EXHIBIT 2
CREDIT AGREEMENT
Dated as of February 5, 1999
among
CORDANT TECHNOLOGIES INC.
and
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and As Administrative Agent,
FIRST CHICAGO CAPITAL MARKETS, INC.,
As Arranger,
and
THE LENDING INSTITUTIONS PARTY HERETO
TABLE OF CONTENTS
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ARTICLE I: DEFINITIONS................................................. 1
ARTICLE II: THE CREDITS................................................ 10
2.1. Advances.......................................................... 10
2.1.1. Commitments to Make Revolving Loans...................... 10
2.1.2. Ratable Loans............................................ 10
2.1.3. Rate Options............................................. 11
2.1.4. Method of Selecting Rate Options and Interest Periods
for Advances............................................. 11
2.1.5. Conversion and Continuation of Outstanding Advances...... 11
2.2. Term Loan Extension Option........................................ 12
2.2.1. Option................................................... 12
2.2.2. Extension Request........................................ 12
2.2.3. Conditions Precedent to Extension........................ 12
2.2.4. Repayment of Term Loans.................................. 13
2.2.5. Rate Options............................................. 13
2.2.6. Conversion and Continuation of Outstanding Advances
consisting of Term Loans................................. 13
2.3. General Facility Terms............................................ 14
2.3.1. Method of Borrowing...................................... 14
2.3.2. Minimum Amount of Each Advance........................... 14
2.3.3. Termination; Required Payments........................... 14
2.3.4. Optional Principal Payments.............................. 14
2.3.5. Commitment Fees and Voluntary Reduction of Commitments... 14
2.3.6. Changes in Interest Rate, etc............................ 15
2.3.7. Ratings Change Rate Increase; Rate after Maturity........ 15
2.3.8. Interest Payment Dates; Interest and Fee Basis........... 15
2.3.9. Method of Payment........................................ 16
2.3.10. Notes; Telephonic Notices............................... 16
2.3.11. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions............................... 17
2.3.12. Lending Installations................................... 17
2.3.13. Non-Receipt of Funds by the Administrative Agent........ 17
2.3.14. Withholding Tax Exemption............................... 18
ARTICLE III: CHANGE IN CIRCUMSTANCES; INDEMNIFICATION.................. 18
3.1. Yield Protection.................................................. 18
3.2. Changes in Capital Adequacy Regulations........................... 19
3.3. Availability of Interest Rate..................................... 20
3.4. Failure to Pay or Borrow on Certain Dates......................... 20
3.5. Bank Certificates; Survival of Indemnity.......................... 20
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ARTICLE IV: CONDITIONS PRECEDENT....................................... 21
4.1. Initial Advance .................................................. 21
4.2. Each Advance...................................................... 22
ARTICLE V: REPRESENTATIONS AND WARRANTIES.............................. 22
5.1. Corporate Existence and Standing.................................. 22
5.2. Authorization and Validity........................................ 22
5.3. Compliance with Laws and Contracts................................ 23
5.4. Financial Statements.............................................. 23
5.5. Material Adverse Change........................................... 23
5.6. Taxes............................................................. 23
5.7. Litigation........................................................ 24
5.8. ERISA............................................................. 24
5.9. Defaults and Prepayment Event..................................... 24
5.10. Accuracy of Information.......................................... 24
5.11. Regulation U..................................................... 24
5.12. Pari Passu....................................................... 24
5.13. Investment Company............................................... 24
5.14. Material Laws.................................................... 25
5.15. Material Agreements.............................................. 25
5.16. Subsidiaries..................................................... 25
5.17. Ownership of Properties.......................................... 25
ARTICLE VI: COVENANTS.................................................. 25
6.1. Affirmative Covenants............................................. 25
6.1.1. Financial Reporting...................................... 26
6.1.2. Use of Proceeds.......................................... 27
6.1.3. Notice of Default and Prepayment Event................... 28
6.1.4. Conduct of Business...................................... 28
6.1.5. Payment of Taxes......................................... 28
6.1.6. Insurance................................................ 28
6.1.7. Compliance with Laws..................................... 28
6.1.8. Maintenance of Properties................................ 29
6.1.9. Inspection................................................ 29
6.2. Negative Covenants................................................ 29
6.2.1. Dividends................................................ 29
6.2.2. Indebtedness of Subsidiaries............................. 29
6.2.3. Merger................................................... 29
6.2.4. Sale of Assets........................................... 30
6.2.5. Sale and Leaseback....................................... 30
6.2.6. Liens.................................................... 30
6.2.7. Funded Debt/EBITDA Ratio................................. 31
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6.2.8. Affiliates; Howmet....................................... 31
ARTICLE VII: DEFAULTS.................................................. 32
ARTICLE VIII: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES........... 34
8.1. Acceleration; Allocation of Payments after Default or
Prepayment Event.................................................. 34
8.2. Amendments........................................................ 34
8.3. Preservation of Rights............................................ 35
ARTICLE IX: GENERAL PROVISIONS......................................... 35
9.1. Survival of Representations....................................... 35
9.2. Governmental Regulation........................................... 35
9.3. Taxes............................................................. 35
9.4. CHOICE OF LAW..................................................... 36
9.5. CONSENT TO JURISDICTION........................................... 36
9.6. WAIVER OF JURY TRIAL.............................................. 36
9.7. Headings.......................................................... 36
9.8. Entire Agreement.................................................. 36
9.9. Several Obligations............................................... 36
9.10. Expenses......................................................... 37
9.12. Numbers of Documents............................................. 37
9.13. Confidentiality.................................................. 37
ARTICLE X: THE ADMINISTRATIVE AGENT.................................... 38
10.1. Appointment...................................................... 38
10.2. Powers........................................................... 38
10.3. General Immunity................................................. 38
10.4. No Responsibility for Loans, Recitals, etc....................... 38
10.5. Right to Indemnity............................................... 38
10.6. Action on Instructions of Banks.................................. 38
10.7. Employment of Agents and Counsel................................. 38
10.8. Reliance on Documents; Counsel................................... 39
10.9. Administrative Agent's Reimbursement............................. 39
10.10. Rights as a Bank................................................ 39
10.11. Bank Credit Decision............................................ 39
10.12. Successor Administrative Agent.................................. 39
10.13. Distribution of Information..................................... 40
10.14. Disclosure...................................................... 40
ARTICLE XI: SETOFF; RATABLE PAYMENTS................................... 41
11.1. Setoff........................................................... 41
11.2. Ratable Payments................................................. 41
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ARTICLE XII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS......... 41
12.1. Successors and Assigns........................................... 41
12.2. Participations................................................... 42
12.2.1. Permitted Participants; Effect........................ 42
12.2.2. Voting Rights......................................... 42
12.3. Assignments...................................................... 42
12.3.1. Permitted Assignments................................. 42
12.3.2. Substitution of Bank.................................. 43
12.3.3. Effect; Effective Date................................ 43
12.4. Dissemination of Information..................................... 44
12.5. Tax Treatment.................................................... 44
ARTICLE XIII: NOTICES.................................................. 44
13.1. Giving Notice.................................................... 44
13.2. Change of Address................................................ 44
ARTICLE XIV: COUNTERPARTS.............................................. 45
EXHIBIT "A": EXTENSION REQUEST......................................... 48
EXHIBIT "B": FORM OF PROMISSORY NOTE................................... 49
EXHIBIT "C": OPINION OF COUNSEL........................................ 51
EXHIBIT "D": LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION............ 54
EXHIBIT "E": ASSIGNMENT AGREEMENT...................................... 55
SCHEDULE "1": SUBSIDIARIES............................................. 65
SCHEDULE "2": INDEBTEDNESS OF SUBSIDIARIES............................. 66
SCHEDULE "3": LIENS.................................................... 67
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CORDANT TECHNOLOGIES INC.
CREDIT AGREEMENT
This Credit Agreement dated as of February 5, 1999 is among Cordant
Technologies Inc., a Delaware corporation, each of the undersigned banks and The
First National Bank of Chicago, individually and as agent for such banks. The
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Banks to the Company at the same time,
at the same Rate Option and for the same Interest Period. Unless the context
otherwise expressly states otherwise, from and after the Revolving Credit
Termination Date if the Revolving Loans shall have been converted to Term Loans,
"Advance" shall mean the borrowings consisting of the aggregate amount of the
several Term Loans.
"Administrative Agent" means The First National Bank of Chicago in its
capacity as agent for the Banks pursuant to Article X, and not in its individual
capacity as a Bank, and any successor Administrative Agent appointed pursuant to
Article X.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Available Commitment" means, at any time prior to the
Revolving Credit Termination Date, the Aggregate Commitment at such time less
the Outstandings at such time.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Banks hereunder.
"Aggregate Outstanding Credit Exposure" means, as of any day, the
aggregate of the Outstanding Credit Exposure of all the Banks.
"Agreement" means this credit agreement, as it may be amended from time
to time.
"Arranger" means First Chicago Capital Markets, Inc.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Representative" means the Chief Financial Officer or the
Treasurer of the Company or any other officer or employee of the Company
designated in writing as an "Authorized Representative" under this Agreement by
the Chief Financial Officer or the Treasurer of the Company.
"Bankruptcy Code" means Xxxxx 00, Xxxxxx Xxxxxx Code Sections 1 et
seq., as the same may be amended from time to time, and any successor thereto or
replacement therefor which may be hereafter enacted.
"Banks" means the banks listed on the signature pages of this Agreement
and their respective successors and assigns.
"Base Eurodollar Rate" means, with respect to a Eurodollar Rate Advance
for the relevant Interest Period, the rate determined by the Administrative
Agent to be the rate at which deposits in U.S. Dollars are offered by First
Chicago to first-class banks in the London interbank market at approximately 11
a.m. (London time) two Business Days prior to the first day of such Interest
Period, in the approximate amount of First Chicago's relevant Eurodollar Rate
Loan and having a maturity approximately equal to such Interest Period.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.1.4.
"Business Day" means (a) with respect to borrowing, payment or rate
selection of Eurodollar Rate Advances, a day (other than a Saturday or Sunday)
on which banks generally are open for business in Chicago and New York for the
conduct of substantially all of their commercial lending activities and on which
dealings in U.S. Dollars are carried on in the London interbank market and (b)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open for business in Chicago and New York for the conduct of
substantially all of their commercial lending activities.
"Capitalized Lease" of any Person means any lease or lease agreement
which creates a Capitalized Lease Obligation of such Person.
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"Capitalized Lease Obligation" of any Person means the obligation of
such Person, as lessee, to pay rent for the letting, use or hire of real or
personal property which in accordance with GAAP is required to be presented on
the balance sheet of such Person as a liability.
"Commitment" means, for each Bank, the obligation of the Bank to make
Loans not exceeding the amount set forth opposite its signature below, as such
amount may be modified from time to time.
"Company" means Cordant Technologies Inc., a Delaware corporation.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
plus interest expense and provision for taxes based on income (in each case to
the extent deducted in determining Consolidated Net Income), adjusted by adding
thereto the amount of (i) all amortization of intangibles and depreciation and
(ii) Receivables Facility Financing Costs (to the extent not otherwise
included).
"Consolidated Funded Debt" means all Indebtedness of the Company and
its Consolidated Subsidiaries which, on the date of determination, would be
required to be shown on the Company's consolidated balance sheet prepared in
accordance with GAAP, plus all Receivables Facility Attributed Indebtedness of
the Company and its Consolidated Subsidiaries on the date of determination
regardless of its treatment under GAAP.
"Consolidated Net Income" means, for any period, the consolidated net
after-tax income of the Company and its Consolidated Subsidiaries determined in
accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary that is consolidated on
a balance sheet of the Company in accordance with GAAP; provided, that,
notwithstanding anything in this Agreement to the contrary, for purposes of the
definitions of Consolidated EBITDA, Consolidated Funded Debt, Consolidated Net
Income and all components of each of the foregoing, Howmet and its Subsidiaries
shall be included as Consolidated Subsidiaries of the Company.
"Consolidated Total Assets" means, as at any date of determination, the
aggregate value of assets of the Company and its Consolidated Subsidiaries
determined in accordance with GAAP.
"Conversion/Continuation Notice" is defined in Section 2.1.5.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.
"Default" means an event described in Article VII.
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"Dollars" and "$" mean lawful money of the United States of America.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Effective Date" means any Business Day on which the Company has
complied with all of the terms and conditions of Section 4.1, the Company has
paid all requisite fees to the Administrative Agent, the Company, the
Administrative Agent and the Banks have executed this Agreement, and the
Administrative Agent has notified the Company and the Banks that all such events
have occurred.
"Eurodollar Margin" means (a) for the period from the Effective Date
until the date that is 180 days thereafter, 0.875% per annum; (b) for the period
beginning 181 days after the Effective Date until the Revolving Credit
Termination Date, 1.0% per annum; and (c) from and after the Revolving Credit
Termination Date, 1.25% per annum.
"Eurodollar Rate" means, with respect to a Eurodollar Rate Advance for
the relevant Interest Period, a per annum rate equal to the sum of (a) the
quotient of (i) the Base Eurodollar Rate applicable to that Interest Period,
divided by (ii) one minus the Reserve Requirement (expressed as a decimal)
applicable to that Interest Period, if any, plus (b) the Eurodollar Margin,
changing when and as said Eurodollar Margin changes. The Eurodollar Rate shall
be rounded, if necessary, to the next higher 1/100th of 1%.
"Eurodollar Rate Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Rate Loan" means a Loan which bears interest at a
Eurodollar Rate.
"Extension Request" means a notice in substantially the form of Exhibit
"A" hereto, with appropriate insertions, duly executed and delivered to the
Administrative Agent by the Company.
"Federal Funds Rate" means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"First Chicago" means The First National Bank of Chicago in its
individual capacity and not as agent hereunder.
Page 4
"Floating Rate" means, for any day, a rate per annum equal to the
higher of (a) the Corporate Base Rate for such day and (b) the Federal Funds
Rate for such day plus .5% per annum.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Funded Debt/EBITDA Ratio" means, as at the last day of any fiscal
quarter of the Company, the ratio of (i) Consolidated Funded Debt as of such day
to (ii) Consolidated EBITDA for the four consecutive fiscal quarters ending on
such day.
"GAAP" means generally accepted principles of accounting as in effect
at the time of application to the provisions hereof, except as provided with
regard to Howmet pursuant to the definition of "Subsidiary" set forth herein.
"Guaranty" of any Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assure any creditor of such
other Person against loss, and shall include, without limitation, the contingent
liability of such Person under or with respect to any Letter of Credit.
"Howmet" means Howmet International, Inc., a Delaware corporation.
"Indebtedness" of any Person means, without duplication, (a) the
obligations of such Person (i) for borrowed money, (ii) under or with respect to
notes payable and drafts accepted which represent extensions of credit (whether
or not representing obligations for borrowed money) to such Person or (iii)
reimbursement obligations with respect to letters of credit issued for the
account of such Person or (iv) for the deferred purchase price of property or
services other than current accounts payable arising in the ordinary course of
business on terms customary in the trade, (b) the obligations of others, whether
or not assumed, secured by Liens on property of such Person or payable out of
the proceeds of or production from property now or hereafter owned or acquired
by such Person, (c) the Capitalized Lease Obligations of such Person, (d) the
obligations of such Person under Guaranties by such Person of any Indebtedness
(other than obligations for borrowed money incurred to finance the purchase of
property leased to such Person pursuant to a Capitalized Lease of such Person)
of any other Person, (e) all Receivables Facility Attributed Indebtedness of
such Person on the date of determination and (f) Off Balance Sheet Liabilities
of such Person.
"Interest Period" means, with respect to a Eurodollar Rate Advance, a
period of one, two, three or six months commencing on a Business Day selected by
the Company pursuant to this Agreement. Such Interest Period shall end on the
day in the succeeding calendar month which
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corresponds numerically to the beginning day of such Interest Period; provided,
however, that if there is no such numerically corresponding day in such
succeeding month, such Interest Period shall end on the last Business Day of
such succeeding month. If an Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next succeeding
Business Day; provided, however, that if said next succeeding Business Day falls
in a new month, such Interest Period shall end on the immediately preceding
Business Day.
"Lending Installation" means, for each type of Loan, any office,
branch, subsidiary or affiliate of any Bank.
"Letter of Credit" of any Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is account party or for which such Person is in any way liable.
"Lien" means, with respect to the property of any Person, any security
interest, mortgage, pledge, lien, claim, charge, encumbrance, conditional sale
agreement, title retention agreement, lessor's interest under a Capitalized
Lease or analogous instrument, in, of or on any of the property of such Person.
"Loan" means, with respect to a Bank, such Bank's portion of any
Advance or, during the Term Loan Period, such Bank's Term Loan.
"Loan Documents" means this Agreement and the Notes.
"Note" means a promissory note in substantially the form of Exhibit "B"
hereto, with appropriate insertions, duly executed and delivered to the
Administrative Agent by the Company and payable to the order of a Bank in the
amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Obligations" means all unpaid principal and accrued and unpaid
interest under the Notes, all accrued and unpaid commitment and extension fees
and all other obligations of the Company or any Subsidiary to the Banks or to
any Bank or the Administrative Agent arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any sale and leaseback
transaction which does not create a liability on the balance sheet of such
Person, (iii) any liability under any financing lease or so-called "synthetic
lease" transaction entered into by such Person, or (iv) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheets of such Person, but excluding Operating Leases.
Page 6
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Outstanding Credit Exposure" means, as to any Bank at any time, the
aggregate principal amount of its Loans outstanding at such time.
"Outstandings" means at any time the aggregate of the principal amounts
of all outstanding Advances.
"Participants" is defined in Section 12.2.1.
"Payment Date" shall mean the last Business Day of each quarter,
commencing March 31, 1999.
"Permitted Lien" means any lien described in clauses (a) through (i) of
Section 6.2.6.
"Person" means any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, government or any department or
agency of any government.
"Plan" means a defined benefit pension plan as such term is defined in
Section 3(35) of ERISA for the unfunded liabilities of which upon termination
the Company or any Subsidiary could be held liable by the Pension Benefit
Guaranty Corporation.
"Plan Year" means a plan year as defined in Section 3(39) of ERISA.
"Prepayment Event" means the earliest to occur of (a) the date of a
public announcement that a Person or group of affiliated or associated Persons
(an "Acquiring Person") has acquired, or has obtained the right to acquire,
legal or beneficial ownership of more than 50% of the outstanding shares of the
Voting Stock of the Company, (b) the date of the commencement of a tender offer
or exchange offer that would result in an Acquiring Person legally or
beneficially owning more than 50% of the outstanding shares of the Voting Stock
of the Company, and (c) the date an Acquiring Person acquires all or
substantially all of the assets of the Company.
"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Receivables Facility Attributed Indebtedness" means the amount of
obligations outstanding under a receivables purchase facility on any date of
determination that would be characterized as principal if such facility were
structured as a secured lending transaction rather than as a purchase.
"Receivables Facility Financing Costs" means all cash fees, service
charges, and other costs, as well as all collections or other amounts retained
by purchasers of receivables pursuant to
Page 7
a receivables purchase facility, which are in excess of amounts paid to the
Company and its Consolidated Subsidiaries under any receivables purchase
facility for the purchase of receivables pursuant to such facility.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA.
"Required Banks" means Banks in the aggregate having at least 51% of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Banks in the aggregate holding at least 51% of the Aggregate Outstanding Credit
Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Credit Termination Balance" means the aggregate principal
amount of Advances outstanding on the Revolving Credit Termination Date after
giving effect to any Advances made or repaid on such date.
"Revolving Credit Termination Date" means November 5, 1999 or any
earlier date on which the Aggregate Commitment is reduced to zero or otherwise
terminated pursuant to the terms hereof.
"Revolving Loan" is defined in Section 2.1.1.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Stock Acquisition" means the acquisition by the Company of all
outstanding shares of capital stock of Howmet owned by The Carlyle Group for an
aggregate purchase price not to
Page 8
exceed the amount set forth in the disclosure letter dated of even date herewith
from the Company to the Agent and the Banks.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture, limited liability company or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Company, provided that, except for the limited
purposes as set forth in the definition of Consolidated Subsidiary, Howmet shall
not be deemed a Subsidiary of the Company for any purposes under this Agreement.
"Term Loan" is defined in Section 2.2.1.
"Term Loan Period" means the period from the Revolving Credit
Termination Date to the date that is nine-months after the Revolving Credit
Termination Date.
"Termination Date" means (1) (a) if the conversion of the Revolving
Credit Termination Balance to Term Loans does not occur, the Revolving Credit
Termination Date or (b) if the conversion of the Revolving Credit Termination
Balance to Term Loans occurs, the date that is nine months after the Revolving
Credit Termination Date, or (2) any earlier date on which the Commitments are
canceled by the Company or otherwise terminated pursuant to this Agreement.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or Eurodollar Rate Advance.
"Unfunded Liabilities" means the amount (if any) by which the excesses
of the accumulated benefit obligations as determined under Financial Accounting
Standard Board Statement 87 exceeds the fair value of all such Plan assets
allocable to such benefits, as reported each year in the Company's Annual Report
to Stockholders.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Voting Stock" means Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect the
corporate directors (or Persons performing similar functions).
Page 9
"Wholly-Owned Subsidiary" means any Subsidiary of which all of the
outstanding voting securities or ownership interests having ordinary voting
power are owned or controlled, directly or indirectly, by the Company or one or
more Wholly-Owned Subsidiaries, or by the Company and one or more Wholly-Owned
Subsidiaries, or any similar business organization which is so owned or
controlled.
"Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Company and its
Subsidiaries and of the Company's and its Subsidiaries' material customers,
suppliers and vendors.
"Year 2000 Program" is defined in Section 5.19.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Advances.
2.1.1. Commitments to Make Revolving Loans. From and including the
Effective Date and prior to the Revolving Credit Termination Date, each Bank
severally agrees, on the terms and conditions set forth in this Agreement, to
make loans (individually a "Revolving Loan" and collectively the "Revolving
Loans") to the Company from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its Commitment, provided
that in no event may the Outstandings at any one time exceed the Aggregate
Commitment as in effect at such time. Subject to the terms of this Agreement,
the Company may borrow, repay and reborrow at any time prior to the Revolving
Credit Termination Date. Subject to the terms and conditions set forth in
Section 2.2 and at the option of the Borrower, the Revolving Loans outstanding
as of the Revolving Credit Termination Date shall be converted to Term Loans and
shall be repaid in accordance with the terms of Section 2.2.
2.1.2. Ratable Loans. Each Advance hereunder shall consist of
Revolving Loans made from the several Banks ratably in proportion to the ratios
that their respective Commitments bear to the Aggregate Commitment.
Page 10
2.1.3. Rate Options. The Advances may be Floating Rate Advances or
Eurodollar Rate Advances, or a combination thereof, selected by the Company in
accordance with Sections 2.1.4 and 2.1.5; provided that there shall be no more
than ten (10) Interest Periods in effect with respect to all of the Loans at any
time.
2.1.4. Method of Selecting Rate Options and Interest Periods for
Advances. The Company shall select the Rate Options and Interest Periods
applicable to each Advance from time to time. The Company shall give the
Administrative Agent irrevocable notice (a "Borrowing Notice") not later than
10:00 a.m. Chicago time on the Borrowing Date of each Floating Rate Advance and
at least three Business Days before the Borrowing Date for each Eurodollar Rate
Advance, specifying:
(a) the Borrowing Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance, which shall be less than or
equal to the Aggregate Available Commitment,
(c) the Rate Option selected for such Advance, and
(d) in the case of each Eurodollar Rate Advance, the Interest Period
applicable thereto.
2.1.5. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Rate Advances. Each
Eurodollar Rate Advance shall continue as a Eurodollar Rate Advance until the
end of the then applicable Interest Period therefor, at which time such
Eurodollar Rate Advance shall be automatically converted into a Floating Rate
Advance unless the Company shall have given the Administrative Agent a
Conversion/Continuation Notice requesting that, at the end of such Interest
Period, such Eurodollar Rate Advance continue as a Eurodollar Rate Advance for
the same or another Interest Period. Subject to the terms of Section 2.3.2, the
Company may elect from time to time to convert all or any part of an Advance of
any Type into any other Type or Types of Advances; provided that (i) any
conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto, and (ii) no Advance may be
continued as or converted into a Eurodollar Rate Advance at such times as a
Default or Unmatured Default has occurred and is continuing. The Company shall
give the Administrative Agent irrevocable notice (a "Conversion/Continuation
Notice") of each conversion of an Advance or continuation of a Eurodollar Rate
Advance not later than 10:00 a.m. Chicago time on the date of the requested
conversion into a Floating Rate Advance and at least three Business Days, in the
case of a conversion into or continuation of a Eurodollar Advance, prior to the
date of the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation;
Page 11
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion
into or continuation of a Eurodollar Rate Advance, the duration
of the Interest Period applicable thereto.
2.2. Term Loan Extension Option.
2.2.1. Option. During the period that is not less than 5 Business Days
prior to the Revolving Credit Termination Date and that is not greater than 30
days prior to the Revolving Credit Termination Date, the Company may request the
Banks to convert the Revolving Loans outstanding on the Revolving Credit
Termination Date into term loans (individually, a "Term Loan" and, collectively,
the "Term Loans") and, subject to the terms and conditions contained in this
Section 2.2, the Revolving Credit Termination Balance will be converted on the
Revolving Credit Termination Date into Term Loans.
2.2.2. Extension Request. When the Company wishes to request
conversion of the Revolving Loans into Term Loans, it shall transmit to the
Administrative Agent by telecopy or telefacsimile an Extension Request so as to
be received no later than noon Chicago time at least five (5) Business Days
prior to the Revolving Credit Termination Date. Promptly upon receipt of an
Extension Request, the Administrative Agent shall send to the Banks by telecopy
or telefacsimile a copy of such Extension Request.
2.2.3. Conditions Precedent to Extension. No Bank shall be required to
convert its Revolving Loans to Term Loans on the Revolving Credit Termination
Date unless:
(a) An Extension Request shall have been delivered to the
Administrative Agent in accordance with the terms of Section 2.2;
(b) No Default or Unmatured Default shall have occurred and be
continuing under Section 7.2, 7.3, 7.6, 7.7, 7.8 or 7.11;
(c) No Prepayment Event has occurred;
(d) On or prior to the Revolving Credit Termination Date, the
Company has paid to the Administrative Agent an extension fee
in the amount of .10% of the Revolving Credit Termination
Balance for the ratable benefit of the Banks and any other
fees due and owing to the Administrative Agent and the Banks
as at the Revolving Credit Termination Date.
Submission by the Company of an Extension Request shall constitute a
representation and warranty by the Company that the conditions contained in
Section 2.2.3 have been satisfied. If the conditions precedent to conversion
contained in this Section 2.2.3 have not been satisfied or waived, the Revolving
Loans shall be due payable on the Revolving Credit Termination Date.
12
2.2.4. Repayment of Term Loans. The outstanding principal balance of
each Term Loan shall be paid in full by the Company on the Termination Date.
Amounts repaid with respect to the Term Loans may not be reborrowed.
2.2.5. Rate Options. The Revolving Loans converted to Term Loans on the
Revolving Credit Termination Date shall initially continue as the Type or Types
of Advances, with the Interest Periods then applicable as are outstanding on the
Revolving Credit Termination Date and shall be continued as or converted into
Floating Rate Advances or Eurodollar Rate Advances, or a combination thereof,
selected by the Company in accordance with Sections 2.2.6.
2.2.6. Conversion and Continuation of Outstanding Advances consisting
of Term Loans. Floating Rate Advances shall continue as Floating Rate Advances
unless and until such Floating Rate Advances are converted into Eurodollar Rate
Advances. Each Eurodollar Rate Advance shall continue as a Eurodollar Rate
Advance until the end of the then applicable Interest Period therefor, at which
time such Eurodollar Rate Advance shall be automatically converted into a
Floating Rate Advance unless the Company shall have given the Administrative
Agent a Conversion/Continuation Notice requesting that, at the end of such
Interest Period, such Eurodollar Rate Advance continue as a Eurodollar Rate
Advance for the same or another Interest Period. Subject to the terms of Section
2.3.2, the Company may elect from time to time to convert all or any part of an
Advance of any Type into any other Type or Types of Advances; provided that (i)
any conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto, and (ii) no Advance may be
continued as or converted into a Eurodollar Rate Advance at such times as a
Default or Unmatured Default has occurred and is continuing. The Company shall
give the Administrative Agent a Conversion/Continuation Notice of each
conversion of an Advance or continuation of a Eurodollar Rate Advance not later
than 10:00 a.m. Chicago time on the date of the requested conversion into a
Floating Rate Advance and at least three Business Days, in the case of a
conversion into or continuation of a Eurodollar Advance, prior to the date of
the requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance
is to be converted or continued and, in the case of a
conversion into or continuation of a Eurodollar Rate Advance,
the duration of the Interest Period applicable thereto.
2.3. General Facility Terms.
13
2.3.1. Method of Borrowing. Not later than 1:00 p.m. Chicago time on
each Borrowing Date, each Bank shall make available its Loan or Loans in funds
immediately available in Chicago, to the Administrative Agent at its address
specified pursuant to Article XII. The Administrative Agent will make the funds
so received from the Banks available to the Company at the Administrative
Agent's aforesaid address. Notwithstanding the foregoing provisions of this
Section 2.3.1 but subject to Section 2.1.5, to the extent that a Loan made by a
Bank matures on the Borrowing Date of a requested Loan, such Bank shall first
apply the proceeds of the Loan it is then making to the repayment of the
maturing Loan.
2.3.2. Minimum Amount of Each Advance. Each Advance shall be in the
minimum amount of $5,000,000 (and in integral multiples of $1,000,000 if in
excess thereof), provided, however, that any Floating Rate Advance may be in the
aggregate amount of the Aggregate Available Commitment.
2.3.3. Termination; Required Payments. The Commitments to lend
hereunder shall expire on the Revolving Credit Termination Date. Unless
converted to Term Loans in accordance with the provisions of Section 2.2, any
outstanding Revolving Loans and all other unpaid Obligations (other than the
Term Loans) shall be paid in full by the Company on the Revolving Credit
Termination Date or, at the election of the Required Banks in accordance with
Section 8.1, upon the occurrence of a Prepayment Event. Any outstanding Term
Loans and all other unpaid Obligations shall be paid in full by the Company on
the Termination Date or, at the election of the Required Banks in accordance
with Section 8.1, upon the occurrence of a Prepayment Event.
2.3.4. Optional Principal Payments. The Company may from time to time
pay all outstanding Floating Rate Advances, or, in a minimum aggregate amount of
$5,000,000, or any integral multiple of $1,000,000 in excess thereof, any
portion of the outstanding Floating Rate Advances upon one Business Day's prior
notice to the Administrative Agent without penalty or premium. A Eurodollar Rate
Advance may be paid prior to the last day of the applicable Interest Period upon
three Business Days' prior notice to the Administrative Agent; provided,
however, that the Company shall indemnify each Bank for any loss or cost
incurred by it resulting therefrom in accordance with Section 3.4.
2.3.5. Commitment Fees and Voluntary Reduction of Commitments.
(a) The Company agrees to pay to the Administrative Agent for
the account of each Bank a commitment fee payable on the average daily
unborrowed portion of such Bank's Commitment from the Effective Date to
but not including the Revolving Credit Termination Date, equal to .15%
per annum, such fee payable in arrears on each Payment Date hereafter
and on the Revolving Credit Termination Date.
14
(b) The Company may permanently reduce the Aggregate
Commitment in whole, or in part ratably among the Banks in integral
multiples of $5,000,000, upon at least three Business Days' written
notice to the Administrative Agent, which shall be irrevocable and
shall specify the amount of any such reduction; provided, however, that
the amount of the Aggregate Commitment may not be reduced below the
Outstandings at the time such reduction is to take effect. All accrued
commitment fees shall be payable on the effective date of any
termination of the obligations of the Banks to make Revolving Loans
hereunder.
2.3.6. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a Eurodollar Rate
Advance into a Floating Rate Advance pursuant to Section 2.1.5 or Section 2.2.6
to but excluding the date it becomes due or is converted into a Eurodollar Rate
Advance pursuant to Section 2.1.5 or Section 2.2.6 hereof, at a rate per annum
equal to the Floating Rate for such day. Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Floating Rate. Each Eurodollar Rate
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such Eurodollar Rate
Advance. Prior to the Revolving Credit Termination Date, no Interest Period may
end after the Revolving Credit Termination Date. In the event the Revolving
Loans are converted to Term Loans in accordance with the terms of Section 2.2,
thereafter no Interest Period may end after the Termination Date.
2.3.7. Ratings Change Rate Increase; Rate after Maturity.
2.3.7.1. Rate Increase with Ratings Change. If at any time the
Company's senior unsecured debt rating is below BBB- as determined by
Standard and Poor's Ratings Group (or its successors or assigns) or
below Baa3 as determined by Xxxxx'x Investors Service (or its
successors and assigns), the interest rates applicable to the Loans
shall automatically be increased by 0.25% per annum.
2.3.7.2. Rate After Maturity. Except as provided in the next
sentence, any Advance not paid at maturity, whether by acceleration or
otherwise, shall bear interest until paid in full at a rate per annum
equal to the Floating Rate plus 2% per annum. In the case of a
Eurodollar Rate Advance the maturity of which is accelerated pursuant
to Section 8.1, such Eurodollar Rate Advance shall bear interest until
paid in full for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum and
thereafter at the Floating Rate plus 2% per annum.
15
2.3.8. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar Rate Advance
shall be payable on the last day of its applicable Interest Period and on any
date on which such Advance is prepaid, whether due to acceleration or otherwise.
Interest accrued on each Eurodollar Rate Advance having an Interest Period
longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest on Eurodollar Rate
Advances and commitment fees shall be calculated for the actual number of days
elapsed on the basis of a year consisting of 360 days. Interest on Floating Rate
Advances shall be calculated for the actual number of days elapsed on the basis
of a year consisting of 365, or when appropriate 366, days. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if payment is received prior to 1:00 p.m. (Chicago time) at the
place of payment. In the event any such payment is made with the proceeds of an
Advance, such payment shall be deemed to have been made prior to 1:00 p.m.
(Chicago time) on the day such Advance is made. If any payment of principal of
or interest on an Advance or any payment of fees shall become due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment or a payment of fees, such
extension of time shall be included in computing interest in connection with
such principal payment or in computing the amount of such payment of fees, as
the case may be.
2.3.9. Method of Payment. All payments of principal, interest, and fees
hereunder shall be made in immediately available funds to the Administrative
Agent at the Administrative Agent's address specified pursuant to Article XIII
or at any other Lending Installation of the Administrative Agent specified in
writing by the Administrative Agent to the Company by noon (local time) on the
date when due. Subject to Section 8.1(b), each such payment shall be applied to
any Advances and other amounts then due in accordance with the written
instructions from the Company to the Administrative Agent before or accompanying
such payment and shall be applied ratably among those Banks for whom any payment
is then due in proportion to the type of Advance or other payment then due. Each
payment delivered to the Administrative Agent for the account of any Bank shall
be delivered promptly by the Administrative Agent to such Bank in the same type
of funds which the Administrative Agent received at its address specified
pursuant to Article XIII or at any Lending Installation specified in a notice
received by the Administrative Agent from such Bank. The Administrative Agent is
hereby authorized to charge the account of the Company at the office of the
Administrative Agent for each payment of principal, interest and fees as it
becomes due hereunder.
2.3.10. Notes; Telephonic Notices. The Loans shall be evidenced by the
Notes. Each Bank is hereby authorized to record on the schedule attached to its
Notes, or otherwise record in accordance with its usual practice, the date and
amount of each of its Loans of the type evidenced by such Note; provided,
however, that any failure to so record shall not affect the Company's
obligations under any Note. The Company hereby authorizes the Banks and the
Administrative Agent to extend Advances and effect Rate Option selections based
on telephonic notices made by any person or persons the Administrative Agent or
any Bank in good faith believes to be an Authorized Representative acting on
behalf of the Company. The Company agrees to deliver promptly to the
Administrative Agent a written confirmation of each telephonic notice signed by
Page 16
an Authorized Representative. If the written confirmation differs in any
material respect from the action taken by the Administrative Agent and the
Banks, the records of the Administrative Agent and the Banks shall govern absent
demonstrable error.
2.3.11. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Administrative Agent
will notify each Bank of the contents of each commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, Extension Request and
repayment notice received by it hereunder. The Administrative Agent will notify
each Bank of the interest rate applicable to each Eurodollar Rate Advance
promptly upon determination of such interest rate and will give each Bank prompt
notice of each change in the Corporate Base Rate.
2.3.12. Lending Installations. Each Bank may book the Loans at any
Lending Installation selected by the Bank and may change the Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Bank for
the benefit of such Lending Installation. Each Bank may, by written notice to
the Administrative Agent and the Company, designate a Lending Installation
through which Loans are made by it and for whose account Loan payments are to be
made. Each Bank shall use its best efforts to minimize any additional cost (if
any) to the Company, under Section 3.3 or otherwise, as a result of a change of
Lending Installation (including, if appropriate, a return to a prior Lending
Installation at such time as the circumstances giving rise to a change of
Lending Installation are no longer in effect), but no Bank shall be required to
take or omit to take any action which action or omission would be economically
or legally disadvantageous to such Bank. In the event that any Bank has booked
its outstanding Eurodollar Rate Loans at such a designated Lending Installation,
the Company hereby agrees, upon the written request of such Bank and receipt of
such Bank's applicable Note, to execute and deliver to such Bank for the account
of such Bank's existing Lending Installation and the account of such designated
Lending Installation, respectively, both: (i) as the case may be, a new Note
which shall exclusively evidence all of such Bank's Floating Rate Loans then and
thereafter outstanding and (ii) as the case may be, a new Note which shall
exclusively evidence all of such Bank's Eurodollar Rate Loans then and
thereafter outstanding, each of said new Notes to be in substantially the form
of Exhibit "B" hereto with such appropriate changes in either case as may be
agreed to by such Bank, the Company and the Administrative Agent and each of
their respective legal counsel. Upon such Bank's receipt of its new Notes, it is
hereby authorized and instructed by the Company to record on the respective
schedules attached thereto all of such Bank's Loans then outstanding of the type
evidenced by each such Note.
2.3.13. Non-Receipt of Funds by the Administrative Agent. Unless the
Company or a Bank, as the case may be, notifies the Administrative Agent prior
to the date on which it is scheduled to make payment to the Administrative Agent
of (a) in the case of a Bank, the proceeds of a Loan or (b) in the case of the
Company, a payment of principal, interest or fees to the Administrative Agent
for the account of the Banks, that it does not intend to make such payment, the
Administrative Agent may assume that such payment has been made. The
Administrative
Page 17
Agent may, but shall not be obligated to, make the amount of such payment
available to the intended recipient in reliance upon such assumption. If such
Bank or the Company, as the case may be, has not in fact made such payment to
the Administrative Agent, the recipient of such payment shall, on demand by the
Administrative Agent, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (a) in the case of payment by a Bank, the
Federal Funds Rate for such day or (b) in the case of payment by the Company,
the interest rate applicable to the relevant Loan.
2.3.14. Withholding Tax Exemption. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Bank, each Bank that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to each of
the Company and the Administrative Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Bank which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of the Company and the Administrative Agent two additional
copies of such form (or a successor form) on or before the date that such form
expires (currently, three successive calendar years for Form 1001 and one
calendar year for Form 4224) or becomes obsolete or after the occurrence of any
event requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Company or the Administrative Agent, in each case certifying
that such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank advises the Company and the Administrative Agent that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax.
ARTICLE III
CHANGE IN CIRCUMSTANCES; INDEMNIFICATION
3.1. Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) which becomes effective after the date hereof, or
any interpretation thereof, or compliance of any Bank with such,
Page 18
(i) subjects any Bank or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due
from the Company (excluding taxation of the overall net income
of any Bank or applicable Lending Installation), or changes
the basis of taxation of payments to any Bank in respect of
its Loans or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank or any applicable
Lending Installation (other than reserves and assessments
taken into account in determining the interest rate applicable
to Eurodollar Rate Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Bank or any applicable Lending Installation of
making, funding or maintaining loans or reduces any amount
receivable by any Bank or any applicable Lending Installation
in connection with loans, or requires any Bank or any
applicable Lending Installation to make any payment calculated
by reference to the amount of loans held or interest received
by it, by an amount deemed material by such Bank,
then, within 15 days of demand by such Bank, the Company shall pay such Bank
that portion of such increased expense incurred or reduction in an amount
received which such Bank determines is attributable to making, funding and
maintaining its Loans and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Bank determines the
amount of capital required or expected to be maintained by such Bank, any
Lending Installation of such Bank or any corporation controlling such Bank is
increased as a result of a Change, then, within 15 days of demand by such Bank,
the Company shall pay such Bank the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Bank determines is attributable to this Agreement, its Loans or its
obligation to make Loans hereunder (after taking into account such Bank's
policies as to capital adequacy). No Bank shall be entitled to demand payment
under this Section 3.2 to the extent that such payment relates to a period of
time more than 90 days prior to the date upon which such Bank first notified the
Company of the occurrence of the event entitling such Bank to such payment.
"Change" means (i) any change after the date of this Agreement in the Risk-Based
Capital Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Bank or any Lending Installation or any corporation
controlling any Bank. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled
Page 19
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Interest Rate. If any Bank determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Banks determine that (i) deposits of
a type and maturity appropriate to match fund Eurodollar Rate Advances are not
available or (ii) a Eurodollar Rate does not accurately reflect the cost of
making or maintaining a Eurodollar Rate Advance, then the Administrative Agent
shall suspend the availability of the affected Rate Option and (subject to the
next sentence) require any Eurodollar Rate Advances outstanding under an
affected Rate Option to be converted to an unaffected Rate Option.
Notwithstanding anything in the preceding sentence to the contrary, the Company
shall not be required to pay or convert any outstanding Eurodollar Rate Loan or
Eurodollar Rate Advance unless such payment or conversion is legally required in
accordance with the circumstances causing such unavailability. Subject to the
provisions of Article II hereof, the Company may select any unaffected Rate
Option to apply to such affected Advances. If the Company fails to select a new
Rate Option, the affected Advances shall be Floating Rate Advances.
3.4. Failure to Pay or Borrow on Certain Dates. If any payment of a
Eurodollar Rate Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Rate Advance is not made on the date specified by the
Company for any reason other than default by the Banks, the Company will
indemnify each Bank for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the Eurodollar Rate Advance.
3.5. Bank Certificates; Survival of Indemnity. To the extent
reasonably possible, each Bank shall designate an alternate Lending Installation
with respect to its Eurodollar Rate Loans to reduce any liability of the Company
to such Bank under Sections 3.1 and 3.2 or to avoid the unavailability of a Rate
Option under Section 3.3, so long as such designation is not disadvantageous to
such Bank as determined by such Bank in its sole discretion. A certificate of a
Bank as to the amount due, if any, under Sections 3.1, 3.2, or 3.4 shall be
final, conclusive and binding on the Company in the absence of manifest error.
Such certificate shall set forth in reasonable detail the basis of the
determination of amounts due under such Sections. Determination of amounts
payable under such Sections in connection with a Eurodollar Rate Loan shall be
calculated as though each Bank funded its Eurodollar Rate Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the certificate shall be payable on demand after receipt by
the Company of the certificate. The obligations of the Company under Sections
3.1, 3.2, and 3.4 shall survive payment of the Obligations and termination of
this Agreement.
Page 20
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. No Bank shall be required to make its initial
Revolving Loan hereunder unless the Company has furnished to the Administrative
Agent with sufficient copies for the Banks:
(a) Copies of the Articles of Incorporation of the Company,
together with all amendments, and a certificate of good
standing, both certified on or within 15 days prior to the
Effective Date by the Secretary of State of Delaware.
(b) Copies, certified on the Effective Date by the Secretary or
Assistant Secretary of the Company, of its By-Laws and of its
Board of Directors' resolutions (and resolutions of other
bodies, if any are deemed necessary by counsel for any Bank)
authorizing the execution of the Loan Documents.
(c) An incumbency certificate, certified on the Effective Date by
the Secretary or Assistant Secretary of the Company, which
shall identify by name and title and bear the signature of the
officers of the Company authorized to sign the Loan Documents
and to make borrowings hereunder, upon which certificates the
Banks shall be entitled to rely until informed of any change
in writing by the Company.
(d) A written opinion of the counsel to the Company, addressed to
the Banks, in substantially the form of Exhibit "C" hereto.
(e) A certificate, dated the Effective Date, signed by the Chief
Financial Officer of the Company, stating that on the
Effective Date (i) no Default or Unmatured Default has
occurred and is continuing; (ii) the Company will be utilizing
the proceeds to consummate the Stock Acquisition on the date
of such Advance and (iii) no Prepayment Event has occurred and
setting forth the determination of the Company's Funded
Debt/EBITDA Ratio for the last day of the most recently ended
fiscal quarter.
(f) A Note payable to the order of each of the Banks.
(g) Payment to the Agent of all fees due and owing to the
Administrative Agent and the Banks as at the Effective Date.
Page 21
(h) Written money transfer instructions, in substantially the form
of Exhibit "D" hereto, addressed to the Administrative Agent
and signed by an Authorized Officer, together with such other
related money transfer authorizations as the Administrative
Agent may have reasonably requested.
(i) Such other documents as any Bank or its counsel may have
reasonably requested.
4.2. Each Advance. No Bank shall be required to make any Advance unless
on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default or Prepayment Event.
(b) The representations and warranties contained in Article V,
except the representation and warranty contained in Section
5.5, are true and correct in all material respects as of such
Borrowing Date as if made on such Borrowing Date except for
changes in the Schedules hereto reflecting transactions
permitted by this Agreement.
(c) All legal matters incident to the making of such Advance shall
be satisfactory to the Banks and their counsel.
Each Borrowing Notice with respect to each such Advance shall constitute a
representation and warranty by the Company that the conditions contained in
Sections 4.2(a) and (b) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Banks that:
5.1. Corporate Existence and Standing. Each of the Company and the
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and each is duly
qualified and in good standing in each jurisdiction where, because of the nature
of its activities or properties, such qualification is required and the failure
so to qualify would materially and adversely affect its business, assets,
financial condition, operations or prospects of the Company and its Subsidiaries
taken as a whole.
5.2. Authorization and Validity. The Company has the corporate power
and authority and legal right to execute and deliver the Loan Documents and
perform its obligations thereunder.
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The execution and delivery by the Company of the Loan Documents and the
performance of its obligations thereunder have been duly authorized by proper
corporate proceedings and the Loan Documents constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights generally.
5.3. Compliance with Laws and Contracts. Neither the execution and
delivery by the Company of the Loan Documents, the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Company or any Subsidiary or the Company's or any
Subsidiary's charter, articles or certificate of incorporation or by-laws or the
provisions of any material indenture, instrument or agreement to which the
Company or any Subsidiary is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien pursuant to the terms of any
such indenture, instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required as of the date hereof in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents.
5.4. Financial Statements. The June 30, 1998 audited consolidated
financial statements of the Company and its Subsidiaries heretofore delivered to
the Banks were prepared in accordance with GAAP in effect on the date such
statements were prepared and fairly present the consolidated financial condition
and operations of the Company and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.
5.5. Material Adverse Change. No material adverse change in the
business, condition (financial or otherwise), operations, performance, or
properties of the Company and its Subsidiaries taken as a whole has occurred
since the date of the audited financial statements referred to in Section 5.4.
The Borrower has made a full and complete assessment of the Year 2000 Issues and
has a realistic and achievable program for remediating the Year 2000 Issues on a
timely basis (the "Year 2000 Program"). Based on such assessment and on the Year
2000 Program the Borrower does not reasonably anticipate that Year 2000 Issues
will have a Material Adverse Effect.
5.6. Taxes. The Company and the Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Company or any Subsidiary, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided. Except as provided in Section 6.2.6(a), no material tax liens have
been filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Company and the Subsidiaries
in respect of any taxes or other governmental charges are adequate.
Page 23
5.7. Litigation. Except as disclosed in the Company's Form 10-K for the
year ended June 30, 1998, there is no litigation or proceeding pending or, to
the knowledge of any of their officers, threatened against the Company or any
Subsidiary which would reasonably be expected to have a material adverse affect
on the condition of the Company or the ability of the Company to perform its
obligations under the Loan Documents.
5.8. ERISA. The Unfunded Liabilities of all Plans do not in the
aggregate exceed an amount equal to 5 percent of the value (as of any date of
determination) of all Plan assets allocable to Plan benefits guaranteed under
ERISA. Each Plan complies in all material respects with all applicable
requirements of law and regulations, neither the Company nor any of its
Subsidiaries has withdrawn from any Plan or initiated steps to do so, no steps
have been taken to terminate any Plan, and no Reportable Event has occurred with
respect to any Plan, the cumulative effect of which could have a material
adverse effect on the business, operations, properties, assets or conditions
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole.
5.9. Defaults and Prepayment Event. No Default or Unmatured Default has
occurred and is continuing. No Prepayment Event has occurred.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Company or any Subsidiary in writing to the Administrative
Agent or to any Bank in connection with the negotiation of the Loan Documents
contained any material misstatement of fact or omitted to state any fact
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
5.11. Regulation U. Neither the Company nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying "margin stock" (as defined in
Regulation U). No part of the proceeds of any Loan will be used in a manner
which would violate, or result in a violation of, Regulation U. No part of the
proceeds of any Loan will be used for "purchasing" or "carrying" "margin stock"
(each as defined in Regulation U).
5.12. Pari Passu. All the payment obligations of the Company arising
under or pursuant to the Loan Documents will at all times rank pari passu with
all other unsecured and unsubordinated payment obligations and liabilities
(including contingent obligations and liabilities) of the Company (other than
those which are mandatorily preferred by laws or regulations of general
application).
5.13. Investment Company. The Company is not, and after giving effect
to any Advance will not be, an "investment company" within the meaning of the
United States Investment Company Act of 1940, as amended.
Page 24
5.14. Material Laws. Neither the Company nor any Subsidiary has
received any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable federal, state and local
environmental, health and safety statutes and regulations with respect to, or
the subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release into the environment of, any
toxic or hazardous waste or physical substance, which non-compliance or remedial
action could have a material adverse effect on the business, operations,
properties, assets or conditions (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
5.15. Material Agreements. Neither the Company nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction materially and adversely affecting its business,
properties or assets, operations or condition (financial or otherwise). Neither
the Company nor any Subsidiary is in default in the performance, observance of
fulfillment or any of the obligations, covenants or conditions contained in any
agreement to which it is a party or any agreement or instrument evidencing or
governing Indebtedness, which default might have a material adverse effect on
the business, properties, financial condition, or results of operations, of the
Company and its Subsidiaries, taken as a whole.
5.16. Subsidiaries. Schedule "1" hereto contains an accurate list of
all of the presently existing Subsidiaries of the Company, setting forth their
respective jurisdictions of incorporation and the percentage of their respective
capital stock owned by the Company or other Subsidiaries (which in the case of
Howmet shall be calculated after taking into account the Stock Acquisition). All
of the issued and outstanding shares of capital stock of such Subsidiaries have
been duly authorized and issued and are fully paid and non-assessable. Schedule
"2" hereto accurately describes all Indebtedness of the Subsidiaries existing on
the date of this Agreement.
5.17. Ownership of Properties. Except as permitted by Section 6.2.6.,
on the date of this Agreement, the Company and its Subsidiaries will have good
title, free of all Liens, to all of the properties and assets reflected in the
financial statements referred to in Section 5.4 as owned by the Company and its
Subsidiaries.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Banks shall
otherwise consent in writing:
6.1. Affirmative Covenants.
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6.1.1. Financial Reporting. The Company will maintain, for itself and
the Consolidated Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to the Banks:
(a) Within 90 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified
public accountants of recognized national standing, acceptable
to the Banks, prepared in accordance with generally accepted
accounting principles on a consolidated basis for itself and
the Consolidated Subsidiaries, including balance sheets as of
the end of such period, related profit and loss statements, a
statement of shareholders' equity, and a statement of cash
flow, accompanied by any management letter prepared by said
accountants.
(b) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and the
Consolidated Subsidiaries, consolidated unaudited balance
sheets as at the close of each such period and consolidated
profit and loss statements, a statement of shareholders'
equity, and a statement of cash flow for the period from the
beginning of such fiscal year to the end of such quarter
(subject to normal year-end audit adjustments), all certified
by its Chief Financial Officer or Treasurer.
(c) Together with the financial statements required hereunder, a
certificate signed by its Chief Financial Officer or Treasurer
(i) stating that no Default or Unmatured Default exists, or if
any Default or Unmatured Default exists, stating the nature
and status thereof, and stating the steps the Company is
taking to cure such Default or Unmatured Default and (ii)
stating that no Prepayment Event has occurred.
(d) As soon as available, and in any event within 45 calendar days
after the end of each quarter of each fiscal year of the Company,
a schedule, certified as being accurate by the Company's Chief
Financial Officer, Treasurer or Controller, showing, as of the
end of each such quarter, the Company's calculation, in form and
detail satisfactory to the Administrative Agent, of the
calculations required to be made to determine compliance with
Section 6.2.7. The schedule delivered within 45 calendar days
after the end of the fourth quarter of each fiscal year shall
set forth a preliminary determination subject to adjustment upon
receipt of audited annual financial statements and shall not be
deemed to constitute a misrepresentation or breach if prepared in
good faith and the audited numbers differ from the unaudited
fourth quarter results.
Page 26
(e) Promptly upon becoming available, copies of:
(i) All financial statements, reports, notices and proxy
statements sent by the Company or any Consolidated
Subsidiary to the stockholders of the Company.
(ii) All prospectuses of the Company or any Consolidated
Subsidiary filed with the Securities and Exchange
Commission or any other governmental agency
succeeding to the jurisdiction thereof.
(iii) All regular and periodic reports filed by the Company
or any Consolidated Subsidiary with any securities
exchange or with the Securities and Exchange
Commission or any other governmental agency
succeeding to the jurisdiction thereof.
(f) As soon as possible and in any event within 10 days after receipt
by the Company, a copy of (i) any notice or claim to the effect
that the Company or any Subsidiary is or may be liable to any
Person as a result of the release by the Company, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste
or physical substance into the environment, and (ii) any notice
alleging any violation of any federal, state or local
environmental, health or safety law or regulation with respect to
any toxic or hazardous waste or physical substance by the Company
or any Subsidiary, which would, in either case, have a material
adverse effect upon the operations of the Company and the
Subsidiaries, taken as a whole.
(g) As to each Plan, within 270 days after the close of each Plan
Year of such Plan, a statement of the Unfunded Liabilities of
such Plan, certified as correct by an actuary enrolled under
ERISA.
(h) As soon as possible and in any event within 10 days after the
Company knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief
financial officer of the Company, describing said Reportable
Event and the action which the Company proposes to take with
respect thereto.
(i) Together with the financial statements required under Section
6.1.1(a) hereinabove, a copy of the Company's annual operating
plan.
(j) Such other information (including non-financial information)
as the Administrative Agent or any Bank may from time to time
reasonably request.
6.1.2. Use of Proceeds. The Company will, and will cause each
Subsidiary to, use the proceeds of the Advances to consummate the Stock
Acquisition and for payment of fees and expenses in connection therewith. The
Company shall use the proceeds of Advances in
Page 27
compliance with all applicable legal and regulatory requirements and any use
shall not result in a violation of any such applicable regulatory requirements,
including, without limitation, Regulation U, and the Securities Act of 1933 and
the Securities Exchange Act of 1934 and the regulations thereunder.
6.1.3. Notice of Default and Prepayment Event. The Company will, and
will cause each Subsidiary to, give prompt notice in writing to the Banks of the
occurrence of any Default or Unmatured Default and of any other development
related specifically to the business, properties or affairs of the Company,
financial or otherwise (including, without limitation, developments with respect
to Year 2000 Issues), which would be reasonably likely to materially adversely
affect the Company's business, properties or affairs or the ability of the
Company to repay the Obligations. The Company will give written notice to the
Banks of any Prepayment Event no later than five Business Days following the
occurrence of such Prepayment Event.
6.1.4. Conduct of Business. The Company will carry on and conduct its
business in the manner of a diversified industrial company with a commitment to
the aerospace industry and will cause each Subsidiary to conduct its business in
a manner consistent with the Company's objectives as such. The Company will, and
will cause each Subsidiary to, do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation, and maintain all requisite authority to
conduct its business in each jurisdiction where, because of the nature of its
activities or properties, such authority is required and the failure to maintain
such authority would materially and adversely affect it business, assets,
financial condition, operations or prospects.
6.1.5. Payment of Taxes. The Company will, and will cause each
Subsidiary to, pay and discharge all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits, or upon any property
belonging to it, and all lawful claims which, if unpaid, would become a Lien,
provided that neither the Company nor a Subsidiary shall be required to pay any
such tax, assessment, charge, levy or claim the payment of which is being
contested in good faith and by appropriate proceedings; the Company will, and
will cause each Subsidiary to, make monthly accruals of all of the estimated
liability of the Company and the Subsidiaries for such taxes, assessments,
charges and levies, determined in accordance with GAAP, and establish adequate
reserves determined in accordance with GAAP, for such thereof as may be
contested, and reflect such accruals and reserves in all financial statements
furnished hereunder.
6.1.6. Insurance. The Company will, and will cause each Subsidiary to,
maintain insurance in such amounts and covering such risks as is consistent with
sound business practice.
6.1.7. Compliance with Laws. The Company will, and will cause each
Subsidiary to, comply in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject.
Page 28
6.1.8. Maintenance of Properties. The Company will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its properties in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements, except for properties
no longer used or useful in the respective businesses of the Company or such
Subsidiary.
6.1.9. Inspection. Except with respect to any information or activities
which are classified by the United States Government or disclosure of which the
Company reasonably believes would compromise matters of national security, the
Company will, and will cause each Subsidiary to, permit the Banks, by their
respective representatives and agents and without cost to the Company, to
inspect any of the properties, corporate books and financial records of the
Company and each Subsidiary, to examine and make copies of the books of accounts
and other financial records of the Company and each Subsidiary, and to discuss
the affairs, finances and accounts of the Company and each Subsidiary with, and
to be advised as to the same by, their respective officers at such reasonable
times and intervals as the Banks may designate.
6.2. Negative Covenants.
6.2.1. Dividends. The Company will not, nor will it permit any
Subsidiary to, declare or pay any dividends on its capital stock or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding, if a Default or Unmatured Default (except any Default or Unmatured
Default described in Section 7.5 hereof) or Prepayment Event exists or would
exist as a result of such declaration, payment or redemption.
6.2.2. Indebtedness of Subsidiaries. The Company will not permit any
Subsidiary to create, incur or suffer to exist any Indebtedness, except:
(a) Indebtedness existing on the date of this Agreement and
refinancings of such Indebtedness;
(b) Indebtedness to the Company; and
(c) other Indebtedness which at any time does not exceed in the
aggregate $75,000,000.
6.2.3. Merger. The Company will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except:
(a) any Subsidiary may merge or consolidate with or into the
Company or any Wholly-Owned Subsidiary so long as in any
merger or consolidation involving the Company, the Company
shall be the surviving or continuing corporation; and
Page 29
(b) the Company may consolidate or merge with any other corporation
if (i) the corporation which results from such merger or
consolidation (the "surviving corporation") is organized under
the laws of the United States or a jurisdiction thereof, (ii) the
due and punctual payment of the principal of and interest on all
of the Notes and the due and punctual performance and observance
of all of the covenants in the Notes and this Agreement to be
performed or observed by the Company are expressly assumed in
writing by the surviving corporation and the surviving
corporation shall furnish to the Banks an opinion of counsel
satisfactory to the Banks to the effect that the instrument of
assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement
of the surviving corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and
by general equitable principles, and (iii) at the time of such
consolidation or merger and immediately after giving effect
thereto, no Default or Unmatured Default or Prepayment Event
would exist.
6.2.4. Sale of Assets. The Company will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of all, or a substantial portion
of, its property, assets or business to any other Person except for sales of
inventory in the ordinary course of business. For purposes of this Section,
"substantial portion" means assets (valued at the higher of book or fair market
value) having a value in excess of 10% of the Company's Consolidated Total
Assets.
6.2.5. Sale and Leaseback. The Company will not, nor will it permit any
Subsidiary to, sell or transfer any property, the aggregate fair market value of
which at any time exceeds 10% of the Company's Consolidated Total Assets, in
order to concurrently or subsequently lease as lessee such or similar property.
The fair market value of any property sold or transferred pursuant to this
Section 6.2.5 shall be determined as of the date of such sale or transfer.
6.2.6. Liens. The Company will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the property of the
Company or any Subsidiary, except:
(a) Liens for taxes, assessments or governmental charges or levies
on its property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings.
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens, interests of bailors, bailees, consignors
and consignees, and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due.
Page 30
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the Company or the Subsidiaries.
(e) Liens created in favor of the United States government or any
other Person who has purchased or contracted to purchase goods
or services from the Company or any Subsidiary with advance or
progress payments.
(f) Liens existing on the date hereof and described in Schedule "3"
hereto.
(g) Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary
shall at any time in good faith be prosecuting an appeal or
proceeding for a review and in respect of which a stay of
execution pending such appeal or proceeding for review shall
have been secured.
(h) Liens to secure statutory obligations, surety or appeal bonds
or other liens of like general nature incurred in the ordinary
course of business and not in connection with the borrowing of
money, provided, in each case, the obligation secured is not
overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings.
(i) Liens of lessors under Capitalized Leases.
(j) Liens, in addition to those described in subsections (a)
through (i) hereof, to secure Indebtedness of the Company or
any Subsidiary in an aggregate amount not to exceed at any
time 10% of the Company's Consolidated Total Assets.
6.2.7. Funded Debt/EBITDA Ratio. The Company will not permit its Funded
Debt/EBITDA Ratio as at the end of any fiscal quarter to exceed 3.00 to 1.0.
6.2.8. Affiliates; Howmet. The Company will not, and will not permit
any Subsidiary to, enter into any transaction (including, without limitation,
the purchase or sale of any property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than the Company or such Subsidiary would obtain in a comparable
arms-length transaction. The
Page 31
Company will not, and will not permit any Subsidiary to, make any advance,
distribution, or payment to or investment in Howmet or any Subsidiary of Howmet
except for purposes of acquiring equity interests in Howmet.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made by or on behalf of the Company
or any Subsidiary to the Banks under or in connection with any Loan Document
shall be materially false as of the date on which made.
7.2. Nonpayment of principal of the Notes when due.
7.3. Nonpayment of interest upon the Notes or of any commitment fee,
extension fee or other obligations under any of the Loan Documents within five
days after the same becomes due.
7.4. The breach by the Company of any of the terms or provisions of
Sections 6.1.3 or 6.2.
7.5. The breach by the Company (other than a breach which constitutes a
Default under Section 7.1, 7.2, 7.3 or 7.4) of any of the terms or provisions of
this Agreement which is not remedied or waived within fifteen days after written
notice from the Administrative Agent or any Bank.
7.6. Failure of the Company, any Consolidated Subsidiary or Howmet to
pay any Indebtedness in an aggregate principal amount in excess of $10,000,000
(or the equivalent thereof in any other currency), when due, or the default by
the Company, any Consolidated Subsidiary or Howmet in the performance of any
other term, provision or condition contained in any agreement or agreements
under which Indebtedness in an aggregate principal amount in excess of
$10,000,000 (or the equivalent thereof in any other currency) was created or is
governed, the effect of which, in either case, is to cause, or to permit the
holder or holders of such Indebtedness to cause, such Indebtedness to become due
prior to its stated maturity; or Indebtedness in an aggregate principal amount
in excess of $10,000,000 (or the equivalent thereof in any other currency) shall
be declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment), prior to the stated maturity thereof; or the
Company, any Consolidated Subsidiary or Howmet shall not pay, or admit in
writing its inability to pay, its debts generally as they become due.
Page 32
7.7. The Company or any Consolidated Subsidiary shall (a) have an order
for relief entered with respect to it under the Bankruptcy Code, (b) make an
assignment for the benefit of creditors, (c) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any substantial part of its property,
(d) institute any proceeding seeking an order for relief under the Bankruptcy
Code or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (e) take any corporate action to authorize or effect any of the foregoing
actions set forth in this Section 7.7 or (f) fail to contest in good faith any
appointment or proceeding described in Section 7.8.
7.8. Without the application, approval or consent of the Company or
any Consolidated Subsidiary, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Company or any Consolidated
Subsidiary or any substantial part of its property, or a proceeding described in
Section 7.7(d) shall be instituted against the Company or any Consolidated
Subsidiary and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 60 consecutive days.
7.9. The Company or any Consolidated Subsidiary shall fail within 30
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $10,000,000, which is not stayed on appeal or otherwise
being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Plans shall exceed in the
aggregate an amount equal to 5 percent of the value (as of any date of
determination) of all Plan assets allocable to Plan benefits guaranteed under
ERISA.
7.11. An administrator, custodian or other representative, by or
pursuant to any legislative act, resolution or rule (other than the Bankruptcy
Code or any similar law, state or federal, whether now or hereafter existing) or
any order or decree of any court or any governmental board or agency (other than
any order or decree issued pursuant to the Bankruptcy Code or any similar law,
state or federal, whether now or hereafter existing) shall take possession or
control of all or such portions of the property of any one or more of the
Company and the Consolidated Subsidiaries as would, in the sole opinion of the
Required Banks, materially interfere with the operation of the business of the
Company and the Consolidated Subsidiaries, on a consolidated basis, and such
possession or control shall continue for 30 calendar days.
7.12. The Company or any Subsidiary shall be the subject of any
proceeding or investigation pertaining to the release by the Company or any of
its Subsidiaries, or any other Person of any toxic or hazardous waste or
physical substance into the environment, or any violation of any federal, state
or local environmental, health or safety law or regulation with respect to any
toxic or hazardous waste or physical substance, which would, in either case,
have a
Page 33
material adverse effect upon the operations of the Company and the Subsidiaries,
taken as a whole.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration; Allocation of Payments after Default or Prepayment
Event. (a) If any Default described in Section 7.7 or 7.8 occurs, the
commitments of the Banks to make Advances hereunder shall automatically
terminate and the Obligations shall immediately become due and payable without
any election or action on the part of the Administrative Agent or any Bank. If
any other Default or Prepayment Event occurs, the Required Banks may terminate
the commitments of the Banks to make Advances hereunder, or declare the
Obligations to be due and payable, whereupon the Obligations shall become
immediately due and payable, or both, without presentment, demand, protest or
notice of any kind, all of which the Company hereby expressly waives.
If, within 14 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Banks to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.7 or 7.8 with respect to the Company) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Banks (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to the Company, rescind and annul such
acceleration and/or termination.
(b) Upon the occurrence of (i) any Unmatured Default as to which the
Required Banks shall have notified the Administrative Agent that the provisions
of this Section 8.1(b) shall apply, (ii) any Default or (iii) any Prepayment
Event, the Banks shall share all collections and recoveries of the Obligations
on a pro rata basis, based on the respective amounts of Obligations (whether or
not mature and currently payable) owing to each Bank in respect of principal and
unpaid accrued interest, fees and indemnities hereunder as of the date of
occurrence of such Default, Unmatured Default or Prepayment Event, as the case
may be.
8.2. Amendments. Subject to the provisions of this Section, the
Required Banks (or the Administrative Agent with the consent in writing of the
Required Banks) and the Company may enter into agreements supplemental hereto
for the purpose of adding any provisions to the Loan Documents or changing in
any manner the rights of the Banks or the Company hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Banks:
Page 34
(a) Modify any of the provisions of this Agreement with respect to
the amount of or the time for the payment of the principal of
or any interest on any of the Obligations or any of the fees
due hereunder,
(b) Reduce the percentage specified in the definition of Required
Banks.
(c) Change the amount of the Commitment of any Bank hereunder or
the Revolving Credit Termination Date or Termination Date.
(d) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent.
8.3. Preservation of Rights. No delay or omission of the Banks or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and any single or partial exercise of any such right shall not preclude
other or further exercise thereof or the exercise of any other right, and no
waiver, amendment or other variation of the terms, conditions or provisions of
the Loan Documents whatsoever shall be valid unless in writing signed by the
Banks required pursuant to Section 8.2, and then only to the extent in such
writing specifically set forth. All remedies contained in the Loan Documents or
by law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Banks until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Company contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Bank shall be obligated to extend credit to the
Company in violation of any limitation or prohibition provided by any applicable
statute or regulation.
9.3. Taxes. Any taxes (excluding income taxes whether or not such taxes
are actually called "income taxes") payable or ruled payable by Federal or State
authority in respect of the Loan Documents shall be paid by the Company,
together with interest and penalties, if any.
Page 35
9.4. CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING
EFFECT TO APPLICABLE FEDERAL LAWS.
9.5. CONSENT TO JURISDICTION. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY BANK TO BRING PROCEEDINGS AGAINST THE COMPANY IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE COMPANY AGAINST
THE ADMINISTRATIVE AGENT OR ANY BANK OR ANY AFFILIATE OF THE ADMINISTRATIVE
AGENT OR ANY BANK INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.6. WAIVER OF JURY TRIAL. THE COMPANY, THE ADMINISTRATIVE AGENT AND
EACH BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.7. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.8. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Company, the Administrative Agent and the Banks and
supersede all prior agreements and understandings among the Company, the
Administrative Agent and the Banks relating to the subject matter thereof.
9.9. Several Obligations. The respective obligations of the Banks
hereunder are several and not joint and no Bank shall be the partner or agent of
any other (except to the extent to which the Administrative Agent is authorized
to act as such). The failure of any Bank to perform any of its obligations
hereunder shall not relieve any other Bank from any of its obligations
hereunder.
Page 36
9.10. Expenses. The Company shall reimburse the Administrative Agent
for any and all costs and out-of-pocket expenses (including attorneys' fees and
time charges of attorneys for the Administrative Agent, which attorneys may be
employees of the Administrative Agent,) paid or incurred by the Administrative
Agent and the Arranger in connection with the preparation, review, execution,
delivery, amendment and modification of the Loan Documents. The Company shall
reimburse the Administrative Agent and the Banks for any and all costs, internal
charges and out-of-pocket expenses (including attorneys' fees and time charges
of attorneys for the Administrative Agent and the Banks, which attorneys may be
employees of the Administrative Agent or the Banks) paid or incurred by the
Administrative Agent or any Bank in connection with the collection and
enforcement of the Loan Documents. The Company further agrees to indemnify the
Administrative Agent, the Arranger and each Bank, its directors, officers and
employees against all losses, claims, damages, penalties, judgments, liabilities
and expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Administrative Agent, the Arranger, or
any Bank is a party thereto) which any of them may pay or incur in connection
with or arising out of or relating to this Agreement, the other Loan Documents,
the transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder; provided, however,
that the Company shall not be liable for any of the foregoing to the extent that
they arise from a violation of law by, or the gross negligence or willful
misconduct of, the Administrative Agent, the Arranger or such Bank, as the case
may be. The obligations of the Company under this Section shall survive the
termination of this Agreement.
9.12. Numbers of Documents. All closing documents, notices and requests
hereunder shall be furnished to the Administrative Agent with sufficient
counterparts so that the Administrative Agent may furnish one to each of the
Banks.
9.13. Confidentiality. Each Bank agrees to hold any confidential
information which it may receive from the Company pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Banks and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to that Bank or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as required by law, regulation, or legal process,
(v) to any Person in connection with any legal proceeding to which that Bank is
a party, and (vi) permitted by Section 12.4. Each Bank will notify the Company
of any disclosure under clauses (iii) (other than disclosure pursuant to a
request arising in the course of a bank audit, notice of which such Bank shall
deliver to the Company as soon as is practicable), (iv), and (v) hereinabove
before divulging such information unless such disclosure is legally prohibited
by the terms of the request or demand for such information.
Page 37
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1. Appointment. The First National Bank of Chicago is hereby
appointed Administrative Agent hereunder, and each of the Banks irrevocably
authorizes the Administrative Agent to act as the agent of such Bank. The
Administrative Agent agrees to act as such upon the express conditions contained
in this Article X. The duties of the Administrative Agent shall be
administrative in nature and the Administrative Agent shall not have a fiduciary
relationship in respect of any Bank by reason of this Agreement.
10.2. Powers. The Administrative Agent shall have and may exercise such
powers hereunder as are specifically delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto. The Administrative Agent shall have no implied duties to the Banks, or
any obligation to the Banks to take any action hereunder except any action
specifically provided by this Agreement to be taken by the Administrative Agent.
10.3. General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Banks or any
Bank for any action taken or omitted to be taken by it or them hereunder or in
connection herewith except for its or their own gross negligence or wilful
misconduct.
10.4. No Responsibility for Loans, Recitals, etc. The Administrative
Agent shall not be responsible to the Banks for any recitals, reports,
statements, warranties or representations herein or any Loans hereunder or be
bound to ascertain or inquire as to the performance or observance of any of the
terms of this Agreement.
10.5. Right to Indemnity. The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder unless it shall
first be indemnified to its satisfaction by the Banks pro rata against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.6. Action on Instructions of Banks. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with written instructions signed by the Required Banks,
and such instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Banks and on all holders of Notes.
10.7. Employment of Agents and Counsel. The Administrative Agent may
execute any of its duties as Administrative Agent hereunder by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Banks, except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The Administrative Agent shall be entitled to
Page 38
advice of counsel concerning all matters pertaining to the agency hereby created
and its duties hereunder.
10.8. Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent.
10.9. Administrative Agent's Reimbursement. Each Bank agrees to
reimburse the Administrative Agent in the amount of such Bank's ratable share of
the Commitments for any expenses not reimbursed by the Company (i) for which the
Administrative Agent is entitled to reimbursement by the Company under the Loan
Documents and (ii) for any other expenses, liabilities, obligations, losses,
damages, penalties, costs, or disbursements of any kind incurred by the
Administrative Agent on behalf of the Banks, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents;
provided, however, that no Bank shall be required to reimburse the
Administrative Agent for any such expenses to the extent that they arise from a
violation of law by, or the gross negligence or willful misconduct of, the
Administrative Agent. The obligations of the Banks under this Section 10.9 shall
survive payment of the Obligations and termination of this Agreement.
10.10. Rights as a Bank. With respect to its Commitment, Loans made by
it and the Note issued to it, the Administrative Agent shall have the same
rights and powers hereunder as any Bank and may exercise the same as though it
were not the Administrative Agent, and the term "Bank" or "Banks" shall, unless
the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business with the
Company as if it were not the Administrative Agent.
10.11. Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank and based on the financial statements referred to in Section 5.4 and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
10.12. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving thirty days' written notice thereof to the Banks
and the Company and may be removed at any time with or without cause by the
Required Banks. Upon any such resignation or removal, the Required Banks shall
have the right to appoint, on behalf of the Banks but with the consent of the
Company (which consent shall not be unreasonably withheld), a successor
Page 39
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
thirty days after the retiring Administrative Agent's giving notice of
resignation, then the retiring Administrative Agent may appoint, on behalf of
the Banks but with the consent of the Company (which consent shall not be
unreasonably withheld), a successor Administrative Agent. Such successor
Administrative Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon 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. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article X shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent hereunder.
10.13. Distribution of Information. The Company authorizes the
Administrative Agent, as the Administrative Agent may elect in its sole
discretion, to discuss with and furnish to the Banks or to any other Person
having an interest in the Obligations (whether as a guarantor, pledgor of
collateral, participant, purchaser or otherwise) all financial statements, audit
reports and other information pertaining to the Company and its Subsidiaries
whether such information was provided by the Company or prepared or obtained by
the Administrative Agent; provided, however, that if such information is
non-public and confidential, the Administrative Agent shall obtain the consent
of the Company (which shall not be unreasonably withheld) prior to delivering
such information to any such Person and such Person shall have agreed to be
bound by Section 9.13 of this Agreement.. Neither the Administrative Agent nor
any of its employees, officers, directors or agents makes any representation or
warranty regarding any audit reports or other analyses of the Company's and its
Subsidiaries condition which the Administrative Agent may elect to distribute,
whether such information was provided by the Company or prepared or obtained by
the Administrative Agent, nor shall the Administrative Agent or any of its
employees, officers, directors or agents be liable to any person or entity
receiving a copy of such reports or analyses for any inaccuracy or omission
contained in or relating thereto.
10.14. Disclosure. The Borrower and each Bank hereby (i) acknowledge
and agree that (a) one or more Affiliates of First Chicago are or may become
direct or indirect equity investors in the Company or its Affiliates, (b) First
Chicago is or may become a lender to, and agent bank for, the Company and/or its
Affiliates, including, without limitation, pursuant to (i) the syndicated credit
arrangements of Howmet in which First Chicago presently acts as administrative
agent and a lender, (ii) the syndicated credit arrangements of the Company in
which First Chicago presently acts as administrative agent and as a lender, and
(iii) the short-term credit arrangements of the Company in which First Chicago
presently acts as the administrative agent and as a lender and (c) First Chicago
and/or its Affiliates from time to time may hold other investments in, make
other loans to or have other relationships with the Company and its Affiliates,
and (ii) waive any liability of First Chicago or such Affiliate to the Borrower
or any Bank, respectively, arising out of or
Page 40
resulting from such investments, loans or relationships other than liabilities
arising out of the gross negligence or willful misconduct of First Chicago or
its Affiliates.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Banks under applicable law, if the Company becomes insolvent, however
evidenced, or any Default or Prepayment Event occurs, any indebtedness from any
Bank to the Company may be offset and applied toward the payment of the
Obligations owing to such Bank, whether or not the Obligations, or any part
thereof, shall then be due.
11.2. Ratable Payments. In case at any time any Bank, whether by setoff
or otherwise, has payment made to it upon its Loans in a greater proportion than
received by any other Bank, such Bank so receiving such greater proportionate
payment agrees to purchase a portion of the Loans held by the other Banks so
that after such purchase each Bank will hold its ratable proportion of Loans. In
case any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made. The Company agrees that any Bank purchasing a
participation hereunder may, to the fullest extent permitted by law, exercise
all its rights of payment with respect to such participation as if such Bank
were the direct creditor of the Company in the amount of the participation.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Company and the
Banks and their respective successors and assigns, except that (i) the Company
shall not have the right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by any Bank must be made in compliance with
Section 12.3. Notwithstanding clause (ii) of this Section, any Bank may at any
time, without the consent of the Company or the Administrative Agent, assign all
or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment to a Federal Reserve
Bank shall release the transferor Bank from its obligations hereunder. The
Administrative Agent may treat the payee of any Note as the owner thereof for
all purposes hereof unless and until such payee complies with Section 12.3 in
the case
Page 41
of an assignment thereof or, in the case of any other transfer, a written notice
of the transfer is filed with the Administrative Agent. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Bank may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such
Bank, any Note held by such Bank, any Commitment of such Bank or any
other interest of such Bank under the Loan Documents. In the event of
any such sale by a Bank of participating interests to a Participant,
such Bank's obligations under the Loan Documents shall remain
unchanged, such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Bank shall
remain the holder of any each of its Notes for all purposes under the
Loan Documents, all amounts payable by the Company under this Agreement
shall be determined as if such Bank had not sold such participating
interests, and the Company and the Administrative Agent shall continue
to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each agreement pursuant to which any
Bank may sell such a participation shall provide that such Bank shall
retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any provision of
the Loan Documents other than any amendment, modification or waiver
with respect to any Loan or Commitment in which such Participant has an
interest which forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Loan or
Commitment, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor of any such Loan or releases any
substantial portion of collateral, if any, securing any such Loan;
provided that such participation agreement may provide that such Bank
will not agree to any modification, amendment or waiver of this
Agreement described in Sections 8.2 (a), (c) and (d) without the
consent of the Participant.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Bank may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all
or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit "E"
hereto or in such other form as may be agreed to by the parties
thereto. The consent of the
Page 42
Company and the Administrative Agent shall be required prior to an
assignment becoming effective; provided, however, that if a Default has
occurred and is continuing, the consent of the Company shall not be
required. Such consent shall not be unreasonably withheld or delayed.
Each such assignment with respect to a Purchaser which is not a Bank or
an Affiliate thereof shall (unless each of the Borrower and the Agent
otherwise consents, such consent of the Borrower not being required if
a Default has occurred and is continuing) be in an amount not less than
the lesser of (i) $10,000,000 or (ii) the remaining amount of the
assigning Bank's Commitment (calculated as at the date of such
assignment) or outstanding Loans (if the applicable Commitment has been
terminated).
12.3.2. Substitution of Bank. The Company may, at its sole
expense and effort, require any Bank to transfer and assign, without
recourse (in accordance with this Section 12.3) all (but not less than
all) of its interests, rights and obligations under this Agreement to
an assignee which shall assume such assigned obligations (which
assignee may be another Bank, if a Bank accepts such assignment);
provided, that (i) such assignment shall not conflict with any law,
rule or regulation or order of any court or other governmental
authority, (ii) the Company shall have received a written consent of
the Agent in the case of an entity that is not a Bank, which consent
shall not be unreasonably withheld, (iii) the Company or such assignee
shall have paid to the assigning Bank in immediately available funds
the principal of and interest accrued to the date of such payment on
the Loans made by it hereunder and all other amounts owed to it
hereunder and the fee payable to the Agent pursuant to Section 12.3.3
and (iv) nothing in the foregoing is intended or shall be construed as
obligating the Administrative Agent or any Bank to locate such an
assignee.
12.3.3. Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of a notice of assignment, substantially in the
form attached as Exhibit "I" to Exhibit "E" hereto (a "Notice of
Assignment"), together with any consents required by Section 12.3.1 or
12.3.2, and (ii) payment of a $3,500 fee to the Administrative Agent
for processing such assignment, such assignment shall become effective
on the effective date specified in such Notice of Assignment. The
Notice of Assignment shall contain a representation by the Purchaser to
the effect that none of the consideration used to make the purchase of
the Commitment and Loans under the applicable assignment agreement are
"plan assets" as defined under ERISA and that the rights and interests
of the Purchaser in and under the Loan Documents will not be "plan
assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Bank party to
this Agreement and any other Loan Document executed by the Banks and
shall have all the rights and obligations of a Bank under the Loan
Documents, to the same extent as if it were an original party hereto,
and no further consent or action by the Company, the Banks or the
Administrative Agent shall be required to release the transferor Bank
with respect to the percentage of the Aggregate Commitment and Loans
assigned to such Purchaser. Upon the consummation of any assignment to
a Purchaser pursuant to this Section 12.3.3, the transferor Bank, the
Administrative Agent and the
Page 43
Company shall make appropriate arrangements so that replacement Notes
are issued to such transferor Bank and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
12.4. Dissemination of Information. The Company authorizes each Bank to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Bank's possession
concerning the creditworthiness of the Company and its Subsidiaries; provided,
however, that if such information is non-public and confidential, such Bank
shall obtain the consent of the Company (which shall not be unreasonably
withheld) prior to delivering such information to such Person and such Person
agrees to be bound by Section 9.13 of this Agreement. No Bank may disclose
confidential information regarding the Company and its Subsidiaries to
prospective Transferees without the consent of the Company.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Bank shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.3.14.
ARTICLE XIII
NOTICES
13.1. Giving Notice. Any notice required or permitted to be given under
this Agreement may be given by (a) actual delivery to the Company, the
Administrative Agent or the Banks at the addresses indicated below their
signatures to this Agreement, or (b) United States mail, postage prepaid, or
telecopy or telefacsimile addressed to the Company, the Banks or the
Administrative Agent at the addresses indicated below their signatures to this
Agreement. Each such notice shall be effective (a) if given by mail, 72 hours
after such notice is deposited in the mails with first class postage prepaid,
addressed as aforesaid, and (b) if given by any other means, when delivered at
the address specified in accordance with this Article XIII.
13.2. Change of Address. The Company and the Banks may each change the
address for service of notice upon it by a notice in writing to the other
parties hereto.
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ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Company, the
Administrative Agent and the Banks and each party has notified the
Administrative Agent by telecopy or telefacsimile or by telephone, confirmed in
writing, that it has taken such action.
Page 45
IN WITNESS WHEREOF, the Company, the Banks and the Administrative Agent
have executed this Agreement as of the date first above written.
CORDANT TECHNOLOGIES INC.
By: /s/
----------------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President and Chief
Financial Officer
All Notices: Cordant Technologies Inc.
00 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Attn: Treasury Department
Telephone: 000-000-0000
Telecopy: 000-000-0000
Page 46
COMMITMENTS
-----------
$400,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT
By: /s/
--------------------------------
Xxxxxxx Xxxxxxx
Vice President
All Notices and Credit Matters: The First National Bank of Chicago
Mail Suite IL1-0374
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Transportation Division,
Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
All Borrowing Notices: The First National Bank of Chicago
Mail Suite IL1-0634
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Wire Transfer Payment Instructions:
The First National Bank of Chicago
Ref: Cordant Technologies Inc.
ABA #: 071 0000 13
Credit LS2OSD Money Transfer Inc.
Account Number 4811-5286-0000
AGGREGATE COMMITMENT
$400,000,000
Page 47
EXHIBIT "A"
EXTENSION REQUEST
_____________, 1999
To: The First National Bank of Chicago,
as agent (the "Administrative Agent")
From: Cordant Technologies Inc.
Re: Credit Agreement (the "Agreement") dated as of February 5, 1999 among
Cordant Technologies Inc., the Banks listed on the signature pages
thereof and the Administrative Agent
We hereby give notice pursuant to Section 2.2.2 of the Agreement that
we request conversion of the Revolving Credit Termination Balance on the
Revolving Credit Termination Date to Term Loans. The Company hereby represents
and warrants that as of the date hereof and as of the Revolving Credit
Termination Date, all conditions precedent to the conversion of the Revolving
Loans to Term Loans under Section 2.2.3 have been satisfied and (i) no Default
or Unmatured Default has occurred and is continuing under the Agreement other
than [______________________]; and (ii) no Prepayment Event has occurred.
Terms used herein have the meanings assigned to them in the Agreement.
CORDANT TECHNOLOGIES INC.
By: __________________________
Title: _______________________
Page 48
EXHIBIT "B"
FORM OF
PROMISSORY NOTE
$400,000,000 February 5, 1999
CORDANT TECHNOLOGIES INC., a Delaware corporation (the "Company"),
promises to pay to the order of _________________ (the "Bank") the lesser of the
principal sum of Four Hundred Million and No/100 Dollars or the aggregate unpaid
principal amount of all Loans made by the Bank to the Company pursuant to
Section 2.1 of the Credit Agreement ("Agreement") hereinafter referred to or
converted pursuant to Section 2.2 of the Agreement, whichever is less, in
immediately available funds at the main office of The First National Bank of
Chicago in Chicago, Illinois, as Administrative Agent, together with interest on
the unpaid principal amount hereof at the rates and on the dates set forth in
the Agreement. The Company shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Termination Date.
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or otherwise record in accordance with its usual practice, the
date and amount of each Loan and the date and amount of each principal payment
hereunder.
This Promissory Note is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Credit Agreement dated as of February 5, 1999,
among the Company, The First National Bank of Chicago, individually and as
Administrative Agent, and the banks named therein, to which Agreement, as it may
be amended from time to time, reference is hereby made for a statement of the
terms and conditions under which this Promissory Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.
CORDANT TECHNOLOGIES INC.
By: __________________________________
Xxxxxxx X. Xxxxxx
Executive Vice President and Chief
Financial Officer
Page 49
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
SYNDICATED LOANS PROMISSORY NOTE
OF CORDANT TECHNOLOGIES INC.
DATED FEBRUARY 5, 1999
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
--------------------------------------------------------------------------------
Page 50
EXHIBIT "C"
OPINION OF COUNSEL
February 5, 1999
The Administrative Agent and the Banks who are parties to the Credit Agreement
described below.
Ladies and Gentlemen:
This is in regard to the Credit Agreement dated as of February 5, 1999 among
Cordant Technologies Inc. (the "Company"), the Banks named therein and The First
National Bank of Chicago, as Administrative Agent (the "Credit Agreement").
Unless the context otherwise requires, all terms used in this opinion which are
specifically defined in the Credit Agreement shall have the meanings given such
terms in the Credit Agreement.
I am the Vice President and General Counsel of the Company and have acted as
such in connection with the Credit Agreement. In so acting, I have examined
originals (or copies thereof certified to my satisfaction) of such corporate and
other documents of the Company (including certificates of officers of the
Company on which I have relied) and such statutes and regulations as I have
deemed relevant and necessary in order to give the following opinion; the
certificate of incorporation and by-laws of the Company and its Subsidiaries as
set forth on Schedule 1 of the Credit Agreement; the corporate proceedings and
other actions taken by the Company and its Subsidiaries as set forth on Schedule
1 of the Credit Agreement to qualify, and maintain its good standing, in the
jurisdiction of its incorporation and in those jurisdictions in which the
Company and its Subsidiaries are qualified as foreign corporations; and the
corporate proceedings of the Company taken to authorize the execution, delivery
and performance of the Credit Agreement and the Notes and the borrowings under
the Credit Agreement.
Based upon the foregoing, it is my opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. The Company has
all corporate power required to carry on its ordinary course of
business.
2. The Company has no other subsidiaries except as set forth on Schedule 1
of the Credit Agreement. Each domestic subsidiary set forth on Schedule
1 of the Credit Agreement is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Incorporation set forth on Schedule 1.
Page 51
3. The Company and its Subsidiaries are each duly qualified as a foreign
corporation in good standing to do business in all jurisdictions where
the failure to so qualify would have a material adverse effect on the
business of the Company and the subsidiaries taken as a whole. The
Company and its operating subsidiaries are duly qualified as a foreign
corporation in good standing in the States listed on Schedule 1A.
4. The execution and delivery of the Credit Agreement and the Notes by the
Company, the borrowings by the Company under the Credit Agreement and
the performance by the Company of its obligations under the Credit
Agreement and the Notes have been duly authorized by all necessary
corporate action and proceedings on the part of the Company and do not
at this time:
(a) require any consent of the Company's shareholders;
(b) contravene, or constitute a default under, any provision of
any law or regulation applicable to the Company or of the
certificate of incorporation or by-laws of the Company or of
any material contract, agreement, judgment, order, decree,
adjudication or other instrument binding upon the Company, or
by which the Company or its property may be bound or affected,
or result in the creation of any Lien on any property now
owned by the Company or any Subsidiaries pursuant to the
provisions of any agreement, indenture or other instrument
binding upon it.
5. The Credit Agreement and the Notes have been duly executed and
delivered by the Company and constitute the legal, valid and binding
obligations of the Company enforceable in accordance with their terms,
except as such enforceability may be limited by bankruptcy or similar
laws and by laws and judicial decisions relating generally to the
enforcement of creditors' rights and subject also to the availability
of equitable remedies and to general principles of equity.
6. Except as otherwise set forth in the Company's Form 10-K as of June 30,
1998, a copy of which has been previously delivered to you, there is as
of the date hereof no action, suit, proceeding or investigation of
which I am aware pending or threatened against or affecting the Company
or any subsidiary before any court, regulatory commission, arbitration
tribunal, governmental department, administrative agency or
instrumentality which, would be reasonably expected to have a material
adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries as a whole.
7. Neither the Company nor its Subsidiaries is in default or violation in
any respect which would have a material adverse effect on the business
or condition (financial or otherwise) of the Company and its
Subsidiaries as a whole with respect to any law, rule, regulation,
order, writ, judgment, injunction, decree, adjudication, determination
or award presently in effect and applicable to it.
Page 52
8. No approval, authorization, consent adjudication or order of any
governmental authority, which has been obtained by the Company, is
required to be obtained by the Company as of the date hereof in
connection with the execution and delivery of the Credit Agreement, the
Notes, the borrowings under the Credit Agreement or in connection with
the performance by the Company of its obligations under the Credit
Agreement and the Notes.
9. The Company is not engaged principally or as one of its important
activities in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System).
10. The Company is not an "investment company," within the meaning of the
Investment Company Act of 1940, as currently in effect.
Very truly yours,
Xxx Xxxxx
Page 53
EXHIBIT "D"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago,
as Administrative Agent (the "Administrative Agent") under the Credit Agreement
Described Below.
Re: Credit Agreement, dated as of February 5, 1999 (as the same may be
amended or modified, the "Credit Agreement"), among Cordant Technologies
Inc. (the "Company"), the Administrative Agent, and the Banks named
therein
-------------------------------------------------------------------------
Terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Company, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Company in
accordance with Section 13.1 of the Credit Agreement or based on any telephonic
notice made in accordance with Section 2.3.10 of the Credit Agreement.
Facility Identification Number(s) _________________________________________
Customer/Account Name _________________________________________________________
Transfer Funds To _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
For Account No. ________________________________________________________________
Reference/Attention To ______________________________________________
Authorized Officer (Customer Representative) Date ________________________
_________________________________ ______________________________
(Please Print) Signature
Bank Officer Name Date ________________________
_________________________________ ______________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
Page 54
EXHIBIT "E"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
____________________________ (the "Assignor") and _____________________________
(the "Assignee") is dated as of __________, 19__. The parties hereto agree as
follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents, such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement and the other Loan
Documents relating to the facilities listed in Item 3 of Schedule 1 and the
other Loan Documents. The aggregate Commitment (or Loans, if the applicable
Commitment has been terminated) purchased by the Assignee hereunder is set forth
in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit "I" attached hereto
has been delivered to the Agent. Such Notice of Assignment must include any
consents required to be delivered to the Agent by Section 12.3.1 or 12.3.2 of
the Credit Agreement. In no event will the Effective Date occur if the payments
required to be made by the Assignee to the Assignor on the Effective Date under
Sections 4 and 5 hereof are not made on the proposed Effective Date. The
Assignor will notify the Assignee of the proposed Effective Date no later than
the Business Day prior to the proposed Effective Date. As of the Effective Date,
(i) the Assignee shall have the rights and obligations of a Bank under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and be released from
its corresponding obligations under the Loan Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee shall
advance funds directly to the Agent with respect to
Page 55
all Loans and reimbursement payments made on or after the Effective Date with
respect to the interest assigned hereby. [In consideration for the sale and
assignment of Loans hereunder, (i) the Assignee shall pay the Assignor, on the
Effective Date, an amount equal to the principal amount of the portion of all
Floating Rate Loans assigned to the Assignee hereunder and (ii) with respect to
each Eurodollar Rate Loan made by the Assignor and assigned to the Assignee
hereunder which is outstanding on the Effective Date, (a) on the last day of the
Interest Period therefor or (b) on such earlier date agreed to by the Assignor
and the Assignee or (c) on the date on which any such Eurodollar Rate Loan
either becomes due (by acceleration or otherwise) or is prepaid (the date as
described in the foregoing clauses (a), (b) or (c) being hereinafter referred to
as the "Payment Date"), the Assignee shall pay the Assignor an amount equal to
the principal amount of the portion of such Eurodollar Rate Loan assigned to the
Assignee which is outstanding on the Payment Date. If the Assignor and the
Assignee agree that the Payment Date for such Eurodollar Rate Loan shall be the
Effective Date, they shall agree to the interest rate applicable to the portion
of such Loan assigned hereunder for the period from the Effective Date to the
end of the existing Interest Period applicable to such Eurodollar Rate Loan (the
"Agreed Interest Rate") and any interest received by the Assignee in excess of
the Agreed Interest Rate shall be remitted to the Assignor. In the event
interest for the period from the Effective Date to but not including the Payment
Date is not paid by the Company with respect to any Eurodollar Rate Loan sold by
the Assignor to the Assignee hereunder, the Assignee shall pay to the Assignor
interest for such period on the portion of such Eurodollar Rate Loan sold by the
Assignor to the Assignee hereunder at the applicable rate provided by the Credit
Agreement. In the event a prepayment of any Eurodollar Rate Loan which is
existing on the Payment Date and assigned by the Assignor to the Assignee
hereunder occurs after the Payment Date but before the end of the Interest
Period applicable to such Eurodollar Rate Loan, the Assignee shall remit to the
Assignor the excess of the prepayment penalty paid with respect to the portion
of such Eurodollar Rate Loan assigned to the Assignee hereunder over the amount
which would have been paid if such prepayment penalty was calculated based on
the Agreed Interest Rate. The Assignee will also promptly remit to the Assignor
(i) any principal payments received from the Agent with respect to Eurodollar
Rate Loans prior to the Payment Date and (ii) any amounts of interest on Loans
and fees received from the Agent which relate to the portion of the Loans
assigned to the Assignee hereunder for periods prior to the Effective Date, in
the case of Floating Rate Loans or fees, or the Payment Date, in the case of
Eurodollar Rate Loans, and not previously paid by the Assignee to the Assignor.]
In the event that either party hereto receives any payment to which the other
party hereto is entitled under this Assignment Agreement, then the party
receiving such amount shall promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. [The Assignee shall pay to the
Assignor a fee on each day on which a payment of interest or commitment fees is
made under the Credit Agreement with respect to the amounts assigned to the
Assignee hereunder (other than a payment of interest or commitment fees for the
period prior to the Effective Date or, in the case of Eurodollar Rate Loans, the
Payment Date, which the Assignee is obligated to deliver to the
Page 56
Assignor pursuant to Section 4 hereof). The amount of such fee shall be the
difference between (i) the interest or fee, as applicable, paid with respect to
the amounts assigned to the Assignee hereunder and (ii) the interest or fee, as
applicable, which would have been paid with respect to the amounts assigned to
the Assignee hereunder if each interest rate was of 1% less than the interest
rate paid by the Company or if the commitment fee was of 1% less than the
commitment fee paid by the Company, as applicable.] [In addition,] [t]he
Assignee agrees to pay % of the recordation fee required to be paid to the Agent
in connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Banks a
security interest in assets of the Company or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the Company
or any guarantor, (iv) the performance of or compliance with any of the terms or
provisions of any of the Loan Documents, (v) inspecting any of the Property,
books or records of the Company, (vi) the validity, enforceability, perfection,
priority, condition, value or sufficiency of any collateral securing or
purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank and based on such documents and information at it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, (iii) appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Bank, (v) agrees that its
payment instructions and notice instructions are as set forth in the attachment
to Schedule 1, (vi) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
Page 57
and under the Loan Documents will not be "plan assets" under ERISA, [and (vii)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying that the Assignee is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States federal
income taxes].
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 12.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
Page 58
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By: _____________________________
Title: _____________________________
_____________________________
_____________________________
[NAME OF ASSIGNEE]
By: _____________________________
Title: _____________________________
_____________________________
_____________________________
Page 59
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
Credit Agreement by and among Cordant Technologies Inc., The First
National Bank of Chicago, as Administrative Agent, and the Banks party
thereto dated as of February 5, 1999.
2. Date of Assignment Agreement: ______________, 19__
3. Amounts (As of Date of Item 2 above):
a. Total of Commitments
(Loans) under
Credit Agreement $_______
b. Assignee's Percentage
of Facility purchased
under the Assignment
Agreement ________%
c. Amount of Assigned Share in
Facility purchased under
the Assignment
Agreement $________
4. Assignee's Aggregate (Loan
Amount)* Commitment Amount
Purchased Hereunder: $________
5. Proposed Effective Date: _______________________
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:____________________________ By:________________________________
Title:_________________________ Title:_____________________________
Page 60
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
Page 61
EXHIBIT "I"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
-------------
______________, 19__
To: Cordant Technologies Inc.
00 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Attn: Treasury Department
The First National Bank of Chicago
Mail Suite IL1-0374
One First Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Transportation Division
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement") described
in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
the Company and the Agent pursuant to Section 12.3.3 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of _________, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the Assignment
shall be the later of the date specified in Item
Page 62
5 of Schedule 1 or two Business Days (or such shorter period as agreed to by the
Agent) after this Notice of Assignment and any consents and fees required by
Sections 12.3.1, 12.3.2, and 12.3.3 of the Credit Agreement have been delivered
to the Agent, provided that the Effective Date shall not occur if any condition
precedent agreed to by the Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Company and the
Agent notice of the assignment and delegation referred to herein. The Assignor
will confer with the Agent before the date specified in Item 5 of Schedule 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to satisfy
the conditions precedent agreed to by the Assignor and the Assignee. At the
request of the Agent, the Assignor will give the Agent written confirmation of
the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $3,500 required by Section 12.3.3 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause the Company to
execute and deliver new Notes or, as appropriate, replacements notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Note received by it from the Company
upon its receipt of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions
are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
Page 63
9. The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to the Company or the
Loan Documents to the Assignee until the Assignee becomes a party to the Credit
Agreement.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By:____________________________ By:________________________________
Title:_________________________ Title:_____________________________
ACKNOWLEDGED AND CONSENTED TO ACKNOWLEDGED AND CONSENTED TO
BY THE FIRST NATIONAL BANK BY CORDANT TECHNOLOGIES INC.
OF CHICAGO
By:____________________________ By:________________________________
Title:_________________________ Title:_____________________________
[Attach photocopy of Schedule 1 to Assignment]
Page 64
SCHEDULE "1"
SUBSIDIARIES
------------
(See Section 5.16)
(Ownership interests are 100% unless otherwise indicated.)
Page 65
SCHEDULE "2"
INDEBTEDNESS OF SUBSIDIARIES
----------------------------
(See Section 5.16)
Page 66
SCHEDULE "3"
LIENS
-----
(See Section 6.2.6)
There are no Liens outstanding by the Company or any Subsidiary except
Liens permitted pursuant to Section 6.2.6 of the Credit Agreement.
Page 67
