1
EXHIBIT 10.24
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 18, 1997,
Amended and Restated as of September 26, 1997
Among
ARGO-TECH CORPORATION,
as Borrower,
AT HOLDINGS CORPORATION,
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
---------------------------
CHASE SECURITIES INC.,
as Arranger
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms...................................... 1
SECTION 1.02. Classification of Loans and
Borrowings....................................... 29
SECTION 1.03. Terms Generally ................................... 29
SECTION 1.04. Accounting Terms; GAAP............................. 29
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments; Outstanding Loans..................... 30
SECTION 2.02. Loans and Borrowings............................... 30
SECTION 2.03. Requests for Borrowings............................ 31
SECTION 2.04. Letters of Credit.................................. 32
SECTION 2.05. Funding of Borrowings.............................. 38
SECTION 2.06. Interest Elections................................. 39
SECTION 2.07. Termination and Reduction of
Commitments...................................... 40
SECTION 2.08. Repayment of Loans; Evidence of Debt............... 41
SECTION 2.09. Amortization of Term Loans......................... 42
SECTION 2.10. Prepayment of Loans................................ 45
SECTION 2.11. Fees............................................... 47
SECTION 2.12. Interest........................................... 48
SECTION 2.13. Alternate Rate of Interest......................... 49
SECTION 2.14. Increased Costs.................................... 50
SECTION 2.15. Break Funding Payments............................. 51
SECTION 2.16. Taxes.............................................. 52
SECTION 2.17. Payments Generally; Pro Rata Treatment;
Sharing of Setoffs............................... 53
SECTION 2.18. Mitigation Obligations; Replacement
of Lenders....................................... 55
3
2
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Organization; Powers............................... 57
SECTION 3.02. Authorization; Enforceability...................... 57
SECTION 3.03. Governmental Approvals; No Conflicts............... 57
SECTION 3.04. Financial Condition; No Material
Adverse Change................................... 58
SECTION 3.05. Properties......................................... 59
SECTION 3.06. Litigation and Environmental Matters............... 59
SECTION 3.07. Compliance with Laws and Agreements................ 60
SECTION 3.08. Investment and Holding Company Status.............. 60
SECTION 3.09. Taxes.............................................. 60
SECTION 3.10. ERISA.............................................. 60
SECTION 3.11. Disclosure......................................... 61
SECTION 3.12. Subsidiaries....................................... 61
SECTION 3.13. Insurance.......................................... 61
SECTION 3.14. Labor Matters...................................... 61
SECTION 3.15. Solvency........................................... 62
SECTION 3.16. Security Documents................................. 62
SECTION 3.17. Federal Reserve Regulations........................ 63
SECTION 3.18. TRW Agreement...................................... 63
SECTION 3.19. Tax Status of ESOP................................. 64
SECTION 3.20. Certain Agreements................................. 64
ARTICLE IV
Conditions
----------
SECTION 4.01. Amendment Effective Date........................... 64
SECTION 4.02. Each Credit Event.................................. 69
ARTICLE V
Affirmative Covenants
---------------------
SECTION 5.01. Financial Statements and Other
Information...................................... 70
SECTION 5.02. Notices of Material Events......................... 72
SECTION 5.03. Information Regarding Collateral................... 72
SECTION 5.04. Existence; Conduct of Business..................... 73
SECTION 5.05. Payment of Obligations............................. 73
SECTION 5.06. Maintenance of Properties.......................... 74
SECTION 5.07. Insurance.......................................... 74
4
3
SECTION 5.08. Casualty and Condemnation.......................... 75
SECTION 5.09. Books and Records, Inspection and
Audit Rights..................................... 76
SECTION 5.10. Compliance with Laws............................... 76
SECTION 5.11. Use of Proceeds and Letters of Credit.............. 77
SECTION 5.12. Additional Subsidiaries............................ 77
SECTION 5.13 Further Assurances................................. 78
ARTICLE VI
Negative Covenants
------------------
SECTION 6.01. Indebtedness; Certain Equity
Securities....................................... 79
SECTION 6.02. Liens.............................................. 81
SECTION 6.03. Fundamental Changes................................ 82
SECTION 6.04. Investments, Loans, Advances,
Guarantees and Acquisitions...................... 83
SECTION 6.05. Asset Sales........................................ 86
SECTION 6.06. Sale and Lease-Back Transactions .................. 86
SECTION 6.07. Hedging Agreements................................. 86
SECTION 6.08. Restricted Payments; Certain Payments
of Indebtedness.................................. 87
SECTION 6.09. Transactions with Affiliates....................... 88
SECTION 6.10. Restrictive Agreements............................. 89
SECTION 6.11. Amendment of Material Documents.................... 89
SECTION 6.12. Capital Expenditures............................... 90
SECTION 6.13. Leverage Ratio..................................... 90
SECTION 6.14 Consolidated Interest Expense Coverage
Ration............................................. 91
SECTION 6.15 Certain Actions under Senior
Subordinated Note Documents........................ 91
ARTICLE VII
Events of Default ................................................... 91
ARTICLE VIII
The Administrative Agent............................................. 95
ARTICLE IX
Miscellaneous
-------------
5
4
SECTION 9.01. Notices.............................................. 98
SECTION 9.02. Waivers; Amendments.................................. 98
SECTION 9.03. Expenses; Indemnity; Damage Waiver................... 100
SECTION 9.04. Successors and Assigns............................... 102
SECTION 9.05. Survival............................................. 105
SECTION 9.06. Counterparts; Integration;
Effectiveness...................................... 106
SECTION 9.07. Severability......................................... 106
SECTION 9.08. Right of Setoff...................................... 106
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process.............................. 107
SECTION 9.10. WAIVER OF JURY TRIAL................................. 108
SECTION 9.11. Headings............................................. 108
SECTION 9.12. Confidentiality...................................... 108
SECTION 9.13. Interest Rate Limitation............................. 109
SCHEDULES:
Schedule 1.01(b) -- Immaterial Subsidiaries
Schedule 2.01 -- Commitments
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.04 -- Investments
Schedule 6.05 -- Real Estate
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B(i) -- Form of Opinion of ▇▇▇▇ ▇. ▇▇▇▇
Exhibit B(ii)-- Form of Opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ &
▇▇▇▇▇
Exhibit C -- Form of Parent Guarantee Agreement
Exhibit D -- Form of Subsidiary Guarantee Agreement
Exhibit E -- Form of Indemnity, Subrogation and Contribution
Agreement
Exhibit F -- Form of Pledge Agreement
Exhibit G -- Form of Security Agreement
Exhibit H -- Form of Amendment to Security Agreement
6
AMENDED AND RESTATED CREDIT AGREEMENT dated
as of July 18, 1997, as amended and restated as of
September 26, 1997, among ARGO-TECH CORPORATION, AT
HOLDINGS CORPORATION, the LENDERS party hereto, and
THE CHASE MANHATTAN BANK, as Administrative Agent.
The Borrower, Holdings, the Lenders and the Administrative
Agent entered into this Agreement as of July 18, 1997 (the "ORIGINAL
AGREEMENT"), pursuant to which the Lenders (a) committed to make Revolving Loans
to the Borrower from time to time during the Revolving Availability Period in an
amount up to $20,000,000, (b) made Tranche A Term Loans to the Borrower in the
amount of $100,000,000 and (c) committed to make Delayed Draw Acquisition Loans
to the Borrower on a single date during the Delayed Draw Acquisition Period in
an amount up to $15,000,000. The Borrower has requested that the Original
Agreement be amended in order to (a) allow the Borrower to make the Acquisition,
(b) allow the Borrower to issue, and the Subsidiary Loan Parties to guarantee,
on a subordinated basis the Senior Subordinated Notes, (c) allow the Borrower
and Holdings to prepay or redeem the Subordinated Notes and (d) effect certain
other changes in connection therewith. The Lenders are willing to amend the
Original Agreement for such purposes and to restate the Original Agreement as so
amended in the form hereof, subject to the terms and conditions hereinafter set
forth.
The parties hereto agree as follows:
ARTICLE I
DEfinitions
-----------
SECTION 1.01. DEFINED TERMS. As used in this
Agreement, the following terms have the meanings specified
below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
7
2
"ACQUISITION" means the acquisition by the
Borrower of ▇.▇. ▇▇▇▇▇▇ pursuant to the Stock Purchase
Agreement.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an
Administrative Questionnaire in a form supplied by the
Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that (a) directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified or (b) owns, directly or indirectly, 10% or more of the voting
securities of the Person specified.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"AMENDMENT" means the amendment to the Original
Agreement effected by this Agreement.
"AMENDMENT EFFECTIVE DATE" means the date on which the
conditions specified in Section 4.01 are satisfied or waived in accordance with
9.02.
"APPLICABLE PERCENTAGE" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined
8
3
based upon the Revolving Commitments most recently in effect, giving effect to
any assignments.
"APPLICABLE RATE" means, for any day with respect to any ABR
Loan or Eurodollar Loan, or with respect to the commitment fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "ABR Spread" "Eurodollar Spread" or "Commitment Fee Rate", as
the case may be, based upon the Leverage Ratio as of the most recent
determination date; PROVIDED that until the delivery to the Administrative
Agent, pursuant to Section 5.01(b), of Borrower's consolidated financial
statements for Borrower's first full fiscal quarter commencing after the
Effective Date, the "Applicable Rate" shall be the applicable rate per annum set
forth below in Category 1:
ABR EURODOLLAR COMMITMENT FEE
LEVERAGE RATIO: SPREAD SPREAD RATE
--------------- ------ ------ ----
CATEGORY 1
----------
Greater than or equal to 5.00 to 1.00 1.00 2.00 0.50
CATEGORY 2
----------
Greater than or equal to 4.50 to
1.00, but less than 5.00 to 1.00 0.75 1.75 0.375
CATEGORY 3
----------
Greater than or equal to 4.00 to
1.00, but less than 4.50 to 1.00 0 .50 1.50 0.375
CATEGORY 4
----------
Greater than or equal to 3.50 to
1.00, but less than 4.00 to 1.00 0.25 1.25 0.250
CATEGORY 5
----------
Less than 3.50 to 1.00 0 1.00 0.20
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of Borrower's fiscal year based
upon Borrower's consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent of such
consolidated financial statements indicating such change and ending on the date
immediately preceding the effective date of the next such change; PROVIDED that
the Leverage Ratio shall be deemed to be in Category 1 (A) at any time that an
Event of Default has occurred and is continuing or (B) if the Borrower fails to
deliver the consolidated financial statements required to be delivered by it
pursuant to Section 5.01(a) or (b), during the period
9
4
from the expiration of the time for delivery thereof until such consolidated
financial statements are delivered.
"ASSESSMENT RATE" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; PROVIDED that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"BASE CD RATE" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"BOARD" means the Board of Governors of the
Federal Reserve System of the United States of America.
"BORROWER" means Argo-Tech Corporation, a Delaware
corporation.
"BORROWING" means Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.
"BORROWING REQUEST" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"BORROWER SUBORDINATED NOTES" means the $5,006,700 of floating
rate Subordinated Notes due December 31, 2007, of the Borrower payable to the
order of ▇▇▇▇▇▇ ▇▇▇▇▇▇, as
10
5
trustee under the Irrevocable Trust Agreement dated December 16, 1988.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; PROVIDED that, when used in connection with a
Eurodollar Loan, the term "BUSINESS DAY" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"CAPITAL EXPENDITURES" means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its consolidated Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by the Borrower
and its consolidated Subsidiaries during such period.
"CAPITAL LEASE OBLIGATIONS" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CHANGE IN CONTROL" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person other than
Holdings of any shares of capital stock of the Borrower; (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof), other than Permitted Owners of shares representing more than 20% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of Holdings; (c) occupation of a majority of the seats (other than
vacant seats) on the board of directors of Holdings by Persons who were neither
(i) nominated by AT Holdings LLC or the chief executive officer of the Borrower
nor (ii) appointed by directors so nominated; (d) the acquisition of direct or
indirect Control of Holdings by any Person or group other than Permitted Owners;
or (e) any
11
6
"Change of Control" as defined in the Senior Subordinated Notes Documents.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"CLASS", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Tranche A Term Loans or Delayed Draw Acquisition Loans and,
when used in reference to any Commitment, refers to whether such Commitment is a
Revolving Commitment or Delayed Draw Acquisition Loan Commitment.
"CLASS A STOCK" means shares of Class A Common Stock, par
value $.01 per share, of Holdings.
"CLASS B STOCK" means shares of Class B Common Stock, par
value $.01 per share, of Holdings.
"CLASS C STOCK" means shares of Class C Common Stock, par
value $.01 per share, of Holdings.
"CLASS D STOCK" means shares of Class D Common Stock, par
value $.01 per share, of Holdings.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COLLATERAL" means any and all "Collateral", as
defined in any applicable Security Document.
"COLLATERAL AGENT" means the "Collateral Agent",
as defined in the Security Agreement.
"COMMITMENT" means a Revolving Commitment or
Delayed Draw Acquisition Loan Commitment, or any combination thereof (as the
context requires).
12
7
"COMMON STOCK" means shares of Class A Stock, Class B Stock,
Class C Stock or Class D Stock.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net
Income for such period (adjusted to exclude any non-cash items attributable to
purchase accounting for any acquisition transactions consummated subsequent to
the Effective Date), plus, without duplication and to the extent deducted from
revenues in determining Consolidated Net Income, the sum of (a) the aggregate
amount of Consolidated Interest Expense for such period, (b) the aggregate
amount of letter of credit fees accrued during such period, (c) the aggregate
amount of income tax expense for such period, (d) all amounts attributable to
depreciation and amortization for such period and (e) all extraordinary charges
during such period and all non-cash charges associated with ESOP compensation
and stock options issued to management, and minus, without duplication and to
the extent added to revenues in determining Consolidated Net Income for such
period, all extraordinary gains during such period, all as determined on a
consolidated basis with respect to the Borrower and its Subsidiaries in
accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
interest expense, both expended and capitalized (including the interest
component in respect of Capital Lease Obligations, but excluding any
amortization of deferred financing costs and prepayment fees), accrued or paid
by the Borrower and its Subsidiaries during such period, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, net income or
loss of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded (a) the income of any Person in which any other Person (other than the
Borrower or any of the Subsidiaries or any director holding qualifying shares in
compliance with applicable law) has a joint interest, except income shall be
included to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Subsidiaries by such Person during
such period and (b) the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary or is merged into or consolidated with the Borrower or
any of its Subsidiaries or the date that Person's assets are acquired by the
Borrower or any of its
13
8
Subsidiaries (except, in the case of ▇.▇. ▇▇▇▇▇▇, which income (or loss)
(excluding the effect of expenses of the office of the president on such income
or (loss)) shall not be excluded for purposes of determining Consolidated EBITDA
for purposes of the Leverage Ratio and Senior Leverage Ratio only).
"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.
"CORPORATION'S NOTES" shall have the meaning set forth in
Section 8.03 of the Stockholders' Agreement.
"DEFAULT" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"DELAYED DRAW ACQUISITION LOAN" means a Loan made pursuant to
clause (a) of Section 2.01.
"DELAYED DRAW ACQUISITION LOAN COMMITMENT" means, with respect
to each Lender, the commitment, if any, of such Lender to make a Delayed Draw
Acquisition Loan hereunder on the Amendment Effective Date, expressed as an
amount representing the maximum principal amount of the Delayed Draw Acquisition
Loan to be made by such Lender hereunder, as such commitment may be (a) reduced
from time to time pursuant to Section 2.07 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
9.04. The initial amount of each Lender's Delayed Draw Acquisition Loan
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed it Delayed Draw Acquisition
Loan Commitment, as applicable. The initial aggregate amount of the Lenders'
Delayed Draw Acquisition Loan Commitments is $15,000,000.
"DELAYED DRAW ACQUISITION LOAN LENDER" means a Lender with a
Delayed Draw Acquisition Loan Commitment or an outstanding Delayed Draw
Acquisition Loan.
"DELAYED DRAW ACQUISITION LOAN MATURITY DATE" means July 18,
2004.
14
9
"DISCLOSED MATTERS" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"DISTRIBUTORSHIP AGREEMENTS" means (a) the Distributorship
Agreement dated as of December 24, 1990, among the Borrower, Yamada Corporation
and Vestar Capital Partners, Inc. and (b) the Japan Distributorship Agreement
dated as of December 24, 1990, between the Borrower and Yamada Corporation.
"DOLLARS" or "$" refers to lawful money of the United States
of America.
"EFFECTIVE DATE" means July 18, 1997.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, handling, treatment, storage, disposal, release or
threatened release of any Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, natural resource damage, costs
of environmental remediation, administrative oversight costs, fines, penalties
or indemnities), of Holdings, the Borrower or any Subsidiary 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.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of
15
10
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"ESOP" means the employee stock ownership plan created
pursuant to the terms of the ESOP Plan and Trust Document.
"ESOP DOCUMENTATION" means the ESOP Plan and Trust Document,
the ESOP Loan Agreement, the ESOP Term Note and the ESOP Pledge Agreement.
"ESOP LOAN" means the loan made by the Borrower to the ESOP
Trust pursuant to the terms of the ESOP Loan Agreement.
"ESOP LOAN AGREEMENT" means the ESOP Loan Agreement, dated May
17, 1994, between the Borrower and the ESOP Trust.
"ESOP PLAN AND TRUST DOCUMENT" means the Argo-Tech Corporation
Employee Stock Ownership Plan and Trust
16
11
Agreement, dated May 17, 1994, between the Borrower and Society National Bank in
its capacity as ESOP Trustee.
"ESOP PLEDGE AGREEMENT" means the ESOP Pledge Agreement, dated
May 17, 1994, executed by the ESOP Trust in favor of the Borrower.
"ESOP PUT OPTION" means, collectively, the put option created
pursuant to Section 7.05 of the ESOP Plan and Trust Document and the put option
payments corresponding to such section created by the Argo-Tech Corporation
Employee Stock Ownership Plan Excess Benefit Plan.
"ESOP TERM NOTE" means the Term Note, dated the date of the
ESOP Loan, in the original principal amount of $16,800,000, executed and
delivered by the ESOP Trust to the Borrower pursuant to the ESOP Loan Agreement,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"ESOP TRUST" means the Argo-Tech Employee Stock Ownership
Trust created pursuant to the terms of the ESOP Plan and Trust Document.
"ESOP TRUSTEE" means Society National Bank, in its capacity as
trustee of the ESOP, and any successor thereto in such capacity.
"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to
such term in Article VII.
"EXCESS CASH FLOW" means, for any period, the sum
(without duplication) of:
(a) the consolidated net income (or loss) of the Borrower and
its consolidated Subsidiaries for such period, adjusted to exclude any
gains or losses attributable to Prepayment Events; PLUS
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such consolidated net income (or loss)
for such period; PLUS
17
12
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such period plus (ii) the amount, if any, by
which the consolidated deferred revenues of the Borrower and its
consolidated Subsidiaries increased during such period plus (iii) the
aggregate principal amount of Capital Lease Obligations and other
Indebtedness incurred during such period to finance Capital
Expenditures, to the extent that mandatory principal payments in
respect of such Indebtedness would not be excluded from clause (f)
below when made; MINUS
(d) the sum of (i) any non-cash gains included in determining
such consolidated net income (or loss) for such period plus (ii) the
amount, if any, by which Net Working Capital increased during such
period plus (iii) the amount, if any, by which the consolidated
deferred revenues of the Borrower and its Subsidiaries decreased during
such period; MINUS
(e) Capital Expenditures permitted under Section 6.12 and made
during such period; MINUS
(f) the aggregate principal amount of Indebtedness repaid or
prepaid by the Borrower and its consolidated Subsidiaries during such
period, excluding (i) Indebtedness in respect of Revolving Loans and
Letters of Credit, (ii) Term Loans prepaid pursuant to Section 2.10(b)
or (d), (iii) repayments or prepayments of Indebtedness financed by
incurring other Indebtedness, to the extent that mandatory principal
payments in respect of such other Indebtedness would not be excluded
from this clause (f) when made and (iv) Indebtedness referred to in
clauses (v), (vi), (ix) and (x) of Section 6.01(a).
"EXCLUDED TAXES" means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a
18
13
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.18(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.16(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.16(a).
"EXISTING CREDIT AGREEMENT" means (a) the Amended and Restated
Loan Agreement dated as of September 21, 1995, as amended, among Holdings, the
Borrower, the Subsidiaries named therein and The Sumitomo Bank, Ltd., and (b)
the Subordinated Loan Agreement dated as of December 24, 1990, as amended,
between Holdings and The Sumitomo Bank, Ltd.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer or
treasurer of the Borrower.
"FOREIGN LENDER" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"FOREIGN SUBSIDIARY" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
19
14
"GAAP" means generally accepted accounting
principles in the United States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United
States of America, any other nation or 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" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; PROVIDED that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"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.
"HEDGING AGREEMENT" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
20
15
"HOLDINGS" means AT Holdings Corporation, a Delaware
corporation.
"HOLDINGS SUBORDINATED NOTES" means the $41,100,000 of 11.25%
Subordinated Notes due December 31, 2007, of Holdings payable to AT Holdings,
LLC.
"INDEBTEDNESS" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E, among the Borrower, Holdings, the Subsidiary Loan Parties and the
Administrative Agent.
21
16
"INFORMATION MEMORANDUM" means the Confidential Information
Memorandum dated June 1997 relating to the Borrower, the Loan Documents, the
borrowing of Loans, the use of proceeds thereof and the issuance of Letters of
Credit hereunder.
"INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.06.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December, and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"INTEREST PERIOD" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; PROVIDED, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"ISSUING BANK" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.04(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term
22
17
"Issuing Bank" shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate.
"▇.▇. ▇▇▇▇▇▇" means ▇.▇. ▇▇▇▇▇▇ Company, Inc., a California
corporation.
"LC DISBURSEMENT" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"LENDERS" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LETTER OF CREDIT" means any letter of credit issued pursuant
to this Agreement.
"LEVERAGE RATIO" means, on any date, the ratio of (a) Total
Debt as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower most recently ended as of such date
(including the Consolidated EBITDA (excluding the effect of expenses of the
office of the president on such Consolidated EBITDA) for such four fiscal
quarters of ▇.▇. ▇▇▇▇▇▇ for the period of four consecutive fiscal quarters of
the Borrower most recently ended) (or, if such date is not the last day of a
fiscal quarter, then most recently ended prior to such date), all determined on
a consolidated basis in accordance with GAAP.
"LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank
23
18
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO RATE" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the promissory notes,
if any, executed and delivered pursuant to Section 2.08(e), the Parent Guarantee
Agreement, the Subsidiary Guarantee Agreement, the Indemnity, Subrogation and
Contribution Agreement and the Security Documents.
"LOAN PARTIES" means Holdings, the Borrower and the Subsidiary
Loan Parties.
"LOANS" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"MANAGEMENT PUT OPTIONS" means the put option created pursuant
to Article IX of the Stockholders' Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, assets, operations or condition, financial or otherwise, of
Holdings, the Borrower and the Subsidiaries taken as a whole, (b) the ability of
one or more Loan Parties to perform any of their obligations under the Loan
Documents that, taken as a whole, are material or (c) the rights of or benefits
available to the Lenders under
24
19
one or more Loan Documents that, taken as a whole, are material.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of Holdings, the Borrower and its Subsidiaries in
an aggregate principal amount exceeding $2,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of Holdings,
the Borrower or any Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that Holdings, the Borrower or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGE" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Collateral Agent.
"MORTGAGED PROPERTY" means each parcel of real property and
improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.12 or 5.13.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by Holdings, the
Borrower and the Subsidiaries to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or other insured damage or condemnation or similar proceeding),
the amount of all payments required to be made by Holdings, the Borrower and the
Subsidiaries as a result of such event to repay Indebtedness (other than Loans)
secured by such asset or otherwise subject to mandatory
25
20
prepayment as a result of such event, and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by Holdings, the Borrower and the
Subsidiaries, and the amount of any reserves established by Holdings, the
Borrower and the Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of the
Borrower).
"NET WORKING CAPITAL" means, at any date, (a) the consolidated
current assets of the Borrower and its consolidated Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the consolidated current
liabilities of the Borrower and its consolidated Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness). Net Working Capital
at any date may be a positive or negative number. Net Working Capital increases
when it becomes more positive or less negative and decreases when it becomes
less positive or more negative.
"OBLIGATIONS" has the meaning assigned to such term in the
Security Agreement.
"OTHER TAXES" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PARENT GUARANTEE AGREEMENT" means the Parent Guarantee
Agreement, substantially in the form of Exhibit C, made by Holdings in favor of
the Administrative Agent for the benefit of the Secured Parties.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"PERFECTION CERTIFICATE" means a certificate in the form of
Annex 1 to the Security Agreement or any other form approved by the Collateral
Agent.
"PERMITTED ACQUISITION" means any acquisition by the Borrower
or a Subsidiary Loan Party of all or
26
21
substantially all the assets of, or all the shares of capital stock of or other
equity interests in, a Person or division or line of business of a Person if,
immediately after giving effect thereto, (i) no Default has occurred and is
continuing or would result therefrom, (ii) all transactions related thereto are
consummated in accordance with applicable laws, (iii) all the capital stock of
any Subsidiary formed for the purpose of or resulting from such acquisition are
owned directly by the Borrower or a Subsidiary Loan Party and all actions
required to be taken, if any, with respect to such acquired or newly formed
Subsidiary under Sections 5.12 and 5.13 have been taken, (iv) the Borrower and
its Subsidiaries are in compliance, on a pro forma basis after giving effect to
such acquisition (and taking into account all appropriate assets, liabilities
and items of income and expense of any acquired entity or acquired assets for
any applicable period prior to the acquisition thereof) with the covenants
contained in Sections 6.01, 6.12, 6.13 and 6.14 recomputed as at the last day of
the most recently ended fiscal quarter of the Borrower, as if such acquisition
had occurred on the first day of each relevant period for testing such
compliance, (v) in the case of an acquisition of assets, such assets are to be
used, and in the case of an acquisition of capital stock or other equity
interests, the Person so acquired is engaged in, the same or a related line of
business as the Borrower and the Subsidiaries and other business activities
incidental thereto, (vi) the Borrower has delivered to the Administrative Agent
an officers' certificate to the effect set forth in clauses (i) and (iv) above,
together with all relevant financial information for the Person or assets to be
acquired, and (vii) neither Holdings, the Borrower nor any Subsidiary, including
any acquired or newly formed Subsidiary, shall be liable for any Indebtedness
other than as permitted by Section 6.01; PROVIDED that the Acquisition shall not
be deemed to constitute a Permitted Acquisition for purposes of this Agreement.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes that are not
yet due or are being contested in compliance with
Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than
27
22
30 days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Borrower or any
Subsidiary; and
(g) rights of the government of the United States of America
or any agency or instrumentality thereof in inventory or equipment,
arising out of any contract between the Borrower or any Subsidiary and
such government, agency or instrumentality or pursuant to any contract
entered into with, or received from, any higher-tier subcontractor or
prime contractor of such government, agency or instrumentality, whether
by operation of law or the terms of such contract, or by virtue of the
receipt by the Borrower or its predecessor or such Subsidiary of
progress or advance payments or reimbursement of costs in connection
therewith.
PROVIDED that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any
28
23
agency thereof to the extent such obligations are backed by the full
faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, (i) any domestic office
of any commercial bank organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus
and undivided profits of not less than $500,000,000, (ii) any domestic
office of any commercial bank organized under the laws of a foreign
jurisdiction that has a rating of at least AA by S&P or Aa by Moody's
and (iii) any Lender; and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"PERMITTED OWNERS" means (a) ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and members of
his immediate family, (b) corporations and other entities that are Controlled by
one or more of the persons referred to in clause (a), (c) trusts for the sole
benefit of one or more of the persons referred to in clause (a),(d) the ESOP and
(e) individuals who are members of management of Holdings or the Borrower as of
the Effective Date.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated,
29
24
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENT" means the Pledge Agreement, substantially
in the form of Exhibit F, among the Borrower, Holdings, the Subsidiaries party
thereto and the Collateral Agent for the benefit of the Secured Parties.
"PREPAYMENT EVENT" means:
(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any property or asset
(including capital stock) of Holdings, the Borrower or any Subsidiary,
other than (i) dispositions described in clauses (a), (b) and (d) of
Section 6.05 and (ii) other dispositions resulting in aggregate Net
Proceeds not exceeding $2,500,000; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of Holdings, the Borrower or any Subsidiary,
but only to the extent that the Net Proceeds therefrom have not been
applied to repair, restore or replace such property or asset within 90
days after such event (or any longer period provided for in Section
5.08(C) with respect to events referred to in such Section); or
(c) the issuance by Holdings, the Borrower or any Subsidiary
of any equity securities, or the receipt by Holdings, the Borrower or
any Subsidiary of any capital contribution, other than any such
issuance of equity securities to, or receipt of any such capital
contribution from, Holdings, the Borrower or a Subsidiary; or
(d) the incurrence by Holdings, the Borrower or any Subsidiary
of any Indebtedness, other than Indebtedness permitted under Section
6.01.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
30
25
"PUT OPTIONS" means, collectively, the ESOP Put Option and the
Management Put Options.
"REGISTER" has the meaning set forth in Section 9.04.
"REGULATION G" means Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION U" means Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION X" means Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"RELATED PARTIES" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having
Revolving Exposures, Term Loans and unused Commitments representing more than
50% of the sum of the total Revolving Exposures, outstanding Term Loans and
unused Commitments at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of Holdings, the Borrower or any Subsidiary, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or termination of any such shares of capital stock of
Holdings, the Borrower or any Subsidiary or any option, warrant or other right
to acquire any such shares of capital stock of Holdings, the Borrower or any
Subsidiary.
"REVOLVING AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitments.
"REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment, if any, of such Lender to make
31
26
Revolving Loans and to acquire participations in Letters of Credit hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender's Revolving Exposure hereunder, as such commitment may be (a) reduced
from time to time pursuant to Section 2.07 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
9.04. The initial amount of each Lender's Revolving Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders' Revolving Commitments is $20,000,000.
"REVOLVING EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure at such time.
"REVOLVING LENDER" means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.
"REVOLVING LOAN" means a Loan made pursuant to clause (b) of
Section 2.01.
"REVOLVING MATURITY DATE" means July 18, 2004.
"S&P" means Standard & Poor's.
"SECURED PARTIES" shall have the meaning assigned to such term
in the Security Agreement.
"SECURITY AGREEMENT" means the Security Agreement,
substantially in the form of Exhibit G, among the Borrower, the Subsidiary Loan
Parties and the Collateral Agent for the benefit of the Secured Parties.
"SECURITY DOCUMENTS" means the Security Agreement, the Pledge
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.12 or 5.13 to secure
any of the Obligations.
"SENIOR DEBT" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis at any time, all Indebtedness of the
Borrower and its Subsidiaries (other than the Subordinated Notes and the Senior
Subordinated Notes) which at such time would be required to be reflected
32
27
as a liability for borrowed money on a consolidated balance sheet of the
Borrower and its consolidated Subsidiaries prepared in accordance with GAAP.
"SENIOR LEVERAGE RATIO" means, on any date, the ratio of (a)
Senior Debt as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower most recently ended as of such date
(including the Consolidated EBITDA (excluding the effect of expenses of the
office of the president on such Consolidated EBITDA) for such four fiscal
quarters of ▇.▇. ▇▇▇▇▇▇ for the period of four consecutive fiscal quarters of
the Borrower most recently ended) (or, if such date is not the last day of a
fiscal quarter, then most recently ended prior to such date), all determined on
a consolidated basis in accordance with GAAP.
"SENIOR SUBORDINATED NOTES" means the 85/8% Senior
Subordinated Notes due 2007 issued on the Amendment Effective Date in the
aggregate principal amount of $140,000,000 and shall include any substantially
identical notes issued in exchange therefore after the Amendment Effective Date,
pursuant to the Senior Subordinated Notes Documents.
"SENIOR SUBORDINATED NOTES DOCUMENTS" means the indenture
under which the Senior Subordinated Notes are issued and all other instruments,
agreements and documents evidencing, guaranteeing or providing for the terms and
conditions of the Senior Subordinated Notes.
"SPECIFIED REAL ESTATE" means the real estate owned by
Argo-Tech Corporation (HBP) as of the Effective Date identified on Schedule
6.05.
"STATUTORY RESERVE RATE" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject (a) with respect to the Base CD Rate, for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal to
three months and (b) with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those
33
28
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"STOCKHOLDERS' AGREEMENT" means the AT Holdings Corporation
Stockholders' Agreement dated as of May 17, 1994, as amended by Amendment No. 1
thereto dated as of May 1, 1997 and Amendment No. 2 thereto dated as of the
Effective Date, by and among Holdings, the Borrower, YC International Inc.,
Yamada Corporation, Sunhorizon International Inc. and the Persons signing the
Stockholders' Agreement designated on Schedule A thereto.
"STOCK PURCHASE AGREEMENt" means the Stock Purchase Agreement,
dated as of August 1, 1997, by and among ▇.▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
individually and as trustee, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, individually and as trustee,
▇▇▇▇▇ ▇. Derbyshire, individually and as trustee, ▇▇▇▇▇ ▇. Derbyshire,
individually and as trustee, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇, as trustee and the Borrower.
"SUBORDINATED NOTES" means the Borrower Subordinated Notes and
Holdings Subordinated Notes.
"SUBSIDIARY" means, with respect to any Person (the "PARENT")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
34
29
"SUBSIDIARY" means any subsidiary of Holdings or
the Borrower, as the context requires.
"SUBSIDIARY GUARANTEE AGREEMENT" means the Subsidiary
Guarantee Agreement, substantially in the form of Exhibit D, made by the
Subsidiary Loan Parties in favor of the Administrative Agent for the benefit of
the Secured Parties.
"SUBSIDIARY LOAN PARTY" means any Subsidiary of the Borrower
other than (a) any Foreign Subsidiary that, if it were to Guarantee the
Obligations, would result in adverse tax consequences to Holdings or the
Borrower, and (b) immaterial subsidiaries set forth on Schedule 1.01(b) so long
as such immaterial subsidiaries have no operating assets or earnings other than
operating assets and earnings as of the Effective Date.
"TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM LOAN" means a Tranche A Term Loan or a Delayed Draw
Acquisition Loan.
"THREE-MONTH SECONDARY CD RATE" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"TOTAL DEBT" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis at any time, all Indebtedness of the
Borrower and its Subsidiaries which at such time would be required to be
reflected as a liability for borrowed money on a consolidated balance sheet
35
30
of the Borrower and its consolidated Subsidiaries prepared in accordance with
GAAP.
"TRANCHE A TERM LOAN" has the meaning set forth in Section
2.01.
"TRANCHE A TERM LOAN LENDER" means a Lender with an
outstanding Tranche A Term Loan.
"TRANCHE A TERM LOAN MATURITY DATE" means July 18, 2004.
"TRANSACTIONS" means (a) the execution, delivery and
performance by each Loan Party of the Loan Documents to which it is to be a
party, (b) the borrowing of Loans, the use of the proceeds thereof and the
issuance of Letters of Credit hereunder, (c) the making of the Acquisition and
(d) the issuance of the Senior Subordinated Notes.
"TRW" means TRW Inc, an Ohio corporation, and its successors
and permitted assigns under the TRW Agreement.
"TRW AGREEMENT" means that certain Agreement of Purchase and
Sale between Agnem Holdings, Inc. and TRW, dated as of August 5, 1986, as
amended by (a) that certain letter agreement dated September 5, 1986, (b) that
certain Agreement dated as of September 16, 1986, (c) that certain Agreement
dated as of September 26, 1986, (d) that certain Agreement dated as of October
1, 1986, (e) that certain letter agreement dated as of October 10, 1986, (f)
that certain letter agreement dated October 15, 1986, and (g) that certain
Amendment No. 6 to Purchase Agreement dated as of October 20, 1986; such term
shall also include any other amendments or modifications thereof entered into in
accordance with Section 6.11.
"TYPE", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
36
31
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For
purposes of this Agreement, Loans may be classified and referred to by Class
(E.G., a "Revolving Loan") or by Type (E.G., a "Eurodollar Loan") or by Class
and Type (E.G., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (E.G., a "Revolving Borrowing") or by Type
(E.G., a "Eurodollar Borrowing") or by Class and Type (E.G., a "Eurodollar
Revolving Borrowing").
SECTION 1.03. TERMS GENERALLY. 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 (a) any definition of or
reference to any agreement, instrument or other document herein 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),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the
37
32
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. COMMITMENTS; OUTSTANDING LOANS. Subject to the
terms and conditions set forth herein, each Lender agrees (a) to make a Delayed
Draw Acquisition Loan to the Borrower on the Amendment Effective Date in a
principal amount not exceeding its Delayed Draw Acquisition Loan Commitment and
(b) to make Revolving Loans to the Borrower from time to time during the
Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Exposure exceeding such Lender's Revolving
Commitment. Term loans (the "TRANCHE A TERM LOANS") in an initial aggregate
amount of $100,000,000 were made to the Borrower on the Effective Date, and no
Lender shall have an obligation to make any additional Tranche A Term Loan. The
outstanding principal amount of each Lender's Tranche A Term Loan as of the
Amendment Effective Date is set forth on Schedule 2.01. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans. Amounts repaid in respect of
Term Loans may not be reborrowed.
SECTION 2.02. LOANS AND BORROWINGS. (a) Each Loan shall be
made as part of a Borrowing consisting of Loans of the same Class and Type made
by the Lenders ratably in accordance with their respective Commitments of the
applicable Class. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder; PROVIDED
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.13, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of
38
33
ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith. Notwithstanding anything to the contrary contained herein, all
Borrowings made on the Amendment Effective Date shall be ABR Borrowings. Each
Lender at its option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; PROVIDED that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $2,500,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 and not less than $1,000,000;
PROVIDED that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Commitments or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.04(e). Borrowings of more than one Type and Class may be outstanding
at the same time; PROVIDED that there shall not at any time be more than a total
of six Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date, Tranche A Term Loan Maturity Date or Delayed
Draw Acquisition Loan Maturity Date, as applicable.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the date
of the proposed Borrowing, or (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing; PROVIDED that any such notice of an ABR Revolving Borrowing
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and
39
34
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Borrowing Request in a form approved by the Administrative
Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a
Revolving Borrowing, Tranche A Term Borrowing or
Delayed Draw Acquisition Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) subject to the second sentence of Section 2.02(b),
whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. LETTERS OF CREDIT. (a) GENERAL. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Revolving Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of
40
35
any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $2,000,000
and (ii) the total Revolving Exposures shall not exceed the total Revolving
Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank
41
36
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; PROVIDED that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 that such payment be financed with an
ABR Revolving Borrowing in an equivalent amount and, to the extent so financed,
the Borrower's obligation to make such payment shall be discharged and replaced
by the resulting ABR Revolving Borrowing. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Revolving Lender of
the applicable LC Disbursement, the
42
37
payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Revolving Lender shall pay to the Administrative Agent its Applicable Percentage
of the payment then due from the Borrower, in the same manner as provided in
Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall
apply, MUTATIS MUTANDIS, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Revolving Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans as contemplated
above) shall not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment
43
38
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; PROVIDED
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; PROVIDED that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC
44
39
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to ABR Revolving Loans; PROVIDED that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.12(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.11(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an
45
40
amount in cash equal to 105% of the LC Exposure as of such date plus any accrued
and unpaid interest thereon; PROVIDED that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in
clause (h) or (i) of Article VII. Each such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower's risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
SECTION 2.05. FUNDING OF BORROWINGS. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
New York City and designated by the Borrower in the applicable Borrowing
Request; PROVIDED that ABR Revolving Loans made to finance the reimbursement
46
41
of an LC Disbursement as provided in Section 2.04(e) shall be remitted by the
Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.06. INTEREST ELECTIONS. (a) Each Revolving Borrowing
and Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were
47
42
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02 and
paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided
48
43
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or
continued as a Eurodollar Borrowing if after giving effect thereto (i) the
Interest Period therefor would commence before and end after a date on which any
principal of the Loans of such Class is scheduled to be repaid and (ii) the sum
of the aggregate principal amount of outstanding Eurodollar Borrowings of such
Class with Interest Periods ending on or prior to such scheduled repayment date
plus the aggregate principal amount of outstanding ABR Borrowings of such Class
would be less than the aggregate principal amount of Loans of such Class
required to be repaid on such scheduled repayment date.
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Unless previously terminated, (i) the Delayed Draw Acquisition Loan Commitments
shall terminate at 5:00 p.m., New York City time, on the Amendment Effective
Date and (ii) the Revolving Commitments shall terminate on the Revolving
Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class; PROVIDED that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral multiple
of $100,000 and not less than $2,500,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.10,
the sum of the Revolving Exposures would exceed the total Revolving Commitments.
(c) In the event that, on the date on which any prepayment
would be required pursuant to Section 2.10(b) or 2.10(c), no Term Borrowings
remain outstanding or the amount of the prepayment required by Section 2.10(b)
or 2.10(c), as the case may be, exceeds the aggregate principal amount of
49
44
Term Borrowings then outstanding, the Borrower shall reduce the Revolving
Commitments by an amount equal to the excess of the required prepayment over the
principal amount, if any, of Term Borrowings actually prepaid.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section, or any required reduction of the Revolving Commitments under paragraph
(c) of this Section, at least three Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; PROVIDED that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
Commitments of such Class.
SECTION 2.08. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date and (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2.09.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and
50
45
payable from the Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.09. AMORTIZATION OF TERM LOANS. (a) Subject to
adjustment pursuant to paragraph (d) of this
51
46
Section, the Borrower shall repay Tranche A Term Borrowings on each date set
forth below in the aggregate principal amount set forth opposite such date:
Date Amount
---- ------
October 24, 1997 $ 1,250,000
January 30, 1998 1,250,000
May 1, 1998 1,250,000
July 31, 1998 1,250,000
October 30, 1998 1,250,000
January 29, 1999 1,250,000
April 30, 1999 1,250,000
July 30, 1999 1,250,000
October 29, 1999 2,500,000
January 28, 2000 2,500,000
April 28, 2000 2,500,000
July 28, 2000 2,500,000
October 27, 2000 2,500,000
January 26, 2001 2,500,000
April 27, 2001 2,500,000
July 27, 2001 2,500,000
October 26, 2001 5,000,000
January 25, 2002 5,000,000
April 26, 2002 5,000,000
July 26, 2002 5,000,000
October 25, 2002 5,000,000
January 24, 2003 5,000,000
April 25, 2003 5,000,000
July 25, 2003 5,000,000
October 24, 2003 7,500,000
January 30, 2004 7,500,000
April 30, 2004 7,500,000
July 18, 2004 7,500,000
(b) Subject to adjustment pursuant to paragraph (d) of this Section, the
Borrower shall repay Delayed Draw Acquisition
52
47
Borrowings on each date set forth below in the aggregate principal amount set
forth opposite such date:
Date Amount
---- ------
October 24, 1997 $ 187,500
January 30, 1998 187,500
May 1, 1998 187,500
July 31, 1998 187,500
October 30, 1998 187,500
January 29, 1999 187,500
April 30, 1999 187,500
July 30, 1999 187,500
October 29, 1999 375,000
January 28, 2000 375,000
April 28, 2000 375,000
July 28, 2000 375,000
October 27, 2000 375,000
January 26, 2001 375,000
April 27, 2001 375,000
July 27, 2001 375,000
October 26, 2001 750,000
January 25, 2002 750,000
April 26, 2002 750,000
July 26, 2002 750,000
October 25, 2002 750,000
January 24, 2003 750,000
April 25, 2003 750,000
July 25, 2003 750,000
October 24, 2003 1,125,000
January 30, 2004 1,125,000
April 30, 2004 1,125,000
July 18, 2004 1,125,000
(c) To the extent not previously paid, (i) all Tranche A Term
Loans shall be due and payable on the Tranche A Term Loan Maturity Date and (ii)
all Delayed Draw Acquisition Loans shall be due and payable on the Delayed
Draw Acquisition Loan Maturity Date.
(d) If the initial aggregate amount of the Lenders' Delayed
Draw Acquisition Loan Commitments exceeds the aggregate principal amount of the
Delayed Draw Acquisition Loans that are made on the Amendment Effective Date,
then the scheduled repayments of Delayed Draw Acquisition Borrowings to be made
pursuant to this Section shall be reduced ratably by an aggregate amount equal
to such excess. Any prepayment of a Term Borrowing of either
53
48
Class shall be applied to reduce the subsequent scheduled repayments of the Term
Borrowings of such Class to be made pursuant to this Section ratably.
(e) Prior to any repayment of any Term Borrowings of either
Class hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date of such
repayment; PROVIDED that each repayment of Term Borrowings of either Class shall
be applied to repay any outstanding ABR Term Borrowings of such Class before any
Eurodollar Term Borrowings of such Class. Each repayment of a Borrowing shall be
applied ratably to the Loans included in the repaid Borrowing. Repayments of
Term Borrowings shall be accompanied by accrued interest on the amount repaid.
SECTION 2.10. PREPAYMENT OF LOANS. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Proceeds
are received by or on behalf of Holdings, the Borrower or any Subsidiary in
respect of any Prepayment Event, the Borrower shall, immediately after such Net
Proceeds are received apply an aggregate amount equal to such Net Proceeds (i)
first, to the prepayment in full of all outstanding Term Borrowings and (ii)
second, to the reduction of the Revolving Commitments. The Borrower will, in any
event, prepay Term Borrowings at such times and in such amounts as shall be
necessary in order to avoid any requirement under the Senior Subordinated Notes
Documents to offer to purchase any Senior Subordinated Notes.
(c) In the event of any partial reduction of the Revolving
Commitments, then (i) at or prior to the date of such reduction, the
Administrative Agent shall notify the Borrower and the Lenders of the Revolving
Exposure after giving effect thereto and (ii) if such Revolving Exposure would
exceed the Revolving Commitments after giving effect to such reduction, then the
Borrower shall, on the date of such reduction, repay or prepay Revolving
Borrowings in an amount sufficient to eliminate such excess.
54
49
(d) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending October 25, 1997, the Borrower shall
prepay Term Borrowings in an aggregate amount equal to 50% (or, in the case of
the fiscal year ending October 25, 1997, 12.5%) of Excess Cash Flow for such
fiscal year; PROVIDED that if the Senior Leverage Ratio as of the end of such
fiscal year is less than 2.10 to 1.00, no prepayment shall be required pursuant
to this paragraph in respect of such fiscal year. Each prepayment pursuant to
this paragraph shall be made on or before the date on which financial statements
are delivered pursuant to Section 5.01 with respect to the fiscal year for which
Excess Cash Flow is being calculated (and in any event within 90 days after the
end of such fiscal year).
(e) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (f) of this Section; PROVIDED that each prepayment of
Borrowings of any Class shall be applied to prepay ABR Borrowings of such Class
before any other Borrowings of such Class. In the event of any optional or
mandatory prepayment of Term Borrowings made at a time when Term Borrowings of
both Classes remain outstanding, the Borrower shall select Term Borrowings to be
prepaid so that the aggregate amount of such prepayment is allocated between the
Tranche A Term Borrowings and Delayed Draw Acquisition Borrowings pro rata based
on the aggregate principal amount of outstanding Borrowings of each such Class.
(f) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
PROVIDED that, if a notice of optional prepayment is given in connection with a
conditional notice of termination of the Revolving Commitments as contemplated
by Section 2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07.
55
50
Promptly following receipt of any such notice, the Administrative Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12.
SECTION 2.11. FEES. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender and Delayed Draw
Acquisition Loan Lender a commitment fee, which shall accrue at the Applicable
Rate on the average daily unused amount of the Revolving Commitment or Delayed
Draw Acquisition Loan Commitment, as applicable, of such Lender during the
period from and including the Effective Date to but excluding the date on which
such Revolving Commitment or Delayed Draw Acquisition Loan Commitment, as
applicable, terminates. Accrued commitment fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which the Revolving Commitments or Delayed Draw Acquisition Loan Commitments,
as applicable, terminate, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). For purposes of computing commitment
fees, a Revolving Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Revolving Loans and LC Exposure of such Lender.
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as interest on Eurodollar Revolving Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at 1/4 of 1% per annum on the
56
51
average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank's standard fees (other than
fronting fees, which shall be payable as specified above) with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; PROVIDED that all such fees
shall be payable on the date on which the Revolving Commitments terminate and
any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.12. INTEREST. (a) The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
57
52
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of
this Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Revolving Commitments; PROVIDED that (i) interest
accrued pursuant to paragraph (c) of this Section shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist
58
53
for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.14. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Bank, as the case may
59
54
be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or on
the capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
PROVIDED that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; PROVIDED FURTHER that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period
60
55
referred to above shall be extended to include the period of retroactive effect
thereof.
SECTION 2.15. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.10(f) and is revoked in accordance therewith), or (d)
the assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.18, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.16. TAXES. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; PROVIDED that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as
61
56
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error. If the Administrative Agent, any Lender or the
Issuing Bank (as the case may be) receives a refund of any Indemnified Taxes or
Other Taxes for which the Borrower has made a payment hereunder, it shall
promptly notify the Borrower thereof and shall promptly upon receipt repay such
refund to the Borrower, without interest and net of any expenses incurred;
PROVIDED that the Borrower, upon the request of the Administrative Agent, such
Lender or the Issuing Bank (as the case may be), agrees to return the amount of
such refund (plus any penalties, interest or other charges required to be paid)
to the Administrative Agent, such Lender or the Issuing Bank (as the case may
be) in the event the Administrative Agent, such Lender or the Issuing Bank (as
the case may be) is required to repay such refund to the relevant Governmental
Authority.
62
57
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.
SECTION 2.17. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SETOFFS. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.14,
2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such
63
58
extension. All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Revolving Loans, Term Loans and participations in
LC Disbursements and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans, Term
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans, Term Loans and
participations in LC Disbursements; PROVIDED that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any
64
59
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of setoff and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the Issuing Bank, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(d) or (e), 2.05(b), 2.17(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.18. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.14, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the
future and (ii) would not subject such
65
60
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.14 or payments required
to be made pursuant to Section 2.16, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
66
61
ARTICLE III
Representations and Warranties
------------------------------
Each of Holdings and the Borrower represents and warrants to
the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. Each of Holdings, the
Borrower and its Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions
to be entered into by each Loan Party are within such Loan Party's corporate
powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly executed and
delivered by each of Holdings and the Borrower and constitutes, and each other
Loan Document to which any Loan Party is to be a party, when executed and
delivered by such Loan Party, will constitute, a legal, valid and binding
obligation of Holdings, the Borrower or such Loan Party (as the case may be),
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of Holdings, the Borrower or any of its Subsidiaries or
any order of any Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or other instrument binding upon
Holdings, the Borrower or any of its Subsidiaries or its
67
62
assets, or give rise to a right thereunder to require any payment to be made by
Holdings, the Borrower or any of its Subsidiaries, and (d) will not result in
the creation or imposition of any Lien on any asset of Holdings, the Borrower or
any of its Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) Holdings has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended October 26, 1996, reported on by Deloitte & Touche
LLP, independent public accountants, and (ii) as of and for the fiscal quarter
and the portion of the fiscal year ended August 2, 1997, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of
Holdings and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.
(b) The Borrower has heretofore furnished to the Lenders its
pro forma consolidated balance sheet as of August 2, 1997, prepared giving
effect to the Transactions as if the Transactions had occurred on such date.
Such pro forma consolidated balance sheet (i) has been prepared in good faith
based on the same assumptions used to prepare the pro forma financial statements
included in the information package distributed to the Lenders in August 1997
(which assumptions are believed by the Borrower to be reasonable), (ii) is based
on the best information available to the Borrower after due inquiry, (iii)
accurately reflects all adjustments necessary to give effect to the Transactions
and (iv) presents fairly, in all material respects, the pro forma financial
position of the Borrower and its consolidated Subsidiaries as of August 2, 1997
as if the Transactions had occurred on such date.
(c) Except as disclosed in the financial statements referred
to above or the notes thereto or in the Information Memorandum and except for
the Disclosed Matters, after giving effect to the Transactions, none of
Holdings, the Borrower or its Subsidiaries has, as of the Amendment Effective
Date, any material contingent liabilities, unusual long-term commitments or
unrealized losses.
68
63
(d) Since October 26, 1996, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of Holdings, the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. PROPERTIES. (a) Each of Holdings, the Borrower
and its Subsidiaries has good title to, or valid leasehold interests in, all its
real and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of Holdings, the Borrower and its Subsidiaries owns,
or is licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by Holdings,
the Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05 sets forth the address of each real property
that is owned or leased by the Borrower or any of its Subsidiaries as of the
Amendment Effective Date after giving effect to the Transactions. As of the
Amendment Effective Date, after giving effect to the Transactions, neither
Holdings, the Borrower nor any of its Subsidiaries owns any real property other
than the real property set forth in Schedule 3.05.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings or the Borrower,
threatened against or affecting Holdings, the Borrower, any of its Subsidiaries
or the ESOP (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, (ii)
that involve any of the Loan Documents or the Transactions or (iii) in the case
of the ESOP, as which there is a reasonable possibility of an adverse decision
that could adversely effect the status of the ESOP.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in
69
64
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither Holdings, the Borrower nor any of its Subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of
Holdings, the Borrower and its Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS. Neither
Holdings, the Borrower nor any of its Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. TAXES. Each of Holdings, the Borrower and its
Subsidiaries has timely filed or caused to be filed all income, franchise and
other material Tax returns and reports required to have been filed and has paid
or caused to be paid all Taxes required to have been paid by it, except Taxes
that are being contested in good faith by appropriate proceedings and for which
Holdings, the Borrower or such Subsidiary, as applicable, has set aside on its
books adequate reserves; PROVIDED, that no representation or warranty can be
made with respect to ▇.▇. ▇▇▇▇▇▇ prior to the Acquisition, other than that the
sellers of ▇.▇. ▇▇▇▇▇▇ have indemnified the Borrower for any such failure to
file or pay taxes prior to the Acquisition.
70
65
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed the fair market value of all the assets of such Plan by an amount that
could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect. Each Plan is in compliance in all material respects
with the requirements under ERISA and the Code.
SECTION 3.11. DISCLOSURE. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
Holdings, the Borrower or any of its Subsidiaries is subject, and all other
matters known to any of them, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. Neither the
Information Memorandum nor any of the other reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(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, Holdings and the Borrower represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.12. SUBSIDIARIES. Holdings does not have any
Subsidiaries other than the Borrower and the Borrower's Subsidiaries. Schedule
3.12 sets forth the name of, and the ownership interest of the Borrower in, each
Subsidiary of the Borrower and identifies each Subsidiary that is a Subsidiary
Loan Party, in each case as of the Amendment Effective Date.
SECTION 3.13. INSURANCE. Schedule 3.13 sets forth a
description of all insurance maintained by or on behalf of the Borrower and its
Subsidiaries as of the
71
66
Amendment Effective Date. As of the Amendment Effective Date, all premiums in
respect of such insurance have been paid.
SECTION 3.14. LABOR MATTERS. As of the Amendment Effective
Date, there are no strikes, lockouts or slowdowns against Holdings, the Borrower
or any Subsidiary pending or, to the knowledge of Holdings or the Borrower,
threatened. The hours worked by and payments made to employees of Holdings, the
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, except where such violations, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. All material payments due from Holdings, the Borrower or any Subsidiary,
or for which any material claim may be made against Holdings, the Borrower or
any Subsidiary, on account of wages and employee health and welfare insurance
and other benefits, have been paid or accrued as a liability on the books of
Holdings, the Borrower or such Subsidiary. The consummation of the Transactions
will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which Holdings,
the Borrower or any Subsidiary is bound.
SECTION 3.15. SOLVENCY. Immediately after the consummation of
the transactions to occur on the Effective Date and immediately following the
making of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans (and taking into consideration the
rights and obligations of the Loan Parties under the Indemnity, Subrogation and
Contribution Agreement), (a) the fair value of the assets of each Loan Party, at
a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
each Loan Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(c) each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Effective Date.
72
67
SECTION 3.16. SECURITY DOCUMENTS. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of each pledgor thereunder in such Collateral, in each case prior and
superior in right to any other Person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property (as defined in the Security Agreement), in
each case prior and superior in right to any other Person, other than with
respect to Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Intellectual Property
(as defined in the Security Agreement) in which a security interest may be
perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the United States Patent and Trademark Office
or the United States Copyright Office, as applicable, in each case prior and
superior in right to any other Person other than Liens expressly permitted by
Section 6.02 (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a Lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after the date hereof).
SECTION 3.17. FEDERAL RESERVE REGULATIONS. (a) Neither
Holdings, the Borrower nor any of its
73
68
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of buying or carrying Margin
Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation G, U
or X.
SECTION 3.18. TRW AGREEMENT. The provisions of the TRW
Agreement pursuant to which TRW is obligated to perform any "Environmental
Remediation" and/or indemnify, defend and hold harmless the Borrower, with
respect to "Excluded Environmental Obligations", TRW's share of "Shared
Environmental Obligations", or otherwise with respect to "Environmental
Activities", are in full force and effect in accordance with the terms of the
TRW Agreement and no party has waived any material rights thereunder. Terms
contained in quotation marks in this Section 3.18 shall have the respective
meanings ascribed to such terms in the TRW Agreement.
SECTION 3.19. TAX STATUS OF ESOP. The ESOP, together with the
ESOP Plan and Trust Document, complies with all the requirements necessary to be
an "employee stock ownership plan" within the meaning of Section 4975(e)(7) of
the Code. The ESOP is a qualified plan and trust under Section 401(a) of the
Code, exempt from the tax under Section 501 of the Code and in compliance with
all applicable requirements of the Code and ERISA.
SECTION 3.20. CERTAIN AGREEMENTS. The Stockholders' Agreement
and the Distributorship Agreements are in full force and effect.
ARTICLE IV
Conditions
----------
SECTION 4.01. AMENDMENT EFFECTIVE DATE. The effectiveness of
the Amendment and this Agreement as amended thereby and obligations of the
Delayed Draw Acquisition Loan Lenders to make Delayed Draw Acquisition Loans
hereunder shall not become effective until the date on which each of
74
69
the following conditions is satisfied (or waived in accordance with Section
9.02):
(a) The Administrative Agent (or its counsel) shall have
received from Holdings, the Borrower and sufficient Lenders to
constitute the Required Lenders either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Amendment Effective Date) of ▇▇▇▇ ▇. ▇▇▇▇, counsel for
the Borrower, substantially in the form of Exhibit B(i), and ▇▇▇▇▇,
Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Borrower, substantially in the
form of Exhibit B(ii), and covering such matters relating to the Loan
Parties, the Loan Documents or the Transactions as the Required Lenders
shall reasonably request. The Borrower hereby requests such counsel to
deliver such opinion.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the Transactions,
including a complete copy of the resolutions duly adopted by the board
of directors of the Loan Parties authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party
and the borrowings hereunder, and any other legal matters relating to
the Loan Parties, the Loan Documents or the Transactions, all in form
and substance satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Amendment Effective Date and signed by the
President or a Financial Officer of the Borrower, confirming compliance
with the conditions set forth in paragraphs (a) and (b) of Section
4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior
75
70
to the Amendment Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.
(f) The Administrative Agent shall have received a supplement
to the Pledge Agreement, in the form of Annex 1 to the Pledge
Agreement, signed on behalf of ▇.▇. ▇▇▇▇▇▇ and its subsidiaries,
together with schedules thereto and stock certificates representing all
the outstanding shares of capital stock of ▇.▇. ▇▇▇▇▇▇ and its
subsidiaries as of the Amendment Effective Date after giving effect to
the Transactions (except that stock certificates representing shares of
common stock of a Foreign Subsidiary that is not a Subsidiary Loan
Party may be limited to 65% of the outstanding shares of common stock
of such Foreign Subsidiary), promissory notes evidencing all
intercompany Indebtedness, if any, owed to any Loan Party by Holdings,
the Borrower or any Subsidiary as of the Amendment Effective Date after
giving effect to the Transactions and stock powers and instruments of
transfer, endorsed in blank, with respect to such stock certificates
and promissory notes.
(g) The Administrative Agent shall have received counterparts
of the Amendment to the Security Agreement, substantially in the form
of Exhibit H hereto, signed on behalf of Holdings, the Borrower and
each Subsidiary Loan Party.
(h) The Administrative Agent shall have received a supplement
to the Security Agreement, in the form of Annex 2 to the Security
Agreement, signed on behalf of ▇.▇. ▇▇▇▇▇▇ and each of its
subsidiaries, together with the following:
(i) all documents and instruments, including Uniform
Commercial Code financing statements required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended
to be created under the Security Agreement, as supplemented;
76
71
(ii) schedules of copyrights, trademarks, licenses
and patents; and
(iii) a completed Perfection Certificate with respect
to ▇.▇. ▇▇▇▇▇▇ and each of its subsidiaries dated the
Amendment Effective Date and signed by an executive officer or
Financial Officer of the Borrower, together with all
attachments contemplated thereby, including the results of a
search of the Uniform Commercial Code (or equivalent) filings
made with respect to ▇.▇. ▇▇▇▇▇▇ and its subsidiaries in the
jurisdictions contemplated by the Perfection Certificate and
copies of the financing statements (or similar documents)
disclosed by such search and evidence reasonably satisfactory
to the Administrative Agent that the Liens indicated by such
financing statements (or similar documents) are permitted by
Section 6.02 or have been released.
(i) The Administrative Agent shall have received (i) a
supplement to the Subsidiary Guarantee Agreement, in the form of Annex
1 to the Subsidiary Guarantee Agreement, signed on behalf of ▇.▇.
▇▇▇▇▇▇ and its subsidiaries and (ii) a supplement to the Indemnity,
Subrogation and Contribution Agreement, in the form of Annex 1 to the
Indemnity, Subrogation and Contribution Agreement, signed on behalf of
▇.▇. ▇▇▇▇▇▇ and its subsidiaries.
(j) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in
effect.
(k) The Lenders shall be reasonably satisfied as to the amount
and nature of any environmental and employee health and safety
exposures to which Holdings and its subsidiaries may be subject after
giving effect to the Transactions, and with the plans of Holdings and
the Borrower with respect thereto.
(l) The Lenders shall be satisfied with the capitalization,
structure and equity ownership of Holdings and its subsidiaries after
giving effect to the Transactions.
77
72
(m) The Lenders shall have received (i) audited consolidated
balance sheets and related statements of income, stockholders' equity
and cash flows of ▇.▇. ▇▇▇▇▇▇ for the 1995 and 1996 fiscal years ended
prior to the Amendment Effective Date and (ii) unaudited consolidated
balance sheets and related statements of income, stockholders' equity
and cash flows of ▇.▇. ▇▇▇▇▇▇ for (A) the latest 1997 fiscal quarter
preceding the Amendment Effective Date and (B) each fiscal month after
the most recent 1997 fiscal quarter for which financial statements were
received by the Lenders as described above and ended 30 days before the
Amendment Effective Date, which financial statements shall not be
materially inconsistent with the financial statements or forecasts
previously provided to the Lenders.
(n) The Lenders shall have received a pro forma consolidated
balance sheet of the Borrower as of August 2, 1997, reflecting all pro
forma adjustments as if the Transactions had been consummated on such
date, and such pro forma consolidated balance sheet shall be consistent
in all material respects with the forecasts and other information
previously provided to the Lenders.
(o) After giving effect to the Transactions, neither Holdings,
the Borrower nor any of its Subsidiaries shall have outstanding any
shares of preferred stock or any Indebtedness, other than (i)
Indebtedness incurred under the Loan Documents, (ii) the Senior
Subordinated Notes and (iii) other Indebtedness permitted under Section
6.01. The terms and conditions of all Indebtedness to remain
outstanding after the Amendment Effective Date shall be satisfactory in
all respects to the Lenders.
(p) The Administrative Agent shall be reasonably satisfied
with the sufficiency of amounts available under the Revolving Facility
to meet the ongoing working capital requirements of the Borrower and
its Subsidiaries following the consummation of the Transactions and the
other transactions contemplated hereby.
(q) The Lenders shall have received a certificate from an
officer of the Borrower satisfactory to the Administrative Agent,
confirming the solvency of the
78
73
Borrower and its Subsidiaries on a consolidated basis after giving
effect to the Transactions and the consummation of the other
transactions contemplated hereby.
(r) The Subordinated Notes shall have been paid in full and
all obligations of Holdings and Borrower in respect thereof shall have
been terminated and released and the Administrative Agent shall have
received evidence, satisfactory in form and substance to it,
demonstrating such payment, termination and release.
(s) The Acquisition shall have been consummated or shall be
consummated on the Amendment Effective Date in compliance with (i) the
Stock Purchase Agreement and related documentation, (ii) applicable law
and (iii) 6.04(a), and the Required Lenders shall otherwise be
satisfied with the structure and terms of the Acquisition and all
related documentation.
(t) The Borrower shall have received not less than
$140,000,000 in gross cash proceeds from the issuance of the Senior
Subordinated Notes, copies of the Senior Subordinated Notes Documents
shall have been delivered to the Lenders in form and substance
satisfactory to the Required Lenders and the terms and conditions of
the Senior Subordinated Notes shall otherwise be satisfactory to the
Required Lenders.
(u) The Lenders shall be reasonably satisfied in all respects
(i) with the tax and ERISA positions and the contingent tax and other
liabilities of ▇.▇. ▇▇▇▇▇▇ for prior operating periods and with the
plans of Holdings and the Borrower with respect thereto and (ii) with
any tax sharing agreements involving Holdings, the Borrower and ▇.▇.
▇▇▇▇▇▇ or their respective subsidiaries after giving effect to the
Transactions.
The Administrative Agent shall notify the Borrower and the Lenders of the
Amendment Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Delayed Draw Acquisition
Loan Lenders to make Delayed Draw Acquisition Loans hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
October 15, 1997 (and, in the event such conditions are not so satisfied or
waived, the Original Agreement shall
79
74
continue in full force and effect and none of the amendments contemplated hereby
shall become effective). Notwithstand ing the effectiveness of the Amendment,
the Borrowers's obligation in respect of interest and fees accrued under the
Original Agreement prior to the Amendment Effective Date shall continue in full
force and effect.
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Holdings
and the Borrower on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of
80
75
Holdings and the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Borrower will furnish to the Administrative Agent and each Lender (directly or
through the Administrative Agent):
(a) within 90 days after the end of each fiscal year of the
Borrower, the Borrower's audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the
end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by
Deloitte & Touche LLP or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently (except as noted therein) applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, the Borrower's
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by one
of the Borrower's Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently (except as noted therein) applied,
subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and,
if a Default
81
76
has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
6.12, 6.13 and 6.14 and (iii) stating whether any change in GAAP or in
the application thereof has occurred since the date of the Borrower's
audited financial statements referred to in Section 3.04 and, if any
such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) within 30 days after the commencement of each fiscal year
of the Borrower, a detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet and related
statements of projected operations and cash flow as of the end of and
for such fiscal year) and, promptly when available, any significant
revisions of such budget;
(f) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by Holdings, the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national
securities exchange, or distributed by Holdings to its shareholders
generally, as the case may be; and
(g) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of Holdings, the Borrower or any Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent or any
Lender may reasonably request.
Delivery to the Administrative Agent and each Lender (directly
or through the Administrative Agent) of a
82
77
copy of the Borrower's Form 10-K or 10-Q, as the case may be, filed with the
Securities and Exchange Commission will satisfy the requirements set forth in
clause (a) and (b) above, as the case may be, PROVIDED that the contents thereof
satisfy such requirements.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. Holdings and the
Borrower will furnish to the Administrative Agent and each Lender (directly or
through the Administrative Agent) prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting Holdings, the Borrower or any Affiliate thereof
that could reasonably be expected to result in either (i) liability in
excess of $1,500,000 or (ii) a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of Holdings, the Borrower and its
Subsidiaries in an aggregate amount exceeding $750,000; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. INFORMATION REGARDING COLLATERAL. (a) The
Borrower will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's corporate name or in any tradename used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it or, subject to Section 2.03, of the
83
78
Security Agreement, any office or facility at which Collateral owned by it is
located (including the establishment of any such new office or facility), (iii)
in any Loan Party's identity or corporate structure or (iv) in any Loan Party's
Federal Taxpayer Identification Number. The Borrower agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the Uniform Commercial Code or otherwise that are required in
order for the Administrative Agent to continue at all times following such
change to have a valid, legal and perfected security interest in all the
Collateral. The Borrower also agrees promptly to notify the Administrative Agent
if any material portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Borrower shall deliver to the Administrative Agent a
certificate of a Financial Officer of the Borrower (i) setting forth the
information required pursuant to Section 2 of the Perfection Certificate or
confirming that there has been no change in such information since the date of
the Perfection Certificate delivered on the Effective Date or the date of the
most recent certificate delivered pursuant to this Section and (ii) certifying
that all Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above to the extent necessary to protect and
perfect the security interests under the Security Agreement for a period of not
less than 18 months after the date of such certificate (except as noted therein
with respect to any continuation statements to be filed within such period).
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS. Each of Holdings
and the Borrower will, and will cause each of its Subsidiaries to, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and tradenames material to the
conduct of its business; PROVIDED that the foregoing shall not prohibit any
84
79
merger, consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.05. PAYMENT OF OBLIGATIONS. Each of Holdings and the
Borrower will, and will cause each of its Subsidiaries to, pay its Indebtedness
and other obligations, including material Tax liabilities, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) Holdings, the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. MAINTENANCE OF PROPERTIES. Each of Holdings and
the Borrower will, and will cause each of its Subsidiaries to, keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
SECTION 5.07. INSURANCE. (a) Each of Holdings
and the Borrower will, and will cause each of its
Subsidiaries to, maintain, with financially sound and
reputable insurance companies:
(i) fire and extended coverage insurance, on a replacement
cost basis, with respect to all personal property and improvements to
real property, in such amounts as are customarily maintained by
companies in the same or similar business operating in the same or
similar locations;
(ii) commercial general liability insurance against claims for
bodily injury, death or property damage occurring upon, about or in
connection with the use of any properties owned, occupied or controlled
by it, providing coverage on an occurrence basis with a combined single
limit of not less than $1,000,000 (plus $35,000,000 of additional
coverage under umbrella and similar policies) and including the broad
form CGL endorsement;
(iii) business interruption insurance, insuring against loss
of gross earnings for a period of not less
85
80
than 12 months arising from any risks or occurrences required to be
covered by insurance pursuant to clause (i) above; and
(iv) such other insurance of the type and in the amount
described in Schedule 3.13 or as may be required by law.
Deductibles or self-insured retention shall not exceed $100,000 for fire and
extended coverage policies, $0 for commercial general liability policies or
$100,000 for business interruption policies.
(b) Fire and extended coverage policies (and any policies
required to be maintained pursuant to paragraph (c) below) maintained with
respect to any Collateral shall be endorsed or otherwise amended to include (i)
a non-contributing mortgage clause (regarding improvements to real property)
and lenders' loss payable clause (regarding personal property), in each case in
favor of the Administrative Agent and providing for losses thereunder to be
payable to the Administrative Agent or its designee, (ii) a provision to the
effect that neither the Borrower, the Administrative Agent nor any other party
shall be a coinsurer and (iii) such other provisions as the Administrative
Agent may reasonably require from time to time to protect the interests of the
Lenders. Commercial general liability policies shall be endorsed to name the
Administrative Agent as an additional insured. Business interruption policies
shall name the Administrative Agent as loss payee. Each such policy referred to
in this paragraph also shall provide that it shall not be canceled, modified or
not renewed (i) by reason of nonpayment of premium except upon not less than 10
days' prior written notice thereof by the insurer to the Administrative Agent
(giving the Administrative Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason except upon not less than 30 days' prior
written notice thereof by the insurer to the Administrative Agent. The Borrower
shall deliver to the Administrative Agent, prior to the cancelation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Administrative Agent) together with evidence satisfactory to
the Administrative Agent of payment of the premium therefor.
86
81
(c) If at any time the area in which any Mortgaged Property is
located is designated (i) a "flood hazard area" in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency (or any successor agency),
the Borrower shall obtain flood insurance in such total amount as the
Administrative Agent or the Required Lenders may from time to time require, and
otherwise comply with the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973, as amended from time to time, or (ii) a
"Zone 1" area, the Borrower shall obtain earthquake insurance in such total
amount as the Administrative Agent or the Required Lenders may from time to time
require.
SECTION 5.08. CASUALTY AND CONDEMNATION. (a) The Borrower will
furnish to the Administrative Agent and the Lenders prompt written notice of any
casualty or other insured damage to any portion of any material Collateral or
the commencement of any action or proceeding for the taking of any material
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds, condemnation
award or otherwise), the Administrative Agent is authorized to collect such Net
Proceeds and, if received by Holdings, the Borrower or any Subsidiary, such Net
Proceeds shall be paid over to the Administrative Agent; PROVIDED that (i) if
the aggregate Net Proceeds in respect of such event (other than proceeds of
business income insurance) are less than $2,000,000, such Net Proceeds shall be
paid over to the Borrower unless a Default has occurred and is continuing, and
(ii) all proceeds of business income insurance shall be paid over to the
Borrower unless a Default has occurred and is continuing. All such Net Proceeds
retained by or paid over to the Administrative Agent shall be held by the
Administrative Agent and released from time to time to pay the costs of
repairing, restoring or replacing the affected property in accordance with the
terms of the applicable Security Document, subject to the provisions of the
applicable Security Document regarding application of such Net Proceeds during a
Default.
(c) If any Net Proceeds retained by or paid over to the
Administrative Agent as provided above continue to be held by the Administrative
Agent on the date that is two
87
82
years after the occurrence of the event resulting in such Net Proceeds, then
such Net Proceeds shall be applied to prepay Term Borrowings as provided in
Section 2.10(b).
SECTION 5.09. BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS.
Each of Holdings and the Borrower will, and will cause each of its Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries are made of all dealings and transactions in relation to its business
and activities. Each of Holdings and the Borrower will, and will cause each of
its Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.10. COMPLIANCE WITH LAWS. Each of Holdings and the
Borrower will, and will cause each of its Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.11. USE OF PROCEEDS AND LETTERS OF CREDIT. The
proceeds of the Tranche A Term Loans were used solely to repay in full the
principal amount of, and accrued interest with respect to, the two existing term
loans under the Existing Credit Agreement in an aggregate principal amount of
$100,000,000. The proceeds of the Delayed Draw Acquisition Loans will be used
solely to pay for a portion of the purchase price payable in connection with the
Acquisition and fees and expenses in connection therewith. The proceeds of the
Revolving Loans have been and will be used solely (a) for working capital
purposes, including the repayment in full of the principal amount of, and all
accrued interest with respect to, loans outstanding under the Borrower's
revolving credit facility under the Existing Credit Agreement, (b) to finance
redemptions of Subordinated Notes and (c) in an amount not in excess of
$10,000,000 at any time outstanding and to the extent permitted by clause (a) of
Section 6.04, (i) to fund distributions from the ESOP in accordance with the
terms of the ESOP Plan and Trust Document, (ii) to fund repurchases of the
Common Stock to fulfill its obligations with respect to the Put Options,
88
83
(iii) to fund repurchases of Common Stock (and options to acquire Common Stock)
from directors and employees of Holdings, the Borrower and the Subsidiaries and
(iv) to finance Permitted Acquisitions; provided that the Borrower shall provide
notice to the Administrative Agent no later than five Business Days after the
date on which proceeds are used pursuant to clause (i), (ii), (iii) or (iv)
above. No part of the proceeds of any Loan has been or will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations G, U and X. Letters of Credit
will be issued only for general corporate purposes (other than to finance
acquisitions).
SECTION 5.12. ADDITIONAL SUBSIDIARIES. If any additional
Subsidiary is formed or acquired after the Effective Date, the Borrower will
notify the Administrative Agent and the Lenders thereof and (a) if such
Subsidiary is a Subsidiary Loan Party, the Borrower will cause such Subsidiary
to become a party to the Subsidiary Guarantee Agreement, the Indemnity,
Subrogation and Contribution Agreement and each applicable Security Document in
the manner provided therein within three Business Days after such Subsidiary is
formed or acquired and promptly take such actions to create and perfect Liens on
such Subsidiary's assets to secure the Obligations as the Administrative Agent
or the Required Lenders shall reasonably request and (b) if any shares of
capital stock or Indebtedness of such Subsidiary are owned by or on behalf of
any Loan Party, the Borrower will cause such shares and promissory notes
evidencing such Indebtedness to be pledged pursuant to the Pledge Agreement
within three Business Days after such Subsidiary is formed or acquired (except
that, if such Subsidiary is a Foreign Subsidiary, shares of common stock of such
Subsidiary to be pledged pursuant to the Pledge Agreement may be limited to 65%
of the outstanding shares of common stock of such Subsidiary).
SECTION 5.13. FURTHER ASSURANCES. (a) Each of Holdings and the
Borrower will, and will cause each Subsidiary Loan Party to, execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or that the Administrative Agent
or the Required Lenders may reasonably request, to effectuate the transactions
contemplated by the
89
84
Loan Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. Holdings and the Borrower
also agree to provide to the Administrative Agent, from time to time upon
request, evidence reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under the Security Agreement that become subject to the
Lien of the Security Agreement upon acquisition thereof), the Borrower will
notify the Administrative Agent and the Lenders thereof, and, if requested by
the Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. INDEBTEDNESS; CERTAIN EQUITY SECURITIES. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) the Borrower Subordinated Notes;
90
85
(iii) in the case of the Borrower, the Guarantee of the
Holdings Subordinated Notes;
(iv) in the case of the Borrower, the Senior Subordinated
Notes;
(v) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary; PROVIDED that
Indebtedness of any Subsidiary that is not a Loan Party to the Borrower
or any Subsidiary Loan Party shall be subject to Section 6.04;
(vi) Guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any
other Subsidiary; PROVIDED that (A) the Indebtedness so guaranteed is
permitted by this Section, (B) Guarantees by the Borrower or any
Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a
Loan Party shall be subject to Section 6.04 and (C) the Senior
Subordinated Notes shall not be Guaranteed by any Subsidiary that is
not a guarantor under the Subsidiary Guarantee Agreement;
(vii) Indebtedness of the Borrower or any Subsidiary incurred
to finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted
average life thereof; PROVIDED that (A) such Indebtedness is incurred
prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (B) the aggregate principal amount
of Indebtedness permitted by this clause (vii) shall not exceed
$3,000,000 at any time outstanding;
(viii) Indebtedness of any Person that becomes a Subsidiary
after the date hereof; PROVIDED that (A) such Indebtedness exists at
the time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a
Subsidiary and (B) the aggregate principal
91
86
amount of Indebtedness permitted by this clause (viii) shall not exceed
$1,500,000 at any time outstanding;
(ix) other unsecured Indebtedness in an aggregate principal
amount not exceeding $2,500,000 at any time outstanding; and
(x) Indebtedness of Argo-Tech Corporation (HBP) secured by
Liens on any Specified Real Estate; PROVIDED that such Indebtedness and
all related obligations are, by the express terms of the agreements and
instruments creating and securing such Indebtedness, recourse solely to
the Specified Real Estate securing such Indebtedness and are not
Guaranteed by Holdings, the Borrower or any other Subsidiary.
(b) Holdings will not create, incur, assume or permit to exist
any Indebtedness except (i) Indebtedness created under the Loan Documents, (ii)
Indebtedness in respect of the Corporation's Notes, subject to Section 6.08(a),
(iii) the Holdings Subordinated Notes and (vi) Indebtedness owing to the
Borrower in respect of loans made by the Borrower to Holdings in lieu of
dividends that the Borrower would have been entitled to pay to Holdings pursuant
to Section 6.08; PROVIDED that (A) any such loans made by the Borrower to
Holdings shall be made at the same times, in the same amounts and for the same
purposes as the Borrower would be permitted to pay dividends to Holdings
pursuant to Section 6.08 and (B) such loans shall be treated as dividends paid
to Holdings for purposes of determining compliance with Section 6.08.
(c) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, issue any preferred stock or be or become liable in
respect of any obligation (contingent or otherwise) to purchase, redeem, retire,
acquire or make any other payment in respect of any shares of capital stock of
Holdings, the Borrower or any Subsidiary or any option, warrant or other right
to acquire any such shares of capital stock, except pursuant to the Put Options.
SECTION 6.02. LIENS. (a) The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now
92
87
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable, other than sales of delinquent accounts
receivable for collection purposes in the ordinary course of business) or rights
in respect of any thereof, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on
any property or asset of any Person that becomes a Subsidiary after the
date hereof prior to the time such Person becomes a Subsidiary;
PROVIDED that (A) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary,
as the case may be, (B) such Lien shall not apply to any other property
or assets of the Borrower or any Subsidiary and (C) such Lien shall
secure only those obligations that it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case
may be and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;
(iv) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; PROVIDED that (A) such
security interests secure Indebtedness permitted by clause (vii) of
Section 6.01(a), (B) such security interests and the Indebtedness
secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (C)
the Indebtedness secured thereby does not exceed 100% of the cost of
acquiring, constructing or improving such fixed or capital assets and
(D) such security interests shall not apply to any other property or
assets of the Borrower or any Subsidiary;
(v) Liens on Specified Real Estate and the income and proceeds
thereof to the extent such Liens secure Indebtedness permitted by
clause (x) of Section 6.01(a) and such Liens do not apply to any other
property or assets of the Borrower or any Subsidiary; and
93
88
(vi) Liens in the form of options on the Common Stock held by
the Borrower issued to directors and employees of Holdings, the
Borrower and the Subsidiaries.
(b) Holdings will not create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect thereof, except Liens created under the Pledge Agreement and
Permitted Encumbrances.
SECTION 6.03. FUNDAMENTAL CHANGES. (a) Neither Holdings nor
the Borrower will, nor will they permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary Loan Party in a transaction in which
the surviving entity is a Subsidiary Loan Party, (iii) any Subsidiary that is
not a Loan Party may merge into any Subsidiary that is not a Loan Party and (iv)
any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders; PROVIDED that any
such merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Section
6.04.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
(c) Holdings will not engage in any business or activity other
than the ownership of all the outstanding shares of capital stock of the
Borrower and activities incidental thereto. Holdings will not own or acquire any
assets (other than shares of its capital stock, capital stock of the Borrower,
cash and Permitted Investments) or incur any liabilities (other than
Indebtedness expressly permitted under Section 6.01(b), other liabilities under
the
94
89
Loan Documents, liabilities imposed by law, including tax liabilities, and other
liabilities incidental to its existence and permitted business and activities).
(d) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, (i) permit the ESOP Trustee to be other than an
independent financial institution or (ii) permit any accumulated funding
deficiency to occur with respect to any Plan.
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS. Neither Holdings nor the Borrower will, nor will they permit any
of the Subsidiaries to, 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 obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:
(a) the Borrower will be permitted to make the Acquisition so
long as (i) no Default has occurred and is continuing or would result
therefrom, (ii) the Acquisition is consummated in accordance with the
Stock Purchase Agreement and related documentation, applicable law and
on terms otherwise satisfactory to the Required Lenders, (iii) the
conditions to the Borrower's obligations set forth in the Stock
Purchase Agreement shall have been satisfied without giving effect to
any waiver or amendment in any manner adverse to the Lenders that was
not approved by the Required Lenders, (iv) all actions required to be
taken with respect to ▇.▇. ▇▇▇▇▇▇ and its subsidiaries pursuant to
Sections 5.12 and 5.13 shall have been taken, (v) the Borrower and the
Subsidiaries are in compliance, on a pro forma basis after giving
effect to the Acquisition, with the covenants contained in Sections
6.01, 6.12, 6.13 and 6.14 recomputed as of the last day of the most
recently ended fiscal quarter of the Borrower, as if the Acquisition
had occurred on the first day of each relevant period for testing such
compliance, and (vi) the Borrower has delivered to the Administrative
95
90
Agent an officers' certificate to the effect set forth in clauses (i)
and (v) above.
(b) if no Default has occurred and is continuing or would
result therefrom, the Borrower (and, in the case of clauses (ii), (iii)
and (iv) below, Holdings) will be permitted to (i) fund distributions
by the ESOP in accordance with the terms of the ESOP Plan and Trust
Document, (ii) repurchase Common Stock pursuant to the Put Options,
(iii) repurchase Common Stock (and options to acquire Common Stock)
from directors and employees of Holdings, the Borrower and the
Subsidiaries and (iv) make Permitted Acquisitions (other than the
Acquisition); PROVIDED that (A) the aggregate amount expended pursuant
to this clause (b), on a cumulative basis, during the period commencing
on the Effective Date and ending on any date of determination
immediately prior to the date of delivery of financial statements
pursuant to Section 5.01 with respect to the fiscal year ending October
25, 1997, shall not exceed an amount equal to $1,000,000, and on or
after the date of delivery of such financial statements, the aggregate
amount expended pursuant to this clause (b), on a cumulative basis,
during the period commencing on the Effective Date and ending on any
date of determination, shall not exceed an amount equal to the sum of
50% (or in the case of the fiscal year ending October 25, 1997, 12.5%)
(which percentage shall be increased to 75% for any fiscal year if the
Senior Leverage Ratio is less than 2.10 to 1.00 as of the last day of
such fiscal year) of Excess Cash Flow for each fiscal year of the
Borrower ending on or after October 25, 1997, and ending prior to such
date of determination, (B) consideration in respect of Permitted
Acquisitions shall consist solely of cash consideration and, subject to
compliance with Section 6.01, assumption or incurrence of Indebtedness
and (C) for purposes of determining compliance with the limitations of
clause (A), the aggregate principal amount of Indebtedness assumed,
incurred or otherwise resulting from Permitted Acquisitions shall be
deemed to constitute amounts expended for such purpose;
(c) Permitted Investments;
(d) investments existing on the Effective Date and set forth
on Schedule 6.04, to the extent such
96
91
investments would not be permitted under any other clause of this
Section;
(e) investments by the Borrower in the capital stock of the
Subsidiaries; PROVIDED that (i) any such shares of capital stock shall
be pledged pursuant to the Pledge Agreement (subject to the limitations
applicable to common stock of a Foreign Subsidiary referred to in
Section 5.12) and (ii) the aggregate amount of investments in, and
loans and advances to, and Guarantees of Indebtedness of, Subsidiaries
that are not Loan Parties shall not exceed $100,000 in the aggregate at
any time outstanding;
(f) loans or advances made by the Borrower to any Subsidiary
and made by any Subsidiary to the Borrower or any other Subsidiary;
PROVIDED that (i) any such loans and advances made by a Loan Party
shall be evidenced by a promissory note pledged pursuant to the Pledge
Agreement and (ii) the amount of all such loans and advances by Loan
Parties to Subsidiaries that are not Loan Parties shall be subject to
the limitation set forth in clause (e)(ii) above;
(g) Guarantees constituting Indebtedness permitted by Section
6.01; PROVIDED that the aggregate principal amount of Indebtedness of
Subsidiaries that are not Loan Parties Guaranteed by any Loan Party
shall be subject to the limitation set forth in clause (e)(ii) above;
(h) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(i) loans to directors and employees of the Borrower and the
Subsidiaries in their capacity as such, in an aggregate principal
amount not to exceed $2,500,000 at any time outstanding;
(j) Hedging Agreements permitted under
Section 6.07;
(k) the ESOP Loan in a principal amount not
exceeding $12,600,000 at any time outstanding;
97
92
(l) contributions to the ESOP in accordance with the terms of
the ESOP Plan and Trust Document; and
(m) loans by the Borrower to Holdings to the extent Holdings
is permitted to incur such Indebtedness pursuant to Section 6.01(b).
SECTION 6.05. ASSET SALES. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of
any asset, including any capital stock, nor will the Borrower permit any of its
Subsidiaries to issue any additional shares of its capital stock or other
ownership interest in such Subsidiary, except:
(a) sales of inventory, used or surplus equipment and
Permitted Investments in the ordinary course of business;
(b) sales, transfers and dispositions to the Borrower or a
Subsidiary; PROVIDED that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;
(c) sales, transfers and dispositions of assets (other than
capital stock of a Subsidiary) that are not permitted by any other
clause of this Section; PROVIDED that the aggregate fair market value
of all assets sold, transferred or otherwise disposed of in reliance
upon this clause (c) shall not exceed $7,500,000 in the aggregate
during the term of this Agreement;
(d) sales of Specified Real Estate; and
(e) pursuant to stock options issued to directors and
employees of Holdings, the Borrower and the Subsidiaries, sales of
Common Stock purchased and held by the Borrower.
PROVIDED that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and solely for cash consideration.
SECTION 6.06. SALE AND LEASE-BACK TRANSACTIONS. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
arrangement, directly or
98
93
indirectly, with any Person whereby it shall sell or transfer any property, real
or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred, except the Specified Real Estate.
SECTION 6.07. HEDGING AGREEMENTS. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.
SECTION 6.08. RESTRICTED PAYMENTS; CERTAIN PAYMENTS OF
INDEBTEDNESS. (a) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:
(i) Holdings may declare and pay dividends with respect to
its capital stock payable solely in additional shares of its common
stock;
(ii) Subsidiaries of the Borrower may declare and pay
dividends ratably with respect to their capital stock;
(iii) subject to the limitations set forth in Section 6.04(a),
if at the time thereof and after giving effect thereto no Default has
occurred and is continuing, (A) Holdings and the Borrower may make the
Restricted Payments contemplated by and permitted under Section 6.04(a)
and (B) Holdings may make Restricted Payments consisting of the
issuance of the Corporation's Notes pursuant to the Stockholders'
Agreement (subject to and to be counted towards the dollar limitations
set forth with respect to distributions, repurchases and acquisitions
in Section 6.04(a)); and
(iv) if at the time thereof and after giving effect thereto
no Default has occurred and is continuing, the Borrower may pay cash
dividends to Holdings at such times and in such amounts as shall be
necessary, after giving effect to the application by
99
94
Holdings of any other cash resources available to it (including
Permitted Investments), to permit Holdings to (A) pay taxes imposed
upon it and liabilities incidental to its existence when due, (B) pay
directors' fees to its directors when due and (C) make Restricted
Payments to be made by Holdings that are permitted by clause (iii)
above; PROVIDED that any dividends permitted to be paid to Holdings
shall not be paid prior to the date that Holdings will apply the
proceeds of such dividends to the purposes for which such dividends are
permitted.
(b) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, make or agree to pay or make, directly or indirectly,
any payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of or interest on any Indebtedness, or
any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancelation or termination of any
Indebtedness, except:
(i) payment of Indebtedness created under the Loan
Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness (subject, in
the case of the Senior Subordinated Notes, to the restrictions on
payments set forth in the indenture governing the Senior Subordinated
Notes); PROVIDED that principal payments in respect of the Senior
Subordinated Notes shall not be permitted; and
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01.
SECTION 6.09. TRANSACTIONS WITH AFFILIATES. Neither Holdings
nor the Borrower will, nor will they permit any Subsidiary to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business that do not involve Holdings and are at prices and
on terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm's-length basis
100
95
from unrelated third parties, (b) transactions between or among the Borrower and
the Subsidiary Loan Parties not involving any other Affiliate, (c) any
Restricted Payment permitted by Section 6.08, (d) director and employee loans
permitted by clause (h) of Section 6.04, (e) transactions between the Borrower
or a Subsidiary and an Affiliate that is an employee of the Borrower or such
Subsidiary that (i) are in the nature of employment agreements or otherwise
related to such employee's employment or compensation and (ii) are at prices and
on terms and conditions not materially less favorable to the Borrower or such
Subsidiary than are customarily obtained by other similarly situated employees
from their employers and (f) the Distributorship Agreements.
SECTION 6.10. RESTRICTIVE AGREEMENTS. Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of Holdings,
the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Borrower or any other Subsidiary or
to Guarantee Indebtedness of the Borrower or any other Subsidiary; PROVIDED that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the Amendment Effective Date identified on Schedule 6.10
(but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.
101
96
SECTION 6.11. AMENDMENT OF MATERIAL DOCUMENTS. Neither
Holdings nor the Borrower will, nor will they permit any Subsidiary to (a)
amend, modify or waive any of its rights under its certificate of incorporation,
by-laws or other organizational documents; PROVIDED that the certificate of
incorporation, by-laws and other organizational documents of ▇.▇. ▇▇▇▇▇▇ may be
amended or modified to the extent necessary to conform them to the
organizational documents of the Borrower and its other Subsidiaries (including
to allow for reincorporation in Delaware), (b) amend, supplement or modify any
of the terms or provisions contained in the TRW Agreement or Stockholders'
Agreement, (c) amend, supplement or modify any of the terms or provisions
contained in the Distributorship Agreements, except for such amendments,
supplements and modifications that do not (individually or in the aggregate)
have a Material Adverse Effect, (d) terminate, amend or modify the ESOP Plan and
Trust Document except for amendments required by law or which do not have a
material adverse effect on the cost of the ESOP to the Borrower or are required
by the Internal Revenue Service as a condition of obtaining a favorable
determination letter, (e) terminate, amend or modify the ESOP Loan Agreement,
the ESOP Term Note or the ESOP Pledge Agreement or (f) amend, modify or
supplement any terms or provisions contained in the Senior Subordinated Note
Documents.
SECTION 6.12. CAPITAL EXPENDITURES. The Borrower will not
permit the aggregate amount of Capital Expenditures made by the Borrower and the
Subsidiaries in any fiscal year to exceed the amount set forth below opposite
such year:
Fiscal Year Amount
----------- ------
1997 $5,500,000
1998 $5,500,000
1999 $6,500,000
2000 $6,500,000
2001 $6,500,000
2002 $6,500,000
2003 $6,500,000
2004 $6,500,000
;PROVIDED that, to the extent Capital Expenditures made in any fiscal year are
less than the amount set forth above for such fiscal year, 50% of such unused
amount may be carried forward to the immediately succeeding fiscal year.
102
97
SECTION 6.13. SENIOR LEVERAGE RATIO. The Borrower will not
permit the Senior Leverage Ratio as of any date during any period set forth
below to be in excess of the ratio set forth below opposite such period:
Fiscal Quarter Ending: Ratio
---------------------- -----
August 2, 1997 4.20:1.0
October 24, 1997 3.00:1.0
January 30, 1998 3.00:1.0
May 1, 1998 2.75:1.0
July 31, 1998 2.75:1.0
October 30, 1998 2.50:1.0
January 31, 1999 2.50:1.0
April, 30 1999 2.25:1.0
July 30, 1999 2.25:1.0
October 29, 1999 2.00:1.0
January 28, 2000 2.00:1.0
April 28, 2000 1.85:1.0
July 28, 2000 1.85:1.0
October 27, 2000 1.75:1.0
Thereafter 1.50:1.0
SECTION 6.14. CONSOLIDATED INTEREST EXPENSE COVERAGE RATIO.
The Borrower will not permit the ratio of (a) Consolidated EBITDA of the
Borrower to (b) Consolidated Interest Expense (net of interest income) of the
Borrower, in each case for any period of four consecutive fiscal quarters of the
Borrower ending during any period set forth below to be less than the ratio set
forth below opposite such period:
Fiscal Quarter Ending: Ratio
---------------------- -----
August 2, 1997 2.00:1.0
October 24, 1997 1.50:1.0
January 30, 1998 1.50:1:0
May 1, 1998 1.85:1.0
July 31, 1998 1.85:1.0
October 30, 1998 2.00:1.0
January 29, 1999 2.00:1.0
April 30, 1999 2.00:1.0
July 30, 1999 2.00:1.0
October 29, 1999 2.10:1.0
January 28, 2000 2.10:1.0
April 28, 2000 2.10:1.0
July 28, 2000 2.10:1.0
October 27, 2000 2.40:1.0
Thereafter 2.75:1.0
103
98
SECTION 6.15. CERTAIN ACTIONS UNDER SENIOR SUBORDINATED NOTE
DOCUMENTS. The Borrower will not designate any Indebtedness (other than the
Indebtedness hereunder) as "Designated Senior Indebtedness" within the meaning
of the Senior Subordinated Note Documents. The Borrower will not take any
action, or fail to take any action, that would result in any Indebtedness
hereunder not constituting "Senior Indebtedness" within the meaning of the
Senior Subordinated Note Documents.
ARTICLE VII
Events Of Default
-----------------
If any of the following events ("EVENTS OF DEFAULT") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of Holdings, the Borrower or any Subsidiary in or in
connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect when made or deemed
made;
(d) Holdings or the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in Section 5.02, 5.04
(with respect to the
104
99
existence of Holdings or the Borrower) or 5.11 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender);
(f) Holdings, the Borrower or any Subsidiary shall fail to
make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
PROVIDED that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of Holdings, the Borrower or
any Subsidiary or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any
Subsidiary or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing
shall be entered;
105
100
(i) Holdings, the Borrower or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) Holdings, the Borrower or any Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $1,500,000 shall be rendered against
Holdings, the Borrower, any Subsidiary or any combination thereof and
the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon
any assets of Holdings, the Borrower or any Subsidiary to enforce any
such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
(i) $750,000 in any year or (ii) $1,500,000 for all periods;
(m) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not
to be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document, except (i) as a result of
the sale or other disposition of the
106
101
applicable Collateral in a transaction permitted under the Loan
Documents or (ii) as a result of the Administrative Agent's failure to
maintain possession of any stock certificates, promissory notes or
other instruments delivered to it under the Pledge Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent (which term for purposes of this Article shall
be deemed to refer to the Administrative Agent and the Collateral Agent) as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms of the Loan
107
102
Documents, together with such actions and powers as are reasonably incidental
thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the Administrative Agent
hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to Holdings, the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall not be deemed to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by Holdings, the Subsidiaries, the Borrower or a Lender,
and the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii)
the performance or
108
103
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the
109
104
Issuing Bank, appoint a successor Administrative Agent that shall be a bank with
an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by
110
105
certified or registered mail or sent by telecopy, as follows:
(a) if to Holdings or the Borrower, to it at Argo-
Tech Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention of ▇▇▇▇▇▇▇ St Clair (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent or the Collateral Agent, to
The Chase Manhattan Bank, Loan and Agency Services Group, One Chase
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to The Chase
Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of
▇▇▇▇▇▇▇ ▇▇▇▇▇ (Telecopy No.(▇▇▇) ▇▇▇-▇▇▇▇);
(c) if to the Issuing Bank, to it at Standby Letter of Credit
Department, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, New York
10041, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a
copy to The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Telecopy No.(▇▇▇) ▇▇▇-▇▇▇▇);
(d) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay by
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are
111
106
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, the Collateral Agent,
any Lender or the Issuing Bank may have had notice or knowledge of such Default
at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrower and the Required Lenders or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent or the Collateral Agent, as applicable,
and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders; PROVIDED that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release
Holdings or any Subsidiary Loan Party from its Guarantee under the Parent
Guarantee Agreement or the Subsidiary Guarantee Agreement,
112
107
as applicable (except as expressly provided in the Parent Guarantee Agreement or
the Subsidiary Guarantee Agreement, as applicable), or limit its liability in
respect of such Guarantee, without the written consent of each Lender, (vii)
except in strict accordance with the express provisions thereof, release all or
any substantial part of the Collateral from the Liens of the Security Documents,
without the written consent of each Lender, or (viii) change any provisions of
any Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of any Class differently than
those holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans and unused Commitments
of each affected Class (in addition to any consents required under the foregoing
provisions of this Section); PROVIDED FURTHER that (A) no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Collateral Agent or the Issuing Bank without the prior written
consent of the Administrative Agent, the Collateral Agent or the Issuing Bank,
as the case may be, and (B) any waiver, amendment or modification of this
Agreement that by its terms affects the rights or duties under this Agreement of
the Revolving Lenders (but not the Tranche A Term Loan Lenders and Delayed Draw
Acquisition Loan Lenders), the Tranche A Term Loan Lenders (but not the
Revolving Lenders and Delayed Draw Acquisition Loan Lenders) or the Delayed Draw
Acquisition Loan Lenders (but not the Revolving Lenders and Tranch A Term Loan
Lenders) may be effected by an agreement or agreements in writing entered into
by Holdings, the Borrower and requisite percentage in interest of the affected
Class of Lenders.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent and their Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and the Collateral Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
113
108
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent, the Collateral Agent,
the Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Borrower shall indemnify the Administrative Agent, the
Collateral Agent, the Issuing Bank and each Lender, and each Related Party of
any of the foregoing Persons (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, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any Mortgaged Property or any other property
currently or formerly owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, 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 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 resulted from the gross negligence or wilful misconduct of such
Indemnitee.
114
109
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Collateral Agent or
the Issuing Bank under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Collateral Agent or the
Issuing Bank, as the case may be, such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; PROVIDED that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent, the Collateral
Agent or the Issuing Bank in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum of
the total Revolving Exposures, outstanding Term Loans and unused Commitments at
the time.
(d) To the extent permitted by applicable law, neither
Holdings nor the Borrower shall assert, and each 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 or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). 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 (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Collateral Agent, the Issuing Bank and the
115
110
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); PROVIDED that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Borrower and the Administrative Agent (and, in the case of an
assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC Exposure, the Issuing Bank) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
an Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that this
clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and PROVIDED FURTHER that
any consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default has occurred and is continuing. Subject to
acceptance and recording thereof pursuant to paragraph (d) of this Section, from
and after the effective date specified in each Assignment and Acceptance the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the
116
111
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive, and Holdings, the Borrower, the Administrative
Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Issuing Bank and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent or the Issuing Bank sell participations to one or more
banks or other entities (a "PARTICIPANT") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); PROVIDED that (i) such Lender's
obligations under this
117
112
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) Holdings, the Borrower, the Administrative Agent, the Collateral
Agent, the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; PROVIDED that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.17(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; PROVIDED that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations
118
113
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
SECTION 9.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Document and any separate letter agreements with respect to fees
payable to the Administrative Agent 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. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an
119
114
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender may have.
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
120
115
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against Holdings, the Borrower or its
properties in the courts of any jurisdiction.
(c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
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, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for
121
116
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
SECTION 9.12. CONFIDENTIALITY. Each of the Administrative
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (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, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, 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, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than Holdings or the Borrower. For the
purposes of this Section, "INFORMATION" means all information received from
Holdings or the Borrower relating to Holdings or the Borrower or its business,
other than any such information that is available to the Administrative Agent,
the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
Holdings or the Borrower; PROVIDED that, in the case of information received
from Holdings or the Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section 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.
122
117
SECTION 9.13. INTEREST RATE LIMITATION. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "CHARGES"), shall
exceed the maximum lawful rate (the "MAXIMUM RATE") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
AT HOLDINGS CORPORATION,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
ARGO-TECH CORPORATION,
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
123
118
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BANK ONE, NA,
by
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Coerdt
Title: Vice President &
Group Manager
COMERICA BANK
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CAISSE NATIONALE DE CREDIT
AGRICOLE
by
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
CREDIT LYONNAIS CHICAGO BRANCH
by
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
124
119
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
by
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ FINANCIAL, INC.
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
KEY BANK NATIONAL ASSOCIATION
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
NATIONAL CITY BANK
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President