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EXHIBIT 10.34
K&F AGREEMENT
K&F AGREEMENT, dated as of October 15, 1997 (this "K&F
Agreement"), by K&F Industries, Inc. ("K&F"), in favor of The First National
Bank of Chicago, a Delaware banking corporation, as administrative agent (in
such capacity, the "Administrative Agent") for the lenders (the "Lenders") that
are parties to the Credit Agreement described below.
WITNESSETH:
WHEREAS, Aircraft Braking Systems Corporation ("ABS") and
Engineered Fabrics Corporation ("EF"; together with ABS, the "Borrowers"), each
Delaware corporations, are parties to Credit Agreement, dated as of October 15,
1997, with the Administrative Agent, the Lenders, ▇▇▇▇▇▇ Brothers Inc., as
Arranger, and ▇▇▇▇▇▇ Commercial Paper Inc., as Syndication Agent (as the same
may from time to time be amended, supplemented or otherwise modified, the
"Credit Agreement");
WHEREAS, pursuant to the terms of the Credit Agreement and the
other Loan Documents, the Lenders have agreed to make and maintain certain
extensions of credit to or for the benefit of the Borrowers;
WHEREAS, K&F owns directly or indirectly all of the issued and
outstanding stock of each of the Borrowers;
WHEREAS, K&F will derive substantial direct and indirect
benefit from the making and maintaining of the extensions of credit; and
WHEREAS, the obligation of the Lenders to make and maintain
the extensions of credit is conditioned upon, among other things, the execution
and delivery by K&F of this K&F Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders to enter into the Credit Agreement and to make and maintain the
extensions of credit, K&F hereby agrees with and for the benefit of the
Administrative Agent and the Lenders as follows:
1. Defined Terms. As used in this K&F Agreement, terms defined
in the Credit Agreement are used herein as therein defined.
2. Covenants. K&F hereby covenants and agrees with the
Administrative Agent and each Lender, from and after the date of this K&F
Agreement until the Obligations are paid in full, the Revolving Credit
Commitments are terminated, and the expiration, termination or return to the
Issuing Lender of the Letters of Credit, that:
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(a) K&F will furnish the Borrowers with all financial
statements and other information and documents concerning K&F and its
consolidated Subsidiaries required to enable the Borrowers timely to
comply with subsections 6.1 and 6.2 of the Credit Agreement;
(b) K&F will not create, incur, assume or suffer to exist any
Indebtedness, except (i) Indebtedness owed by K&F to either Borrower
and (ii) Indebtedness in respect of the Senior Subordinated Notes;
(c) K&F will not make any payment or expenditure of any kind
or nature, including, without limitation, any payments to any
stockholder of K&F, except for (i) payments of interest in respect of
Indebtedness permitted by clause (b) above, (ii) an amount in respect
of operating expenses during each fiscal year of K&F consistent with
the past practices of K&F, (iii) payments in respect of United States
federal and New York state taxes and (iv) to the extent permitted by
Sections 7.6(d), 7.8(d) and (j), and 7.10, in each case in accordance
with the terms thereof and any other applicable provisions of the
Credit Agreement, including, without limitation, Section 6.10 of the
Credit Agreement;
(d) K&F will not (i) make any optional payment or optional
prepayment on or optional redemption of any Indebtedness (including,
without limitation, the Senior Subordinated Notes) or other obligation,
or (ii) amend, modify or change, or consent or agree to any amendment,
modification or change to any of the terms relating to the payment or
prepayment of principal of or interest on any Indebtedness (other than
any such amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or
which would reduce the rate or extend the date for payment of interest
thereon), including but not limited to the subordination provisions of
the Senior Subordinated Notes;
(e) K&F will not change its fiscal year from the year ended
December 31;
(f) Unless required by changes in GAAP, K&F will not (except
with the consent of the Required Lenders) change any of its accounting
or financial practices or policies in a manner that affects the way in
which it currently accounts for (and expenses currently) its product
development costs and its discounts on sales;
(g) K&F will not fail to comply with Section 7.1 of the Credit
Agreement, which Section is hereby incorporated by reference herein as
if such provisions were set forth in full herein, and
(h) K&F will not have more cash or cash equivalents on hand at
any time than is consistent with its past practices.
3. Severability. Any provision of this K&F Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
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prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
4. No Waiver; Cumulative Remedies. Neither the Administrative
Agent nor any Lender shall by any act (except by a written instrument pursuant
to paragraph 5 hereof), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default or in any breach of any of the terms and conditions hereof.
No failure to exercise, nor any delay in exercising any right, power or
privilege hereunder, on the part of the Administrative Agent or any Lender,
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 the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
5. Integration; Waivers and Amendments; Successors and
Assigns; Governing Law. This K&F Agreement represents the agreement of K&F with
respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein. None of the terms or provisions of
this K&F Agreement may be waived, amended or supplemented or otherwise modified
except by a written instrument executed by K&F and the Administrative Agent,
provided that any provision of this K&F Agreement may be waived by the
Administrative Agent and the Lenders in a letter or agreement executed by the
Administrative Agent or by telex or facsimile transmission from the
Administrative Agent. This K&F Agreement shall be binding upon the successors
and assigns of K&F and shall inure to the benefit of the Administrative Agent
and the Lenders and their respective successors and assigns. THIS K&F AGREEMENT
SHALL BE GOVERNED BY AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK.
6. Notices. All notices, requests and demands to or upon K&F
or the Administrative Agent or any Lender to be effective shall be in writing or
by telegraph or telex and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or, in the case
of mail, three days after deposit in the postal system, first class postage
prepaid, or, in the case of telegraphic notice, when sent, answerback received,
addressed to the Administrative Agent at the address set forth in subsection
10.2 of the Credit Agreement and to K&F as follows:
K&F Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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7. Paragraph Headings. The paragraph headings used in this K&F
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
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IN WITNESS WHEREOF, the undersigned has caused this K&F
Agreement to be duly executed and delivered by its duly authorized officer as of
the day and year first above written.
K&F INDUSTRIES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President