Exhibit 10.2
LOAN, SECURITY, AND GUARANTY AGREEMENT
THIS LOAN, SECURITY, AND GUARANTY AGREEMENT (this "Agreement") is made as
of this 8th day of December, 2000, by and between (a) GALAXY INDUSTRIES
CORPORATION ("Galaxy"), a Michigan corporation, MID STATE MACHINE PRODUCTS
("Midstate"), a Maine corporation, NATIONWIDE PRECISION PRODUCTS CORP.
("Nationwide"), a New York corporation, and GENERAL AUTOMATION, INC. ("GA"), an
Illinois corporation ("Galaxy, Midstate, Nationwide and GA, together with their
permitted successors and assigns being sometimes hereinafter called
collectively, the "Borrowers"); (b) GENERAL ELECTRIC CAPITAL CORPORATION, FOR
ITSELF AND AS AGENT FOR CERTAIN PARTICIPANTS (together with its successors and
assigns, the "Lender"); and (c) PRECISION PARTNERS, INC., a Delaware corporation
(together with its permitted successors and assigns, the "Guarantor").
R E C I T A L S
The Borrowers and the Lender are currently parties to a certain Master
Lease Agreement dated March 31, 2000 (together with all amendments,
modifications, supplements and schedules thereto, the "Master Lease Agreement"),
pursuant to which the Lender has agreed to lease to Borrowers certain equipment.
The Borrowers' obligations pursuant to the Master Lease Agreement are guaranteed
by the Guarantor pursuant to a Corporate Guaranty dated March 31, 2000 from the
Guarantor to the Lender (as the same may from time to time be amended, restated,
supplemented or otherwise modified, The "Lease Guaranty").
The Borrowers have now requested that the Lender make available to the
Borrowers an equipment loan in the maximum principal amount of $20,770,826.00,
subject to and upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. The Equipment Loan.
1.1. DEFINITIONS. All capitalized terms used herein and not otherwise
defined shall have the meanings set forth in ANNEX A hereto.
1.2. EQUIPMENT LOAN. Subject to and upon the provisions of this
Agreement and relying upon the representations and warranties herein set
forth, the Lender agrees to make to the Borrowers, on the date hereof, a term
loan in the principal amount of $20,770,826.00.
1.3. MINIMUM AMOUNT USE OF PROCEEDS. The proceeds of the Equipment Loan
will be used by the Borrowers (a) for purchase money in the amount of
$9,000,000 to purchase new equipment more particularly described in Schedule
1.3(a) attached hereto (the "New Equipment"), and (b) to refinance certain
outstanding payment obligations under the Master Lease Agreement in an amount
equal to $11,770,826.00 incurred in connection with the Borrowers'
acquisition of the equipment listed on SCHEDULE 1.3(B) attached hereto (the
"Refinanced Equipment").
1.4. NOTE. The Borrowers' obligation to repay the Equipment Loan with
interest shall be evidenced by the Note. The Lender will maintain on its
books the Equipment Loan Account with respect to repayments and prepayments
of the Equipment Loan, the accrual and payment of interest on the Equipment
Loan and all other amounts and charges owing to the Lender in connection with
the Equipment Loan. Except for manifest error, the Equipment Loan Account
shall be conclusive as to all amounts owing by the Borrowers to the Lender in
connection with and on account of the Equipment Loan.
1.5. GUARANTY. The payment of the Obligations and the performance of
this Agreement, the Note and the other Loan Documents are guaranteed by the
Guarantor pursuant to Section 8 hereof.
1.6. VOLUNTARY PREPAYMENTS. The Borrower may prepay all or any portion
of the Equipment Loan at any time and from time to time without premium or
penalty. Amounts prepaid shall be applied first to accrued and unpaid
interest, then to the principal balance due at maturity, then to the monthly
installments of principal in the inverse order of their maturity.
1.7. INTEREST CALCULATION. All interest and fees payable under the
provisions of this Agreement or the Note shall be computed on the basis of
actual number of days elapsed over a year of 360 days. Where applicable, the
interest rate on all amounts on which interest is calculated with respect to
the Prime Rate shall change immediately and contemporaneously with each
change of the Prime Rate.
1.8. LATE CHARGES. If the Borrowers fail to make any payment of
principal, interest, prepayments, fees or any other amount becoming due
pursuant to the provisions of this Agreement or the Note within fifteen (15)
days of the date due and payable, the Borrowers shall pay to the Lender a
late charge equal to five percent (5%) of the amount of such payment. Such
15-day period shall not be construed in any way to extend the due date of any
such payment. Late charges are imposed solely for the purpose of defraying
the Lender's expenses incident to the handling of delinquent payments, and
are in addition to, and not in lieu of, the exercise by the Lender of any
rights and remedies hereunder or under applicable laws and any fees and
expenses of any agents or attorneys which the Lender may employ upon Default.
1.9. LOAN PAYMENTS. Whenever any payment to be made by the Borrowers
under the provisions of this Agreement or the Note is due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, in the case of any payment which bears interest,
such extension of time shall be included in computing interest on such
payment. All payments of principal, interest, fees or other amounts to be
made by the Borrowers under the provisions of this Agreement or the Note
shall be paid without set-off or counterclaim to the Lender at the Lender's
office specified in Section 8.3 hereof in lawful money of the United States
of America in immediately available funds.
1.10. INTEREST ON OVERDUE AMOUNTS. If the principal of or interest on
the Note or any other amount required to be paid to the Lender hereunder or
under the Note is not paid when due (whether by acceleration or otherwise),
the Borrowers shall from time to time pay on demand to the Lender interest on
such principal, interest or other amount from the due date thereof until the
date of payment (after as well as before any judgment) at the Default Rate.
1.11. COLLATERAL.
In order to secure the full and punctual payment of the Obligations in
accordance with the terms thereof, and to secure the performance of this
Agreement and the other Loan Documents, each Borrower hereby pledges and
assigns to the Lender, and grants to the Lender a continuing lien and
security interest in and to all of each Borrower's right, title and interest
in and to the Collateral and all proceeds and products of the Collateral.
The payment of the Obligations and the performance of this Agreement,
the Note and the other Loan Documents are also secured by the provisions of,
and the property described in the GE Capital Security Agreement.
1.12. THE BORROWERS' REPRESENTATIVES. Each of the Borrowers hereby
represents and warrants to the Lender that each of them will derive benefits,
directly and indirectly, from the proceeds of the Equipment Loan, both in its
separate capacity and as a member of the integrated group to which each of
the Borrowers belong, since the successful operation of the integrated group
is dependent upon the continued successful performance of the functions of
the integrated group as a whole. For administrative convenience, the
Guarantor is hereby irrevocably appointed by each of the Borrowers as agent
for each of the Borrowers for the purpose of receiving the proceeds of the
Equipment Loan and disbursing the proceeds of such Equipment Loan among the
Borrowers. In its capacity as such agent, the Guarantor shall have the power
and authority through its authorized officer or officers to (i) endorse any
check for the proceeds of the Equipment Loan for and on behalf of each of the
Borrowers and in the name of each of the Borrowers, and (ii) instruct the
Lender to credit the proceeds of the Equipment Loan directly to a banking
account of any of the Borrowers which shall evidence the making of Equipment
Loan and shall constitute the acknowledgment by each of the Borrowers of the
receipt of the proceeds of Equipment Loan. By reason of the foregoing, the
Lender is hereby irrevocably authorized by each of the Borrowers to make
Equipment Loan to the Borrowers pursuant to this Agreement upon the request
of any one of the persons who is authorized to do so under the provisions of
the most recent "Certificate" of corporate resolutions of the Guarantor on
file with the Lender. Except in the case of its own gross negligence or
willful misconduct, the Lender assumes no responsibility or liability for any
errors, mistakes and/or discrepancies in any oral, telephonic, written or
other transmissions of any instructions, orders, requests and confirmations
between the Lender and any or all of the Borrowers in connection with the
Equipment Loan or transaction pursuant to the provisions of this Agreement.
1.13. BORROWERS' GUARANTY OF THE OBLIGATIONS. Each Borrower
acknowledges that it is jointly and severally liable for all of the
Obligations and, as a result hereby, unconditionally guarantees the full and
prompt payment when due, whether at maturity or earlier, by reason of
acceleration or otherwise, and at all times thereafter, of all Obligations of
every kind and nature of the other Borrowers to the Lender under the Loan
Documents, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, joint or several, now or hereafter
existing, or due or to become due, and howsoever owned, held or acquired by
the Lender. Each Borrower agrees that if this guaranty, or any liens securing
this guaranty, would, but for the application of this sentence, be
unenforceable under applicable law, this guaranty and each such lien shall be
valid and enforceable to the maximum extent that would not cause this
guaranty or such lien to be unenforceable under applicable law, and this
guaranty and such lien shall automatically be
deemed to have been amended accordingly at all relevant times.
Each Borrower hereby agrees that its obligations under this guaranty
shall be unconditional, irrespective of (a) the validity or enforceability of
the Obligations or any part thereof, or of any promissory note or other
document evidencing all or any part of the Obligations, (b) the absence of
any attempt to collect the Obligations from any Borrower or other action to
enforce the same, (c) the waiver or consent by the Lender with respect to any
provision of any agreement, instrument or document evidencing or securing all
or any part of the Obligations, or any other agreement, instrument or
document now or hereafter executed by any Borrower and delivered to the
Lender, (d) the failure by the Lender to take any steps to perfect and
maintain its security interest in, or to preserve its rights to, any
Collateral for the Obligations, for the benefit of itself, (e) the Lender's
election, in any proceeding instituted under the Bankruptcy Code, of the
application of Section 1111(b)(2) of the Bankruptcy Code, (f) any borrowing
or grant of a security interest by any Borrower as debtor-in-possession,
under Section 364 of the Bankruptcy Code, (g) the disallowance, under Section
502 of the Bankruptcy Code, of all or any portion of the Lender's claim(s)
for repayment of the Obligations, or (h) any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of any
Borrower.
Each Borrower hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of receivership or bankruptcy of
any Borrower, protest or notice with respect to the Obligations and all
demands whatsoever, and covenants that this guaranty will not be discharged,
except by complete and irrevocable payment and performance of the Obligations
(other than contingent and unasserted indemnification obligations). No notice
to any Borrower or any other party shall be required for the Lender to make
demand hereunder. Such demand shall constitute a mature and liquidated claim
against any Borrower. Upon the occurrence and continuance of any Event of
Default, the Lender may, in its sole discretion, proceed directly and at
once, without notice, against one of the Borrowers to collect and recover the
full amount of any portion of the Obligations, without first proceeding
against the other Borrowers, any other person, firm, corporation, or any
security or collateral for the Obligations. The Lender shall have the
exclusive right to determine the application of payments and credits, if any,
from any Borrower, any other person, firm or corporation, or any security or
collateral for the Obligations, on account of the Obligations.
At any time after and during the continuance of an Event of Default,
the Lender may, in its sole discretion, without notice to any Borrower and
regardless of the acceptance of any collateral for the payment hereof,
appropriate and apply toward payment of the Obligations (i) any indebtedness
due or to become due from the Lender to such Borrower and (ii) any moneys,
credits or other property belonging to such Borrower at any time held by or
coming into the possession of the Lender or any of its affiliates, whether
for deposit or otherwise. The Lender agrees promptly to notify the Borrowers
after any such set-off and application made by such Person.
SECTION 2. CONDITIONS PRECEDENT.
2.1. CONDITIONS PRECEDENT TO THE EQUIPMENT LOAN. The Lender shall not
be required to make the Equipment Loan hereunder unless the following
conditions precedent have been satisfied in a
manner reasonably acceptable to the Lender:
(a) EACH OBLIGORS' CORPORATE DOCUMENTS. The Lender shall have
received (i) a copy, certified as of a recent date by the state of
incorporation of each Obligor of the Articles of Incorporation of
the Obligor incorporated in such state, (ii) a short form
Certificate of Good Standing for each Obligor issued by the state
of incorporation of such Obligor, and (iii) a copy, certified to
the Lender as true and correct as of the date hereof by the
Secretary of each Obligor of the by-laws of each Obligor and the
resolutions of each Obligor's Board of Directors authorizing the
execution and delivery of this Agreement and the other Loan
Documents to which each Obligor is a party and designating by
title the officer or officers of each Obligor who are authorized
to sign this Agreement and such other Loan Documents for and on
behalf of each Obligor and to make the borrowings hereunder;
(b) OFFICE LOCATIONS. A list showing the street address, city
or county and state of each Obligor's chief executive office and
of any other location where such Obligor conducts or has a place
of business or where any of the Collateral is or may be located;
(c) INSURANCE. A property and casualty insurance policy from
a well-rated and responsible insurance company insuring the
Collateral in amounts reasonably satisfactory to the Lender
against loss or damage resulting from fire and other risks insured
against by extended coverage, together with a standard
non-contributing and non-reporting loss payee endorsement in favor
of the Lender in form satisfactory to the Lender, and such other
insurance policies as the Lender shall reasonably require;
(d) LIEN SEARCHES, ETC. The results of a search by an
attorney or company satisfactory to the Lender of the Uniform
Commercial Code filings with respect to each Obligor in each
jurisdiction in which such Obligor conducts or has a place of
business or in which any of the Collateral is or will be located,
accompanied by copies of such filings, if any, and evidence
satisfactory to the Lender that any security interest or other
lien indicated in any such filing has or will be released so that
the Lender's security interest in the Collateral will be a
perfected first security interest and lien on the Collateral
except to the extent that the Lender otherwise agrees;
(e) OPINIONS. The written opinion of counsel of the Borrowers
and Guarantor reasonably satisfactory in form and content to the
Lender, opining, among other things, that each Borrower and the
Guarantor are duly organized validly existing and in good
standing, that the Loan Documents executed and delivered by the
Borrowers and the Guarantor have been duly authorized by all
requisite corporate action, and that the Loan Documents executed
and delivered by the Borrowers and Guarantor constitute the legal,
valid, binding, and enforceable obligations of the Borrowers and
Guarantor, enforceable against the Borrowers and Guarantor in
accordance with the terms thereof and that the Lender has a
perfected security interest in and to the Collateral;
(f) LOAN DOCUMENTS. Each of the Loan Documents required by
the Lender to be executed and delivered prior to the making of the
Equipment Loan; and
(g) INTERCREDITOR AGREEMENT. An Intercreditor Agreement
between Citicorp and the Lender satisfactory in all respects to
the Lender (the "Intercreditor Agreement"), relating to the
interests
of the Lender and Citicorp in the Collateral and the other assets
of the Obligors.
(h) FEE. The Lender shall have received from the Borrowers
$200,000 in partial payment of the $500,000 loan fee due to the
Lender. The remaining $300,000, which is fully earned on the date
hereof, is payable on September 30, 2001; provided, however, if
none of the Obligors is subject to an insolvency proceeding prior
to that date, the Lender will collect only $100,000 at such time,
and waive its right to the other $200,000.
(i) INVOICES, ETC. Copies of all original purchase orders and
invoices in respect of the Equipment for which funding is
requested, along with evidence satisfactory to Lender that all
amounts owed in connection with the purchase of such Equipment
have been, or concurrently with making of the Equipment Loan, will
be paid in full;
(j) DESCRIPTION OF EQUIPMENT. Complete descriptions of the
Equipment for which funding is requested, including manufacturer,
model number(s), serial numbers, (if any), age, original cost
breakdown including "hard" and "soft" costs and equipment
specifications;
(k) ESTOPPEL/WAIVER AGREEMENT. An Estoppel/Waiver Agreement
(each an "Estoppel/Waiver Agreement") in the form acceptable to
the Lender each landlord and/or mortgagee (if any) with respect to
the applicable location of the Equipment for which funding is
requested;
(l) ADDITIONAL DOCUMENTS. Such additional documents,
agreements, certifications, record searches, insurance policies or
opinions which the Lender may reasonably require.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Obligors hereby
represent and warrant to the Lender that the following statements are true,
correct and complete as of the date hereof:
3.1. AUTHORITY, ETC. Galaxy is a corporation duly organized, validly
existing and in good standing under the laws of the State of Michigan and is
duly qualified to do business in all states where Galaxy conducts business
and in which such qualification is necessary. Midstate is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Maine and is duly qualified to do business in all states where Midstate
conducts business and in which such qualification is necessary. The Guarantor
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and is duly qualified to do business in all
states where the Guarantor conducts business and in which such qualification
is necessary. Nationwide is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York and is duly
qualified to do business in all states where Nationwide conducts business and
in which such qualification is necessary. GA is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois
and is duly qualified to do business in all states where GA conducts business
and in which such qualification is necessary. Each Obligor has the full power
and authority to execute, deliver and perform this Agreement and the other
Loan Documents to which such Obligor is a party. Neither such execution,
delivery and performance, nor compliance by the Obligors with the provisions
of this Agreement and of the other Loan Documents to which any Obligor is a
party will conflict with or result in a breach or violation of or default
under (a) any Obligor's articles of incorporation or
by-laws, or articles of organization or operating agreement, or (b) any
judgment, order, regulation, ruling or law to which any Obligor is subject, or
(c) the Citicorp Credit Agreement or the documents executed in connection
therewith, or (d) the Senior Subordinated Notes, or any document executed in
connection therewith, or (e) any other contract or agreement to which any
Obligor is a party or to which any of any Obligor's assets and properties is
subject to the extent that a conflict, violation or default under such contract
or agreement could reasonably be expected to have a Material Adverse Effect. The
execution, delivery and performance of this Agreement and all other Loan
Documents to which any Obligor is a party have been duly authorized and approved
by all necessary corporate action by the Obligor and constitute the legal, valid
and binding obligations of the Obligors, jointly and severally enforceable in
accordance with their terms except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and principles of equity.
3.2. LITIGATION. There is no litigation or proceeding pending or, to
the knowledge of any representative of the Obligors signing this Agreement on
behalf of the Obligors, threatened against or any Obligor which could
reasonably be expected to have a Material Adverse Effect.
3.3. NO SUBSIDIARIES, ETC. No Obligor directly or indirectly owns or
controls securities or other ownership interests in any corporation,
partnership, limited liability company, association, organization or other
business entity representing 50% or more of the voting power thereof other
than those listed on Schedule 3.3 attached hereto.
3.4. FINANCIAL CONDITION. The consolidated financial statements of the
Guarantor and its Subsidiaries as of September 30, 2000, as incorporated into
the Form 10-Q of the Guarantor for the quarter ending on such date have been
or will be, as of the date of filing thereof, prepared in accordance with
generally accepted accounting principles and fairly present the consolidated
financial position of the Guarantor and its Subsidiaries as of such date and
the results of the Guarantor's and its Subsidiaries' operations for the
periods covered thereby subject to normal year end adjustments. No material
adverse change in the business, financial condition or operations of the
Guarantor and its Subsidiaries taken as a whole has occurred since the date
of such financial statements. No Obligor has any material liabilities other
than that reflected on such financial statements or expressly permitted by
the provisions of this Agreement.
3.5. TAXES. Each Obligor has filed all federal, state and local income,
excise, property and other tax returns which are required to be filed and has
paid all taxes as shown on such returns or assessments received by such
Obligor (including, without limitation, all FICA payments and withholding
taxes, if appropriate), except for such taxes, if any, as are being contested
in good faith and as to which adequate reserves have been provided. No tax
liens have been filed and to the best of the Obligors' knowledge no claims
are being asserted with respect to such taxes or assessments.
3.6. TITLE TO PROPERTIES AND COLLATERAL. Each Obligor has good and
marketable title to all of such Obligor's assets and properties, including,
without limitation, the Collateral and such assets and properties of the
Obligors are subject to no liens, security interests or other encumbrances
other than Permitted Liens. In addition, the lien granted to the Lender in
the Collateral created hereunder constitutes a first lien security interest
in the Collateral, subject to no liens other than those granted in favor of
the Lender or those expressly permitted by the provisions of the
Agreement and the other Loan Documents.
3.7. OBLIGORS' NAMES, BUSINESS LOCATIONS, ETC. The correct legal name
of the Obligors are those specified on the signature page of this Agreement.
The Obligors have conducted business under their current legal names since
their dates of incorporation or as otherwise set forth in Schedule 3.7.
Except as otherwise indicated on SCHEDULE 3.7 attached hereto, within the
last five (5) years prior to the date hereof, no Obligor has changed its
legal name, been the surviving corporation or limited liability company in a
merger or changed the location of its chief execute office. Except as
otherwise indicated on SCHEDULE 3.7 attached hereto, no Obligor does business
under any trade or fictitious names. The chief executive office of each
Obligor and the place where its records concerning Receivables and other
Collateral are kept is as set forth on SCHEDULE 3.7 hereto, and each other
location at which no Obligor conducts business or keeps any of the Collateral
is listed on SCHEDULE 3.7 attached hereto. All Equipment is personalty and is
not and will not be affixed to real estate in such a manner as to become a
fixture and a part of such real estate other than as listed on Schedule 3.7
or where an Estoppel/Waiver Agreement has been obtained.
3.8. COMPLIANCE WITH LAWS.
(a) No Obligor is in violation of any applicable federal,
state or local law, statute, rule, regulation or ordinance or has
received any notice of, and is not the subject of, any
investigation or complaint alleging that such Obligor or the
Collateral (or any part thereof) or any other property owned,
leased, operated or used by such Obligor is in violation of any
such law, statute, rule, regulation or ordinance, including,
without limitation, Environmental Laws, other than violations that
could not reasonably be expected to have a Material Adverse Effect.
(b) To the best of the Obligors' knowledge, no Hazardous
Materials have been used, located, installed, spilled, treated,
released or stored on, under or from any property in or on which
any Obligor conducts its operations except for those which have
been handled in a manner not prohibited by applicable
Environmental Laws and which could not reasonably be expected to
have a Material Adverse Effect.
3.9. FEDERAL RESERVE BOARD REGULATIONS. The Obligors are not engaged in
the business of extending credit for the purpose of purchasing or carrying
"margin stock" within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System of the United States (the "Board") and no part
of the proceeds of the Equipment Loan will be used for any purpose which
entails a violation of Regulations U, T or X of the Board.
3.10. ERISA. Within the last five (5) years no Plan maintained by any
Obligor or any trade or business group with which any Obligor is affiliated
subject to the requirements of ERISA has been terminated, no lien exists
against any Obligor in favor of the PBGC, and no "reportable event" (as such
term is defined in ERISA) has occurred with respect to any such Plan. No
Obligor has incurred any material "accumulated funding deficiency" within the
meaning of ERISA or any material liability to the PBGC in connection with any
Plan during such five (5) year period. No Obligor has any material withdrawal
or other liability (absolute, contingent or otherwise) with respect to any
Multi-Employer Plan. Within the last five (5) years, each Obligor has
complied with in all material respects all provisions of ERISA and with all
provisions of any Plan sponsored, maintained by, or contributed to, by such
Obligor.
3.11. LICENSES, ETC. Each Obligor has obtained and now holds (or, as
disclosed in Schedule 3.11, has applied for) all licenses, permits,
franchises, patents, trademarks, copyrights and trade names which are
necessary to the conduct of the business of such Obligor as now conducted
(except for those for which the failure to obtain could not be reasonably
expected to have a Material Adverse Effect), free of any conflict with the
rights of any other person.
3.12. LABOR MATTERS. No Obligor is, as of the date hereof, subject to
any collective bargaining agreements or any agreements, contracts, decrees or
orders requiring such Obligor to recognize, deal with or employ any persons
organized as a collective bargaining unit or other form of organized labor.
There are, as of the date hereof, no strikes or other material labor disputes
pending or to the knowledge of any Obligor threatened against any Obligor.
Each Obligor has complied in all material respects with the Fair Labor
Standards Act.
3.13. ACCURACY OF INFORMATION. No material information, exhibit,
report, statement, certificate or document furnished by the Obligors or any
other person to the Lender in connection with the Equipment Loan, this
Agreement or the other Loan Documents or the negotiation thereof contains any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained herein or therein not misleading
in any material respect.
3.14. MATERIAL AGREEMENTS. No Obligor is in default or breach in the
performance, observance or fulfillment or any of the terms, conditions or
provisions of any instrument, agreement or document to which such Borrower is
a party (including, without limitation, the Master Lease Agreement, Citicorp
Credit Agreement and any instrument or agreement evidencing or made in
connection with any indebtedness or liabilities) which default or breach
could reasonably be expected to have a Material Adverse Effect.
SECTION 4. AFFIRMATIVE COVENANTS. The Obligors jointly and severally
covenant and agree with the Lender that so long as any of the Obligations (or
commitments therefor) shall be outstanding:
4.1. PAYMENT OF OBLIGATIONS. The Obligors shall punctually pay the
principal of and interest on the Equipment Loan and the other Obligations, at
the times and places, in the manner and in accordance with the terms of this
Agreement, the Note and the other Loan Documents.
4.2. FINANCIAL INFORMATION. The Obligors shall maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of consolidated financial statements of the
Obligors and their Subsidiaries in conformity with GAAP, and each of the
financial statements described below shall be prepared from such system and
records. The Obligors shall deliver or cause to be delivered to the Lender
within the time frames set forth in Section 6.1 of the Citicorp Credit
Agreement, each of the financial statements and other reports required to be
delivered pursuant to Section 6.1 of the Citicorp Credit Agreement as in
effect on the date hereof; provided that (a) such statements and reports
required by this Section 4.2 shall be delivered to the Lender at its address
for notices set forth herein, and (b) each compliance certificate shall be
addressed to the Lender. Any amendment to Section 6.1 of the Citicorp Credit
Agreement after the date hereof shall not be effective to amend the
provisions of this Section 4.2 unless the Lender shall have, in its sole and
absolute discretion, agreed to such amendment in writing.
In addition, the Borrowers shall deliver or cause to be delivered to the
Lender such other non-privileged reports, contracts, schedules, lists,
documents, agreements and instruments with respect to (i) the Collateral and
(ii) the business, condition (financial or otherwise), operations, performance
or properties of any Obligor as the Lender may, from time to time, reasonably
request. Each Borrower hereby authorizes the Lender and its representatives to
communicate directly with the accountants and the restructuring professionals
engaged by the Borrowers and hereby authorizes such accountants and
restructuring professionals to disclose to the Lender and such representatives
any and all financial statements and other non-privileged information of any
kind that such accountants and restructuring professionals may have with respect
to the Collateral or the financial condition, operations, properties and
performance of the Obligors.
4.3. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Each of the
Obligors shall continue to engage in business of the same general type as now
being conducted by such Obligor, and do and cause to be done all things
necessary to maintain and keep in full force and effect its corporate or
limited liability company existence (as applicable) in good standing in each
jurisdiction in which it conducts business except where a failure to do so
could not reasonably be expected to have a material adverse effect on the
business, properties, operations or financial condition of such Obligor.
4.4. COMPLIANCE WITH LAWS.
(a) Each of the Obligors shall comply in all material respect
with all laws, statutes, ordinances, orders, rules or regulations
applicable to such Obligor or to the Collateral (or any part
thereof) or to any other property owned, leased, operated or used
by such Obligor, including, without limitation, Environmental Laws.
(b) None of the Obligors shall use, locate, install, spill,
treat, release or store Hazardous Materials on, under or from any
property owned, leased, operated or used by them unless such
Hazardous Materials are handled in a manner not prohibited by
applicable Environmental Laws and are handled in a manner and in
such quantities that would not subject them to any prosecution or
material liability in connection therewith. Each of the Obligors
shall dispose of all Hazardous Materials only at facilities and/or
with carriers that maintain governmental permits under applicable
Environmental Laws. Each of the Obligors shall promptly, at their
sole cost and expense, take all action necessary or required by
Environmental Laws to remedy or correct any violation of
Environmental Laws by the Obligors, the Collateral (or any part
thereof) or by any other property owned, leased, used or operated
by the Obligors. This Section 4.4(b) shall not be breached by any
circumstance which could not reasonably be expected to have a
Material Adverse Effect.
(c) If the Lender shall have, in the exercise of good faith,
reason to believe at any time or from time to time there are or
may be Hazardous Materials affecting the Collateral (or any part
thereof) or any other property owned, leased, operated or used by
any of the Obligors in violation of applicable Environmental Laws
(which circumstance could reasonably be expected to have a
Material Adverse Effect) the Obligors, upon the request of the
Lender and at the cost and expense of the Obligors, shall furnish
to the Lender an environmental assessment of the Collateral and
such other property in such detail and content and by an
environmental consultant or engineer acceptable to the Lender. The
Obligors shall provide evidence /to the Lender within
five (5) days of the Lender's request, that such an assessment will
be promptly undertaken and completed.
(d) Each of the Obligors hereby grants to the Lender and its
designees and agents the right to enter any premises on which the
Collateral (or any part thereof) is located or any other property
on or from which it conducts its business operations upon
reasonable notice and during normal business hours for the purpose
of making such audits, tests, inspections, examinations and
assessments (including, without limitation, subsurface exploration
and testing) as the Lender in its reasonable discretion deems
necessary or desirable to determine whether the use, operation and
ownership of the Collateral or such other property are in
compliance with applicable Environmental Laws. Each of the
Obligors hereby irrevocably directs its employees and agents
subject to applicable privilege and confidentiality considerations
(including, without limitation, any consultants or experts
retained by such Obligor) to openly and fully discuss
environmental matters with, and provide information concerning
environmental matters to, the Lender and its designees and agents.
All reasonable costs and expenses advanced, incurred and paid by
the Lender with respect to the aforegoing audits, tests,
inspections, examinations and assessments after the occurrence of
an Event of Default shall be paid by the Obligors and shall be a
part of the enforcement costs (as hereafter defined) and the
Obligations.
(e) The Obligors hereby jointly and severally agree to
indemnify, defend and hold the Lender and its employees and agents
harmless from and against any and all liability, loss, damage,
costs and expenses suffered or incurred by the Lender during or
after the term of this Agreement arising out of or resulting from
a violation of any Environmental Laws by the Obligors (or any of
them), the Collateral (or any part thereof) and any other property
owned, leased, used or operated by any or all of the Obligors
unless such liability, loss, damage, cost or other expense is
directly attributable to the gross negligence or willful
misconduct of the Lender. The obligations and liabilities of the
Obligors under the foregoing indemnity, together with interest
thereon from the date due until paid in full at the Default Rate,
shall be paid by the Obligors to the Lender upon demand and shall
be a part of the Obligations hereunder. The foregoing indemnity
shall survive the payment of all other Obligations and the release
of the Collateral.
4.5. PAYMENT OF LIABILITIES AND TAXES. Each of the Obligors shall pay,
when due, all of its material liabilities, and pay and discharge promptly all
material taxes, assessments and governmental charges and levies (including,
without limitation, F.I.C.A. payments and withholding taxes) upon such
Obligor or upon such Obligor's income, profits or property (including,
without limitation, the Collateral), except to the extent the amount or
validity thereof is contested in good faith by appropriate proceedings so
long as adequate reserves have been set aside therefor.
4.6. CONTRACTUAL OBLIGATIONS. Each of the Obligors shall comply with
any agreement or undertaking to which such Obligor is a party and maintain in
full force and effect all contracts and leases to which such Obligor is or
becomes a party unless the failure to do so would not have a Material Adverse
Effect. Each of the Obligors shall comply with all of the terms and
provisions to be performed, observed, or complied with under each contract,
agreement or other obligation relating to the Collateral where the failure to
perform, observe, or comply with such terms and conditions could reasonably
be expected to (a) result in a lien upon the Collateral or (b) have an
adverse effect (other than an immaterial effect) upon the value, condition,
or useful life of the Collateral.
4.7. MAINTENANCE OF PROPERTIES. Each of the Obligors shall 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 so that such Obligor's business may be
properly conducted at all times, unless the failure to do so could not
reasonably be expected to have a Material Adverse Effect. The Obligors shall
promptly notify the Lender of any event causing material deterioration, loss
or depreciation in value of any substantial portion of the Collateral and the
amount of such loss or depreciation. The Lender shall have no duty to, and
the Obligors hereby release the Lender from all claims for loss or damage
caused by the failure of the Lender to, collect, protect, preserve or enforce
any of the Collateral or preserve rights against account debtors and prior
parties to the Collateral.
4.8. INSURANCE. Each of the Obligors shall maintain with financially
sound, well rated and reputable insurance companies insurance in such amounts
and covering such risks as is consistent with sound business practice, and in
any event as is ordinarily and customarily carried by companies similarly
situated and in the same or similar businesses as such Obligor. Each of the
Obligors shall pay, when due, all premiums on such insurance and will furnish
to the Lender, upon request, evidence of payment of such premiums and other
information as to the insurance carried by such Obligor. Such insurance shall
include, without limitation, (a) comprehensive fire and extended coverage
insurance on the physical assets and properties of such Obligor (including,
without limitation, the Collateral) against such risks, with such loss
deductible amounts and in such amounts not less than those which may be
satisfactory to the Lender but in all events conforming to prudent business
practices and in such minimum amounts that such Obligor will not be deemed a
co-insurer under applicable insurance laws, regulations, policies and
practices, (b) public liability insurance against claims for personal injury
or death or property damage occurring upon, in, about or in connection with
the use of any properties owned, occupied or controlled by the Obligors, and
(c) worker's compensation insurance. Each policy of such insurance covering
the Collateral shall contain a provision or endorsement satisfactory to the
Lender naming the Lender as loss payee or mortgagee and providing that (a)
such policy may not be canceled or altered and the Lender may not be removed
as loss payee or mortgagee without at least thirty days prior written notice
to the Lender, and (b) no act or default of the Obligors or any other person
shall affect the right of the Lender to recover under such policy. Each
Obligor hereby irrevocably (x) assigns and grants to the Lender a security
interest in any and all proceeds of each such insurance policy covering the
Collateral, (y) directs each insurance company to pay all such proceeds
directly to the Lender, and (z) constitutes and appoints the Lender (and all
officers, employees or agents designated by the Lender) as each Obligor's
true and lawful attorney-in-fact (coupled with an interest) with authority
and power on behalf of each Obligor to make, adjust, settle or compromise all
claims under each such insurance policy, to collect and receive all proceeds
payable under each such insurance policy and to endorse any check, draft or
instrument for such proceeds. Any proceeds of such insurance received by the
Lender (less the amount of any reasonable costs and settlement of such
losses) shall, absent an Event of Default, be applied, at the option of the
Obligors, to the repayment of the Obligations, or to the restoration or
replacement of any damaged or destroyed Collateral. Following the occurrence
of and during the continuance of any Event of Default all insurance proceeds
received by the Lender shall be applied by the Lender either to the
Obligations (whether matured or unmatured) in such manner and at such times
as the Lender may determine in its sole discretion OR to the restoration or
replacement of the damaged or destroyed Collateral upon terms and conditions
reasonably
satisfactory in all material respects to the Lender.
4.9. INSPECTION. Each Obligor shall permit the Lender, by its
representatives and agents, upon reasonable notice during normal business
hours, to inspect any of the properties, books and financial records of such
Obligor, to examine and make copies of the books of accounts and other
financial records of such Borrowers, and to discuss the affairs, finances and
accounts of such Borrowers with, and to be advised as to the same by, such
Obligor (or its representatives) at such reasonable times and intervals as
the Lender may designate. In connection with the foregoing, the Lender and
its representatives and agents, shall have the right upon reasonable notice
during normal business hours, to (a) enter any business premises of the
Obligors or any other premises where the Collateral and the records relating
thereto may be located and to audit, appraise, examine and inspect the
Collateral and all records related thereto and to make extracts therefrom and
copies thereof, and (b) verify under reasonable procedures the validity,
amount, quality, quantity, value and condition of, and any other matter
relating to, the Collateral, including contacting any person possessing any
of the Collateral. Without limiting the foregoing, the Obligors specifically
agree that the Obligors will permit quarterly audits to be performed by the
Lender; PROVIDED, HOWEVER, that (i) each such audit shall be performed during
normal business hours upon at least two (2) Business Days' prior notice to
the Obligors, (ii) absent a Default or Event of Default, such audit shall not
occur more often than once every three (3) months, and (iii) absent a Default
or Event of Default, each such audit shall be at the expense of the Lender.
4.10 FURTHER ASSURANCES. The Obligors shall defend the title of the
Obligors to the Collateral and the security interest and lien thereon of the
Lender against all persons and against all security interests and liens on
the Collateral adverse to those of the Lender. The Obligors will, from time
to time, at the expense of the Obligors, execute, deliver, acknowledge and
cause to be duly filed, recorded or registered any statement, assignment,
instrument, paper, agreement or other document and take any other action that
from time to time may be necessary or desirable, or that the Lender may
reasonably request, in order to create, preserve, continue, perfect, confirm
or validate the security interest and lien of the Lender on the Collateral or
to enable the Lender to obtain the full benefits of this Agreement or to
exercise and enforce any of its rights, powers and remedies hereunder or
under applicable laws. The Obligors shall pay all costs of, and incidental
to, the filing, recording or registration of any such document as well as any
recordation, transfer or other tax required to be paid in connection with any
such filing, recordation or registration. The Obligors hereby covenant to
indemnify, defend and save harmless the Lender, its officers, directors,
agents and employees, from and against any liability resulting from the
failure to pay any required documentary stamps, recordation and transfer
taxes and recording costs incurred by the Lender in connection with this
Agreement or the Collateral which covenant shall survive the termination of
this Agreement and the payment of all other Obligations. The Obligors agree
that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a financing statement signed by the Obligors in connection
with this Agreement shall be sufficient as a financing statement. If, any
Equipment is or may become a part of any real estate owned or leased by any
Obligor, the Obligors will, upon the request of the Lender, furnish to the
Lender in form and content satisfactory to the Lender, a landlord's waiver by
the record owner of such real estate and a mortgagee's waiver by any person
who has a security interest or lien on such real estate which is or may be
superior to the security interest and lien of the Lender on such Equipment or
in such Collateral.
4.11. NOTICE. Promptly give written notice to the Lender of (a) the
occurrence of any Default or any event, development or circumstance which
could reasonably be expected to have a Material Adverse Effect, (b) any
litigation instituted or threatened against any Obligors or any judgment
against any Obligor where claims against such Obligor exceed $1,000,000 and
are not covered in full by insurance, (c) any notice of a claim against, or
investigation of, any Obligor, the Collateral or any other property owned,
leased, operated or used by any Obligor alleging a violation of Environmental
Laws or the discovery, use, location, installation, spill, treatment, release
or storage of any Hazardous Materials by any Obligor on, under or from the
Collateral (or any part thereof) or any other property owned, leased, used or
operated by any Obligor which could reasonably be expected to result in a
breach of the provisions of Section 4.4 hereof, and (d) the occurrence of any
"reportable event" within the meaning of ERISA or any assertion of liability
of the Obligors by the PBGC.
SECTION 5. NEGATIVE COVENANTS. The Obligors jointly and severally
covenant and agree with the Lender that so long as any of the Obligations (or
commitments therefor) shall be outstanding:
5.1. INDEBTEDNESS. The Obligors shall not create, incur, assume or
permit to exist any Indebtedness except (a) indebtedness to the Lender, (b)
other indebtedness existing on the date hereof or expressly permitted by the
provisions hereof, (c) Indebtedness incurred by the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business, (d)
indebtedness incurred in the ordinary course of business which is unsecured
and consists of open accounts extended by suppliers on normal trade terms in
connection with the purchase of goods and services, (e) purchase money
indebtedness including capital leases incurred for the acquisition of new
hardware and software or for furniture, equipment and infrastructure, and (f)
indebtedness permitted pursuant to Section 7.2 of the Citicorp Credit
Agreement.
5.2. LIENS. The Obligors shall not create, incur, assume or permit to
exist any lien, security interest or encumbrance of any nature whatsoever on
any of the Collateral, except for (a) any lien or security interest now or
hereafter securing all or any part of the Obligations, (b) any lien, security
interest or encumbrance existing on the date hereof securing all or any part
of the obligations owed by the Obligors to the Lender in connection with the
Master Lease Agreement, (c) any lien, security interest or encumbrance
existing on the date hereof securing all or any part of the obligations owed
by the Obligors to Citicorp in connection with the Citicorp Credit Agreement
and subordinated to the lien on the Collateral granted herein, (d) any lien,
security interest or encumbrance existing on the date hereof which was
immediately prior hereto disclosed to, and approved by, the Lender in
writing, (e) any lien, security interest or other encumbrance subsequently
approved by the Lender in writing after the date hereof. The Obligors shall
not create, incur, assume or permit to exist any lien, security interest or
encumbrance of any nature whatsoever on any Obligor's property or assets
(other than the Collateral) both now owned and hereafter acquired except as
permitted pursuant to Sections 6.9 and 7.3 of the Citicorp Credit Agreement.
5.3. INVESTMENTS. Without the prior written consent of the Lender
(which shall be exercised in its sole discretion), no Obligor shall make or
permit to remain outstanding any, Investment (as defined in the Citicorp
Credit Agreement) in, any Person, other than as permitted pursuant to Section
7.7 of the Citicorp Credit Agreement.
5.4. RESTRICTED PAYMENTS. No Obligor shall declare or make any
Restricted Payment except as permitted pursuant to Section 7.6 of the
Citicorp Credit Agreement.
5.5 MERGERS, ETC. No Obligor shall enter into any merger or
consolidation other than the Galaxy Restructuring and Certified Fabrication
Restructuring without the Lender's prior written consent, except that any
Borrower may be merged into or consolidated with another Borrower.
5.6. LIQUIDATION. Without the consent of the Lender, no Obligor shall
sell, lease or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business, assets or
properties, including, without limitation, the Collateral (other than as part
of the Galaxy Restructuring or the Certified Fabricators Restructuring)
outside of the ordinary course of business or take any action to liquidate,
dissolve or wind up any Obligor or its business.
5.7. SALE OF ASSETS. The Obligors shall not, directly or indirectly,
sell, assign, transfer, lease, convey or otherwise dispose of any asset
(other than the Collateral), whether now owned or hereafter acquired, or any
income or profits therefrom, or enter any agreement to do so, except as
permitted pursuant to Section 7.5 of the Citicorp Credit Agreement or as
otherwise permitted by the Required Lenders under the Citicorp Credit
Agreement, and except for disposal, of capital stock of any Subsidiary of the
Guarantor which is not a Borrower. The Obligors shall not, directly or
indirectly, sell, assign, transfer, lease, convey or otherwise dispose of the
Collateral or any income or profits therefrom, without the prior written
consent of the Lender, which consent may be granted or withheld in the
Lender's absolute sole discretion; provided, however, that Galaxy may sell to
Nationwide all or a portion of the Collateral owned by Galaxy provided that
the Borrowers shall (a) give the Lender not less than ten (10) Business Days
prior written notice of such sale, and (b) execute, deliver, and/or file,
prior to such sale, such uniform commercial code financing statements,
releases and/or termination statements as shall be necessary to maintain the
Lender's perfected first priority lien on such Collateral.
5.8. CHANGE OF BUSINESS. No Obligor shall enter into any business other
than the business as conducted by such Obligor on the date hereof or any
business substantially similar thereto.
5.9. CHANGE OF NAME, LOCATION, ETC. No Obligor shall (a) change its
legal name, identity or, except in connection with its creation or
acquisition of any subsidiaries permitted under Section 3.3 hereof, its
structure, (b) change the location of its chief executive office or its chief
place of business, (c) change the location where it keeps its records
concerning the Collateral, (d) change the location of any Collateral, or (e)
open a new place of business, unless such Obligor shall have given the Lender
prior written notice thereof and shall at its cost and expense have executed,
delivered, acknowledged, filed, recorded or registered all financing
statements and other documents as may be reasonably required by the Lender in
order to create, perfect, continue, preserve, confirm or validate the
security interest and lien of the Lender on the Collateral and their
priority; PROVIDED that no Obligor shall in any event change the location of
any Collateral if such change would cause the security interest and lien of
the Lender on the Collateral (or the perfection thereof) to lapse, or if
required to be perfected prior to such change, to cease to be perfected.
5.10. FISCAL YEAR. No Obligor shall change its fiscal year.
5.11. AFFILIATES. No Obligor shall enter into or participate in any
transaction with an Affiliate except on terms and at rates no more favorable
than those which would have prevailed in an arm's length transaction between
unrelated third parties except as permitted pursuant to Section 7.9 of the
Citicorp Credit Agreement.
5.12. SALE AND LEASEBACK TRANSACTIONS. No Obligor shall sell or
transfer any property in order to concurrently or subsequently lease as
lessee such or similar property except as permitted pursuant to Section 7.10
of the Citicorp Credit Agreement.
5.13. ERISA. No Obligor shall engage in any "prohibited transaction"
(as such term is defined by ERISA), incur any "accumulated funding
deficiency" (as such term is defined by ERISA) whether or not waived, or
terminate any Plan in a manner which could reasonably be expected to result
in a Material Adverse Effect.
5.14. FINANCIAL CONDITION COVENANTS. The Obligors will comply with each
and every one of the covenants set forth in Section 7.1 of the Citicorp
Credit Agreement, as in existence on the date hereof. Any amendment or waiver
of the provisions of Section 7.1 of the Citicorp Credit Agreement after the
date hereof shall not bind the Lender or be effective to amend the provisions
of this section 5.14 unless the Lender shall have in its sole and absolute
discretion, agreed to such waiver or amendment in writing.
5.15. MANAGEMENT FEES AND CONSULTING FEES. The Obligors shall not pay
any management fee or consulting fee or transfer any Property to any
Affiliate other than as permitted pursuant to Section 7.9 of the Citicorp
Credit Agreement.
SECTION 6. DEFAULT. The occurrence of any one or more of the following
events shall constitute a default under the provisions of this Agreement, and
the term "Event of Default" shall mean, whenever it is used in this
Agreement, any one or more of the following events:
6.1. PAYMENT OF OBLIGATIONS. The failure of the Borrowers to pay any
principal payment of any of the Obligations as and when due and payable in
accordance with the provisions of this Agreement, the Note, any of the other
Loan Documents and/or documents executed in connection therewith, whether at
the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise or the failure of the Borrowers to make any
interest, fee, or other payment within five (5) days of the date when the
same becomes due and payable in accordance with the provisions of the
Agreement, the Note, or any of the other Loan Documents, whether (both) at
the due date thereof, a date fixed for prepayment, or by acceleration thereof
or otherwise;
6.2. PERFORM, ETC. CERTAIN PROVISIONS OF THIS AGREEMENT. The failure of
the Borrowers to perform, observe or comply with any of the provisions of
subsections 4.3, or 4.8 of this Agreement (Affirmative Covenants) or of
Section 5 (Negative Covenants) of this Agreement;
6.3. PERFORM, ETC. OTHER PROVISIONS OF THIS AGREEMENT. The failure of
the Borrowers to perform, observe or comply with any of the provisions of
this Agreement other than those covered by Sections 6.1 and 6.2 above, and
such failure is not cured to the satisfaction of the Lender within a period
of thirty (30) days after the date of written notice thereof by the Lender to
the Borrowers.
6.4. REPRESENTATIONS AND WARRANTIES. If any representation and warranty
contained herein or any
statement or representation made in any certificate or any other information at
any time given by or on behalf of the Obligors or furnished in connection with
this Agreement or any of the other Loan Documents shall prove to be false,
incorrect or misleading in any material respect on the date as of which made;
6.5. DEFAULT UNDER MASTER LEASE, CITICORP CREDIT AGREEMENT, ETC. The
occurrence of a default (as defined and described therein) under the
provisions of the Master Lease Agreement or the Citicorp Credit Agreement,
which is not cured within applicable cure periods, if any;
6.6 PERFORM OTHER PROVISIONS OF LOAN DOCUMENTS. The failure of the
Obligors to perform, observe, or comply with any of the provisions of this
Agreement or the other Loan Documents (other than those covered by Sections
6.1 through 6.5 and Sections 6.7 through 6.13), which failure is not cured to
the satisfaction of the Lender within thirty (30) days after the date of
written notice from the Lender to the Borrowers.
6.7. LIQUIDATION, TERMINATION, DISSOLUTION, ETC. If any Borrower or the
Guarantor shall liquidate, dissolve or terminate its existence other than in
accordance with Section 5.6;
6.8. DEFAULT UNDER OTHER INDEBTEDNESS. Except as set forth in Section
6.1, 6.3 or 6.5 above, if any Borrower or the Guarantor shall fail to pay
when due any Indebtedness, in excess of $1,500,000 owed to any Person beyond
the period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created, or default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur the effect of which
default or other event is to cause or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to demand payment prior to its stated maturity and such
indebtedness is accelerated prior to its scheduled maturity;
6.9. ATTACHMENT. The issuance of any attachment or garnishment against
property or credits of any Borrower or the Guarantor for an amount in excess,
singly or in the aggregate, of $1,000,000, which shall not have been vacated,
discharged, stayed or bonded pending appeal within thirty (30) days after the
issuance thereof;
6.10. JUDGMENTS. One or more judgments or decrees shall be entered
against any Borrower or the Guarantor involving in the aggregate a liability
in excess of $1,000,000, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within thirty (30)
days after the entry thereof.
6.11. INABILITY TO PAY DEBTS, ETC. If any Borrower or the Guarantor
shall admit its inability to pay its debts as they mature or shall make any
assignment for the benefit of any of its creditors;
6.12. BANKRUPTCY. If proceedings in bankruptcy, or for reorganization
of any Borrower or the Guarantor, or for the readjustment of any of any
Borrower's or Guarantor's debts, under the United States Bankruptcy Code (as
amended) or any part thereof, or under any other applicable laws, whether
state or federal, for the relief of debtors, now or hereafter existing, shall
be commenced against or by any Borrower or the Guarantor, and, except with
respect to any such
proceedings instituted by any Borrower or the Guarantor, shall not be discharged
within sixty (60) days of their commencement;
6.13. RECEIVER, ETC. A receiver or trustee shall be appointed for any
Borrower or for any substantial part of any Borrower's or Guarantor's assets,
or any proceedings shall be instituted for the dissolution or the full or
partial liquidation of any Borrower or the Guarantor and, except with respect
to any such appointments requested or instituted by any Borrower or the
Guarantor, such receiver or trustee shall not be discharged within sixty (60)
days of his or her appointment, and , except with respect to any such
proceedings instituted by any Borrower or the Guarantor, such proceedings
shall not be discharged within sixty (60) days of their commencement;
SECTION 7. RIGHTS AND REMEDIES.
7.1. RIGHTS AND REMEDIES. If any Event of Default shall occur and be
continuing, the Lender may declare the unpaid principal amount of the Note,
together with accrued and unpaid interest thereon, and all other Obligations
then outstanding to be immediately due and payable, whereupon the same shall
become and be forthwith due and payable by the Borrowers to the Lender,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived by the Borrowers; PROVIDED THAT, in the case of any Event of
Default referred to in Sections 6.12 and 6.13 above, the unpaid principal
amount of the Note, together with accrued and unpaid interest thereon, and
all other Obligations then outstanding shall be automatically and immediately
due and payable by the Borrowers to the Lender without notice, presentment,
demand, protest or other action of any kind, all of which are expressly
waived by the Borrowers. Upon the occurrence and during the continuation of
any Event of Default, then in each and every case, the Lender shall be
entitled to exercise in any jurisdiction in which enforcement thereof is
sought, the following rights and remedies, in addition to the rights and
remedies available to the Lender under the other provisions of this Agreement
and the other Loan Documents, the rights and remedies of a secured party
under the New York Uniform Commercial Code and all other rights and remedies
available to the Lender under applicable law, all such rights and remedies
being cumulative and enforceable alternatively, successively or concurrently,
but subject to the terms of the Intercreditor Agreement:
(a) The Lender shall have the right to take possession of the
Collateral, and for that purpose, so far as the Borrowers may give
authority therefor or to the extent permitted under applicable
laws, to enter upon any premises on which the Collateral or any
part thereof may be situated, exclude the Borrowers therefrom, and
remove therefrom all or any of the Collateral without any
liability for suit, action or other proceeding, THE BORROWERS ARE
HEREBY WAIVING ANY AND ALL RIGHTS TO PRIOR NOTICE AND TO JUDICIAL
HEARING WITH RESPECT TO REPOSSESSION OF COLLATERAL, and require
the Borrowers, at the Borrowers' expense, to assemble and deliver
all or any of the Collateral to such place or places as the Lender
may designate.
(b) The Lender shall have the right to operate, manage and
control all or any of the Collateral permit the Collateral or any
portion thereof to remain idle or store the same, and collect all
rents and revenues therefrom and sell, lease or otherwise dispose
of any or all of the Collateral upon such terms and under such
conditions as the Lender, in its sole discretion, may determine,
and purchase or acquire any of the Collateral at any such sale or
other disposition, all to the extent
permitted by applicable law. Any purchaser or lessee of any of the
Collateral so sold or leased shall hold the property so sold
or leased free from any claim or right of the Borrowers and the
Borrowers hereby waive (to the extent permitted by law) all rights
of redemption, stay or appraisal with respect thereto. The Lender
and the Borrowers agree that commercial reasonableness and good
faith require the Lender to give to the Borrowers no more than ten
(10) days prior written notice of any public sale or other
disposition of the Collateral or of the time after which any
private sale or other disposition of the Collateral is to be made.
(c) The Lender shall have the right, and each Borrower hereby
irrevocably designates and appoints the Lender and its designees
as the attorney-in-fact of such Borrower, with power of
substitution and with power and authority in such Borrower's name,
the Lender's name or otherwise and for the use and benefit of the
Lender (i) to remove from any place of business of the Borrowers
all records in respect of the Collateral and, at the cost and
expense of the Borrowers, to make use of any place of business of
the Borrowers as may be necessary or desirable to administer,
control, collect, sell or otherwise dispose of the Collateral,
(ii) to commence, prosecute or defend any action, suit or
proceeding relating to the Collateral or the collection,
enforcement or realization upon the Collateral, (iii) to adjust
and compromise any claims under insurance policies, and (iv) to
use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with any or all of the Collateral and
to do all other acts and things necessary to carry out this
Agreement as though the Lender were absolute owner of the
Collateral. This power of attorney, being coupled with an
interest, is irrevocable and all acts by the Lender and its
designees pursuant thereto are hereby ratified and confirmed by
the Borrowers. Neither the Lender nor any of its designees shall
be liable for any acts of commission or omission, nor for any
error of judgment or mistake of fact or law other than acts of
willful misconduct or gross negligence. The provisions of this
subsection shall not (x) be construed as requiring or obligating
the Lender or any designee to take any action authorized hereunder
and any action taken or any action not taken hereunder shall not
give rise to any liability on the part of the Lender or its
designees or to any defense, claim, counterclaim or offset in
favor of the Borrowers, (y) be construed to mean the Lender has
assumed any of the obligations of any Borrower under any
instrument or agreement as the Lender shall not be responsible in
any way for the performance of any Borrower of any of the
provisions thereof, and (z) relieve any Borrower of any of its
obligations hereunder or in any way limit the exercise by the
Lender of any other or further rights it may have hereunder, under
the other Loan Documents, by law or otherwise.
7.2. DEFAULT RATE. Notwithstanding the entry of any decree, order,
judgment or other judicial action, upon the occurrence of an Event of Default
hereunder, the unpaid principal amount of the Note and all other monetary
Obligations outstanding or becoming outstanding while such Event of Default
exists shall bear interest from the date of such Event of Default until such
Event of Default has been cured to the satisfaction of the Lender, at a
floating and fluctuating per annum rate of interest equal at all times to the
Default Rate, irrespective of whether or not as a result thereof, the Note or
any of the Obligations has been declared due and payable or the maturity
thereof accelerated. The Borrowers jointly and severally agreed to pay on
demand from time to time such interest to the Lender and the same shall be a
part of the Obligations hereunder.
7.3. LIENS, SET-OFF. As security for the payment of the Obligations and
the performance of the Loan Documents, each Borrower hereby grants to the
Lender a continuing security interest and lien on, in and upon all
Indebtedness owing to, and all deposits (general or special), credits,
balances,
monies, securities and other property of, such Borrower and all proceeds
thereof, both now and hereafter held or received by, in transit to, or due by,
the Lender. In addition to, and without limitation of, any rights of the Lender
under applicable laws, if any Borrower becomes insolvent, however evidenced, or
any Event of Default occurs, the Lender may at any time and from time to time
thereafter, without notice to any Borrower, set-off, hold, segregate,
appropriate and apply at any time and from time to time thereafter all such
Indebtedness, deposits, credits, balances (whether provisional or final and
whether or not collected or available), monies, securities and other property
toward the payment of all or any part of the Obligations in such order and
manner as the Lender in its sole discretion may determine and whether or not the
Obligations or any part thereof shall then be due or demand for payment thereof
made by the Lender.
7.4. ENFORCEMENT COSTS. The Borrowers jointly and severally agree to
pay to the Lender on demand (a) all enforcement costs paid, incurred or
advanced by or on behalf of the Lender after the occurrence of an Event of
Default and (b) interest on such enforcement costs from the date paid,
incurred or advanced until paid in full at a per annum rate of interest equal
at all times to the Default Rate.
7.5. APPLICATION OF PROCEEDS. Any proceeds of the collection of the
Obligations and/or the sale or other disposition of the Collateral will be
applied by the Lender to the payment of enforcement costs, and any balance of
such proceeds (if any) will be applied by the Lender to the payment of the
remaining Obligations (whether then due or not), at such time or times and in
such order and manner of application as the Lender may from time to time in
its sole discretion determine, with any excess to be paid to the Obligors. If
the sale or other disposition of the Collateral fails to satisfy all of the
Obligations, the Borrowers shall remain liable to the Lender for any
deficiency.
7.6. REMEDIES, ETC. CUMULATIVE. Each right, power and remedy of the
Lender as provided for in this Agreement or in the other Loan Documents or
now or hereafter existing under applicable laws or otherwise shall be
cumulative and concurrent and shall be in addition to every other right,
power or remedy provided for in this Agreement or in the other Loan Documents
or now or hereafter existing under applicable laws or otherwise, and the
exercise or beginning of the exercise by the Lender of any one or more of
such rights, powers or remedies shall not preclude the simultaneous or later
exercise by the Lender of any or all such other rights, powers or remedies.
7.7. NO WAIVER, ETC. No failure or delay by the Lender to insist upon
the strict performance of any term, condition, covenant or agreement of this
Agreement or of the other Loan Documents, or to exercise any right, power or
remedy consequent upon a breach thereof, shall constitute a waiver of any
such term, condition, covenant or agreement or of any such breach, or
preclude the Lender from exercising any such right, power or remedy at any
later time or times. By accepting payment after the due date of any amount
payable under this Agreement or under any of the other Loan Documents, the
Lender shall not be deemed to waive the right either to require prompt
payment when due of all other amounts payable under this Agreement or under
any of the other Loan Documents, or to declare a Default or Event of Default,
as applicable, for failure to effect such prompt payment of any such other
amount. The payment by the Borrowers or any other person and the acceptance
by the Lender of any amount due and payable under the provisions of this
Agreement or the other Loan Documents at any time during which an Event of
Default exists shall not in any way or manner be construed as a waiver of
such Event of Default by the Lender or preclude the Lender from exercising
any right of power or remedy consequent upon such
Event of Default.
SECTIN 8. THE GUARANTEE. The Guarantor hereby unconditionally and
irrevocably guarantees to the Lender, the due and punctual payment of all
present and future indebtedness evidenced by or arising out of this
Agreement, the Note and the due and punctual payment of all other sums now or
hereafter owed by the Borrowers under this Agreement and the Note as and when
the same shall become due and payable, whether at maturity, by declaration or
otherwise, according to the terms hereof and thereof. In case of failure by
any Borrower punctually to pay the indebtedness guaranteed hereby, the
Guarantor hereby unconditionally agrees to cause such payment to be made
punctually as and when the same shall become due and payable, whether at
maturity or by declaration or otherwise, and as if such payment were made by
such Borrowers.
8.1. GUARANTEE UNCONDITIONAL. The obligations of the Guarantor under
this Section 8 shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any other Obligor under
any Loan Document, by operation of law or otherwise;
(b) any modification or amendment of or supplement to any Loan
Document;
(c) any modification, amendment, waiver, release,
non-perfection or invalidity of any direct or indirect security,
or of any guarantee or other liability of any third party, for any
obligation of any other Obligor under any Loan Document;
(d) any change in the corporate existence, structure or
ownership of any other Obligor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any other
Obligor or its assets or any resulting release or discharge of any
obligation of any other Obligor contained in any Loan Document;
(e) the existence of any claim, set-off or other rights which
the Guarantor may have at any time against any other Obligor or
any other Person, whether or not arising in connection with any
Loan Document, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory
counterclaim;
(f) any invalidity or unenforceability relating to or against
any other Obligor for any reason of any Loan Document, or any
provision of applicable law or regulation purporting to prohibit
the payment by any other Obligor of the principal of or interest
on the Note or any other amount payable by it under any Loan
Document; or
(g) any other act or omission to act or delay of any kind by
any other Obligor, any Lender or any other Person or any other
circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the
obligations of the Guarantor under this Section 8.
8.2. DISCHARGE. The Guarantor's obligations under this Section 8 shall
remain in full force and effect until the Commitments are terminated and the
principal of and interest on the Notes and all other amounts payable by the
Borrowers under this Agreement shall have been paid in full. If at any
time any payment of the principal of or interest on any Note or any other amount
payable by a Borrower under this Agreement is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of such
Borrower or otherwise, the Guarantor's obligations under this Section 8 with
respect to such payment shall be reinstated at such time as though such payment
had become due but had not been made at such time.
8.3. WAIVER. The Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well
as any requirement that at any time any action be taken by any Person against
any other Obligor or any other Person.
8.4. SUBROGATION AND CONTRIBUTION. The Guarantor irrevocably waives any
and all rights to which it may be entitled, by operation of law or otherwise,
upon making any payment hereunder (i) to be subrogated to the rights of the
payee against a Borrower with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by a Borrower in respect thereof or
(ii) to receive any payment, in the nature of contribution or for any other
reason, from any other Obligor with respect to such payment.
8.5. STAY OF ACCELERATION. If acceleration of the time for payment of
any amount payable by a Borrower under this Agreement or the Note is stayed
upon the insolvency, bankruptcy or reorganization of such Borrower, all such
amounts otherwise subject to acceleration under the terms of this Agreement
shall nonetheless be payable by the Guarantor hereunder forthwith on demand
by the Lender.
SECTION 9. MISCELLANEOUS.
9.1. COURSE OF DEALING; AMENDMENT. No course of dealing between the
Lender and the Borrowers shall be effective to amend, modify or change any
provision of this Agreement or the other Loan Documents. The Lender shall
have the right at all times to enforce the provisions of this Agreement and
the other Loan Documents in strict accordance with the provisions hereof and
thereof, notwithstanding any conduct or custom on the part of the Lender in
refraining from so doing at any time or times. The failure of the Lender at
any time or times to enforce its rights under such provisions, strictly in
accordance with the same, shall not be construed as having created a custom
in any way or manner contrary to specific provisions of this Agreement or the
other Loan Documents or as having in any way or manner modified or waived the
same. This Agreement and the other Loan Documents to which any Borrower is a
party may not be amended, modified, or changed in any respect except by an
agreement in writing signed by the Lender and the Borrowers
9.2. WAIVER OF DEFAULT. The Lender may, at any time and from time to
time, execute and deliver to the Borrowers a written instrument waiving, on
such terms and conditions as the Lender may specify in such written
instrument, any of the requirements of this Agreement or of the other Loan
Documents or any Event of Default or Default and its consequences, PROVIDED
that any such waiver shall be for such period and subject to such conditions
as shall be specified in any such instrument. In the case of any such waiver,
the Borrowers and the Lender shall be restored to their former positions
prior to such Event of Default or Default and shall have the same rights as
they had hereunder. No such waiver shall extend to any subsequent or other
Event of Default or Default, or impair any right consequent thereto and shall
be effective only in the specific
instance and for the specific purpose for which given.
9.3. NOTICES. All notices, requests and demands to or upon the parties
to this Agreement shall be deemed to have been given or made when delivered
by hand, or when deposited in the mail, postage prepaid by registered or
certified mail, return receipt requested, or, in the case of notice by
telegraph, telex or facsimile transmission, when properly transmitted,
addressed as follows or to such other address as may be hereafter designated
in writing by one party to the other:
Borrowers: c/o Precision Partners, Inc.
0000 X. XxxXxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Lender General Electric Capital Corporation
000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Tel: (000) 000-0000
Fax: (000)000-0000
except in cases where it is expressly herein provided that such notice,
request or demand is not effective until received by the party to whom it
is addressed.
9.4. RIGHT TO PERFORM. If the Borrowers shall fail to make any payment
or to otherwise perform, observe or comply with the provisions of this
Agreement or any of the other Loan Documents, then and in each such case, the
Lender may (but shall be under no obligation whatsoever to) without notice to
or demand upon the Borrowers remedy any such failure by advancing funds or
taking such action as it reasonably deems appropriate for the account and at
the expense of the Borrowers. The advance of any such funds or the taking of
any such action by the Lender shall not be deemed or construed to cure a
Default or waive performance by the Borrowers of any provisions of this
Agreement. The Borrowers shall pay to the Lender on demand, together with
interest thereon from the date advanced or incurred until paid in full at a
per annum rate of interest equal at all times to the Default Rate, any such
funds so advanced by the Lender and any costs and expenses advanced or
incurred by or on behalf of the Lender in taking any such action, all of
which shall be a part of the Obligations hereunder.
9.5. COSTS AND EXPENSES. The Borrowers jointly and severally agree to
pay to the Lender on demand all fees, recordation and other taxes, costs and
expenses of whatever kind and nature, including reasonable attorney's fees
and disbursements, which the Lender may incur or which are payable in
connection with the closing, including, without limitation, the preparation
of this Agreement and the other Loan Documents, the recording or filing of
any and all of the Loan Documents and obtaining lien searches and title
insurance policies. All such fees, costs, recordation and other taxes shall
be a part of the Obligations hereunder.
9.6. CONSENT TO JURISDICTION. Each Borrower irrevocably (a) consents
and submits to the jurisdiction and venue of any state or federal court
sitting in the State of New York over any suit, action or proceeding arising
out of or relating to this Agreement or any of the other Loan Documents, (b)
waives, to the fullest extent permitted by law, any objection that such
Borrower may now or hereafter have to the laying of the venue of any such
suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in
an inconvenient forum, and (c) consents to the service of process in any such
suit, action or proceeding in any such court by the mailing of copies of such
process to such Borrower by certified or registered mail at such Borrower's
address set forth herein for the purpose of giving notice.
9.7. WAIVER OF JURY TRIAL. THE BORROWERS AND THE LENDER HEREBY
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THE EQUIPMENT LOAN, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS.
9.8. ASSIGNMENT AND PARTICIPATIONS. The Lender may sell, assign or
transfer to any person or persons, all or any part of the Obligations or all
or any part of the Loan Documents and each such person or persons shall have
the right to enforce the provisions of the Loan Documents and any of the
Obligations as fully as the Lender; PROVIDED, THAT, the Lender shall continue
to have the unimpaired right to enforce the provisions of the Loan Documents
and any of the Obligations as to so much of the Loan Documents and/or the
Obligations that it has not sold, assigned or transferred. Additionally, the
Lender may sell or grant to any other person or persons participations in all
or any part of the Obligations or all or any part of the Loan Documents. In
connection with and prior to and after any such sale, transfer, assignment or
participation, the Lender may subject to obtaining a confidentiality
undertaking, disclose and furnish to any prospective or actual purchaser,
transferee, assignee or participant, any and all reports, financial
statements and other information obtained by the Lender at any time and from
time to time in connection with the Obligations, any of the Loan Documents or
otherwise. The Borrowers will fully cooperate with the Lender in connection
with any such assignment and will execute and deliver such documents as are
necessary to effect any such assignment, amendments to this Agreement in
order to effect any such assignment (including, without limitation, the
appointment of the Lender as agent for itself and all assignees) and new or
replacement promissory note for the Note in conjunction with any such
assignment; PROVIDED, THAT, the Borrowers' indebtedness, obligations and
liabilities under this Agreement and the other Loan Documents will not be
increased by reason of any such assignment.
9.9 JOINT AND SEVERAL LIABILITY, ETC. Each of the Borrowers shall be
jointly and severally liable for the Obligations. The Lender may, without
notice to or consent of any of the Borrowers and with or without
consideration, release, discharge, compromise or settle with, waive, grant
indulgences to, proceed against or otherwise deal with, any of the Borrowers
without in any way affecting, limiting, modifying, discharging or releasing
any of the obligations and liabilities under this Agreement or the other Loan
Documents of any other Borrowers. Each Borrower consents and agrees that (a)
the Lender shall not be under any obligation to xxxxxxxx any assets in favor
of such Borrower or against or in payment of any or all of the obligations
and liabilities of such Borrower under this Agreement or any of the other
Loan Documents, (b) any rights such
Borrower may have against any other Borrowers for contribution, exoneration from
payment or otherwise, in respect of any amounts paid by such Borrower pursuant
to any of the Loan Documents or which continue to be owing pursuant to any of
the Loan Documents, shall be postponed until the Obligations have been
indefeasibly paid in full and no commitments therefor are outstanding and (c)
the Lender may enforce and collect the obligations and liabilities of such
Borrower hereunder or under the other Loan Documents irrespective of any
attempt, pursuit, enforcement or exhaustion of any rights and remedies the
Lender may at any time have to collect the obligations and liabilities hereunder
or under the other Loan Documents of any other Borrowers.
9.10. CERTAIN DEFINITIONAL PROVISIONS. Accounting terms used in this
Agreement shall have the respective meanings given to them under generally
accepted accounting principles in effect from time to time in the United
States of America. The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. As used herein,
the singular number shall include the plural, the plural, the singular and
the use of the masculine, feminine or neuter gender shall include all
genders, as the context may require. Unless otherwise defined herein, all
terms used herein which are defined by the New York Uniform Commercial Code
shall have the same meanings as assigned to them by the New York Uniform
Commercial Code unless and to the extent varied by this Agreement.
9.11. SEVERABILITY. The invalidity, illegality or unenforceability of
any provision of this Agreement shall not affect the validity, legality or
enforceability of any of the other provisions of this Agreement which shall
remain effective.
9.12. SURVIVAL. All representations, warranties and covenants contained
among the provisions of this Agreement shall survive the execution and
delivery of this Agreement and all other Loan Documents.
9.13. BINDING EFFECT. This Agreement and all other Loan Documents shall
be binding upon and inure to the benefit of the Borrowers and the Lender and
their respective personal representatives, and permitted successors and
assigns, except that the Borrowers shall not have the right to assign their
rights hereunder or any interest herein without the prior written consent of
the Lender.
9.14. APPLICABLE LAW AND TIME OF ESSENCE. This Agreement and the rights
and obligations of the parties hereunder shall be construed and interpreted
in accordance with the laws of the State of New York, both in interpretation
and performance. Time is of the essence in connection with all obligations of
the Borrowers hereunder and under any of the other Loan Documents.
9.15. DUPLICATE ORIGINALS AND COUNTERPARTS. This Agreement may be
executed in any number of duplicate originals or counterparts, each of such
duplicate originals or counterparts shall be deemed to be an original and all
taken together shall constitute but one and the same instrument.
9.16. HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only, shall not constitute a
part of this Agreement for any other purpose and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
9.17. INTERCREDITOR AGREEMENT. This Agreement shall be subject to the
terms of the Intercreditor Agreement, which shall override this Agreement to
the extent (and only to the extent) of any inconsistency.
IN WITNESS WHEREOF, each of the parties hereto have executed and delivered
this Agreement as of the day and year first written above.
WITNESS: GALAXY INDUSTRIES CORPORATION
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
WITNESS: MIDSTATE MACHINE PRODUCTS
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
WITNESS: NATIONWIDE PRECISION PRODUCTS
CORP.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
WITNESS: GENERAL AUTOMATION, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
WITNESS: GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
WITNESS: PRECISION PARTNERS, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
Schedule 1.3(a)
to
Loan, Security, and Guaranty
Agreement
NEW EQUIPMENT
THE FOLLOWING EQUIPMENT, TOGETHER WITH ALL ACCESSIONS, ATTACHMENTS (INCLUDING,
BUT NOT LIMITED TO, FILTERMATIC SYSTEMS, CHIPBLASTERS, MAGNETIC CHIP CONVEYORS
AND AUTODOORS) SUBSTITUTIONS AND REPLACEMENTS THEREFOR, AND PROCEEDS (INCLUDING
INSURANCE PROCEEDS) THEREOF:
Serial Type and Model
Manufacturer Numbers of Equipment Owner
-------------------------------------------------------------------------------
Mitsui MT-1294B OM VT5-16N(e) 1
Mitsui MT-1294D OM VT5-16N(e) 1
Mitsui MT1301A OM VT5-16N(e) 1
Toshiba 130298 BP-130 1
Mori Seiki 158 CL-253A CNC Machine 2
Mori Seiki 2355 SV-503B/50 CNC Machine 2
Mori Seiki 2356 SV-5003B/50 CNC Machine 2
Mori Seiki 89 RL-253 CNC Machine 2
Mori Seiki 182 VL-25A1 CNC Machine 2
Mori Seiki 185 CL-25A1 CNC Machine 2
Mori Seiki 1008 SH-403 CNC Machine 2
Mori Seiki 90 RL-253 CNC Machine 2
Mori Seiki 1517 CL-203B CNC Machine 2
Mori Seiki 1528 CL-203B CNC Machine 2
Xxxxx Machinery 434 CNC Lathe 2
Hitachi Seiki USA 63126 HS630-50 2
Hitachi Seiki 63087 HS630-50 2
Hitachi Seiki 63129 HS630-50 2
Hitachi Seiki 63130 HS630-50 2
Hitachi Seiki 63113 HS630-50 2
Mori Seiki 2399 SV-503B/50 CNC Machine 2
Mori Seiki 1035 SH-403 CNC Machine 2
Mori Seiki 1031 SH-403 CNC Machine 2
Mori Seiki 1036 SH-403 CNC Machine 2
Mori Seiki 2357 SV-503B/50 CNC Machine 2
Mori Seiki 186 VL-25A1 CNC Machine 2
Mori Seiki 88 RL-253 CNC Machine 2
Mori Seiki 57 MT-253S 2
Mori Xxxxx 0000 XX-000 2
Mori Xxxxx 0000 XX-000 2
Mori Xxxxx 0000 XX-000 2
Mori Seiki 187 VL-25A1 2
OWNER:
1. Mid State Machine Products
2. Nationwide Precision Products Corporation
-
Schedule 1.3(b)
to
Loan, Security, and Guaranty
Agreement
REFINANCED EQUIPMENT
THE FOLLOWING EQUIPMENT, TOGETHER WITH ALL ACCESSIONS, ATTACHMENTS (INCLUDING,
BUT NOT LIMITED TO, FILTERMATIC SYSTEMS, CHIPBLASTERS, MAGNETIC CHIP CONVEYORS
AND AUTODOORS) SUBSTITUTIONS AND REPLACEMENTS THEREFOR, AND PROCEEDS (INCLUDING
INSURANCE PROCEEDS) THEREOF:
Type and Model
MANUFACTURER SERIAL NUMBERS OF EQUIPMENT
MORI SEIKI 30 MH-1000
MORI SEIKI 20 MH-1000
MORI SEIKI 23 MH-1000
MORI SEIKI 25 MH-1000
MORI XXXXX 00 XX-0000
XXXX SEIKI 27 MH-1000
WOTAN 50.191 CUTMAX 2
WOTAN 51.190 CUTMAX 2
WOTAN 52.193 CUTMAX 2
WOTAN 53.194 CUTMAX 2
DUNNAGE WASH SYSTEMS 99-0909-01B Parts Washer RPT-4827GDB (40%)
XXXXX & XXXXXX 784-1220-155-87 XCEL 122010 BASE MACHINE - CMM
OMNI-TECH SALES EMD-5101 MODULAR SYSTEM SURFACE ANALZYER
DETROIT AIR COMPRESSOR AII 365-001H-1 ATLAS GA45-125FF - AIR COMPRESSOR
DETROIT AIR COMPRESSOR AII 351-116H ATLAS GA50-VSD-FF - AIR COMPRESSOR
DETROIT AIR COMPRESSOR AII 365-001H-2 ATLAS GA45-125FF - AIR COMPRESSOR
FRAZA EQUIPMENT 2E25-MC LIFT TRUCK-MDL
X X XXXXXXX 6125 BUCKHORN CONTAINERS (LOT)
NUMEROUS N/A ASSOCIATED MISC ITEMS (LOT)
CAH-2013,
ROYAL ARC XXXXX XX-2012-3-10 HOIST, CRANE AND CONVEYORS (LOT) (90%)
CONCRETE WORK-MACHINE FOUNDATIONS
XXXXXX CONSTRUCTION 11625 (LOT)
XXXXXXX ELECTRIC 12129 ELECTRICAL INSTALLATION (LOT)
DETROIT AIR COMPRESSOR 12508 OIL/WATER SEPARATOR,MISC. (LOT)
PLYMOUTH RUBBER & TRANS C31-06A COUPLERS/AIR HOSE (LOT)
AMERITECH 000-0000 00000 PHONE SYSTEM
NETARX, INC. CSU-DSU SOFTWARE-AUTOCAD (2)MECH. DESKTOP (1)
OTHER COSTS:
HARDWARE AND
ACCESSORIES:
(6) TRANSFORMERS 3PT40-1112.5K
(6) cooljet, 1000 psi
coolant systems 70-30-DF
(10) HYDRAULIC SYSTEMS U4903, U4905,
U4906, N/A,
V0103, V0503,
V0102, V0505,
V0507, V0506
(6) TORIT MIST IG588275-001-4,
COLLECTORS IG588275-001-5,
IG588275-001-1,
IG588275-001-2,
IG588275-001-6,
IG588275-001-3
-------------------------------------------------------------------------------
OWNER: Galaxy Industries Corporation
Schedule 3.3
to
Loan, Security, and Guaranty
Agreement
LIST OF SUBSIDIARIES OR OTHER ENTITIES OWNED OR CONTROLLED BY GALAXY
None.
LIST OF SUBSIDIARIES OR OTHER ENTITIES OWNED OR CONTROLLED BY MID STATE
Mid State Foundation
LIST OF SUBSIDIARIES OR OTHER ENTITIES OWNED OR CONTROLLED BY
NATIONWIDE
None.
LIST OF SUBSIDIARIES OR OTHER ENTITIES OWNED OR CONTROLLED BY GA
None.
LIST OF SUBSIDIARIES OR OTHER ENTITIES OWNED OR CONTROLLED BY THE
GUARANTOR
Mid State Machine Products
Galaxy Industries Corporation
Certified Fabricators, Inc.
General Automation, Inc.
Nationwide Precision Products Corp.
Xxxxxxxx Machine and Tool Co., Inc.
Schedule 3.7
to
Loan, Security, and Guaranty
Agreement
GENERAL AUTOMATION, INC.
CHIEF EXECUTIVE XXXXXX
XXXXXXX XXXXXX XXXXX
0000 Xxxxxx Xxxxxx, Xxxxxx Xxxx Xxxxxxxx
FIXTURES
Property included on Exhibit A to the UCC-1 financing statement relating
to the Xxxx County, 3300 Oakton, Skokie real property.
NAME CHANGES
GA Acquisition Illinois, Inc. was the surviving corporation to a
merger with GA Acquisition Delaware, Inc. on March 5, 1999.
GA Acquisition Illinois, Inc. purchased substantially all the assets
and assumed the liabilities of General Automation, Inc. and changed
its corporate name to General Automation, Inc. on March 19, 1999.
TRADENAMES
None.
Schedule 3.7
to
Loan, Security, and Guaranty
Agreement
NATIONWIDE PRECISION PRODUCTS CORP.
CHIEF EXECUTIVE XXXXXX
XXXXXXX XXXXXX XXXXX
000 Xxxx Xxxx Xxxxx, Xxxxxxxxx Xxxxxx New York
OTHER BUSINESS XXXXXXXXX
XXXXXXX XXXXXX XXXXX
Xxxxx Xxxxxxxx #0 Xxxx, 000 Xxxxxxxx
Xxxx Xxxxxx Xxx Xxxx
FIXTURES
Property included on Exhibit A to the UCC-1 financing statement relating
to the Monroe County, 000 Xxxx Xxxx, Xxxxxxxxx real property.
NAME CHANGES
Nationwide Acquisition New York, Inc. was the surviving corporation to
a merger with Nationwide Acquisition Delaware, Inc. on March 8, 1999.
Nationwide Acquisition New York, Inc. purchased substantially all the
assets and assumed the liabilities of Nationwide Precision Products
Corp. and changed its corporate name to Nationwide Precision Products
Corp. on March 19, 1999.
TRADENAMES
None.
Schedule 3.7
to
Loan, Security, and Guaranty
Agreement
MID STATE MACHINE PRODUCTS
CHIEF EXECUTIVE XXXXXX
XXXXXXX XXXXXX XXXXX
0000 Xxxxx Xxxxx, Xxxxxxx Xxxxxxxx Xxxxx
OTHER BUSINESS LOCATIONS
None.
FIXTURES
Property included on Exhibit A to the UCC-1 financing statement relating
to the Kennebec County, 1501 Verti, Winslow real property.
NAME CHANGES
None.
TRADENAMES
None.
Schedule 3.7
to
Loan, Security, and Guaranty
Agreement
GALAXY INDUSTRIES CORPORATION
CHIEF EXECUTIVE OFFICE
ADDRESS COUNTY STATE
00000 Xxx Xxxx, Xxxxxxxx Xxxxx Xxxxxxxx
OTHER BUSINESS LOCATIONS
ADDRESS COUNTY STATE
0000 Xxxxx Xxxxx, Xxxxxx Xxxxx Xxxxxxxx
00000 Joy Road, Plymouth Wayne Michigan
00000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxxx Xxxxxxxx
FIXTURES
Property included on Exhibit A to the UCC-1 financing statement relating
to the Xxxxx County, 41150-41160 Joy, Plymouth real property.
NAME CHANGES
Incorporated as Galaxy Investment Co. 10-12-67
Amendment changing name to Galaxy Industries Corporation 02-25-97
TRADENAMES
MRL Engineering Company
Galaxy Precision Machining Co., Inc.
MERGERS.
Galaxy Investment Co. and Galaxy Industries Corporation, with Galaxy
Investment Co., with Galaxy Investment Co. as the surviving
corporation 9/27/96
Galaxy Industries Corporation and Galaxy Acquisition, Inc., with
Galaxy Industries Corporation as the surviving corporation 9/29/98
Schedule 3.7
to
Loan, Security, and Guaranty
Agreement
PRECISION PARTNERS, INC.
CHIEF EXECUTIVE OFFICE
ADDRESS COUNTY STATE
0000 X. XxxXxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxx Xxxxxx Xxxxx
OTHER BUSINESS LOCATIONS
None.
FIXTURES
None.
NAME CHANGES
Precision Partners, Inc. was the surviving corporation to mergers with
the following corporations on March 19, 1999:
Galaxy Hold Co., Inc.
Mid State Holding Co., Inc.
Precision Partners Holding Corp.
Precision Partners Management Corp.
TRADENAMES
None.
Schedule 3.11
to
Loan, Security, and Guaranty
Agreement
TRADEMARKS AND TRADEMARK APPLICATIONS
XXXX REG. NUMBER REG. DATE
"The Mid-State Tombstone" 1,268,864
PATENTS AND PATENT APPLICATIONS
U.S. Patent TITLE OF APPLICATION
APPLICATION
NUMBER
NONE
ANNEX A
to
LOAN, SECURITY, AND GUARANTY AGREEMENT
By and Between
GALAXY INDUSTRIES CORPORATION,
and
MIDSTATE MACHINE PRODUCTS,
and
NATIONWIDE PRECISION PRODUCTS CORP.,
and
GENERAL AUTOMATION, INC.
and
GENERAL ELECTRIC CAPITAL CORPORATION
Dated as of December 8, 2000
DEFINITIONS
In addition to the defined terms appearing below, capitalized terms
used in the above-referenced Loan, Security and Guaranty Agreement (the
"Loan Agreement") shall have (unless otherwise provided elsewhere in the
Loan Agreement) the following respective meanings when used in the Loan
Agreement:
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under common control with, any Borrower or
directly or indirectly owning 10% or more of any equity interest or
membership interest in any Borrower or 10% or more of whose voting stock
or other equity or membership interest is directly or indirectly owned by
any Borrower.
"Borrowers" shall have the meaning set forth in the Preamble
to the Loan Agreement.
"Business Day" shall mean any day other than Saturday, Sunday
or other day on which commercial Lenders in the State of New York (or for
LIBOR purposes, London) are authorized to close.
"Certified Fabricators" shall mean Certified Fabricators,
Inc., a California corporation.
"Certified Fabricators Restructuring" shall mean (i) the sale
of certain excess Equipment by Certified Fabricators and (ii) the
consolidation and restructuring of Certified Fabricators' remaining
business.
"Citicorp" means Citicorp U.S.A., Inc.
"Citicorp Credit Agreement" shall mean that certain Credit
Agreement among the Guarantor, as borrower, the several guarantors from
time to time thereof, the several lenders from time to time parties
thereto, Citicorp, as administrative agent, NationsBank, N.A., as
syndication agent and SunTrust Bank, Atlanta, as documenting agent as
amended through the date hereof; provided, however, that except as
otherwise set forth herein, any reference in Article VI hereof to the
Citicorp Credit Agreement shall be deemed to be a reference to the
Citicorp Credit Agreement as amended through the date hereof, without
giving effect to any subsequent amendments thereto unless such amendments
are consented to in writing by the Lender.
"Collateral" shall mean collectively (a) all of the
Equipment, (b) all rentals and other sums due in connection with the
sale, lease, or other disposition of such Equipment, and (c) any and all
insurance proceeds payable in connection therewith.
"Compliance Certificate" shall have the meaning set forth in
Section 4.2 hereof.
"Default" shall mean an event which, with the giving of
notice or the passage of time or both, shall constitute an Event of
Default.
"Default Rate" shall mean the floating and fluctuating per
annum rate of interest equal to two percent (2%) in excess of the
otherwise applicable rate.
"Enforcement Costs" shall mean all reasonable expenses,
charges, recordation or other taxes, costs and fees (including reasonable
attorneys' fees and expenses) of any nature whatsoever advanced, paid or
incurred by or on behalf of the Lender in connection with (a) the
collection or enforcement of the Loan Agreement or any of the other Loan
Documents, (b) the maintenance, preservation, defense, protection,
realization upon, disposition, collection, sale or enforcement of all or
any part of the Collateral, and (c) the exercise by the Lender of any
rights or remedies available to it under the provisions of the Loan
Agreement or any of the other Loan Documents.
"Environmental Laws" shall mean all laws, statutes, rules,
regulations or ordinances which relate to Hazardous Materials and/or the
protection of the environment or human health ("Environmental Laws").
"Equipment" shall mean all the New Equipment and the
Refinanced Equipment.
"Equipment Loan" shall mean the loan in the principal amount
not to
exceed $20,770,826.00, made available pursuant to the terms of the Loan
Agreement.
"Equipment Loan Account" shall mean the loan account
maintained by the Lender with respect to repayments and prepayments of
the Equipment Loan, the accrual and payment of interest on the Equipment
Loan and all other amounts and charges owing to the Lender in connection
with the Equipment Loan.
"ERISA" shall mean the Employee Retirement Security Act of
1974 as amended from time to time.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with any Credit Party would be
deemed to be a "single employer" (i) within the meaning of Sections
414(b), (c), (m) and (o) of the Internal Revenue Code of 1986, as amended
from time to time and the Treasury Regulations issued thereunder, or (ii)
as a result of an Obligor being a general partner of such person.
"Event of Default" shall have the meaning set forth in
Section 6 of the Loan Agreement.
"GA" shall have the meaning set forth in the Recitals of the
Loan Agreement.
"GAAP" shall mean generally accepted accounting principles in
the United States.
"Galaxy" shall have the meaning set forth in the Recitals of
the Loan Agreement.
"Galaxy Restructuring" shall mean (i) the transfer of
responsibility and ultimate sale or contribution to Nationwide of certain
equipment of, and the assumption of certain trade payables, accruals and
other liabilities incurred in the ordinary course of business directly
related to the production of engine blocks for Caterpillar by, Galaxy and
(ii) the transfer to Xxxxxxxx Machine & Tool Co., Inc., a New York
corporation of responsibility for the management of Galaxy's remaining
assets and liabilities.
"GE Capital Security Agreement" means that certain Security
Agreement of even date herewith between Citicorp USA, Inc. as Agent,
General Electric Capital Corporation, the Guarantor, and the Borrowers as
grantors.
"Guarantor" shall mean Precision Partners, Inc.
"Guaranty" shall have the meaning set forth in Section 1.5 of
the Loan Agreement.
"Hazardous Materials" shall mean hazardous wastes, hazardous
substances, toxic chemicals and substances, oil and petroleum products
and their by-products, radon, asbestos, pollutants or contaminants.
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of property or services which in accordance with GAAP
would be shown on the liability side of the balance sheet of such Person,
(iii) all obligations of such Person, contingent or otherwise, as an
account party under letters of credit and with respect to all drawings
thereunder, (iv) all Indebtedness of a second Person secured by any Lien
on any property owned by such first Person, whether or not such
Indebtedness has been assumed, (v) all lease obligations of such Person
which are required to be classified and accounted for as capital leases
on a balance sheet of such Person in accordance with GAAP and all
synthetic lease obligations of such person; (vi) all obligations of such
Person to pay a specified purchase price for goods or services whether or
not delivered or accepted, I.E., take-or-pay and similar obligations, and
(vii) all contingent obligations of such Person in respect of obligations
of the kind referred to in clauses (i) through (vi) above, PROVIDED that
Indebtedness shall not include trade payables and accrued expenses, in
each case arising in the ordinary course of business.
"Interecreditor Agreement" shall have the meaning set forth
in Section 1.1(g).
"Interest Period" shall mean (a) the period commencing of the
date hereof and ending on December 31, 2000, (b) each one-month period
commencing on the first day of each calendar month thereafter.
"Lease Guaranty" shall have the meaning set forth in the
Recitals of the Loan Agreement.
"LIBOR" shall mean with respect to (i) the rate of interest
determined by reference to page 3750 of the Telerate screen at which U.S.
Dollar deposits in immediately available and transferable funds, are
offered as of 11:00 A.M. London Time, two Business Days prior to the
beginning of such period in amounts equal to the outstanding balance of
the Equipment Loan, for a period of thirty (30) days, divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a
percentage (expressed as a decimal) equal to 100% minus the then stated
maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Loan Agreement" shall mean the Loan, Security, and Guaranty
Agreement of even date herewith, by and among the Borrowers, the Lender,
and the Guarantor, as the same may from time to time be amended,
restated, supplemented, or otherwise modified.
"Loan Documents" shall mean the Loan Agreement, the Note, the
GE Capital Security Agreement (as defined in the Intercreditor
Agreement), and any other instrument, document or agreement both now and
hereafter executed, delivered or
furnished by the Borrowers, the Guarantor or any other person evidencing,
guaranteeing, securing or in connection with the Loan Agreement or all or
any part of the Equipment Loan.
"Master Lease Agreement" shall have the meaning set forth in
the Recitals of the Loan Agreement.
"Material Adverse Effect" shall mean a material adverse
effect on the business, properties, operations or financial condition of
the Obligors taken as a whole.
"Midstate" shall have the meaning set forth in the Recitals
of the Loan Agreement.
"Nationwide" shall have the meaning set forth in the Recitals
of the Loan Agreement.
"New Equipment" shall have the meaning set forth in Section
1.3 of the Loan Agreement.
"Note" shall mean the Note of even date herewith from the
Borrowers made payable to the Lender, in the principal amount of
$20,770,826.00
"Obligations" shall mean all present and future indebtedness,
liabilities and obligations of any kind and nature whatsoever of the
Borrowers to the Lender both now existing and hereafter arising under, as
a result of, on account of, or in connection with, the Loan Agreement and
any and all amendments thereto, restatements thereof, supplements thereto
and modifications thereof made at any time and from time to time
hereafter, the Note, any and all extensions, renewals or replacements
thereof, amendments thereto and restatements or modifications thereof
made at any time or from time to time hereafter, or the other Loan
Documents, including, without limitation, future advances, principal,
interest, indemnities, fees, late charges, enforcement costs and other
costs and expenses whether direct, contingent, joint, several, matured or
unmatured.
"Obligors" means collectively the Borrowers and the
Guarantor.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor entity.
"Permitted Liens" shall mean liens permitted pursuant to
Section 5.2 of the Loan Agreement.
"Person" shall mean any natural person, individual, company,
corporation, partnership, joint venture, unincorporated association,
government or political subdivision or agency thereof, or any other
entity of whatever nature.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is
an obligation to contribute
of) any Obligor or any ERISA Affiliate, and each such plan for the five
year period immediately following the latest date on which an Obligor or
an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Prime Rate" shall mean the floating and fluctuating per
annum rate of interest which is published from time to time in THE WALL
STREET JOURNAL listing of money rates as the prime rate, and shall be the
highest such rate if more than one is quoted.
"Refinanced Equipment" shall have the meaning set forth in
Section 1.3 of the Loan Agreement.
"RESTRICTED PAYMENT" shall have the meaning given to such
term in the Citicorp Credit Agreement, as in effect on the date hereof.
