention of the parties hereto that all such Obligations shall be the joint and
several obligations of each of the Borrowers without preferences or distinction
among them.  Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by the
Lender under this Agreement, for the mutual benefit, directly and indirectly, of
each of the Borrowers and in consideration of the undertakings of each of the
other Borrowers to accept joint and several liability for the obligations of all
of them.  Each Borrower has derived and will derive benefits from the Term Loan,
the Revolving Loans to be made under the Revolving Commitment and the Advancing
Term Loan, both in its individual capacity and as a member of the integrated
group of Borrowers, since the successful operation and condition of each is
dependent on the continued successful performance of the integrated group as a
whole.  The Borrowers acknowledge that their acceptance of joint and several
liability has allowed each of them to obtain more favorable credit terms. If and
to the extent that a Borrower shall fail to make any payment with respect to any
of the obligations hereunder as and when due or to perform any of such
obligations in accordance with the terms thereof, then in each such event, the
other Borrowers will make such payment with respect to, or perform, such
obligation. Except to the extent notice is expressly required to be given
pursuant to the terms of this Agreement and as otherwise expressly provided
herein, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of occurrence of any Default or Event of Default
(except to the extent notice is expressly required to be given pursuant to the
terms of this Agreement), or of any demand for any payment under this Agreement,
notice of any
 
 
 
26
 
 

--------------------------------------------------------------------------------

 
action at any time taken or omitted by the Lender under or in respect of any of
the obligations hereunder, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in connection with this
Agreement.  Each Borrower hereby assents to, and waives notice of, any extension
or postponement of the time for the payment of any of the obligations hereunder,
the acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by the Lender at any time or times in respect of any
default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Lender in respect of any of the obligations
hereunder, and the taking, addition, substitution or release, in whole or in
part, at any time or times, of any security for any of such obligations or the
addition, substitution or release, in whole or in part, of any Borrower.  The
obligations of each Borrower under this Agreement shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any
reconstruction or similar proceeding with respect to any Borrower.
 
2.13 Increased Costs.  If, after the Effective Date, any Change in Law: (1)
shall impose, modify or deem applicable any reserve (including any reserve
imposed by the FRB, or any successor thereto), special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by the Lender; or (2)
shall impose on the Lender any other condition affecting any of the Notes; and
the result of anything described in clauses (1) above and (2) is to increase the
cost to (or to impose a cost on) the Lender of making or maintaining any Loan,
or to reduce the amount of any sum received or receivable by the Lender under
this Agreement or under any of the Notes with respect thereto, then upon demand
by the Lender (which demand shall be accompanied by a statement setting forth
the basis for such demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to the Lender), the Borrowers shall
promptly pay to the Lender such additional amount as will compensate the Lender
for such increased cost or such reduction, so long as such amounts have accrued
on or after the day which is 270 days prior to the date on which the Lender
first made demand therefor.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES
 
The Borrowers jointly and severally represent and warrant to the Lender that:
 
3.01 Existence, Qualification and Power.  Each Borrower (a) is duly
incorporated, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation, (b) has all requisite power and authority and
all requisite governmental licenses, authorizations, consents and approvals to
(i) own or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party, and
(c) is duly qualified and is licensed and in good standing under the Laws of
each jurisdiction where its ownership, lease or operation of Properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or (c), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.
 
3.02 Authorization; No Contravention.  The execution, delivery and performance
by each Borrower of each Loan Document to which such Person is party have been
duly authorized
 
 
 
27
 
 

--------------------------------------------------------------------------------

 
by all necessary corporate action, and do not (a) contravene the terms of any of
such Person's Organizational Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject; or (c) violate any Law
(including Regulation U or Regulation X issued by the FRB), except to the extent
that any such violation could not reasonably be expected to have a Material
Adverse Effect.
 
3.03 Governmental Authorization; Other Consents.  No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Borrower of this Agreement or any other Loan Document other than
(i) those that have already been obtained and are in full force and effect and
(ii) filings to perfect the Liens created by the Collateral Documents.
 
3.04 Binding Effect.  Each Loan Document has been duly executed and delivered by
each Borrower that is party thereto. Each Loan Document constitutes a legal,
valid and binding obligation of each Borrower that is party thereto, enforceable
against each such Borrower in accordance with its terms.
 
3.05 Financial Statements; No Material Adverse Effect.
 
(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein and (ii) fairly present in all material respects the
consolidated financial position of the Borrowers as of the date thereof and
their results of operations for the period covered thereby in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein.
 
(b) The Interim Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein and (ii) fairly present in all material respects the
consolidated financial position of the Borrowers as of the date thereof and
their results of operations for the period covered thereby, subject, in the case
of clauses (i) and (ii), to the absence of footnotes and to normal year-end
audit adjustments.
 
(c) From the date of the Audited Financial Statements to and including the
Effective Date, there has been no Disposition by any Borrower, or any
Involuntary Disposition, of any material part of the business or Property of any
Borrower, and no Acquisition by any of them of any business or Property
(including any Equity Interests of any other Person) material in relation to the
consolidated financial position of the Borrowers, taken as a whole, in each
case, which is not reflected in the foregoing financial statements or in the
notes thereto and has not otherwise been disclosed in writing to the Lender on
or prior to the date of this Agreement.
 
 
 
28
 
 

--------------------------------------------------------------------------------

 
(d) The financial statements delivered pursuant to Section 4.01(a) and (b) have
been prepared in accordance with GAAP (except as may otherwise be permitted
under Section 4.01(a) and (b)) and present fairly in all materials respects the
consolidated financial position, results of operations and cash flows of the
Borrowers as of the dates thereof and for the periods covered thereby.
 
(e) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.
 
3.06 Litigation.  There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Borrowers after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Borrowers or against any of
their Properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby or (b) if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
 
3.07 No Default.
 
(a) No Borrower is in default under or with respect to any Contractual
Obligation that could reasonably be expected to have a Material Adverse Effect.
 
(b) No Default hereunder has occurred and is continuing.
 
3.08 Ownership of Property; Liens.  Each of the Borrowers has good record and
marketable title to all Property necessary or used in the ordinary conduct of
its business, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. None of
the Properties of the Borrowers is subject to any Liens, other than Permitted
Liens.
 
3.09 Environmental Compliance.  The Borrowers conduct in the ordinary course of
business a review of the effect of existing Environmental Laws and claims
alleging potential liability or responsibility for violation of any
Environmental Laws on their respective businesses, operations and Properties,
and as a result thereof the Borrowers have reasonably concluded that such
Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
 
3.10 Insurance.  The properties of the Borrowers are insured with financially
sound and reputable insurance companies not Affiliates of any Borrower, in such
amounts, after giving effect to any self-insurance compatible with the following
standards, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in the localities where the Borrowers operate, and in compliance with Section
4.07. The insurance coverage of the Borrowers as in effect on the Effective Date
is outlined as to carrier, policy number, expiration date, type, amount and
deductibles on Schedule 3.10.
 
 
 
29
 
 

--------------------------------------------------------------------------------

 
3.11 Taxes.  The Borrowers have filed all Federal, state and other material tax
returns and reports required to be filed, and have paid all Federal, state and
other material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no known proposed tax assessment
against any Borrower that would, if made, have a Material Adverse Effect.  No
Borrower is a party to any tax sharing agreement.
 
3.12 ERISA Compliance.
 
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Internal Revenue Code and other Federal or state Laws.
Each Plan that is intended to qualify under Section 401(a) of the Internal
Revenue Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto, or may rely upon an opinion letter issued with respect to a
plan pre-approved by the IRS and, to the best knowledge of the Borrowers,
nothing has occurred which would prevent, or cause the loss of, such
qualification. Each Borrower and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Internal Revenue Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Internal Revenue Code has been made with
respect to any Plan.
 
(b) There are no pending or, to the best knowledge of the Borrowers, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
 
(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability, except as reflected in the
Audited Financial Statements; (iii) no Borrower or any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) no Borrower or any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) no Borrower or any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
 
3.13 Subsidiaries.  As of the Effective Date, the Borrowers have no Subsidiaries
(other than Subsidiaries that are also Borrowers).
 
3.14 Disclosure.  Each Borrower has disclosed to the Lender all agreements,
instruments and corporate or other restrictions to which it is subject, and all
other matters known
 
 
 
30
 
 

--------------------------------------------------------------------------------

 
to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf of
any Borrower to the Lender in connection with the transactions contemplated
hereby and the negotiation of this Agreement or delivered hereunder or under any
other Loan Document (in each case, as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrowers represent only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
 
3.15 Compliance with Laws.  Each Borrower is in compliance with the requirements
of all Laws and all orders, writs, injunctions and decrees applicable to it or
to its Properties, except in such instances in which (a) such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
 
3.16 Investment Company Act.  Neither any Borrower or any Person Controlling any
Borrower is or is required to be registered as an "investment company" under the
Investment Company Act of 1940.
 
3.17 Solvency.   Each of the Borrowers is and after each Credit Extension will
be Solvent.
 
3.18 Business Locations.   Set forth on Schedule 3.18(a) is a list of all
locations where any material inventory of any Borrower is located as of the
Effective Date. Set forth on Schedule 3.18(b) is the chief executive office,
taxpayer identification number and organizational identification number of each
Borrower as of the Effective Date. The exact legal name and state of
organization of each Borrower is as set forth on the signature pages hereto.
Except as set forth on Schedule 3.18(c), no Borrower has during the five years
preceding the Effective Date (i) changed its legal name, (ii) changed its state
of incorporation, or (iii) been party to a merger, consolidation or other change
in structure.
 
3.19 Labor Matters.  Except as, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect; (i) there are no strikes, lockouts
or other labor disputes pending or, to the knowledge of any Borrower, threatened
against any Borrower; (ii) hours worked by and wages paid to employees of each
Borrower have not violated the Fair Labor Standards Act or any other applicable
Law; and (iii) all payments due in respect of employee health and welfare
insurance from any Borrower have been paid or properly accrued on the books of
the relevant Borrower.
 
ARTICLE IV
AFFIRMATIVE COVENANTS
 
As long as the Loans or other Obligations hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit remains outstanding, or the Revolving
Commitment or any obligation to make advances under the Advancing Term Loan
shall remain in effect, the Borrowers shall:
 
 
 
31
 
 

--------------------------------------------------------------------------------

 
4.01 Financial Statements.  Deliver to the Lender, in form and detail
satisfactory to the Lender:
 
(a) as soon as available, but in any event within 120 days after the end of each
fiscal year of the Borrowers, a consolidated balance sheet of the Borrowers as
at the end of such fiscal year, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and prepared in accordance with GAAP,
audited and accompanied by a report and opinion of an independent certified
public accounting firm of recognized standing reasonably acceptable to the
Lender, which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any "going concern" or
like qualification or exception or any qualification or exception as to the
scope of such audit; and
 
(b) as soon as available, but in any event within 60 days after the end of each
fiscal quarter of each fiscal year of the Borrowers, a consolidated balance
sheet of the Borrowers as at the end of such fiscal quarter, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal quarter and for the portion of the fiscal year then ended,
setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and certified by a Responsible
Officer of Monarch as fairly presenting the consolidated financial position,
results of operations, shareholders' equity and cash flows of the Borrowers in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.
 
4.02 Certificates; Other Information.  Deliver to the Lender, in form and detail
satisfactory to the Lender:
 
(a) concurrently with the delivery of the financial statements referred to in
Sections 4.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of Monarch;
 
(b) within 30 days prior to the end of each fiscal year of the Borrowers, an
annual budget of the Borrowers for the following fiscal year (such budget to
contain, among other things, a budget of Capital Expenditures and pro forma
projections and financial statements of the following fiscal year and the
assumptions upon which such projections are based), together with such revisions
to such budget as may be periodically prepared;
 
(c) promptly after any request by the Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Borrowers by
its independent accountants in connection with the accounts or books of the
Borrowers, or any audit of any of them;
 
 
 
32
 
 

--------------------------------------------------------------------------------

 
(d) promptly upon transmission thereof, copies of all such financial statements,
proxy statements, material notices and reports as it shall send to its public
stockholders and copies of all registration statements (without exhibits) and
all reports which it files with the Securities and Exchange Commission;
provided, however, that Borrowers shall be deemed to have satisfied the
requirements of this clause (d) insofar as the items required pursuant to this
clause (d) have been filed with the Securities and Exchange Commission and are
publicly available pursuant to EDGAR or any replacement electronic filing
system;
 
(e) promptly after the furnishing thereof, copies of any material statement or
report furnished to any holder of debt securities of any Borrower pursuant to
the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lender pursuant to Section 4.01 or any
other clause of this Section 4.02; and
 
(f) promptly, such additional information regarding the business, financial or
corporate affairs of the Borrowers, or compliance with the terms of the Loan
Documents, as the Lender may from time to time reasonably request.
 
4.03 Notices.
 
(a) Within two Business Days after a Responsible Officer obtains knowledge
thereof, notify the Lender of the occurrence of any Default.
 
(b) Promptly notify the Lender of any matter that has resulted or could
reasonably be expected to result in a Material Adverse Effect, including (i) any
breach or non-performance of, or any default under, a Contractual Obligation of
any Borrower; (ii) any dispute, litigation, investigation, proceeding or
suspension between any Borrower and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting any Borrower, including pursuant to any applicable Environmental Laws.
 
(c) Promptly notify the Lender of (i) any change of the legal name, corporate
structure, jurisdiction of incorporation, organization or formation (as
applicable), or organizational identification number of any Borrower, or (ii)
the formation or Acquisition of any Subsidiary that is required to become a
Borrower.
 
(d) Promptly notify the Lender of (i) any Disposition (other than a Permitted
Transfer), or (ii) any Involuntary Disposition.
 
(e) Promptly notify the Lender of the occurrence of any ERISA Event.
 
(f) Promptly notify the Lender of any material change in accounting policies or
financial reporting practices by the Borrowers.
 
Each notice pursuant to this Section 4.03(a) through (f) shall be accompanied by
a statement of a Responsible Officer of Monarch setting forth details of the
occurrence referred to therein and stating what action the Borrowers have taken
and proposes to take with respect
 
 
 
33
 
 

--------------------------------------------------------------------------------

 
thereto. Each notice pursuant to Section 4.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.
 
4.04 Payment of Obligations.  Pay and discharge, as the same shall generally
become due and payable, all its obligations and liabilities, except where the
failure to pay or discharge such obligations or liabilities could not reasonably
be expected to have a Material Adverse Effect, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrowers, and (b) all lawful claims
which, if unpaid, would by law become a Lien upon any of their Properties (other
than a Permitted Lien).
 
4.05 Preservation of Existence and Rights.
 
(a) Preserve, renew and maintain in full force and effect their legal existence
and good standing under the Laws of the jurisdiction of each Borrower's
incorporation, except as a result of mergers, dissolutions or other transactions
permitted pursuant to Section 5.04.
 
(b) Maintain all rights, privileges, permits, licenses and franchises necessary
or desirable in the normal conduct of their business, except to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
 
(c) Preserve or renew all of their material registered patents, copyrights,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
 
4.06 Maintenance of Properties.
 
(a) Maintain, preserve and protect all of its material Properties and equipment
necessary in the operation of their business in good working order and
condition, ordinary wear and tear excepted.
 
(b) Make all necessary repairs thereto and renewals and replacements thereof,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
 
(c) Use the standard of care typical in the industry in the operation and
maintenance of its facilities.
 
4.07 Maintenance of Insurance.  The Borrowers will keep all property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.  The Borrowers will maintain (i) casualty insurance on all real
and personal property on an all risks basis (including the perils of flood and
quake), covering the repair and replacement cost of all such property and
coverage for business interruption and public liability insurance (including
products/completed operations liability coverage) in each case of the kinds
customarily carried or maintained by Persons of established reputation engaged
in similar businesses and in amounts reasonably acceptable to the Lender and
(ii) such other insurance coverage in such amounts and
 
 
 
34
 
 

--------------------------------------------------------------------------------

 
with respect to such risks as the Lender may reasonably request; provided,
however, that in no event shall any Subsidiary of Monarch be required to obtain
business interruption insurance.  All such insurance shall be provided by
insurers having an A.M. Best policyholders rating reasonably acceptable to the
Lender.  The Borrowers will not bring or keep any article on any business
location of any Borrower, or cause or allow any condition to exist, if the
presence of such article or the occurrence of such condition could reasonably
cause the invalidation of any insurance required by this 4.07, or would
otherwise be prohibited by the terms thereof.  On or prior to the Effective
Date, and at all times thereafter, the Borrowers will cause the Lender to be
named as an additional insured, assignee and loss payee (which shall include, as
applicable, identification as mortgagee), as applicable, on each insurance
policy required to be maintained pursuant to this 4.07 pursuant to endorsements
in form and content acceptable to the Lender.  The Borrowers will deliver to the
Lender (i) on the Effective Date, a certificate from the Borrowers' insurance
broker dated such date showing the amount of coverage as of such date, and that
such policies will include effective waivers (whether under the terms of any
such policy or otherwise) by the insurer of all claims for insurance premiums
against all loss payees and additional insureds and all rights of subrogation
against all loss payees and additional insureds, and that if all or any part of
such policy is canceled, terminated or expires, the insurer will forthwith give
notice thereof to each additional insured, assignee and loss payee and that no
cancellation, reduction in amount or material change in coverage thereof shall
be effective until at least thirty (30) days after receipt by each additional
insured, assignee and loss payee of written notice thereof, (ii) on an annual
basis, and upon the request of Lender from time to time full information as to
the insurance carried, (iii) within five (5) days of receipt of notice from any
insurer, a copy of any notice of cancellation, nonrenewal or material change in
coverage from that existing on the date of this Agreement and (iv) forthwith,
notice of any cancellation or nonrenewal of coverage by the Borrowers.  In the
event the Borrowers fail to provide the Lender with evidence of the insurance
coverage required by this Agreement, the Lender may purchase insurance at the
Borrowers' expense to protect the Lender's interests in the Collateral.  This
insurance may, but need not, protect the Borrowers' interests.  The coverage
purchased by the Lender may not pay any claim made by any Borrower or any claim
that is made against any Borrower in connection with the Collateral.  The
Borrowers may later cancel any insurance purchased by the Lender, but only after
providing the Lender with evidence that the Borrowers have obtained insurance as
required by this Agreement.  If the Lender purchases insurance for the
Collateral, to the fullest extent provided by law the Borrowers will be
responsible for the costs of that insurance, including interest and other
charges imposed by the Lender in connection with the placement of the insurance,
until the effective date of the cancellation or expiration of the
insurance.  The costs of the insurance may be added to the Obligations.  The
costs of the insurance may be more than the cost of insurance the Borrowers are
able to obtain on their own.
 
4.08 Compliance with Laws.  Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
 
 
 
35
 
 

--------------------------------------------------------------------------------

 
4.09 Books and Records.
 
(a) Maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions of the Borrowers.
 
(b) Maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrowers.
 
4.10 Inspection Rights.
 
(a) Permit the Lender to visit and inspect any of their properties, to examine
its corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss their affairs, finances and accounts with
its directors, officers, and independent public accountants, all at the expense
of the Borrowers and at such reasonable times during normal business hours and
as often as may be reasonably desired, upon reasonable advance notice to the
Borrowers; provided, however, that when an Event of Default exists the Lender
(or any of its representatives or independent contractors) may do any of the
foregoing at the expense of the Borrowers at any time during normal business
hours and without advance notice.
 
(b) Permit the Lender, through its authorized representatives (who need not be
employees of the Lender), during normal business hours and upon reasonable
advance notice to the Borrowers, to conduct periodic field audits of the
Borrowers to review their operations, books and records, credit policies,
charge-off policies, collection procedures, methodology for eligibility
calculations, and other matters relating to the value and maintenance of the
Borrowers' Accounts and inventory.  Except after the occurrence and during the
continuation of any Default, field audits will be conducted no more than once
per year, at the Lender's discretion.  The cost of each field audit shall be
reasonable and in accordance with standard industry practices, and so long as an
Event of Default exists at the time of any such audit, the Borrowers will
reimburse the Lender for all reasonable costs and expenses incurred by the
Lender in connection with such field audit.
 
4.11 Use of Proceeds.  Use the proceeds of the Credit Extensions solely for the
purposes set forth in Section 2.02.  In no event shall the proceeds of the
Credit Extensions be used in contravention of any Law or of any Loan Document.
 
4.12 Additional Subsidiaries.  Within 30 days after the Acquisition or formation
of any Subsidiary (other than a Subsidiary which is acquired or formed pursuant
to an Investment permitted by Section 5.02(g) and which is not a Wholly-Owned
Subsidiary):
 
(a) notify the Lender thereof in writing, together with (i) the jurisdiction of
formation, (ii) the number of shares of each class of Equity Interests
outstanding, (iii) the number and percentage of outstanding shares of each class
owned (directly or indirectly) by the applicable Borrower(s) and (iv) the number
and effect, if exercised, of all outstanding options, warrants, rights of
conversion or purchase and all other similar rights with respect thereto; and
 
 
 
36
 
 

--------------------------------------------------------------------------------

 
(b) cause such Person to (i) become a Borrower by executing and delivering to
the Lender a Joinder Agreement or such other documents as the Lender shall deem
appropriate for such purpose, (ii) deliver to the Lender documents of the types
of documents necessary to become a party to the necessary Collateral Documents,
as determined by the Lender, and (iii) execute and deliver to the Lender the
Collateral Documents contemplated by Section 2.11(b), all in form, content and
scope reasonably satisfactory to the Lender.
 
4.13 ERISA Compliance.  Do, and cause each of its ERISA Affiliates to do, each
of the following: (a) maintain each Plan in compliance in all material respects
with the applicable provisions of ERISA, the Internal Revenue Code and other
Federal or state law; (b) cause each Plan that is qualified under Section 401(a)
of the Internal Revenue Code to maintain such qualification; and (c) make all
required contributions to any Plan subject to Section 412 of the Internal
Revenue Code.
 
4.14 Perfection and Preservation of Collateral. Cause the Lender to have an
Acceptable Security Interest in each item or type of Property included (or
intended to be included) in the Collateral, subject to any exceptions which may
be expressly provided in any Loan Document.
 
ARTICLE V
NEGATIVE COVENANTS
 
So long as any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, or the Revolving
Commitment or any obligation to make advances under the Advancing Term Loan
shall remain in effect, no Borrower shall, directly or indirectly:
 
5.01 Liens.  Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
 
(a) Liens pursuant to any Loan Document;
 
(b) Liens existing on the date hereof and listed on Schedule 5.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not expanded, (ii) the amount secured or benefited thereby is not increased,
and (iii) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 5.03(c);
 
(c) Excepted Liens;
 
(d) any interest of title of a lessor under, and Liens arising from UCC
financing statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, leases permitted by this Agreement;
 
(e) Liens deemed to exist in connection with Investments in repurchase
agreements permitted under Section 5.02;
 
 
 
37
 
 

--------------------------------------------------------------------------------

 
(f) normal and customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions;
 
(g) Liens of a collecting bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection; and
 
(h) Liens in connection with Indebtedness permitted under Section 5.03(h), but
Indebtedness in connection with such Liens shall not exceed $500,000 in the
aggregate.
 
5.02 Investments.  Purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Wholly-Owned Subsidiary prior to such merger) any
capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any Indebtedness of, or make
or permit to exist any investment or any other interest in, any other Person,
except:
 
(a) Investments held by the Borrowers in the form of cash or Cash Equivalents;
 
(b) advances to officers, directors and employees of any Borrower or any
Subsidiary in an aggregate amount not to exceed $100,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
 
(c) Investments existing as of the date of this Agreement and set forth in
Schedule 5.02;
 
(d) Investments in any Person that is a Borrower prior to giving effect to such
Investment;
 
(e) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;
 
(f) Guarantees permitted by Section 5.03;
 
(g) Acquisitions permitted under Section 5.05;
 
(h) Investments in publicly-traded companies not Affiliates of the Borrowers
listed on a U.S. national stock exchange; and
 
(i) To the extent constituting Investments, transactions (including any
consideration received in connection with transactions) permitted by Sections
5.03, 5.04, 5.07, 5.08 and 5.09.
 
5.03 Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness,
except:
 
 
 
38
 
 

--------------------------------------------------------------------------------

 
(a) Indebtedness under the Loan Documents and other Indebtedness owing to the
Lender or any of its Affiliates;
 
(b) intercompany Indebtedness of any Borrower owing to another Borrower;
 
(c) Indebtedness outstanding as of the date of this Agreement and set forth in
Schedule 5.03 (including, in the case of any such Indebtedness that constitutes
revolving credit, letter of credit or other  Indebtedness that is not fully
disbursed, funded or drawn upon on the Effective Date, any disbursements,
fundings or drawings under such Indebtedness after the Effective Date), together
with any renewals, extensions, refinancings or replacements of such
Indebtedness, provided that amount of such Indebtedness is not increased as the
result of such renewals, extensions, refinancing or replacements;
 
(d) obligations (contingent or otherwise) of the Borrowers existing or arising
under any Swap Contract, provided that (i) such obligations are (or were)
entered into by such Person in the ordinary course of business for the purpose
of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a "market view;" and (ii) such Swap Contract
does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;
 
(e) to the extent constituting Indebtedness, accounts payable and rentals
payable under operating leases incurred in the ordinary course of business which
are not more than 60 days past due, unless such payables are being contested in
good faith by a Borrower and adequate reserves are maintained in accordance with
GAAP;
 
(f) Guarantees with respect to Indebtedness permitted under clauses (a) through
(f) of this Section 5.03;
 
(g) to the extent constituting Indebtedness, inventory that is prepaid and which
is accounted for as an accrued liability on a Borrower's balance sheet; and
 
(h) any other Indebtedness, provided that the Borrowers' aggregate Indebtedness
permitted under this clause (h)—when combined with the aggregate amount of
Indebtedness permitted under clauses (c) and (d) above (other than, in the case
of clause (d), Indebtedness owing to the Lender or any of its Affiliates)—may
not exceed $2,500,000 at any time.
 
5.04 Mergers; Fundamental Changes.
 
(a) Merge, dissolve, liquidate, consolidate with or into another Person, or
Dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person; provided that, notwithstanding the foregoing provisions
of this Section 5.04 but subject to the terms of Sections 4.12 and 4.14, (a) any
Borrower may merge or consolidate with any other Borrower, (b) any Subsidiary of
a Borrower, including any Subsidiary that is not a
 
 
 
39
 
 

--------------------------------------------------------------------------------

 
Wholly-Owned Subsidiary, may merge or consolidate with any Borrower provided
that such Borrower is the continuing or surviving entity, and (c) so long as no
Default exists, any Borrower other than Monarch may dissolve, liquidate or wind
up its affairs at any time provided that such dissolution, liquidation or
winding up, as applicable, could not reasonably be expected to have a Material
Adverse Effect.
 
(b) Engage in any material line of business substantially different from those
lines of business conducted by the Borrowers on the date of this Agreement or
any business substantially related or incidental thereto.
 
5.05 Acquisitions.  Make any Acquisition unless the purchase price is payable
solely in Equity Interests of Monarch or any other Borrower; provided, however,
the Borrower may make any Acquisition so long as no Event of Default exists or
would result therefrom.
 
5.06 Dispositions.  Make any Disposition, except for Permitted Transfers.
 
5.07 Restricted Payments.  So long as any Event of Default exists or would
result therefrom, declare or make, directly or indirectly, any Restricted
Payment or incur any obligation (contingent or otherwise) to do so, except that:
 
(a) each Borrower that is a Subsidiary of another Borrower may make and pay any
Restricted Payment to such parent Borrower and any other Person that owns an
Equity Interest in such Subsidiary, ratably according to their respective
holdings of the type of Equity Interest in respect of which such Restricted
Payment is being made;
 
(b) the Borrowers may declare and make Restricted Payments payable solely in
their Equity Interests; and
 
(c) the Borrowers may purchase, redeem or otherwise acquire their outstanding
Equity Interests with proceeds received from the substantially concurrent issue
of new Equity Interests.
 
5.08 Transactions with Affiliates and Insiders.  Enter into or permit to exist
any transaction or series of transactions with any officer, director or
Affiliate of such Person other than:
 
(a) advances of working capital to any Borrower;
 
(b) transfers of cash and assets to any Borrower;
 
(c) intercompany transactions expressly permitted by Section 5.02, Section 5.03,
Section 5.04 or Section 5.05;
 
(d) normal and reasonable compensation and reimbursement of expenses of officers
and directors;
 
(e) any issuance of Equity Interests of such Person pursuant to the exercise of
options or warrants, or any issuance of Equity Interests of such Person pursuant
to the
 
 
 
40
 
 

--------------------------------------------------------------------------------

 
conversion of any debt securities to equity or the conversion of any class
equity securities to any other class of equity securities, or any issuance of
options or warrants relating to Equity Interests of such Person, including any
issuance under any executive incentive compensation plan; or
 
(f) except as otherwise specifically limited in this Agreement, other
transactions which are on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arm's-length
transaction with a Person other than an officer, director or Affiliate.
 
5.09 Burdensome Agreements.  Enter into, or permit to exist, any Contractual
Obligation that prohibits or otherwise restricts the existence of any Lien upon
any of its Property in favor of the Lender for the purpose of securing the
Obligations, whether now owned or hereafter acquired, or requiring the grant of
any security for any obligation if such Property is given as security for the
Obligations, except (i) in connection with any Permitted Lien or any document or
instrument governing any Permitted Lien, provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien and (ii) pursuant to customary restrictions and conditions contained in any
agreement relating to the sale of any property permitted under Section 5.05,
pending the consummation of such sale.
 
5.10 Prepayment of Other Indebtedness, Etc.
 
(a) Amend or modify any of the terms of any Indebtedness of the Borrowers (other
than Indebtedness arising under the Loan Documents) if such amendment or
modification would add or change any terms in a manner adverse to the Borrowers,
or shorten the final maturity or average life to maturity or require any payment
to be made sooner than originally scheduled or increase the interest rate
applicable thereto.
 
(b) Make (or give any notice with respect thereto) any voluntary or optional
payment or prepayment or redemption or acquisition for value of (including
without limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any Indebtedness of the Borrowers (other than
Indebtedness arising under the Loan Documents) in excess of $250,000.
 
5.11 Organizational Documents; Fiscal Year, Legal Name, State of Incorporation
or Formation and Form of Entity.
 
(a) Amend, modify or change its Organizational Documents in a manner adverse to
the Lender.
 
(b) Change its fiscal year.
 
(c) Without providing 10 days' prior written notice to the Lender, change its
name, state of incorporation or formation or form of organization.
 
5.12 Sale Leasebacks.  Enter into any Sale and Leaseback Transaction.
 
 
 
41
 
 

--------------------------------------------------------------------------------

 
5.13 Foreign Subsidiaries.  Form or acquire any Subsidiary that is not organized
under the Laws of the United States or any State thereof.
 
ARTICLE VI
FINANCIAL COVENANTS
 
So long as any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, or the Revolving
Commitment shall remain in effect, the Borrowers shall not:
 
6.01 Minimum Tangible Net Worth Before Other Comprehensive Income.  Permit their
consolidated tangible net worth before Other Comprehensive Income as of the end
of any fiscal quarter of the Borrowers to be less than $95,000,000.
 
6.02 Minimum Tangible Net Worth After Other Comprehensive Income.  Permit their
consolidated tangible net worth after Other Comprehensive Income as of the end
of any fiscal quarter of the Borrowers to be less than $85,000,000.
 
For purposes of this Article VI, "Other Comprehensive Income" means the
"accumulated other comprehensive income (loss)" as presented in the most
recently available consolidated financial statements of the Borrowers.
 
ARTICLE VII
CONDITIONS PRECEDENT
 
7.01 Conditions to Closing.  The obligation of the Lender to enter into this
Agreement and extend the Revolving Commitment hereunder is subject to the
Borrowers' satisfaction of the following conditions precedent as of or prior to
the Effective Date:
 
(a) Loan Documents.  The Lender shall have received executed counterparts of
this Agreement and the other Loan Documents, each properly executed by a
Responsible Officer of each Borrower.
 
(b) Organizational Documents and Resolutions.  The Lender shall have received
the following, each of which shall be originals or facsimiles (followed promptly
by originals), in form and substance satisfactory to the Lender and its legal
counsel:
 
(i) copies of the Organizational Documents of each Borrower certified to be true
and complete as of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation or organization, where
applicable, and certified by a secretary or assistant secretary of such Borrower
to be true and correct as of the Effective Date;
 
(ii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Borrower as the Lender
may require evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in
 
 
 
42
 
 

--------------------------------------------------------------------------------

 
 
connection with this Agreement and the other Loan Documents to which such
Borrower is a party; and
 
(iii) such documents, certifications or evidence as the Lender may reasonably
require to evidence that each Borrower is duly incorporated or organized, and is
validly existing, in good standing and qualified to engage in business in its
state of incorporation, organization or formation, the state of its principal
place of business and each other jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect.
 
(c) Perfection and Priority of Liens.  The Lender shall have received:
 
(i) fully executed copies of all Collateral Documents and other policies,
certificates and documents described or referred to in Section 2.11;
 
(ii) evidence that no Liens exist on any of the Collateral or other Property of
the Borrowers, other than Permitted Liens (such evidence to include Uniform
Commercial Code termination statements with respect to all effective financing
statements covering any portion of the Personal Property Collateral); and
 
(iii) if any Collateral is at any time in the possession or control of a
warehouseman, bailee or any agent or processor of any Borrower and the Lender so
requests, a notification from such Person in writing of the Lender's security
interest therein, instructing such Person to hold all such Collateral for the
Lender's account and subject to the Lender's instructions and a written
acknowledgment from such Person that it is holding such Collateral for the
benefit of the Lender.
 
(d) Evidence of Insurance. The Lender shall have received copies of insurance
policies or certificates of insurance of the Borrowers evidencing liability and
casualty insurance meeting the requirements set forth in the Loan Documents,
including, but not limited to, naming the Lender as additional insured (in the
case of liability insurance) or loss payee (in the case of hazard insurance).
 
(e) Closing Certificate.  The Lender shall have received a certificate, dated
the Effective Date and signed by a Responsible Officer of the Borrowers,
certifying that the conditions specified in Section 7.01 and Sections 7.02 have
been satisfied.
 
(f) Financial Statements.  The Lender shall have received:
 
(i) the Audited Financial Statements; and
 
(ii) unaudited consolidated financial statements of the Borrowers for the fiscal
quarter ending September 30, 2012, including balance sheets and statements of
income or operations, shareholders' equity and cash flows (the "Interim
Financial Statements").
 
 
43
 
 

--------------------------------------------------------------------------------

 
(g) Accrued Interest.  The Borrowers shall have paid all accrued but unpaid
interest arising under the Existing Loan Agreement and the Term Note.
 
(h) No Material Adverse Change.  There shall not have occurred any material
adverse change since the effective date of the Audited Financial Statements in
the business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrowers, taken as a whole.
 
(i) Litigation.  There shall not exist any action, suit, investigation or
proceeding pending or threatened in any court or before an arbitrator or
Governmental Authority that could reasonably be expected to have a Material
Adverse Effect.
 
(j) Attorneys' Fees and Expenses.  The Borrowers shall have paid all reasonable
fees and disbursements of counsel to the Lender incurred in connection with the
negotiation, documentation and closing of this Agreement and the lending
transactions contemplated hereby, to the extent invoiced prior to or on the
Effective Date.
 
7.02 Conditions to all Credit Extensions.
 
The obligation of the Lender to honor any request for Credit Extension is
subject to the following conditions precedent:
 
(a) The representations and warranties of the Borrowers contained in Article III
or any other Loan Document, or which are contained in any document furnished at
any time under or in connection herewith or therewith, shall be true and correct
on and as of the date of such Credit Extension, except (i) to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct as of such earlier date, (ii) that,
for purposes of this Section 7.02, the representations and warranties contained
in subsections (a) and (b) of Section 3.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 4.01, and (iii) for changes resulting from transactions occurring after
the Effective Date that are permitted under this Agreement.
 
(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.
 
(c) The Lender shall have received a Loan Notice or Notice of LC Credit Event in
accordance with the requirements hereof.
 
Each request for a Credit Extension submitted by the Borrowers shall be deemed
to be a representation and warranty that the conditions specified in Sections
7.02(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.
 
 
ARTICLE VIII
EVENTS OF DEFAULT
 
8.01 Events of Default.  Any of the following shall constitute an Event of
Default:
 
 
 
44
 
 

--------------------------------------------------------------------------------

 
 
(a) Non-Payment.  If any Borrower fails to pay (i) within five days when and as
required to be paid herein, any amount of principal of or interest on any Loan
or any Letter of Credit Obligation, or any fee due hereunder, or (ii) within 10
days after the same becomes due, any other amount payable hereunder or under any
other Loan Document; or
 
(b) Specific Covenants.  If any Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 4.01, 4.02, 4.03, 4.05, 4.10,
4.11, 4.12 or 4.14 or Article V or Article VI; or
 
(c) Pledge Agreement.  If Monarch fails to perform or observe any covenant or
agreement contained in the Pledge Agreement, including the obligation to
maintain at least the Minimum Balance (as defined in the Pledge Agreement) in
the Pledged Account; or
 
(d) Other Defaults.  If any Borrower fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in this Agreement or in any other Loan Document on its part to be performed or
observed and such failure continues for 30 days after Monarch receives written
notice thereof from the Lender (or, if earlier, when a Responsible Officer
obtains knowledge of such failure); or
 
(e) Representations and Warranties. If any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of any
Borrower herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading in any
material respect when made or deemed made; or
 
(f) Cross-Default.  If (i) any Borrower (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness
hereunder and Indebtedness under Swap Contracts) having an aggregate principal
amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement) of
more than $250,000, or (B) fails to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; or (ii) there occurs under any
Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (A) any event of default under such Swap Contract as to which the
Borrowers is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which any
 
 
 
45
 
 

--------------------------------------------------------------------------------

 
Borrower is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by such Borrower as a result thereof is greater than
$500,000; or
 
(g) Insolvency Proceedings.  If any Borrower institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
days; or any proceeding under any Debtor Relief Law relating to any such Person
or to all or any material part of its property is instituted without the consent
of such Person and continues undismissed or unstayed for more than 60 days, or
an order for relief is entered in any such proceeding; or
 
(h) Inability to Pay Debts; Attachment.  If (i) any Borrower becomes unable or
admits in writing its inability or fails generally to pay its debts as they
become due, or (ii) any writ or warrant of attachment or execution or similar
process is issued or levied against all or any material part of the property of
any such Person and is not released, vacated or fully bonded within thirty days
after its issue or levy; or
 
(i) Judgments.  If there is entered against any Borrower (i) one or more final
judgments or orders for the payment of money in an aggregate amount exceeding
$250,000 (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of ten consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or
 
(j) ERISA.  If (i) an ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of any Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $500,000 for
any calendar year, or (ii) any Borrower or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of $500,000; or
 
(k) Invalidity of Loan Documents. If any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; or any Borrower or any other Person contests in
any manner the validity or enforceability of any Loan Document; or any Borrower
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document, or any
Lien with respect to any material portion of the
 
 
 
46
 
 

--------------------------------------------------------------------------------

 
Collateral intended to be secured thereby ceases to be, or subject to Section
5.01, is not, valid, perfected and prior to all other Liens or is terminated,
revoked or declared void; or
 
(l) Change of Control.  If any Change of Control shall occur.
 
8.02 Remedies Upon Event of Default.  Upon the occurrence of any Event of
Default or at any time thereafter, the Lender may take any or all of the
following actions:
 
(a) declare the Revolving Commitment and any obligation of the Lender to make
further Revolving Loans or Letter of Credit extensions to be terminated;
 
(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers;
 
(c) require that the Borrowers Cash Collateralize the Letter of Credit
Liabilities (in an amount equal to the then Outstanding Amount thereof);
 
(d) realize or foreclose upon the Collateral or any portion or part of the
Collateral in any order; and
 
(e) exercise all rights and remedies available to it under the Loan Documents or
applicable Law;
 
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the
United States, the obligation of the Lender to make Revolving Loans and any
obligation of the Lender to make Letter of Credit extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, and
the obligation of any Borrower to Cash Collateralize the Letter of Credit
Liabilities as aforesaid shall automatically become effective, in each case
without further act of the Lender.
 
8.03 Application of Funds.  After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the Letter of Credit Liabilities have automatically been required to
be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Lender in the
following order.
 
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Lender and amounts payable under Article VII)
payable to the Lender;
 
Second, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit fees and interest on the Loans and L/C Borrowings and
interest accrued on any other Obligations owing to the Lender (or any Affiliate
of the Lender);
 
 
 
47
 
 

--------------------------------------------------------------------------------

 
 
Third, to payment of any amounts due under any Swap Contract between any
Borrower and the Lender (or any Affiliate of the Lender), including payment of
breakage, termination or other payments and any interest accrued thereon;
 
Fourth, to (a) payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, and (b) Cash Collateralize that
portion of Letter of Credit Liabilities comprised of the aggregate undrawn
amount of Letters of Credit;
 
Fifth, to the payment of amounts due under any Capital Lease between any
Borrower and the Lender (or any Affiliate of the Lender);
 
Sixth, to payment of amounts due under any Treasury Management Agreement between
any Borrower and the Lender (or any Affiliate of the Lender);
 
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to Borrowers or as otherwise required by Law.
 
Subject to Section 2.04(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
 
8.04 Marshalling; Waivers.  Each Borrower waives any right it may have to
require marshaling of assets or Collateral for repayment of the Obligations in
the event of the occurrence of any Event of Default. Each Borrower waives any
and all rights it may have under 12 Okla. Stat. § 686 or any other applicable
law that may require or arguably require the Lender to proceed first against any
Collateral or portion of the Collateral in lieu of or prior to proceeding
against the Borrowers.  Each Borrower also waives any right under 12 Okla. Stat.
§ 686 or under any other applicable law to obtain credit for the fair market
value of the Property secured by any of the Collateral Documents, even if such
Collateral Document is released by the Lender, unless the Lender forecloses the
particular Lien represented by such Collateral Document and the Property
encumbered by such Collateral Document is sold at sheriff's sale or by power of
sale pursuant to such Collateral Document. The terms of this Section 8.04 shall
survive any release of any Collateral Document and shall remain in effect
between the Lender and the Borrowers as long as any Obligations exist in any
form.
 
ARTICLE IX
EXPENSES AND INDEMNITY
 
9.01 Cost and Expenses. The Borrowers shall pay (i) all reasonable out-of-pocket
expenses incurred by the Lender and its Affiliates (including the reasonable
fees, charges and disbursements of counsel for the Lender, but not to exceed
$6,000), in connection with the preparation, negotiation, execution, delivery
and administration of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all reasonable out-of-pocket expenses incurred by the
Lender (including the fees, charges
 
 
48
 
 

--------------------------------------------------------------------------------

 
and disbursements of any counsel for the Lender) in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Loan, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of the Loans.
 
9.02 Indemnification. The Borrowers shall indemnify the Lender and each Related
Party of the Lender (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements
of any counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all fees and time charges and disbursements for attorneys who
may be employees of any Indemnitee, incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Borrowers arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, the administration of this Agreement and the
other Loan Documents, (ii) the Loans or the use or proposed use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrowers, or any
Environmental Liability related in any way to the Borrowers or (iv) any actual
or prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrowers, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence, willful misconduct or bad faith of such Indemnitee or (y) result
from a claim brought by the Borrowers against an Indemnitee for breach of such
Indemnitee's obligations hereunder or under any other Loan Document, if the
Borrowers have obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.
 
9.03 Increased Cost and Reduced Return; Capital Adequacy.  If, after the
Effective Date, any Change in Law: (1) shall impose, modify or deem applicable
any reserve (including any reserve imposed by the FRB, or any successor
thereto), special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by the Lender; or (2) shall impose on the Lender any
other condition affecting the Notes; and the result of anything described in
clauses (1) above and (2) is to reduce the amount of any sum received or
receivable by the Lender under this Agreement or under any of the Notes with
respect thereto, then upon demand by the Lender (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Lender), the Borrowers shall promptly pay to the Lender such
additional amount as will compensate the Lender for such increased cost or such
reduction, so long as such amounts have accrued on or after the day which is two
hundred seventy (270) days prior to the date on which the Lender first made
demand therefor.
 
9.04 Taxes.
 
 
 
49
 
 

--------------------------------------------------------------------------------

 
 
(a) Any and all payments by the Borrowers to or for the account of the Lender
under any Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities with
respect thereto, excluding, in the case of the Lender, taxes imposed on or
measured by its overall net income and franchise taxes imposed on it by the
jurisdiction (or any political subdivision thereof) under the Laws of which the
Lender is organized or maintains a lending office (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as "Taxes"). If any
Borrower shall be required by any Laws to deduct any Taxes from or in respect of
any sum payable under any Loan Document to the Lender, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
9.04), the Lender receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Borrower shall make such deductions,
(iii) such Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws, and (iv) within
30 days after the date of such payment, such Borrower shall furnish to the
Lender the original or a certified copy of a receipt evidencing payment thereof.
 
(b) In addition, the Borrowers agree to pay any and all present or future stamp,
court or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Loan Document or from
the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as "Other
Taxes").
 
(c) If a Borrower shall be required to deduct or pay any Taxes or Other Taxes
from or in respect of any sum payable under any Loan Document to the Lender,
such Borrower shall also pay to the Lender, at the time interest is paid, such
additional amount that the Lender specifies is necessary to preserve the
after-tax yield (after factoring in all taxes, including taxes imposed on or
measured by net income) that the Lender would have received if such Taxes or
Other Taxes had not been imposed.
 
(d) The Borrowers agree to indemnify the Lender for (i) the full amount of Taxes
and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 9.04) paid by the Lender,
(ii) amounts payable under Section 9.04(c) and (iii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this subsection (d) shall be made within 30 days after the date
the Lender makes a demand therefor.
 
9.05 Matters Applicable to all Requests for Compensation.  A certificate of the
Lender claiming compensation under Section 9.03 or 9.04 and setting forth the
calculation of the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error. In determining such amount, the
Lender may use any reasonable averaging and attribution methods.
 
 
 
50
 
 

--------------------------------------------------------------------------------

 
9.06 Payments.  All amounts due under this Article IX shall be payable not later
than ten Business Days after demand therefor.
 
9.07 Survival.  All obligations of the Borrowers under this Article XI shall
survive the termination of the Revolving Commitment and the repayment of all
Obligations hereunder.
 
ARTICLE X
[INTENTIONALLY OMITTED.]
 
ARTICLE XI
MISCELLANEOUS
 
11.01 Amendments.  No amendment or waiver of any provision of this Agreement or
any other Loan Document, and no consent to any departure by the Borrowers
therefrom, shall be effective unless in writing signed by the Lender and the
Borrowers, and each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
 
11.02 Notices and Other Communications; Facsimile Copies.
 
(a) Notices Generally.  Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:
 
(i) if to the Borrowers:
 
c/o The Monarch Cement Company
449 1200 Street
Humboldt, Kansas  66748
Attention: Debra Roe, Chief Financial Officer
Telephone: (620) 473-2225
Telecopier: (620) 473-2447
Email: debbie.roe@monarchcement.com
 
(ii) if to the Lender:
 
Bank of Oklahoma
Bank of Oklahoma Tower
P. O. Box 2300
Tulsa, Oklahoma  74102-2300
Attention:  Paul Johnson
Telephone: (918) 588-6490
Telecopier: (918) 295-0400
Email: PJohnson@bokf.com
 
 
51
 
 

--------------------------------------------------------------------------------

 

Notices sent by hand or overnight courier service, or mailed by certified mail,
shall be deemed to have been given when received. Notices sent by telecopier
shall be deemed to have been given when sent (except that, if not given during
normal business hours for the recipient, shall be deemed to have been given at
the opening of business on the next business day for the recipient). Notices and
other communications sent to an email address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return email or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient. Any notice or other communication given
as set forth above shall be deemed notice to all of the Borrowers.
 
(b) Change of Address.  Any of the Borrowers or the Lender may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the other party hereto.
 
11.03 No Waiver; Cumulative Remedies.  No failure by the Lender to exercise, and
no delay by the Lender in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
 
11.04 Right of Setoff.  To the extent that any payment by or on behalf of any
Borrower is made to the Lender, or the Lender exercises its right of setoff, and
such payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred.
 
11.05 Successors and Assigns.  The provisions of this Agreement and the other
Loan Documents shall be binding upon and inure to the benefit of the parties
hereto and thereto and their respective successors and assigns permitted hereby,
except that the Borrowers may not assign or otherwise transfer any of their
rights or obligations hereunder or thereunder.  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
any participants in the Loans (to the extent provided in Section 11.06), and the
Related Parties of the Lender) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
 
11.06 Participations.  The Lender may at any time, without the consent of, or
notice to, the Borrowers, sell participations to any Person (each, a
"Participant") in all or a portion of the Lender's rights and/or obligations
under this Agreement (including all or a portion of its Revolving Commitment
and/or the Loans owing to it); provided that (i) the Lender's obligations
 
52
 
 

--------------------------------------------------------------------------------

 
 
under this Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the Borrowers for the performance of such obligations, and (iii)
the Borrowers shall continue to deal solely and directly with the Lender in
connection with its rights and obligations under this Agreement.  The Borrowers
agree that, subject to the terms of the agreements of participation, each
Participant will be entitled to rely on the terms of this Agreement and the
other Loan Documents as fully as if such Participant had been named as the
holder of the Notes and a party to the other Loan Documents.
 
11.07 Confidential Information.  The Lender agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates' respective
partners, directors, officers, employees, agents, advisors and representatives
and to any direct or indirect contractual counterparty (or such contractual
counterparty's professional advisor) under any Swap Contract relating to Loans
outstanding under this Agreement (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section 11.07, to (i) any Participant
in, or any prospective Participant in, any of its rights or obligations under
this Agreement or (ii) any actual or prospective counterparty (or its advisors)
to any swap or derivative transaction relating to a Borrower and its
obligations, or (g) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this Section 11.07 or (y)
becomes available to the Lender or any of its Affiliates on a nonconfidential
basis from a source other than a Borrower.  For purposes of this Section 11.07,
"Information" means all information received from a Borrower relating to the
Borrowers or any of their respective businesses, other than any such information
that is available to the Lender on a nonconfidential basis prior to disclosure
by such Borrower. Any Person required to maintain the confidentiality of
Information as provided in this Section 11.07 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
 
11.08 Set-off.  If an Event of Default shall have occurred and be continuing,
the Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by applicable law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by the Lender or any such Affiliate to or for the
credit or the account of any Borrower against any and all of the obligations of
such Borrower now or hereafter existing under this Agreement or any other Loan
Document to the Lender, irrespective of whether or not the Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of such Borrower may be contingent or unmatured or are owed to
a branch or office of the Lender different from the branch or office holding
such deposit or obligated on such indebtedness. The rights of the Lender
 
 
 
53
 
 

--------------------------------------------------------------------------------

 
and its Affiliates under this Section 11.08 are in addition to other rights and
remedies (including other rights of setoff) that the Lender or its Affiliates
may have. The Lender agrees to notify the Borrowers promptly after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
 
11.09 Waiver of Consequential and Punitive Damages.  To the fullest extent
permitted by applicable law, none of Borrowers shall assert, and each of the
Borrower hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, or the use
of the proceeds of the Loan.
 
11.10 Counterparts; Integration; Effectiveness; Amendment and Restatement.  This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy or by electronic communication in electronic portable
format (PDF) shall be effective as delivery of a manually executed counterpart
of this Agreement.
 
11.11 Survival of Representations and Warranties.  All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Lender,
regardless of any investigation made by the Lender and notwithstanding that the
Lender may have had notice or knowledge of any Default at the time of any Credit
Extension, and shall continue in full force and effect as long as any Loan or
any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter
of Credit shall remain outstanding.
 
11.12 Severability.  If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
 
11.13 GOVERNING LAW; JURISDICTION; ETC.  THIS AGREEMENT, EACH NOTE AND EACH
OTHER FINANCING DOCUMENT, AND ALL MATTERS RELATING HERETO OR THERETO OR ARISING
THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF OKLAHOMA, WITHOUT REGARD TO
 
 
54
 
 

--------------------------------------------------------------------------------

 
CONFLICTS OF LAWS PRINCIPLES.  EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION
OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF TULSA, STATE OF
OKLAHOMA AND IRREVOCABLY AGREES THAT, SUBJECT TO LENDER’S ELECTION, ALL ACTIONS
OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.  EACH BORROWER EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS.  EACH BORROWER HEREBY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
UPON IT BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
 
11.14 WAIVER OF RIGHT TO TRIAL BY JURY.   EACH BORROWER AND THE LENDER EACH
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  EACH BORROWER AND THE
LENDER EACH ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO
THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH BORROWER AND THE
LENDER EACH WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF
REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
 
11.15 Borrower Representative.  Monarch is hereby appointed by each of the
Borrowers as its contractual representative hereunder and under each other Loan
Document, and each of the Borrowers irrevocably authorizes Monarch to act as the
contractual representative of such Borrower with the rights and duties expressly
set forth herein and in the other Loan Documents.
 
11.16 Release.  In consideration of the amendments contained herein, each of the
Borrowers hereby waives and releases the Lender from any and all claims and
defenses, known or unknown, with respect to the Existing Credit Agreement and
the other Loan Documents (as defined therein) and the transactions contemplated
thereby.
 
11.17 Ratification and Affirmation.  Each Borrower hereby acknowledges the terms
of this Agreement and ratifies and affirms its obligations under, and
acknowledges, renews and extends its continued liability under, each Loan
Document to which it is a party and agrees that each Loan Document to which it
is a party remains in full force and effect.
 
 
 
55
 
 

--------------------------------------------------------------------------------

 
 
11.18 USA PATRIOT Act Notice.  The Lender hereby notifies the Borrowers that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), it is required to obtain,
verify and record information that identifies each Borrower, which information
includes the names and addresses of the Borrowers and other information that
will allow the Lender to identify each Borrower in accordance with the Act.
 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURES APPEAR ON FOLLOWING PAGES.]
 
 
 
 
 
56
 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
 
BORROWERS:
THE MONARCH CEMENT COMPANY, a Kansas corporation

 
By:    /s/ Walter H. Wulf,
Jr.                                                                                     
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
BEAVER LAKE CONCRETE, INC., an Arkansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
CAPITOL CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                          
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
CITY WIDE CONSTRUCTION PRODUCTS CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                          
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
CONCRETE ENTERPRISES, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                          
Name: Walter H. Wulf, Jr.
Title: President
 
 

Signature Page to
Second Amended and Restated Credit Agreement
 
 

--------------------------------------------------------------------------------

 
CONCRETE MATERIALS, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                        
Name: Walter H. Wulf, Jr.
Title: President
 
DODGE CITY CONCRETE, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                        
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
JOPLIN CONCRETE COMPANY, INC., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                        
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
KANSAS SAND AND CONCRETE, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                        
Name: Walter H. Wulf, Jr.
Title: President
 
KAY CONCRETE MATERIALS CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                        
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 

 

Signature Page to
Second Amended and Restated Credit Agreement
 
 

--------------------------------------------------------------------------------

 

MONARCH CEMENT OF IOWA, INC., an Iowa corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                          
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                           
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
SPRINGFIELD READY MIX CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                           
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
TULSA DYNASPAN, INC., an Oklahoma corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                           
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 

 
 
 

 

Signature Page to
Second Amended and Restated Credit Agreement
 
 

--------------------------------------------------------------------------------

 
LENDER:     BOKF, NA DBA BANK OF OKLAHOMA

 
By:  /s/ Paul Johnson__________
Name: Paul Johnson
Title: Officer
 
 
 
 
 
 
 
 
 
 

Signature Page to
Second Amended and Restated Credit Agreement
 
 

--------------------------------------------------------------------------------

 

Schedule 3.10
 
INSURANCE
 

 

(see attached)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Schedule 3.10

 
 

--------------------------------------------------------------------------------

 

  insurance logo [acord_logo.jpg]                               DATE
(MM/DD/YYYY)
01/03/2013
  CERTIFICATE OF LIABILITY INSURANCE             
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS
UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR
NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING
INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies)
must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions
of the policy, certain policies may require an endorsement. A statement on this
certificate does not confer rights to the certificate holder in lieu of such
endorsement(s).
PRODUCER                                                      1-816-421-7788 
CONTACT NAME:   Carolyn Short
Arthur J. Gallagher Risk Management Services, Inc. 
PHONE (A/C, No, Ext):    816-395-8558
FAX (A/C, No): 816-467-5558
2345 Grand Blvd., Suite 400 
ADDRESS: E-MAIL carolyn_short@ajg.com
Kansas City, MO 64108  INSURER(S) AFFORDING COVERAGE
NAIC #
Mark Lathrom  INSURER A : LIBERTY MUT FIRE INS CO 
23035
INSURED  INSURER B : LIBERTY INS CORP
42404
The Monarch Cement Company
INSURER C :
 
449 1200th Street
INSURER D :   
P.O. Box 1000
INSURER E :   
Humboldt, KS 66748
INSURER F :    COVERAGES   
CERTIFICATE NUMBER:    31329805
  REVISION NUMBER:   
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED
TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY
REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO
WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY
THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND
CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
INSR
LTR
 
TYPE OF INSURANCE
     
ADDL
INSR
SUBR
WVD
 
POLICY NUMBER
POLICY EFF
(MM/DD/YYYY)
POLICY EXP
(MM/DD/YYYY)
 
LIMITS 
A
GENERAL LIABILITY       
X
X
TB2-Z91-512405-033
01/01/13
01/01/14
EACH OCCURRENCE 
$1,000,000
 
X
COMMERCIAL GENERAL LIABILITY
         
DAMAGE TO RENTED PREMISES (Ea occurance)
$300,000
 
 
 
CLAIMS MADE
X
OCCUR
         
MED EXP (Any one person)
$5,000
                           
PERSONAL & ADV INJURY
$1,000,000
                           
GENERAL AGGREGATE
$2,000,000
 
GEN'L AGGREGATE LIMIT APPLIES PER:
         
PRODUCTS - COMP/OP AGG
$2,000,000
   
POLICY
  PRO-
JECT
   
                  X
LOC
           
$
A
AUTOMOBILE LIABILITY
     
X
X
AS2-Z91-512405-023
01/01/13
01/01/14
COMBINED SINGLE LIMIT (Ea accident)
$1,000,000
 
X
ANY AUTO                   
BODILY INJURY (Per person)
$
 
 
ALL OWNED
AUTOS
   SCHEDULED
AUTOS
           
BODILY INJURY (Per accident)
$
 
X
HIRED AUTOS 
              
              X
NON-OWNED
AUTOS
           
PROPERTY DAMAGE (Per accident)
$
                       
$
B
X
UMBRELLA LIAB
X
OCCUR
X
X
TH7-Z91-512405-563
01/01/13
01/01/14
EACH OCCURRENCE 
$15,000,000
    EXCESS LIAB   
CLAIMS-MADE
          AGGREGATE 
$15,000,000
 
 
DED
X
RETENTION  
$10,000             
$
A
 WORKERS COMPENSATION
AND EMPLOYERS' LIABILITY
 
 
Y/N
 
X
WC2-Z91-512405-053
01/01/13
01/01/14
X
WC STATU-
TORY LIMITS
  OTH-
ER
 
  ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED?    
 N/A
       
E.L. EACH ACCIDENT
 
$1,000,000
  (Mandatory in NH)           
E.L. DISEASE - EA EMPLOYEE
$1,000,000
 
 If yes, describe under
DESCRIPTION OF OPERATIONS below
         
E.L. DISEASE - POLICY LIMIT
$1,000,000
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (Attach ACORD 101, Additional
Remarks Schedule, if more space is required)
Bank of Oklahoma is included as an Additional Insured under the General
Liability, Automobile Liability and Umbrella Liability policies as required by
written contract. A waiver of subrogation is included under the General
Liability, Automobile Liability, Umbrella Liability and Workers' Compensation
(as allowed by state law) as required by written contract. CERTIFICATE HOLDER   
   
CANCELLATION
               
Bank of Oklahoma
Bank of Oklahoma Tower
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.
Bershunda J. Taylor
One Williams Center
AUTHORIZED REPRESENTATIVE
                                                                          
insurance signature [acord_sign.jpg]                                   
 PO Box 2300  Tulsa, OK 74192          USA ACORD 25 (2010/05)   
                                   The ACORD name and logo are registered marks
of ACORD                            © 1988-2010 ACORD CORPORATION. All rights
reserved.

 

--------------------------------------------------------------------------------

 
 
 

SUPPLEMENT TO CERTIFICATE OF INSURANCE             
  DATE
 01/03/2013
 NAME OF INSURED:  The Monarch Cement Company   
Additional Description of Operations/Remarks from Page 1:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional Information:
 
General Liability Additional Insured as Required by Written Contract or
Agreement per Form:
LG 31 80 09 07
 
Automobile Liability Additional Insured as Required by Written Contract or
Agreement per Form:
CA 20 48 02 99
 
30 Day Notice of Cancellation as required by Written Contract or Agreement per
Forms:
General Liability - LIM 99 01 05 11
Workers' Compensation - WM 90 18 06 11
Automobile Liability - LIM 99 01 05 11
Umbrella Liability - LIM 99 01 05 11
 
 
 
 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

  insurance logo [acord_logo.jpg]                         DATE (MM/DD/YYYY)
01/02/2013
EVIDENCE OF COMMERCIAL PROPERTY INSURANCE 
THIS EVIDENCE OF COMMERCIAL PROPERTY INSURANCE IS ISSUED AS A MATTER OF
INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE ADDITIONAL INTEREST NAMED BELOW.
THIS EVIDENCE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE
COVERAGE AFFORDED BY THE POLICIES BELOW. THIS EVIDENCE OF INSURANCE DOES NOT
CONSTITUTE A CONTRACT BETWEEN THE ISSUEING INSURER(S), AUTHORIZED REPRESENTATIVE
OR PRODUCER, AND THE ADDITIONAL INTEREST.
PRODUCER NAME,
CONTACT PERSON AND ADDRESS  
Arthur J. Gallagher Risk Management Services, Inc. 
2345 Grand Blvd., Suite 400 
Kansas City, MO 64108
PHONE
(A/C NO. EXT):
1-816-421-7788 
COMPANY NAME AND ADDRESS
 
LIBERTY MUT FIRE INS CO
 
                                              
 
NAIC NO: 23035
FAX
(A/C, No): 1-816-472-5517
E-MAIL
ADDRESS:
IF MULTIPLE COMPANIES, COMPLETE SEPARATE FORM FOR EACH
 CODE:  SUB CODE:
POLICY TYPE
AGENCY
CUSTOMER ID #:
Commercial Property
NAMED INSURED AND ADDRESS
The Monarch Cement Company
449 1200th Street
 LOAN NUMBER   
POLICY NUMBER
YU2-L9L-512405-373
P.O. Box 1000
Humboldt, KS 66748
EFFECTIVE DATE
01/01/13
 EXPIRATION DATE
01/01/14
  o     CONTINUED UNTIL TERMINATED IF CHECKED
ADDITIONAL NAMED INSURED(S)
See Attached
   PROPERTY INFORMATION ( Use REMARKS on page 2, if more space is
required)         x    BUILDING   OR  x    BUSINESS PERSONAL PROPERTY  
LOCATION/DESCRIPTION
Locations 1.1 - 51.1 - See attached Statement of Values
 THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED
ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR
CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS EVIDENCE
OF PROPERTY INSURANCE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY
THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND
CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
    COVERAGE INFORMATION                     PERILS INSURED  o       BASIC 
o       BROAD  x       SPECIAL  o  
COMMERCIAL PROPERTY COVERAGE AMOUNT OF INSURANCE:   $250,000,000                
DED: See Below
 
YES
NO
N/A
   x  BUSINESS INCOME      o  RENTAL VALUE  X     If YES, LIMIT:
$35,000,000           xActual Loss Sustained; # of months:  BLANKET COVERAGE  X
    If YES, indicate value(s) reported on property identified above: $ See
Attached  TERRORISM COVERAGE   X    Attach Disclosure notice / DEC      IS THERE
A TERRORISM-SPECIFIC EXCLUSION?  X            IS DOMESTIC TERRORISM EXCLUDED?  X
       LIMITED FUNGUS COVERAGE  X     If YES,
LIMIT: 250,000                          DED: 100,000  FUNGUS EXCLUSION (If
"YES", specify organization's form used)     X     REPLACEMENT COST X      
 AGREED VALUE X        COINSURANCE   X    If YES,            %  EQUIPMENT
BREAKDOWN (If Applicable) X     If YES, LIMIT:  Follows Prop                
DED:   See Below  ORDINANCE OR LAW   - Coverage for loss to undamaged portion of
bldg X                          - Demolition Costs X     If YES,
LIMIT: 10,000,000                          DED: 100,000                      -
Incr. cost of Construction X     If YES, LIMIT: Included    
                         DED:  EARTH MOVEMENT (If Applicable) X     If YES,
LIMIT: 50,000,000                          DED: 100,000    FLOOD (If Applicable)
X     If YES, LIMIT: See Below                           DED: 100,000    WIND /
HAIL (If Subject to Different Provisions) X     If YES, LIMIT: See
Below                           DED: See Below  PERMISSION TO WAIVE SUBROGATION
IN FAVOR OF MORTGAGE HOLDER PRIOR TO LOSS X      
CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.
ADDITIONAL INTEREST    o   MORTGAGEE  o    CONTRACT OF SALE
 LENDER SERVICING AGENT NAME AND ADDRESS
  x   LENDERS LOSS PAYABLE  x    LOSS PAYEE   NAME AND ADDRESS
 Bank of Oklahoma
 Bank of Oklahoma Tower
AUTHORIZED REPRESENTATIVE                      
                                                                                
insurance signature [acord_sign.jpg]             
 Bershunda J. Taylor
 One Williams Center
 PO Box 2300
 Tulsa, OK 74192                                                   USA
ACORD 28 (2009/12)                                       Page 1 of
2                      © 2003-2009 ACORD CORPORATION. All rights reserved.
The ACORD name and logo are registered marks of ACORD

 
 

--------------------------------------------------------------------------------

 
 
EVIDENCE OF COMMERCIAL PROPERTY INSURANCE REMARKS - Including Special Conditions
(Use only if more space is required)
 
Bank of Oklahoma is included as Lenders Loss Payable and Loss Payee under the
Property policy as required by written contract.
 
Business Interruption Coverage only applies to Locations 1.1 and 2.1
Flood limit: $50,000,00 except $5,000,000 for locations 6, 12, 35.1, 35.2, 35.3,
35.4, 35.6 and 46
No Flood Coverage for Locations 4.5, 18, 22, 29, 33, 37, 39, 41, 51
Mobile Equipment or Tools Limit: $1,140,000
Deductibles:
$100,000 - policy deductible except
$250,000 - Loss of Business Income / Extra Expense for Locations 1.1 and 2.1
$10,000 - Locations 3.1 - 51.1
$30,000 Per Vehicle - $100,000 Maximum per Occurence - Unscheduled Licensed
Vehicles
$10,000 - Exhibitions, Expositions, Fairs or Trade Shows
$10,000 - Mobile Equipment or Tools
 
Equipment Breakdown Deductibles:
$100,000 - Covered Objects Location 1.1 and 2.1
$10,000 - covered Objects All Other covered Locations
5x ADV - Loss of Business Income and Extra Expense Locations 1.1 and 2.1
 
Wind Associated with named Storm Deductible:
2% subject to $100,000 minimum - First tier wind Counties and Parishes
5% subject to $250,000 minimum - Florida and Puerto Rico
 
 
 
 
 
 
  Page 2 of 2 

 
 

--------------------------------------------------------------------------------

 
Named Insureds
 
 * The Monarch Cement Company
 * Beaver Lake Concrete, Inc.
 * Capitol Concrete Products Co., Inc.
 * City Wide Construction Products Co.
 * Concrete Enterprises, Inc.
 * Concrete Enterprises, South, A Division of Concrete Enterprises, Inc.
 * Concrete Materials, Inc.
 * Dodge City Concrete, Inc.
 * Kay Concrete Materials Co.
 * Concrete Industries, A Division of Dodge City Concrete, Inc.
 * Joplin Concrete Company, Inc.
 * Kansas Sand & Concrete, Inc.
 * Monarch Cement of Iowa, Inc.
 * Salina Concrete Products, Inc.
 * Kansas Building Products, A Division of Salina Concrete Products, Inc.
 * Springfield Ready Mix Co.
 * Tulsa Dynaspan, Inc.
 * Arrow Concrete Company, A division of Tulsa Dynaspan, Inc.

 
 
 
 
 

--------------------------------------------------------------------------------

 

  Monarch Cement Company - 2013 Statement of Values    
Loc #
Sub-
loc #
Location
Name
Insureds
Complete
Street
Address
City
State
Zip
Code
Zip
Code
Ext
 
Building
 
Inventory/
Stock &
Supplies
 
All Other
Personal
Property
 
Mobile
Equipment
 
Loss of
Business
Income
 
Total TIV
1
1
Monarch Cement
449 1200th St
Humboldt
KS
66748
1785
 
       90,235,000
 
     10,000,000
 
      110,000,000
 
                -
 
     35,000,000
 
      245,235,000
2
1
Quarry Location
432 1600th St
Humboldt
KS
66748
2220
 
                    -
 
                  -
 
         2,250,000
 
                -
 
                  -
 
         2,250,000
3
1
DCC
1105 E Wyatt Earp Blvd
Dodge City
KS
67801
5338
 
              50,000
 
                  -
 
            600,000
 
                -
 
                  -
 
            650,000
4
1
BLC
2425 Old Wire Rd
Springdale
AR
72764
8020
 
            100,000
 
                  -
 
            250,000
 
                -
 
                  -
 
            350,000
4
2
BLC - Rogers
2500 W Hudson Rd
Rogers
AR
72756
2072
 
            100,000
 
                  -
 
            350,000
 
                -
 
                  -
 
            450,000
4
3
BLC - Fayetteville
1474 Van Asche
Fayetteville
AR
72704
   
              35,000
 
                  -
 
            165,000
 
                -
 
                  -
 
            200,000
4
4
BLC - Bentonville
5698 S Vaughn Rd # 279
Bentonville
AR
72712
   
              35,000
 
                  -
 
            165,000
 
                -
 
                  -
 
            200,000
4
5
BLC - Huntsville
383 N Parrott Dr
Huntsville
AR
72740
   
              30,000
 
                  -
 
            120,000
 
                -
 
                  -
 
            150,000
5
1
CWC - Springfield
1948 Northwest Bypass
Springfield
MO
65803
   
                    -
 
                  -
 
              25,000
 
                -
 
                  -
 
              25,000
5
2
CWC - Ozark
1817 N Farmer Branch Rd
Ozark
MO
65721
7272
 
              75,000
 
                  -
 
            400,000
 
                -
 
                  -
 
            475,000
6
1
CEI
2430 E 1st Ave
Hutchinson
KS
67501
1804
 
            225,000
 
                  -
 
            600,000
 
                -
 
                  -
 
            825,000
7
1
CMI
9900 W 75th St
Overland Park
KS
66204
2216
 
         1,300,000
 
                  -
 
         1,350,000
 
                -
 
                  -
 
         2,650,000
8
1
KSC
531 NW Tyler St
Topeka
KS
66608
1563
 
            800,000
 
                  -
 
         1,350,000
 
                -
 
                  -
 
         2,150,000
9
1
TDI
1601 E Houston St
Broken Arrow
OK
74012
4407
 
         2,150,000
 
                  -
 
         5,600,000
 
                -
 
                  -
 
         7,750,000
10
1
KBP
1600 S Hoover Rd
Wichita
KS
67209
2812
 
            400,000
 
       1,000,000
 
            600,000
 
                -
 
                  -
 
         2,000,000
11
1
DCCI
1105 E Wyatt Earp Blvd
Dodge City
KS
67801
5338
 
                    -
 
                  -
 
            850,000
 
                -
 
                  -
 
            850,000
12
1
SCP
1100 W Ash St
Salina
KS
67401
2559
 
            800,000
 
       1,500,000
 
            850,000
 
                -
 
                  -
 
         3,150,000
13
1
SRM
2836 W Division St
Springfield
MO
65802
1151
 
            100,000
 
                  -
 
         1,000,000
 
                -
 
                  -
 
         1,100,000
14
1
MCI
5200 Park Ave
Des Moines
IA
50321
1229
 
            650,000
 
                  -
 
            400,000
 
                -
 
                  -
 
         1,050,000
15
1
CCP
627 NW Tyler St
Topeka
KS
66608
1591
 
         1,250,000
 
          800,000
 
         2,250,000
 
                -
 
                  -
 
         4,300,000
16
1
CCP
1452 N 1823 Rd
Lawrence
KS
66044
9100
 
            300,000
 
          250,000
 
            200,000
 
                -
 
                  -
 
            750,000
17
1
JCC
7425 Newman Rd
Joplin
MO
64801
5726
 
            150,000
 
                  -
 
            410,000
 
                -
 
                  -
 
            560,000
18
1
KSC
1628 NW Valencia Rd
Topeka
KS
66615
9658
 
                    -
 
                  -
 
         1,500,000
 
                -
 
                  -
 
         1,500,000

19
1
MCC Dwelling
1300 S 8th St
Humboldt
KS
66748
1782
 
250,000
 
 -
 
-
 
 -
 
                  -
 
            250,000
20
1
MCC Dwelling
1314 S 8th St
Humboldt
KS
66748
1782
 
400,000
 
 -
 
-
 
-
 
                  -
 
            400,000
21
1
MCC Dwelling
1316 S 8th St
Humboldt
KS
66748
1782
 
175,000
 
 -
 
-
 
 -
 
                  -
 
            175,000
22
1
MCC Dwelling
245 1600th St
Humboldt
KS
66748
2283
 
25,000
 
 -
 
-
 
-
 
                  -
 
              25,000
23
1
MCC Dwelling
240 1200th St
Humboldt
KS
66748
2244
 
125,000
 
 -
 
-
 
-
 
                  -
 
            125,000

                                                        The Monarch Cement
Company                                                                              
34
 
 
 
 
24
1
MCC Dwelling
242 1200th St
Humboldt
KS
66748
2244
 
40,000
 
 -
 
 -
 
-
 
                  -
 
              40,000
25
1
MCC Dwelling
1003 Wulf Dr
Humboldt
KS
66748
2022
 
15,000
 
 -
 
 -
 
-
 
                  -
 
              15,000
26
1
MCC Dwelling
346 1200th St
Humboldt
KS
66748
2236
 
40,000
 
-
 
-
 
-
 
                  -
 
              40,000
27
1
MCC Dwelling
1490 Delaware Rd
Humboldt
KS
66748
2224
 
20,000
 
-
 
-
 
-
 
                  -
 
              20,000
28
1
MCC Dwelling
1935 Georgia Rd
Humboldt
KS
66748
2068
 
45,000
 
 -
 
-
 
-
 
                  -
 
              45,000
29
1
MCC Dwelling
1051 Arkansas Rd
Humboldt
KS
66748
2251
 
55,000
 
-
 
-
 
 -
 
                  -
 
              55,000
30
1
MCC Dwelling
496 1800th St
Humboldt
KS
66748
2214
 
55,000
 
 -
 
-
 
-
 
                  -
 
              55,000
31
1
MCC Dwelling
2103 Connecticut Rd
Humboldt
KS
66748
2158
 
100,000
 
 -
 
 -
 
-
 
                  -
 
            100,000
32
1
BLC Dwelling
5700 S Vaughn
Benton
AR
72015
   
45,000
 
 -
 
 -
 
-
 
                  -
 
              45,000
33
1
MCC Dwelling
456 1585th St
Humboldt
KS
66748
2226
 
75,000
 
 -
 
-
 
-
 
                  -
 
              75,000
34
1
MCC Dwelling
476 1600th St
Humboldt
KS
66748
2220
 
60,000
 
 -
 
 -
 
 -
 
                  -
 
              60,000
35
1
Cid - Ready Mix
111 J C St
Garden City
KS
67846
   
200,000
 
  -
 
650,000
 
-
 
                  -
 
            850,000
35
2
Cid - Batch Plant
111 J C St
Garden City
KS
67846
   
 -
 
-
 
-
 
100,000
 
                  -
 
            100,000
35
3
Batch Plant
111 J C St
Garden City
KS
67846
   
 -
 
 -
 
-
 
500,000
 
                  -
 
            500,000
35
4
Batch Plant
111 J C St
Garden City
KS
67846
   
 -
 
-
 
-
 
75,000
 
                  -
 
              75,000
35
5
Batch Plant
111 J C St
Garden City
KS
67846
   
 -
 
 -
 
-
 
75,000
 
                  -
 
              75,000
36
1
Cid - Ready Mix
107 Glenn St
Scott City
KS
67871
   
35,000
 
  -
 
150,000
 
-
 
                  -
 
            185,000
36
2
Cid - Batch Plant
107 Glenn St
Scott City
KS
67871
   
 -
 
 -
 
 -
 
75,000
 
                  -
 
              75,000
37
1
Cid - Batch Plant
E Walnut
Ness City
KS
67560
   
25,000
 
 -
 
120,000
 
 -
 
                  -
 
            145,000
38
1
Cid - Batch Plant
404 2nd St
Leoti
KS
67861
   
15,000
 
 -
 
45,000
 
-
 
                  -
 
              60,000
39
1
Cid - Batch Plant
6 E Road 153
Dighton
KS
67839
   
25,000
 
-
 
45,000
 
-
 
                  -
 
              70,000
40
1
 
804 E Main St
Harper
KS
67058
   
25,000
 
-
 
200,000
 
 -
 
                  -
 
            225,000
41
1
 
245 E Sherman
Kingman
KS
67068
   
150,000
 
-
 
600,000
 
-
 
                  -
 
            750,000
42
1
 
317 W 3rd
Medicine Lodge
KS
67104
   
25,000
 
-
 
200,000
 
-
 
                  -
 
            225,000
43
1
 
1100 S Jackson
Pratt
KS
67124
   
100,000
 
 -
 
600,000
 
 -
 
                  -
 
            700,000
44
1
 
1301 W 10th
Pratt
KS
67124
   
100,000
 
-
 
600,000
 
 -
 
                  -
 
            700,000
45
1
 
50 Kay Dr
Monett
MO
65708
   
357,000
 
-
 
425,000
 
-
 
                  -
 
            782,000
46
1
 
30 E Mill St
Aurora
MO
65605
   
270,000
 
-
 
180,000
 
-
 
                  -
 
            450,000
47
1
 
Hwy 60
Billings
MO
65610
   
427,000
 
-
 
418,000
 
-
 
                  -
 
            845,000
48
1
 
410 N Main
Mt Vernon
MO
65712
   
390,000
 
-
 
145,000
 
-
 
                  -
 
            535,000
49
1
 
Hwy 37
Sarcoxie
MO
64862
   
125,000
 
 -
 
82,000
 
-
 
                  -
 
            207,000
50
1
 
845 Farm Rd 2035
Monett
MO
65708
   
129,000
 
-
 
364,500
 
-
 
                  -
 
            493,500
51
1
 
7905 S. Regency Dr.
Sapulpa
OK
74066
   
50,000
 
-
 
300,000
 
-
 
                  -
 
            350,000
                 
$102,758,000
 
$13,550,000
 
$136,409,500
 
$825,000
 
$35,000,000
 
$288,542,500

                                                        The Monarch Cement
Company                                                                              
35
 
 

--------------------------------------------------------------------------------

 

 
Schedule 3.18(a)

LOCATIONS OF INVENTORY
 

The inventory described in the attached spreadsheet or located on or adjacent to
the locations described in such spreadsheet; it being understood that a Borrower
may have inventory located on adjacent property that has a different mailing
address.
 
 
 
 
 
 
 
 
 
 
Schedule 3.18(a)

 
 

--------------------------------------------------------------------------------

 

The Monarch Cement Co.                                       
Location
Name
Street
Address
City
State/
Province
Zip
Code
Zip
Code
Ext
Occupancy
Description
Monarch Cement
449 1200th St
Humboldt
KS
66748
1785
Cement Plant
Quarry Location
432 1600th St
Humboldt
KS
66748
2220
Quarry location
BLC-Office and plant
2425 Old Wire Rd
Springdale
AR
72764
8020
Batch Plant
BLC
2500 W Hudson Rd
Rogers
AR
72756
2072
Batch Plant
BLC
1474 Van Asche
Fayetteville
AR
72704
 
Batch Plant
BLC
5698 S Vaughn Rd # 279
Bentonville
AR
72712
 
Batch Plant
BLC
383 N Parrott Dr
Huntsville
AR
72740
 
Batch Plant
CCP-Office and plant
627 NW Tyler St
Topeka
KS
66608
1591
Block Plant
CCP
1452 N 1823 Rd
Lawrence
KS
66044
9100
Block retail
CWC
1817 N Farmer Branch Rd
Ozark
MO
65721
7272
Batch Plant
CEI
2430 E 1st Ave
Hutchinson
KS
67501
1804
Batch Plant
CES- divison of CEI
804 E Main St
Harper
KS
67058
 
Batch Plant
CES- divison of CEI
245 E Sherman
Kingman
KS
67068
 
Batch Plant
CES- divison of CEI
317 W 3rd
Medicine Lodge
KS
67104
 
Batch Plant
CES- divison of CEI*
1100 S Jackson
Pratt
KS
67124
 
Sand plant
CES- divison of CEI
1301 W 10th
Pratt
KS
67124
 
Batch Plant
CMI
9900 W 75th St
Overland Park
KS
66204
2216
Batch Plant
JCC
7425 Newman Rd
Joplin
MO
64801
5726
Batch Plant
KSC- Office and plant
531 NW Tyler St
Topeka
KS
66608
1563
Batch Plant
KSC*
1628 NW Valencia Rd
Topeka
KS
66615
9658
Sand plant
KCM-Office and plant
50 Kay Dr
Monett
MO
65708
 
Batch Plant
KCM
30 E Mill St
Aurora
MO
65605
 
Batch Plant
KCM
Hwy 60
Billings
MO
65610
 
Batch Plant
KCM
410 N Main
Mt Vernon
MO
65712
 
Batch Plant
KCM
Hwy 37
Sarcoxie
MO
64862
 
Batch Plant
KCM-Sand Distribution
845 Farm Rd 2035
Monett
MO
65708
 
Sand distribution
DCC
1105 E Wyatt Earp Blvd
Dodge City
KS
67801
5338
Cement terminal and Ready Mix
Cid - division of DCC
111 J C St
Garden City
KS
67846
 
Batch Plant
Cid - division of DCC
107 Glenn St
Scott City
KS
67871
 
Batch Plant
Cid - division of DCC
E Walnut
Ness City
KS
67560
 
Batch Plant
Cid - division of DCC
404 2nd St
Leoti
KS
67861
 
Batch Plant
Cid - division of DCC
6 E Road 153
Dighton
KS
67839
 
Batch Plant
MCI
5200 Park Ave
Des Moines
IA
50321
1229
Cement Terminal
SCP
1100 W Ash St
Salina
KS
67401
2559
Block plant & Batch plant
KBP - division of SCP
1600 S Hoover Rd
Wichita
KS
67209
2812
Block Plant
CES- Batch Plant
804 E Main St
Harper
KS
67058
 
Batch Plant
CES- Batch Plant
245 E Sherman
Kingman
KS
67068
 
Batch Plant
CES- Batch Plant
317 W 3rd
Medicine Lodge
KS
67104
 
Batch Plant
CES- Batch Plant
1100 S Jackson
Pratt
KS
67124
 
Batch Plant
CES- Batch Plant
1301 W 10th
Pratt
KS
67124
 
Batch Plant
SRM**
2836 W Division St
Springfield
MO
65802
1151
Batch Plant
TDI-Office and plant
1601 E Houston St
Broken Arrow
OK
74012
4407
Precast & Batch Plant
TDI-Batch Plant
7905 S. Regency Dr.
Sapulpa
OK
74066
 
Batch Plant
             
We also own 6 portable ready mix plants that are moved from job to job
                                   
*CES and KSC have sand plants in Pratt and Topeka, respectively.  We do not own
this land.
 
**SRM - we do not own the land, office building or maintenance building at this
location
       

 
 
 

--------------------------------------------------------------------------------

 

 
Schedule 3.18(b)
 
LOCATIONS OF CHIEF EXECUTIVE OFFICE, TAXPAYER IDENTIFICATION NUMBER, AND
ORGANIZATIONAL IDENTIFICATION NUMBER
 
Borrower
Chief Executive
Office
Taxpayer
Identification Number
Organizational
Identification
Number
The Monarch Cement Company
449 1200 Street
Humboldt, KS
48-0340590
0100776
Beaver Lake Concrete, Inc.
449 1200 Street
Humboldt, KS
71-0540425
100006030
Capitol Concrete Products Company, Inc.
449 1200 Street
Humboldt, KS
48-0160063
0082677
City Wide Construction Products Co.
449 1200 Street
Humboldt, KS
43-1379721
00254332
Concrete Enterprises, Inc.
449 1200 Street
Humboldt, KS
48-0770955
0136853
Concrete Materials, Inc.
449 1200 Street
Humboldt, KS
48-0177785
0115063
Dodge City Concrete, Inc.
449 1200 Street
Humboldt, KS
48-1141823
2125045
Joplin Concrete Company, Inc.
449 1200 Street
Humboldt, KS
01-0714960
00509878
Kansas Sand and Concrete, Inc.
449 1200 Street
Humboldt, KS
48-0693463
0083196
Kay Concrete Materials Co.
449 1200 Street
Humboldt, KS
43-0798704
00111484
Monarch Cement of Iowa, Inc.
449 1200 Street
Humboldt, KS
42-1497601
235254
Salina Concrete Products, Incorporated
449 1200 Street
Humboldt, KS
48-0402725
0116707
Springfield Ready Mix Co.
449 1200 Street
Humboldt, KS
43-1114249
00193565
Tulsa Dynaspan, Inc.
449 1200 Street
Humboldt, KS
73-1094010
N/A

 
 

 

Schedule 3.18(b)

 
 

--------------------------------------------------------------------------------

 

Schedule 3.18(c)
 
CHANGES IN LEGAL NAME, STATE OF FORMATION AND STRUCTURE
 

None.

Schedule 3.18(c)

 
 

--------------------------------------------------------------------------------

 

Schedule 5.01
 
EXISTING LIENS
 

To the extent constituting Liens, the interests of the applicable lessors or
secured parties or their respective assigns with respect to the property
described in the following:

1.
Uniform Commercial Code financing statement from The Monarch Cement Company, as
debtor, to United Rentals Northwest, Inc., as secured party, filed April 8, 2010
as filing number 97791917 in the Kansas Secretary of State's office.

2.
Uniform Commercial Code financing statement from The Monarch Cement Company, as
debtor, to United Rentals Northwest, Inc., as secured party, filed October 5,
2011 as filing number 98809165 in the Kansas Secretary of State's office.

3.
Uniform Commercial Code financing statement from Tulsa Dynaspan, Inc., as
debtor, to Hoidale Co Inc, as secured party, filed August 16, 2011 as document
number 20110816020813670 in the Oklahoma County Clerk's office.

 
 
 
 
 
 
 
 
 

Schedule 5.01

 
 

--------------------------------------------------------------------------------

 

Schedule 5.02
 
EXISTING INVESTMENTS
 

1.           Monarch's Investments in its Subsidiaries that are Borrowers.

2.           Investments held in the Pledged Account.

3.           East Kansas Agri-Energy, L.L.C. – 418 Class A Units and 22 Class B
Units.

4.           General Finance Incorporated – 9,371 shares.

5.           Ash Grove Cement Company – 100 shares.
 
 
 
 
 
 

Schedule 5.02

 
 

--------------------------------------------------------------------------------

 

 
Schedule 5.03
 
EXISTING INDEBTEDNESS
 

 
Debtor
Payee
Nature of Indebtedness
Kay Concrete Materials Co.
David Larry Kay, as Trustee of the David Larry Kay Trust u/t/a dated March 24,
1999
Promissory Note dated April 15, 2011 with a current balance of $700,000;
$175,000 due December 31, 2012, 2013, 2014 and 2015.
The Monarch Cement Company
Emprise Bank
Letter of Credit to Kansas Department of Health and Environment (KDHE) for
$1,250.
The Monarch Cement Company
Emprise Bank
Letter of Credit to Liberty Mutual for $310,000

 
And, to the extent constituting Indebtedness, the obligations secured by the
Liens described in Schedule 5.01.
 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

Exhibit A

FORM OF LOAN NOTICE

Date: _____________, 20___
To:           BOKF, NA dba Bank of Oklahoma (the "Lender").

Re:
Second Amended and Restated Credit Agreement dated as of December 31, 2012 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Credit Agreement") between THE MONARCH CEMENT COMPANY, a
Kansas corporation, BEAVER LAKE CONCRETE, INC., an Arkansas corporation, CAPITOL
CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation, CITY WIDE CONSTRUCTION
PRODUCTS CO., a Missouri corporation, CONCRETE ENTERPRISES, INC., a Kansas
corporation, CONCRETE MATERIALS, INC., a Kansas corporation, DODGE CITY
CONCRETE, INC., a Kansas corporation, JOPLIN CONCRETE COMPANY, INC., a Missouri
corporation, KANSAS SAND AND CONCRETE, INC., a Kansas corporation, KAY CONCRETE
MATERIALS CO., a Missouri corporation, MONARCH CEMENT OF IOWA, INC., an Iowa
corporation, SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation,
SPRINGFIELD READY MIX CO., a Missouri corporation, and TULSA DYNASPAN, INC., an
Oklahoma corporation (collectively, the "Borrowers"), the and the
Lender.  Capitalized terms used herein have the respective meanings assigned to
them in the Credit Agreement.

 
Ladies and Gentlemen:

The undersigned, being a Responsible Officer of the Borrowers, hereby requests
(select one) a borrowing:

1.
On _______________ (a Business Day).

2.
In the amount of $_________________.

By: _____________________________
Name: ___________________________
Title: ____________________________
 
 
 

 
 

--------------------------------------------------------------------------------

 

Exhibit B
 
FORM OF TERM NOTE

 
 

--------------------------------------------------------------------------------

 
 
PROMISSORY NOTE
(Term Note)
 
 
$10,000,000
December 31, 2012
 
Tulsa, Oklahoma

 
FOR VALUE RECEIVED, the undersigned, THE MONARCH CEMENT COMPANY, a Kansas
corporation, BEAVER LAKE CONCRETE, INC., an Arkansas corporation, CAPITOL
CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation, CITY WIDE CONSTRUCTION
PRODUCTS CO., a Missouri corporation, CONCRETE ENTERPRISES, INC., a Kansas
corporation, CONCRETE MATERIALS, INC., a Kansas corporation, DODGE CITY
CONCRETE, INC., a Kansas corporation, JOPLIN CONCRETE COMPANY, INC., a Missouri
corporation, KANSAS SAND AND CONCRETE, INC., a Kansas corporation, KAY CONCRETE
MATERIALS CO., a Missouri corporation, MONARCH CEMENT OF IOWA, INC., an Iowa
corporation, SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation,
SPRINGFIELD READY MIX CO., a Missouri corporation, and TULSA DYNASPAN, INC., an
Oklahoma corporation (collectively, the "Makers"), hereby jointly and severally
promise to pay to the order of BOKF, NA DBA BANK OF OKLAHOMA (the "Lender"), on
or before the Revolving Credit Maturity Date, the principal sum of TEN MILLION
AND NO/100 DOLLARS ($10,000,000).
 
This Note is executed and delivered by the Makers pursuant to, and is entitled
to the benefits of, that certain Second Amended and Restated Credit Agreement
dated as of December 31, 2012 (as amended, restated, extended, supplemented,
increased or otherwise modified from time to time, the "Credit Agreement"),
between the Makers and the Lender.  All capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
 
This Note is made, executed and delivered pursuant to the Credit Agreement and
is the "Term Note" described and defined therein.  Reference is hereby made to
the Credit Agreement for terms and provisions regarding the collateral security
for payment of this Note, the prepayment rights and obligations of the Makers,
the right of the holder of this Note to accelerate the maturity hereof on the
occurrence or existence of any Event of Default specified therein, and for all
other pertinent purposes.
 
The unpaid principal balance of this Note will bear interest from the date
hereof until maturity (whether at the stated maturity date, upon acceleration of
maturity or otherwise), at the WSJ Prime Rate less 1.25%, provided, however,
such rate of interest shall not be less than  1.75% per annum.  Interest shall
be calculated on the basis of actual days elapsed, but computed as if each
calendar year consisted of 360 days.
 
Prior to the Term Loan Maturity Date, interest and principal shall be due as
provided in the Credit Agreement.  The entire outstanding principal balance of
this Note and all unpaid interest accrued hereon will be due and payable in full
on the Term Loan Maturity Date.  If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as

 
 

--------------------------------------------------------------------------------

 
after judgment) computed at the rate or rates determined in accordance with the
Credit Agreement.
 
All payments, including prepayments, of principal of, or interest on, this Note
shall be made to the Lender at the Lender's principal office located at Bank of
Oklahoma Tower, One Williams Center, Eighth Floor, Tulsa, Oklahoma 74172, in
Dollars and in immediately available funds not later than 2:00 p.m. (Tulsa time)
on the date due.  Whenever a payment is due on a day other than a Business Day,
the due date shall be extended to the next succeeding Business Day and interest
(if any) shall accrue during such extension.
 
It is the intent of the Lender and the Makers to conform strictly to all
applicable usury laws, and any interest on the principal balance hereof in
excess of that allowed by said usury laws shall be subject to reduction to the
maximum amount of interest allowed under said laws.  If any interest in excess
of the maximum amount of interest allowable by said usury laws is inadvertently
paid to the holder hereof, at any time, any such excess interest shall be
refunded by the holder to the party or parties entitled to the same after
receiving notice of payment of such excess interest.
 
All advances and payments hereunder will be recorded by the Lender in its books
and records, and the unpaid principal balance so recorded shall be presumptive
evidence of the amount owing on this Note.  The Lender may also attach schedules
to this Note and endorse thereon the date and amount of each Revolving Loan and
all payments with respect to this Note.
 
If, and as often as, this Note is placed in the hands of an attorney for
collection or to defend or enforce any of the holder's rights hereunder, the
Makers will pay to the holder hereof its reasonable attorneys' fees, together
with all court costs and other expenses paid by such holder.
 
To the extent any payment due hereunder is not paid within 10 calendar days of
the applicable due date, and, to the extent that the following described fee is
deemed to constitute interest, subject to Section 2.05(d) of the Credit
Agreement, in addition to any interest or other fees and charges due hereunder
or under the applicable Loan Document, the Makers shall pay a late fee equal to
5% of the amount of the payment that was to have been made.  The Makers agree
that such late fee is reasonable compensation to the Lender for the acceptance
and handling of such late payments.
 
The Makers and all endorsers, sureties, guarantors and other parties who may
become liable for all or any part of this Note severally waive diligence,
demand, presentment, notice of dishonor, protest, notice of protest, non-payment
and notice of non-payment, and consent to: (a) any and all extensions of time
for any term or terms regarding any payment due under this Note, including
partial payments or renewals before or after maturity; (b) any substitutions or
release of collateral; and (c) the addition, substitution or release of any
party liable for payment of this Note.
 
No waiver of any payment or other right under this Note or any related agreement
shall operate as a waiver of any other payment or right.  All of the holder's
rights hereunder are

 
 
 

--------------------------------------------------------------------------------

 
cumulative and not alternative.  This Note shall inure to the benefit of the
successors and assigns of the Lender or other holder and shall be binding upon
the successors and assigns of the Makers.
 
This Note is issued in replacement of and substitution for that certain
Promissory Note dated February 3, 2012, made by the Makers payable to the order
of the Lender in the stated principal amount of $9,043,690.18 (the "Prior
Note"). The indebtedness evidenced by this Note is a continuing indebtedness,
and all collateral instruments securing payment of the Prior Note, and the
security interests created and continued thereunder, shall continue in full
force and effect, uninterrupted and unabated, as security for payment of the
indebtedness evidenced by this Note.
 
This Note has been delivered to and accepted by the Lender in the State of
Oklahoma, is to be performed in the State of Oklahoma and shall be deemed a
contract made under the laws of the State of Oklahoma, and all rights and
indebtedness hereunder, including matters of construction, validity and
performance, shall be governed by the laws of the State of Oklahoma, without
regard to its principles of conflicts of laws.
 
IN WITNESS WHEREOF, the undersigned have executed this Note as of the date first
above written.
 
THE MONARCH CEMENT COMPANY, a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                 
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
 
BEAVER LAKE CONCRETE, INC., an Arkansas corporation
 
By:    /s/ Walter H. Wulf, Jr.                                
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
 
CAPITOL CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 

 
 

--------------------------------------------------------------------------------

 
 
CITY WIDE CONSTRUCTION PRODUCTS CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
CONCRETE ENTERPRISES, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
CONCRETE MATERIALS, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
DODGE CITY CONCRETE, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
JOPLIN CONCRETE COMPANY, INC., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board

 
 

--------------------------------------------------------------------------------

 

KANSAS SAND AND CONCRETE, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
KAY CONCRETE MATERIALS CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
MONARCH CEMENT OF IOWA, INC., an Iowa corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
SPRINGFIELD READY MIX CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board

 
 

--------------------------------------------------------------------------------

 
 
TULSA DYNASPAN, INC., an Oklahoma corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

 

Exhibit C

FORM OF REVOLVING NOTE
 
 
 

--------------------------------------------------------------------------------

 

PROMISSORY NOTE
(Revolving Note)
 
$15,000,000.00
December 31, 2012
 
Tulsa, Oklahoma

 
FOR VALUE RECEIVED, the undersigned, THE MONARCH CEMENT COMPANY, a Kansas
corporation, BEAVER LAKE CONCRETE, INC., an Arkansas corporation, CAPITOL
CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation, CITY WIDE CONSTRUCTION
PRODUCTS CO., a Missouri corporation, CONCRETE ENTERPRISES, INC., a Kansas
corporation, CONCRETE MATERIALS, INC., a Kansas corporation, DODGE CITY
CONCRETE, INC., a Kansas corporation, JOPLIN CONCRETE COMPANY, INC., a Missouri
corporation, KANSAS SAND AND CONCRETE, INC., a Kansas corporation, KAY CONCRETE
MATERIALS CO., a Missouri corporation, MONARCH CEMENT OF IOWA, INC., an Iowa
corporation, SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation,
SPRINGFIELD READY MIX CO., a Missouri corporation, and TULSA DYNASPAN, INC., an
Oklahoma corporation (collectively, the "Makers"), hereby jointly and severally
promise to pay to the order of BOKF, NA DBA BANK OF OKLAHOMA (the "Lender"), on
or before the Revolving Credit Maturity Date, the principal sum of FIFTEEN
MILLION AND NO/100 DOLLARS ($15,000,000.00), or such lesser principal amount as
shall be advanced and remain outstanding hereunder.
 
This Note is executed and delivered by the Makers pursuant to, and is entitled
to the benefits of, that certain Second Amended and Restated Credit Agreement
dated as of December 31, 2012 (as amended, restated, extended, supplemented,
increased or otherwise modified from time to time, the "Credit Agreement"),
between the Makers and the Lender.  All capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
 
This Note is made, executed and delivered pursuant to the Credit Agreement and
is the "Revolving Note" described and defined therein.  Reference is hereby made
to the Credit Agreement for terms and provisions regarding the collateral
security for payment of this Note, the prepayment rights and obligations of the
Makers, the right of the holder of this Note to accelerate the maturity hereof
on the occurrence or existence of any Event of Default specified therein, and
for all other pertinent purposes.
 
The unpaid principal balance of this Note will bear interest from the date
hereof until maturity (whether at the stated maturity date, upon acceleration of
maturity or otherwise), at the WSJ Prime Rate less 1.50%, provided, however,
such rate of interest shall not be less than  1.50% per annum.  Interest shall
be calculated on the basis of actual days elapsed, but computed as if each
calendar year consisted of 360 days.
 
Prior to the Revolving Credit Maturity Date, interest only on this Note will be
due and payable in consecutive quarterly installments on the last day of each
quarter commencing March 31, 2013.  The entire outstanding principal balance of
this Note and all unpaid interest accrued hereon will be due and payable in full
on the Revolving Credit Maturity Date.  If any amount is not paid in full when
due hereunder, such unpaid amount shall bear interest, to be paid upon

 
 

--------------------------------------------------------------------------------

 
demand, from the due date thereof until the date of actual payment (and before
as well as after judgment) computed at the rate or rates determined in
accordance with the Credit Agreement.
 
All payments, including prepayments, of principal of, or interest on, this Note
shall be made to the Lender at the Lender's principal office located at Bank of
Oklahoma Tower, One Williams Center, Eighth Floor, Tulsa, Oklahoma 74172, in
Dollars and in immediately available funds not later than 2:00 p.m. (Tulsa time)
on the date due.  Whenever a payment is due on a day other than a Business Day,
the due date shall be extended to the next succeeding Business Day and interest
(if any) shall accrue during such extension.
 
It is the intent of the Lender and the Makers to conform strictly to all
applicable usury laws, and any interest on the principal balance hereof in
excess of that allowed by said usury laws shall be subject to reduction to the
maximum amount of interest allowed under said laws.  If any interest in excess
of the maximum amount of interest allowable by said usury laws is inadvertently
paid to the holder hereof, at any time, any such excess interest shall be
refunded by the holder to the party or parties entitled to the same after
receiving notice of payment of such excess interest.
 
All advances and payments hereunder will be recorded by the Lender in its books
and records, and the unpaid principal balance so recorded shall be presumptive
evidence of the amount owing on this Note.  The Lender may also attach schedules
to this Note and endorse thereon the date and amount of each Revolving Loan and
all payments with respect to this Note.
 
If, and as often as, this Note is placed in the hands of an attorney for
collection or to defend or enforce any of the holder's rights hereunder, the
Makers will pay to the holder hereof its reasonable attorneys' fees, together
with all court costs and other expenses paid by such holder.
 
To the extent any payment due hereunder is not paid within 10 calendar days of
the applicable due date, and, to the extent that the following described fee is
deemed to constitute interest, subject to Section 2.05(d) of the Credit
Agreement, in addition to any interest or other fees and charges due hereunder
or under the applicable Loan Document, the Makers shall pay a late fee equal to
5% of the amount of the payment that was to have been made.  The Makers agree
that such late fee is reasonable compensation to the Lender for the acceptance
and handling of such late payments.
 
The Makers and all endorsers, sureties, guarantors and other parties who may
become liable for all or any part of this Note severally waive diligence,
demand, presentment, notice of dishonor, protest, notice of protest, non-payment
and notice of non-payment, and consent to: (a) any and all extensions of time
for any term or terms regarding any payment due under this Note, including
partial payments or renewals before or after maturity; (b) any substitutions or
release of collateral; and (c) the addition, substitution or release of any
party liable for payment of this Note.
 
No waiver of any payment or other right under this Note or any related agreement
shall operate as a waiver of any other payment or right.  All of the holder's
rights hereunder are

 
 
 

--------------------------------------------------------------------------------

 
cumulative and not alternative.  This Note shall inure to the benefit of the
successors and assigns of the Lender or other holder and shall be binding upon
the successors and assigns of the Makers.
 
This Note is issued in replacement of and substitution for that certain
Promissory Note dated February 3, 2012, made by the Makers payable to the order
of the Lender in the stated maximum principal amount of $15,000,000 (the "Prior
Note"). The indebtedness evidenced by this Note is a continuing indebtedness,
and all collateral instruments securing payment of the Prior Note, and the
security interests created and continued thereunder, shall continue in full
force and effect, uninterrupted and unabated, as security for payment of the
indebtedness evidenced by this Note.
 
This Note has been delivered to and accepted by the Lender in the State of
Oklahoma, is to be performed in the State of Oklahoma and shall be deemed a
contract made under the laws of the State of Oklahoma, and all rights and
indebtedness hereunder, including matters of construction, validity and
performance, shall be governed by the laws of the State of Oklahoma, without
regard to its principles of conflicts of laws.
 
IN WITNESS WHEREOF, the undersigned have executed this Note as of the date first
above written.
 
THE MONARCH CEMENT COMPANY, a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                 
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
 
BEAVER LAKE CONCRETE, INC., an Arkansas corporation
 
By:    /s/ Walter H. Wulf, Jr.                              
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
CAPITOL CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 

 
 
 
 
 

--------------------------------------------------------------------------------

 
 
CITY WIDE CONSTRUCTION PRODUCTS CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
CONCRETE ENTERPRISES, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
CONCRETE MATERIALS, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
DODGE CITY CONCRETE, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
JOPLIN CONCRETE COMPANY, INC., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
 
 
 
 

--------------------------------------------------------------------------------

 

KANSAS SAND AND CONCRETE, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
KAY CONCRETE MATERIALS CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
MONARCH CEMENT OF IOWA, INC., an Iowa corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
SPRINGFIELD READY MIX CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board

 
 

--------------------------------------------------------------------------------

 
 
TULSA DYNASPAN, INC., an Oklahoma corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board

 
 
 

--------------------------------------------------------------------------------

 
Exhibit D
 
FORM OF ADVANCING TERM NOTE
 
 

--------------------------------------------------------------------------------

 
 
PROMISSORY NOTE
(Advancing Term Note)
 
$10,000,000.00
December 31, 2012
 
Tulsa, Oklahoma

 
FOR VALUE RECEIVED, the undersigned, THE MONARCH CEMENT COMPANY, a Kansas
corporation, BEAVER LAKE CONCRETE, INC., an Arkansas corporation, CAPITOL
CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation, CITY WIDE CONSTRUCTION
PRODUCTS CO., a Missouri corporation, CONCRETE ENTERPRISES, INC., a Kansas
corporation, CONCRETE MATERIALS, INC., a Kansas corporation, DODGE CITY
CONCRETE, INC., a Kansas corporation, JOPLIN CONCRETE COMPANY, INC., a Missouri
corporation, KANSAS SAND AND CONCRETE, INC., a Kansas corporation, KAY CONCRETE
MATERIALS CO., a Missouri corporation, MONARCH CEMENT OF IOWA, INC., an Iowa
corporation, SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation,
SPRINGFIELD READY MIX CO., a Missouri corporation, and TULSA DYNASPAN, INC., an
Oklahoma corporation (collectively, the "Makers"), hereby jointly and severally
promise to pay to the order of BOKF, NA DBA BANK OF OKLAHOMA (the "Lender"), on
or before the Advancing Term Loan Maturity Date, the principal sum of TEN
MILLION AND NO/100 DOLLARS ($10,000,000.00), or such lesser principal amount as
shall be advanced and remain outstanding hereunder.
 
This Note is executed and delivered by the Makers pursuant to, and is entitled
to the benefits of, that certain Second Amended and Restated Credit Agreement
dated as of December 31, 2012 (as amended, restated, extended, supplemented,
increased or otherwise modified from time to time, the "Credit Agreement"),
between the Makers and the Lender.  All capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
 
This Note is made, executed and delivered pursuant to the Credit Agreement and
is the "Advancing Term Note" described and defined therein.  Reference is hereby
made to the Credit Agreement for terms and provisions regarding the collateral
security for payment of this Note, the prepayment rights and obligations of the
Makers, the right of the holder of this Note to accelerate the maturity hereof
on the occurrence or existence of any Event of Default specified therein, and
for all other pertinent purposes.
 
The unpaid principal balance of this Note will bear interest from the date
hereof until maturity (whether at the stated maturity date, upon acceleration of
maturity or otherwise), at the WSJ Prime Rate less 1.50%, provided, however,
such rate of interest shall not be less than  1.50% per annum.  Interest shall
be calculated on the basis of actual days elapsed, but computed as if each
calendar year consisted of 360 days.
 
Prior to the Advancing Term Loan Maturity Date, interest only on this Note will
be due and payable in consecutive quarterly installments on the last day of each
quarter commencing March 31, 2013.  The entire outstanding principal balance of
this Note and all unpaid interest accrued hereon will be due and payable in full
on the Advancing Term Loan Maturity Date.  If any amount is not paid in full
when due hereunder, such unpaid amount shall bear interest, to be
 
 

--------------------------------------------------------------------------------

 
paid upon demand, from the due date thereof until the date of actual payment
(and before as well as after judgment) computed at the rate or rates determined
in accordance with the Credit Agreement.
 
All payments, including prepayments, of principal of, or interest on, this Note
shall be made to the Lender at the Lender's principal office located at Bank of
Oklahoma Tower, One Williams Center, Eighth Floor, Tulsa, Oklahoma 74172, in
Dollars and in immediately available funds not later than 2:00 p.m. (Tulsa time)
on the date due.  Whenever a payment is due on a day other than a Business Day,
the due date shall be extended to the next succeeding Business Day and interest
(if any) shall accrue during such extension.
 
It is the intent of the Lender and the Makers to conform strictly to all
applicable usury laws, and any interest on the principal balance hereof in
excess of that allowed by said usury laws shall be subject to reduction to the
maximum amount of interest allowed under said laws.  If any interest in excess
of the maximum amount of interest allowable by said usury laws is inadvertently
paid to the holder hereof, at any time, any such excess interest shall be
refunded by the holder to the party or parties entitled to the same after
receiving notice of payment of such excess interest.
 
All advances and payments hereunder will be recorded by the Lender in its books
and records, and the unpaid principal balance so recorded shall be presumptive
evidence of the amount owing on this Note.  The Lender may also attach schedules
to this Note and endorse thereon the date and amount of each Revolving Loan and
all payments with respect to this Note.
 
If, and as often as, this Note is placed in the hands of an attorney for
collection or to defend or enforce any of the holder's rights hereunder, the
Makers will pay to the holder hereof its reasonable attorneys' fees, together
with all court costs and other expenses paid by such holder.
 
To the extent any payment due hereunder is not paid within 10 calendar days of
the applicable due date, and, to the extent that the following described fee is
deemed to constitute interest, subject to Section 2.05(d) of the Credit
Agreement, in addition to any interest or other fees and charges due hereunder
or under the applicable Loan Document, the Makers shall pay a late fee equal to
5% of the amount of the payment that was to have been made.  The Makers agree
that such late fee is reasonable compensation to the Lender for the acceptance
and handling of such late payments.
 
The Makers and all endorsers, sureties, guarantors and other parties who may
become liable for all or any part of this Note severally waive diligence,
demand, presentment, notice of dishonor, protest, notice of protest, non-payment
and notice of non-payment, and consent to: (a) any and all extensions of time
for any term or terms regarding any payment due under this Note, including
partial payments or renewals before or after maturity; (b) any substitutions or
release of collateral; and (c) the addition, substitution or release of any
party liable for payment of this Note.
 
No waiver of any payment or other right under this Note or any related agreement
shall operate as a waiver of any other payment or right.  All of the holder's
rights hereunder are
 
 

--------------------------------------------------------------------------------

 
cumulative and not alternative.  This Note shall inure to the benefit of the
successors and assigns of the Lender or other holder and shall be binding upon
the successors and assigns of the Makers.
 
This Note has been delivered to and accepted by the Lender in the State of
Oklahoma, is to be performed in the State of Oklahoma and shall be deemed a
contract made under the laws of the State of Oklahoma, and all rights and
indebtedness hereunder, including matters of construction, validity and
performance, shall be governed by the laws of the State of Oklahoma, without
regard to its principles of conflicts of laws.
 
IN WITNESS WHEREOF, the undersigned have executed this Note as of the date first
above written.
 
 
THE MONARCH CEMENT COMPANY, a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                 
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
 
BEAVER LAKE CONCRETE, INC., an Arkansas corporation
 
By:    /s/ Walter H. Wulf, Jr.                              
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
 
CAPITOL CONCRETE PRODUCTS COMPANY, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
CITY WIDE CONSTRUCTION PRODUCTS CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
 
 

--------------------------------------------------------------------------------

 

CONCRETE ENTERPRISES, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
CONCRETE MATERIALS, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
DODGE CITY CONCRETE, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
JOPLIN CONCRETE COMPANY, INC., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board
 
 
KANSAS SAND AND CONCRETE, INC., a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: President
 
 
 

--------------------------------------------------------------------------------

 

KAY CONCRETE MATERIALS CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
MONARCH CEMENT OF IOWA, INC., an Iowa corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
SALINA CONCRETE PRODUCTS, INCORPORATED, a Kansas corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
SPRINGFIELD READY MIX CO., a Missouri corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
TULSA DYNASPAN, INC., an Oklahoma corporation
 
By:    /s/ Walter H. Wulf,
Jr.                                                                                      
Name: Walter H. Wulf, Jr.
Title: Chairman of the Board
 
 
 

--------------------------------------------------------------------------------

 
Exhibit E

FORM OF COMPLIANCE CERTIFICATE

THE MONARCH CEMENT COMPANY
BEAVER LAKE CONCRETE, INC.
CAPITOL CONCRETE PRODUCTS COMPANY, INC.
CITY WIDE CONSTRUCTION PRODUCTS CO.
CONCRETE ENTERPRISES, INC.
CONCRETE MATERIALS, INC.
DODGE CITY CONCRETE, INC.
JOPLIN CONCRETE COMPANY, INC.
KANSAS SAND AND CONCRETE, INC.
KAY CONCRETE MATERIALS CO.
MONARCH CEMENT OF IOWA, INC.
SALINA CONCRETE PRODUCTS, INCORPORATED
SPRINGFIELD READY MIX CO. and
TULSA DYNASPAN, INC.
 
Date: __________, 20___
 
This certificate is given by _____________________, a Responsible Officer of THE
MONARCH CEMENT COMPANY, a Kansas corporation ("Monarch"), BEAVER LAKE CONCRETE,
INC., an Arkansas corporation, CAPITOL CONCRETE PRODUCTS COMPANY, INC., a Kansas
corporation, CITY WIDE CONSTRUCTION PRODUCTS CO., a Missouri corporation,
CONCRETE ENTERPRISES, INC., a Kansas corporation, CONCRETE MATERIALS, INC., a
Kansas corporation, DODGE CITY CONCRETE, INC., a Kansas corporation, JOPLIN
CONCRETE COMPANY, INC., a Missouri corporation, KANSAS SAND AND CONCRETE, INC.,
a Kansas corporation, KAY CONCRETE MATERIALS CO., a Missouri corporation,
MONARCH CEMENT OF IOWA, INC., an Iowa corporation, SALINA CONCRETE PRODUCTS,
INCORPORATED, a Kansas corporation, SPRINGFIELD READY MIX CO., a Missouri
corporation, and TULSA DYNASPAN, INC., an Oklahoma corporation (collectively,
the "Borrowers"), pursuant to Section 7.02(b) of that certain Second Amended and
Restated Credit Agreement dated as of December 31, 2012, between the Borrowers
and BOKF, NA dba Bank of Oklahoma, as Lender (as such agreement may have been
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement").  Capitalized terms used herein without definition shall
have the meanings set forth in the Credit Agreement.
 
The undersigned Responsible Officer hereby certifies to Lender that:
 
(a) the financial statements delivered with this certificate in accordance with
Section 4.01 of the Credit Agreement fairly present in all material respects the
results of operations and financial condition of Borrowers as of the dates and
the accounting period covered by such financial statements;
 
 
 
 

--------------------------------------------------------------------------------

 
(b) I have reviewed the terms of the Credit Agreement and have made, or caused
to be made under my supervision, a review in reasonable detail of the
transactions and conditions of Borrowers during the accounting period covered by
such financial statements;
 
(c) such review has not disclosed the existence during or at the end of such
accounting period, and I have no knowledge of the existence as of the date
hereof, of any condition or event that constitutes a Default or an Event of
Default, except as set forth in Schedule 1 hereto, which includes a description
of the nature and period of existence of such Default or an Event of Default and
what action the Borrowers have taken, are undertaking and propose to take with
respect thereto;
 
(d) The Borrowers are in compliance with the covenants contained in Article VI
of the Credit Agreement, as demonstrated by the calculation of such covenants
below, except as set forth below;
 
(e) the Minimum Tangible Net Worth Before Other Comprehensive Income for the
period covered by this certificate, as demonstrated by the calculations attached
hereto, is $________; and
 
(f) the Minimum Tangible Net Worth After Other Comprehensive Income for the
period covered by this certificate, as demonstrated by the calculations attached
hereto, is $________.
 
IN WITNESS WHEREOF, the undersigned officer, in his or her capacity as such, has
executed and delivered this certificate this ____ day of ___________, ____.
 
 
 
 
_____________________________________________
Name:
 
 
 
 

--------------------------------------------------------------------------------

 
 
Exhibit F

FORM OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this "Joinder Agreement"), dated as of ____________,
20__, is by and between __________________________________________, a
______________________ (the "Subsidiary"), and BOKF, NA DBA BANK OF OKLAHOMA
(the "Lender") under that certain Second Amended and Restated Credit Agreement
dated as of December 31, 2012 (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"), between THE MONARCH
CEMENT COMPANY, a Kansas corporation ("Monarch"), BEAVER LAKE CONCRETE, INC., an
Arkansas corporation, CAPITOL CONCRETE PRODUCTS COMPANY, INC., a Kansas
corporation, CITY WIDE CONSTRUCTION PRODUCTS CO., a Missouri corporation,
CONCRETE ENTERPRISES, INC., a Kansas corporation, CONCRETE MATERIALS, INC., a
Kansas corporation, DODGE CITY CONCRETE, INC., a Kansas corporation, JOPLIN
CONCRETE COMPANY, INC., a Missouri corporation, KANSAS SAND AND CONCRETE, INC.,
a Kansas corporation, KAY CONCRETE MATERIALS CO., a Missouri corporation,
MONARCH CEMENT OF IOWA, INC., an Iowa corporation, SALINA CONCRETE PRODUCTS,
INCORPORATED, a Kansas corporation, SPRINGFIELD READY MIX CO., a Missouri
corporation, and TULSA DYNASPAN, INC., an Oklahoma corporation (collectively,
the "Borrowers"), and the Lender.  All of the defined terms in the Credit
Agreement are incorporated herein by reference.

The Borrowers are required by Section 4.12 of the Credit Agreement to cause the
Subsidiary to become a "Borrower" under the Credit Agreement.

Accordingly, the Subsidiary hereby agrees as follows with the Lender:

1.           The Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Subsidiary will be deemed to be a party to
the Credit Agreement and a "Borrower" for all purposes of the Credit Agreement,
and shall have all of the obligations of a Borrower thereunder as if it had
executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Subsidiary Guarantors contained in the Credit Agreement.
Without limiting the generality of the foregoing terms of this Paragraph 1, the
Subsidiary hereby jointly and severally together with the other Borrowers the
prompt payment and performance of the Obligations in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise)
strictly in accordance with the terms thereof.

2.           The Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Subsidiary will be deemed to be a party to
the Security Agreement, and shall have all the obligations of an "Obligor" (as
such term is defined in the Security Agreement) thereunder as if it had executed
the Security Agreement. The Subsidiary hereby ratifies, as of the date hereof,
and agrees to be bound by, all of the terms, provisions and conditions contained
in the Security Agreement. Without limiting generality of the foregoing terms of
this paragraph 2, the Subsidiary hereby grants to the Lender a continuing
security interest in, and a right of set off against any and all right, title
and interest of the Subsidiary in and to the Collateral (as such term
 
 
 

--------------------------------------------------------------------------------

 
 
is defined in Section 2 of the Security Agreement) of the Subsidiary. The
Subsidiary hereby represents and warrants to the Lender that:

(i)           The Subsidiary's chief executive office, taxpayer identification
number, organization identification number, and chief place of business are (and
for the prior four months have been) located at the locations set forth on
Schedule 1 attached hereto and the Subsidiary keeps its books and records at
such locations.

(ii)           The Subsidiary's legal name and jurisdiction of organization is
as shown in this Agreement and the Subsidiary has not in the past four months
changed its name, been party to a merger, consolidation or other change in
structure or used any tradename except as set forth in Schedule 2 attached
hereto.

3.           The address of the Subsidiary for purposes of all notices and other
communications is ___________________________, ______________________________,
Attention of _______________________ (Facsimile No._______________) (Email
_______________).

4.           This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or by electronic communication in
electronic portable format (PDF) shall be effective as delivery of a manually
executed counterpart of this Agreement.

5.           This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the State of Oklahoma, without regard to its
principles of conflicts of laws.

IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to be duly
executed by its authorized officers, and the Lender has caused the same to be
accepted by its authorized officer, as of the day and year first above written.

[SUBSIDIARY]

By:                                                                                                                         
Name:
Title:
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
Acknowledged and accepted:

BOKF, NA DBA BANK OF OKLAHOMA

By:                                                                     
                                             
Name:
Title:
 
 
 
 
 

--------------------------------------------------------------------------------

 
Schedule 1
TO FORM OF JOINDER AGREEMENT

[Chief Executive Office, Tax Identification Number, Organization Identification
Number
and Chief Place of Business]
 
 
 
 
 
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
Schedule 2
TO FORM OF JOINDER AGREEMENT

[Name Changes, Mergers, Consolidations, Other Structural Changes and Tradenames]
 
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
Exhibit G

FORM OF PLEDGE AGREEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
 
 

--------------------------------------------------------------------------------

 
SECOND AMENDED AND RESTATED SECURITIES ACCOUNT PLEDGE AND COLLATERAL MAINTENANCE
AGREEMENT

THIS SECOND AMENDED AND RESTATED SECURITIES ACCOUNT PLEDGE AND COLLATERAL
MAINTENANCE AGREEMENT (this "Agreement") is made as of December 31, 2012, by THE
MONARCH CEMENT COMPANY, a Kansas corporation ("Pledgor"), in favor of BOKF, NA
dba BANK OF OKLAHOMA, a national banking association ("Secured Party").
 

 
RECITALS
 

A.           Pledgor has previously entered into that certain Amended and
Restated Securities Account Pledge and Collateral Maintenance Agreement dated
February 3, 2012, in favor of Secured Party (the "Existing Pledge Agreement").
 
 
B.           Concurrently with the execution and delivery of this Agreement,
Pledgor is entering into that certain Second Amended and Restated Credit
Agreement of even date herewith (as it may be amended, modified, supplemented or
restated from time to time, the "Credit Agreement"), among Pledgor, the
Subsidiaries of Pledgor named therein (together with Pledgor, collectively, the
"Borrowers"), and Secured Party.  Pursuant to the Credit Agreement, the Lender
has agreed to renew and continue a revolving credit facility and a term loan,
and establish an advancing term loan, in favor of the Borrowers in the maximum
aggregate principal amount of $35,000,000.

C.           It is a condition precedent to the closing of the Credit Agreement
and the obligations of Secured Party thereunder that Pledgor execute and deliver
this Agreement.

D.           The parties intend that this Agreement shall amend and restate the
Existing Pledge Agreement in its entirety.

NOW, THEREFORE, in consideration of the foregoing, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce the Lender to extend credit to Pledgor under the Credit
Agreement, Pledgor hereby covenants and agrees with Secured Party as follows:

ARTICLE I
DEFINITIONS
 
1.01 Terms Defined in Credit Agreement. Capitalized terms used herein and not
otherwise defined have the respective meanings assigned to them in the Credit
Agreement.
 
1.02 Certain Definitions. The following terms have the meanings indicated below
(unless the context otherwise requires):
 
 
 
7
 
 

--------------------------------------------------------------------------------

 
"Account Value" means, as of any determination date, the fair market value of
the Pledged Securities and other assets held in the Pledged Account, as
reflected in any account statement or other statement provided by Securities
Intermediary.
 
"Collateral" means and includes (i) the Pledged Account, (ii) the Pledged
Securities, (iii) all cash and cash equivalents, including money market deposit
accounts, money market mutual funds, overnight "sweep" investment funds, deposit
accounts and certificates of deposit, from time to time held or carried in or
credited to the Pledged Account, (iv) all security entitlements from time to
time relating to or credited to the Pledged Account, and (v) all Proceeds of the
foregoing.
 
"Control Agreement" means that certain Control Agreement and Acknowledgment of
Pledge and Security Interest dated January 21, 2011, entered into by and among
Pledgor, Secured Party and Securities Intermediary, as the same may (with
Secured Party's consent) be amended, modified or restated from time to time.
 
"Eligible Securities" means (i) equity securities issued by the issuers and of
the same classification and type as the equity securities currently held in the
Pledged Account, as listed in Schedule I hereto, and (ii) other readily
marketable securities selected by Pledgor and acceptable to Secured Party in its
sole and absolute discretion.
 
"Minimum Balance" means $12,000,000.
 
"Pledged Account" means the securities account (investment account) maintained
by Pledgor with Securities Intermediary and currently identified as Account #
4NC-632631 (or any successor securities account into which the securities,
security entitlements, financial assets, investment property, cash, cash
equivalents or other items from time to time held or carried in or credited to
the Pledged Account may be transferred).
 
"Pledged Securities" means (i) the securities that are currently held in the
Pledged Account, as more fully described on Schedule I attached hereto, and (ii)
all other securities, financial assets and other investment property from time
to time held or carried in the Pledged Account, including securities acquired
upon the reinvestment from time to time of the Proceeds of the sale, transfer or
other disposition of any securities held in the Pledged Account.
 
"Proceeds" means and includes (i) all interest, cash dividends and other
earnings from time to time credited to the Pledged Account or otherwise paid or
payable with respect to the Pledged Securities, (ii) all other amounts at any
time paid or payable to Pledgor on account of the Pledged Account or the Pledged
Securities or any sale, transfer or other disposition thereof, including in-kind
distributions and liquidating distributions, (iii) all securities received as a
result of stock dividends, stock splits, mergers, consolidations,
recapitalizations and the like, and (iv) all other property constituting
proceeds within the meaning assigned to that term under the UCC.
 
"Securities Intermediary" means BOSC, Inc., having a place of business and
mailing address at Bank of Oklahoma Tower-Plaza SE, PO Box 2300, Tulsa, OK
74192, and its successors and assigns.
 
 
 
8
 
 

--------------------------------------------------------------------------------

 
"UCC" means Articles 1 and 9 of the Uniform Commercial Code as adopted and in
effect in the State of Oklahoma.
 
1.03 Terms Defined in UCC. Terms used herein that are defined in the UCC have
the respective meanings set forth therein.
 
1.04 Construction. The following rules of construction shall apply, unless
elsewhere specifically indicated to the contrary: (a) all terms defined herein
in the singular shall include the plural, as the context requires, and
vice-versa; (b) pronouns stated in the neuter gender shall include the
masculine, the feminine, and the neuter genders; (c) the term "or" is not
exclusive; (d) the term "including" (or any form thereof) shall not be limiting
or exclusive; (e) all references herein to Sections are references to the
several Sections of this Agreement; and (f) all references herein to exhibits
and schedules are references to exhibits or schedules attached to this
Agreement.
 
ARTICLE II
GRANT OF SECURITY INTEREST
 
2.01 Grant of Security Interest. To secure the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations (which term includes, without limitation, all
Obligations from time to time evidenced by the Notes and all other Obligations
of Pledgor to Secured Party arising under or in connection with the Credit
Agreement, this Agreement or any other Loan Documents), Pledgor hereby pledges
and continues in favor of Secured Party, and does hereby grant and reaffirm in
favor of Secured Party, a continuing first priority security interest in and to,
the Collateral.
 
2.02 Perfection; Control. In order to provide Secured Party with the benefit of
a first priority, perfected security interest in the Collateral, Pledgor (i)
authorizes Secured Party to file one or more financing statements covering the
Collateral in the appropriate UCC filing offices, (ii) reaffirms the Control
Agreement with Securities Intermediary granting Secured Party control of the
Pledged Account, and (iii) agrees from time to time to promptly execute and
deliver all further instruments and documents, and take all further actions,
that may be necessary, or that Secured Party may reasonably request, in order to
continue, perfect and protect the security interest granted hereby.
 
ARTICLE III
AGREEMENTS WITH RESPECT TO THE PLEDGED ACCOUNT
 
3.01 Trading in the Pledged Account. Pledgor shall be authorized to trade in the
Pledged Account and to sell, transfer or otherwise dispose of any securities
carried in the Pledged Account.
 
3.02 Investments of Cash. Any cash credited to the Pledged Account may be
invested by Securities Intermediary in certificates of deposit, money market
deposit accounts, money market mutual funds, overnight "sweep" investment funds
and/or bank deposit accounts on condition that (i) Pledgor shall not make (or
have the ability to make) any direct withdrawals from any such accounts or
funds, (ii) such accounts or funds shall not provide a check-writing
 
 
 
9
 
 
 
 

--------------------------------------------------------------------------------

 
 feature, and (iii) all such accounts and funds, and all interests therein,
shall remain a part of the applicable Pledged Account.
 
3.03 Collateral Maintenance. Pledgor shall own and maintain in the Pledged
Account at all times Eligible Securities which, together with the cash and cash
equivalents credited to the Pledged Account, have an Account Value that is
greater than or equal to the Minimum Balance.
 
3.04 Loans from Securities Intermediary. Pledgor shall not obtain or have
outstanding at any time any margin loans or other extensions of credit secured
by any of the assets carried in any of the Pledged Account.
 
3.05  Control Agreement. Pledgor shall maintain the Pledged Account in strict
accordance with the terms of the Control Agreement, the terms of which are
incorporated herein by this reference.
 
3.06 Monthly Statements. Pledgor shall cause Securities Intermediary to furnish
to Secured Party, within ten Business Days following the end of each calendar
month, a statement of Pledged Account as of the last day of such month.
 
3.07 "Financial Assets" Election. The parties agree that each item of property
(whether investment property, financial asset, security, instrument, cash or
other property) credited to the Pledged Account shall be treated as a "financial
asset" within the meaning of Sections 8-102(a)(9) and 8-103 of the UCC.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
 
Pledgor hereby represents and warrants to Secured Party that:

4.01 Ownership Free of Encumbrances. Pledgor is and will remain the sole legal
and beneficial owner of the Collateral, free and clear of any security
interests, liens, encumbrances, restrictions, rights of first refusal, adverse
claims or conflicting rights whatsoever, except the security interest created
hereby and except for broker's liens in favor of Securities Intermediary for
normal brokerage commissions and service fees. The Pledged Securities from time
to time held in the Pledged Account are not and will not at any time be subject
to any voting agreement, voting trust, shareholder agreement, buy/sell agreement
or other similar agreement or arrangement. Pledgor will defend the Collateral
against all claims and demands of all persons at any time claiming the
Collateral or any interest therein. At no time shall any other Person have any
security interest in the Pledged Account.
 
4.02 Authorization. Pledgor has full power and authority to execute and deliver
this Agreement. Neither the execution and delivery of this Agreement by Pledgor
nor the performance of the terms and conditions contained herein are subject to
the approval or consent of any third party. This Agreement constitutes the valid
and legally binding obligation of Pledgor, enforceable in accordance with its
terms.
 
4.03 Conflicting Agreements and Restrictions. Neither the execution and delivery
of this Agreement by Pledgor nor the performance of the terms and conditions
contained herein will
 
10
 
 

--------------------------------------------------------------------------------

 
conflict with, or result in a breach of the terms, conditions or provisions of,
or constitute a default under, or result in any violation of any agreement,
instrument, undertaking, judgment, decree, order or injunction to which Pledgor
is subject.
 
4.04 Nature of Account. The Pledged Account is a "securities account" within the
meaning of Section 8-501 of the UCC.
 
4.05 Initial Pledged Securities. Schedule I attached hereto is a true and
correct list of the Pledged Securities held in the Pledged Account as of the
date hereof.
 
ARTICLE V
COVENANTS
 
Pledgor covenants and agrees with Secured Party that from the date hereof until
payment in full of the Obligations:

5.01 Disposition of Collateral. Pledgor will not (i) offer, sell, transfer,
assign, dispose of or grant any option with respect to the Collateral, except as
permitted by Section 3.1 or Section 3.2 hereof, (ii) create or suffer to exist
any lien, security interest, option or other charge or encumbrance upon or with
respect to the Collateral, except for the security interest created hereby and
except for broker's liens in favor of Securities Intermediary for normal
brokerage commissions and service fees, or (iii) enter into any voting
agreement, voting trust, shareholder agreement, buy/sell agreement or other
similar agreement or arrangement with respect to the Collateral.
 
5.02 Voting Rights. Unless an Event of Default shall have occurred and be
continuing, Pledgor will be entitled to vote the Pledged Securities and to give
consents, waivers and ratifications in respect of the Pledged Securities;
provided, however, that no vote shall be cast, or consent, waiver or
ratification given or action taken which would impair the value of the
Collateral or be inconsistent with or violate any provision of this Agreement or
the Credit Agreement.
 
5.03 Compliance with Federal Reserve Board Regulations. Upon the request of
Secured Party, Pledgor will complete, execute and deliver to Secured Party a
"Purpose Statement" (Form U-1) pursuant to Regulation U of the Board of
Governors of the Federal Reserve System. No part of the proceeds of any loans
included in the Obligations will be used, and no part of any loan repaid or to
be repaid with the proceeds of any such loan was or will be used, directly or
indirectly, for the purpose of purchasing or carrying any "margin security" or
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System.
 
5.04 Relocation of Chief Executive Office. Pledgor will immediately notify
Secured Party of any change in the location of its chief executive office.
 
 
 
11
 
 

--------------------------------------------------------------------------------

 

ARTICLE VI
REMEDIES
 
6.01 Sale of Collateral. Upon the occurrence of any Event of Default and at any
time thereafter during the continuation thereof, (i) Secured Party shall have
and may exercise any of the remedies provided in the Credit Agreement, without
further notice to Pledgor, and (ii) Secured Party shall have and may exercise
any one or more of the following rights and remedies:
 
(a)           Deliver instructions pursuant to the Control Agreement (it being
understood that Secured Party will not deliver any such instructions prior to
the occurrence of an Event of Default).

(b)           Direct Securities Intermediary to transfer, sell, redeem, close
open trades or otherwise liquidate the Pledged Account and any or all shares of
Pledged Securities held or carried therein, and to pay the Proceeds thereof to
Secured Party for application to the outstanding Obligations.

(c)           Sell, lease or otherwise dispose of the Collateral at private or
public sale, in bulk or in parcels and, where permitted by law, without having
the Collateral present at the place of sale. Unless Pledgor has signed a
statement (after the occurrence of an Event of Default) renouncing or modifying
Pledgor's right to notice, Secured Party will give Pledgor reasonable notice of
the time and place of any public sale or other disposition thereof or the time
after which any private sale or other disposition thereof is to be made. The
requirements of reasonable notice shall be met if such notice is given to
Pledgor at least ten Business Days before the time of any such sale or
disposition. Secured Party shall not be obligated to make any such sale pursuant
to any such notice. Secured Party 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 the sale, and such sale may be
made at any time or place to which the same may be so adjourned. Pledgor
acknowledges that the Securities Act of 1933, as amended, and certain other
federal and state laws or regulations may constitute legal restrictions or
limitations upon Secured Party in any attempts to dispose of any portion of the
Collateral which constitutes securities and the enforcement by Secured Party of
its rights and remedies with respect thereto. Secured Party is authorized, but
shall in no event be obligated, to sell or dispose of any portion of the
Collateral which constitutes securities at a private sale subject to investment
letter or in any other manner which would not require the sale of the Collateral
or any portion thereof to be registered in accordance with the Securities Act of
1933, the rules and regulations promulgated thereunder, or under any other
securities laws or regulations, and Secured Party is authorized to take such
action, give such notice, obtain such consents and do such things as it may deem
necessary and appropriate in connection with any such private sale or
disposition.

(d)           Recover from Pledgor an amount equal to all costs, expenses and
attorney’s fees incurred by Secured Party in connection with the exercise of the
rights contained or referred to herein, together with interest on such sums at
the Default Rate applicable to the Notes from time to time.

 
12
 
 

--------------------------------------------------------------------------------

 
6.02 Earnings. Upon the occurrence and during the continuation of any Event of
Default, all interest, cash dividends and other earnings on the Pledged Account
shall be paid over to Secured Party to be held by it as additional collateral
security for the Obligations, and Secured Party may give notice to Securities
Intermediary that all such earnings are to be paid directly to Secured Party.
 
6.03 Limitation. Notwithstanding any other provision of this Agreement, the
maximum amount that Secured Party may realize from the Pledged Account following
the occurrence of any Event of Default will be an amount equal to the sum of (i)
the amount of the Obligations outstanding as of the date of such Event of
Default and (ii) interest, fees and collection costs accruing or incurred from
and after the date of such Event of Default.
 
6.04 Secured Party's Satisfaction of Pledgor's Obligations. Upon any failure by
Pledgor to perform any of its obligations hereunder, Secured Party may, but
shall not be obligated to, satisfy or cure such obligation, and Pledgor will
from time to time within five days after a request made by Secured Party
reimburse Secured Party for all amounts expended, advanced or incurred by
Secured Party in connection with such payment, cure or satisfaction, together
with interest on such sums at the Default Rate.
 
ARTICLE VII
MISCELLANEOUS
 
7.01 Amendment; Entire Agreement. This Agreement may not be amended, modified or
supplemented, except by an agreement in writing signed by the party or parties
against whom enforcement of any waiver, change, amendment, modification or
discharge is sought. This Agreement constitutes the entire agreement of the
parties hereto with respect to the matters dealt with herein.
 
7.02 Notices. All notices, requests and other communications to either party
hereunder shall be made in accordance with Section 11.02 of the Credit
Agreement.
 
7.03 Waivers; Consents. Pledgor hereby (i) consents to any and all extensions,
renewals, increases, modifications, rearrangements and consolidations of the
Obligations, (ii) consents to the addition, release or substitution of any
person other than Pledgor liable on any portion of the Obligations, (iii) waives
all demands and notices of any action taken by Secured Party pursuant to the
Credit Agreement or in connection with the Obligations, and (iv) waives any
indulgence by Secured Party.
 
7.04 Survival of Representations and Warranties. All representations and
warranties of Pledgor contained herein or made in writing by Pledgor in
connection herewith shall continue and shall survive the execution and delivery
of this Agreement.
 
7.05 Successors and Assigns. All covenants and agreements in this Agreement made
by Pledgor and Secured Party shall inure to the benefit of and shall be binding
upon Secured Party and Pledgor and their respective successors and assigns,
whether so expressed or not.
 
7.06 Descriptive Headings. The descriptive headings of the Sections of this
Agreement are inserted for convenience only and do not constitute a part of the
Agreement.
 

13
 
 

--------------------------------------------------------------------------------

 
7.07 GOVERNING LAW. THIS AGREEMENT IS EXECUTED AND DELIVERED IN THE STATE OF
OKLAHOMA AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS
OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF OKLAHOMA, WITHOUT
REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.
 
7.08 Severability. In the event any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof.
 
7.09 Preservation of Collateral. To the extent any Collateral should hereafter
be delivered into the physical custody, possession or safekeeping of Secured
Party, Secured Party's sole duty with respect to such the custody, possession
and safekeeping shall be to deal with it in the same manner as Secured Party
deals with similar property for its own account. Neither Secured Party nor any
of its directors, officers, employees or agents shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral, or for any
delay in doing so, or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of Pledgor or otherwise.
 
7.10 No Waiver by Secured Party. Secured Party shall not by any act (except by a
written instrument), delay, indulgence, omission, or otherwise, be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Event of
Default, or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of Secured Party, any
right, power, or privilege hereunder, shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof, or the exercise of any other
right, power or privilege. A waiver by Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Secured Party would otherwise have on any future occasion.
 
7.11 Financing Statements. A carbon, photographic or other reproduction of this
instrument or any financing statement in connection herewith shall be sufficient
as a financing statement for any and all purposes.
 
7.12 SUBMISSION TO JURISDICTION.  FOR PURPOSES OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, PLEDGOR
HEREBY IRREVOCABLY AND EXPRESSLY AGREES TO SUBMITS AND CONSENTS, FOR ITSELF AND
THE COLLATERAL, TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA AND THE OKLAHOMA STATE DISTRICT COURT IN AND FOR
THE DISTRICT OF TULSA COUNTY
 
7.13 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
 

 
14
 
 

--------------------------------------------------------------------------------

 
 
OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
SECURED PARTY OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.13.
 
7.14 Amendment and Restatement.  This Agreement amends, restates in its entirety
and supersedes, and continues without interruption the security interest created
under, that certain Second Amended and Restated Pledge Agreement dated as of
February 3, 2012, executed by Pledgor in favor of Secured Party.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURES APPEAR ON FOLLOWING PAGE.]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15
 
 

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, Pledgor has executed and delivered this Agreement effective
as of the date first above written.

THE MONARCH CEMENT COMPANY

By:    /s/ Walter H. Wulf,
Jr.                                                                                 
Name: Walter H. Wulf, Jr.
Title: President and Chairman of the Board

 
 

 
 

--------------------------------------------------------------------------------

 
SCHEDULE I
 
Identification of Initial Pledged Securities
 

1.           CVR Energy, Inc. (CVI)
2.           Eagle Materials Inc. (EXP)
3.           Texas Industries, Inc. (TXI)
4.           Vulcan Materials Company (VMC)