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EXHIBIT 10.21
AGENCY AND CONTRIBUTION AGREEMENT
THIS AGENCY AND CONTRIBUTION AGREEMENT ("AGREEMENT") dated as of
November 27, 1996, by and among FRICTION PRODUCTS CO., an Ohio corporation
("FRICTION PRODUCTS"), HAWK BRAKE, INC., an Ohio corporation ("HAWK BRAKE"),
XXXXXX, INC., a Delaware corporation ("XXXXXX"), XXXXXXXXXX PRODUCTS
CORPORATION, a Delaware corporation ("XXXXXXXXXX"), XXXXX METAL STAMPINGS, INC.,
an Ohio corporation ("XXXXX"), X.X. XXXXXXX HOLDINGS, INC., a Delaware
corporation ("XXXXXXX HOLDINGS"), X.X. XXXXXXX CORP., a Delaware corporation
("XXXXXXX CORP."), XXXXXXX FRICTION PRODUCTS U.K. CORP., a Delaware corporation
("XXXXXXX FRICTION") (Friction Products, Hawk Brake, Helsel, Hutchinson, Logan,
Wellman Holdings, Xxxxxxx Corp. and Xxxxxxx Friction each sometimes hereinafter
referred to individually as a "BORROWER" and collectively as "BORROWERS") and
HAWK CORPORATION, a Delaware corporation, acting in its capacity as borrowing
agent for the Borrowers (in such capacity, the "HAWK FUNDS ADMINISTRATOR"). As
used herein, the term "CONTRIBUTOR" shall mean each of the Borrowers required to
make any payment to any other Borrower pursuant to PARAGRAPH 2(A) of this
Agreement. Except as otherwise defined herein, capitalized terms used herein
shall have the respective meanings assigned to those terms in the "CREDIT
AGREEMENT" (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, Borrowers, the Hawk Funds Administrator, various lending
institutions from time to time parties thereto (the "LENDERS") and BT Commercial
Corporation, a Delaware corporation ("BTCC"), acting in its capacity as agent
(in such capacity, "AGENT") for itself and each of the other Lenders are parties
to a certain Credit Agreement dated as of November 27, 1996 (as amended,
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), providing for the making of Revolving Loans and the issuance of,
and participation in Letters of Credit as contemplated therein; and
WHEREAS, each Borrower will obtain direct and indirect economic,
financial and other benefits from the incurrence of all Loans and the issuance
of all Letters of Credit under the Credit Agreement and, accordingly, each
Borrower is unconditionally and irrevocably jointly and severally liable for the
payment,
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performance and observance of all Obligations, as primary obligor and not merely
as surety; and
WHEREAS, Borrowers wish to enter into this Agreement (i) to effect an
equitable sharing of the Obligations and (ii) to designate and appoint the Hawk
Funds Administrator as agent for the Borrowers under the Credit Agreement and
other Credit Documents;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. AGENCY. Each Borrower hereby designates and appoints the Hawk Funds
Administrator as its agent to act as specified in the Credit Agreement and each
of the other Credit Documents and the Hawk Funds Administrator hereby
acknowledges such designation and accepts such appointment. Each Borrower hereby
irrevocably authorizes and directs the Hawk Funds Administrator to take such
action on its behalf under the provisions of the Credit Agreement and the other
Credit Documents, and any other instruments and agreements referred to therein,
and to exercise such powers and to perform such duties thereunder as are
specifically delegated to or required of the Hawk Funds Administrator by the
respective terms thereof, and such other powers as are reasonably incidental
thereto, including without limitation, to take the following actions for and on
such Borrower's behalf:
(a) The Hawk Funds Administrator is authorized and empowered
to submit on behalf of each Borrower Notices of Borrowing to the Agent
in accordance with the provisions of SECTION 2.2(b) of the Credit
Agreement. The Hawk Funds Administrator shall submit such Notices of
Borrowing to the Agent as soon as practicable after receiving a request
to do so from a Borrower.
(b) The Hawk Funds Administrator is authorized and empowered
to receive on behalf of each Borrower the proceeds of the Revolving
Loans in accordance with the provisions of SECTION 2.2(c) of the Credit
Agreement. The Hawk Funds Administrator shall receive such proceeds
into the Disbursement Account and disburse to the applicable Borrower
as soon as practicable after the receipt thereof.
(c) The Hawk Funds Administrator is authorized and
empowered to submit on behalf of each Borrower Letter of
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Credit Requests to the Agent in accordance with the provisions of
SECTION 3.3 of the Credit Agreement. The Hawk Funds Administrator shall
submit any such Letter of Credit Request to the Agent as soon as
practicable after receiving a request to do so from a Borrower.
(d) The Hawk Funds Administrator is authorized and empowered
on behalf of each Borrower to submit Notices of Continuation and
Notices of Conversion to the Agent in accordance with the provisions of
the Credit Agreement. The Hawk Funds Administrator shall submit any
such Notice of Continuation or Notice of Conversion to the Agent as
soon as practicable after receiving a request to do so from a Borrower.
(e) The Hawk Funds Administrator is further authorized to take
all such actions on behalf of each Borrower necessary to exercise the
specific powers granted in PARAGRAPHS (a) through (d) above and to
perform such duties hereunder and under the Credit Agreement and
deliver such documents as delegated to or required of the Hawk Funds
Administrator by the terms hereof or of the Credit Agreement.
The Hawk Funds Administrator may perform any of its duties under the Credit
Agreement or any of the other Credit Documents by or through its agents or
employees.
2. CONTRIBUTION AMONG BORROWERS.
(a) At any time a payment in respect of the Obligations is
made by any Borrower, the right of contribution, if any, of each
Borrower against each Contributor shall be determined as provided in
the immediately following sentence, with the right of contribution of
each Borrower to be revised and restated as of each date on which such
a payment (a "RELEVANT PAYMENT") is made. At any time that a Relevant
Payment is made by a Borrower that results in the aggregate payments
made by such Borrower in respect of the Obligations to and including
the date of the Relevant Payment exceeding such Borrower's
"CONTRIBUTION PERCENTAGE" (as hereinafter defined) of the aggregate
payments made by all Borrowers in respect of the Obligations to and
including the date of the Relevant Payment (such excess, the "AGGREGATE
EXCESS AMOUNT"), each such Borrower shall have a right of contribution
against each Contributor that has made payments in respect of the
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Obligations to and including the date of the Relevant Payment in an
aggregate amount less than such Contributor's Contribution Percentage
of the aggregate payments made by all Borrowers in respect of the
Obligations to and including the date of the Relevant Payment (the
aggregate amount of such deficit, the "AGGREGATE DEFICIT AMOUNT") in an
amount equal to (x) a fraction the numerator of which is the Aggregate
Excess Amount of such Borrower and the denominator of which is the
Aggregate Excess Amount of all Borrowers MULTIPLIED BY (y) the
Aggregate Deficit Amount of such Contributor. A Borrower's rights of
contribution, if any, pursuant to the preceding sentences shall arise
at the time of each computation, subject to adjustment to the time of
any subsequent computation. As used in this Agreement, (i) each
Contributor's "CONTRIBUTION PERCENTAGE" shall mean the percentage
obtained by dividing (x) the Adjusted Net Worth of such Contributor by
(y) the aggregate Adjusted Net Worth of all Borrowers; (ii) the
"ADJUSTED NET WORTH" of each Borrower shall mean the greater of (x) the
Net Worth of such Borrower or (y) zero; and (iii) the "NET WORTH" of
each Borrower shall mean the amount by which the fair salable value of
such Borrower's assets on the Closing Date exceeds its existing debts
and other liabilities (including contingent liabilities, but without
giving effect to (1) any Obligations arising under the Credit Agreement
as a result of such Borrower's joint and several liability, (2) the
obligations of such Borrower hereunder and (3) the obligations of such
Borrower under any intercompany notes, in each case after giving effect
to the transactions occurring on the Closing Date.
(b) No Borrower will exercise any rights which it may acquire
by way of contribution under PARAGRAPH 2(a) until all of the
Obligations shall have been indefeasibly paid and satisfied in full and
the Credit Agreement and each of the other Credit Documents shall have
terminated pursuant to the respective terms and provisions thereof in
full, it being expressly recognized and agreed by each of the Borrowers
that such Borrower's right of contribution hereunder against any other
Borrower shall be expressly junior and subordinate to such other
Borrower's obligations under the Credit Agreement and the other Credit
Documents.
3. NO OTHER CONTRIBUTION OR SUBROGATION RIGHTS. Each of the Borrowers
recognizes and agrees that, except for the right of contribution, if any,
arising pursuant to SECTION 1, such Borrower
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shall have no right of contribution or subrogation against any other Borrower in
respect of any payment of any Obligation, any such right of contribution or
subrogation arising under law or otherwise being expressly waived by each of the
Borrowers.
4. AMENDMENT OR WAIVER. Any provision of this Agreement may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed
by each of the parties hereto and consented to by the Majority Lenders.
5. BENEFIT OF AGREEMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of each of the parties hereto and their
respective successors and assigns.
6. TERMINATION. This Agreement, as it may be amended, supplemented or
otherwise modified from time to time, shall remain in full force and effect and
shall not be terminated unless and until all of the Obligations have been
indefeasibly paid and satisfied in full and the Credit Agreement and each of the
Credit Documents has terminated pursuant to the respective terms and provisions
thereof.
7. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS AND
DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
8. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
9. EFFECTIVENESS. This Agreement shall become effective as of the date
hereof upon execution hereof by each party and delivery of executed counterparts
hereof by or on behalf of such party to the Agent.
10. ADDITIONAL BORROWERS. At the time any Person becomes a "Borrower"
under the Credit Agreement after the Closing Date, it shall upon execution of a
counterpart hereof become a "Borrower" for all purposes of this Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.
FRICTION PRODUCTS CO.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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HAWK BRAKE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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XXXXXXXXXX PRODUCTS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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XXXXX METAL STAMPINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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Agency and
Contribution Agreement
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X.X. XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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X.X. XXXXXXX CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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XXXXXXX FRICTION PRODUCTS U.K.
CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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HAWK CORPORATION, A DELAWARE
CORPORATION, IN ITS CAPACITY
AS HAWK FUNDS ADMINISTRATOR
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President-Finance
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Agency and
Contribution Agreement
