EXHIBIT 10.1
AMENDMENT AND RESTATEMENT AGREEMENT dated as of
January 24, 2003, among ARGO-TECH CORPORATION (the
"Borrower"), AT HOLDINGS CORPORATION ("Holdings"), the Lenders
party hereto and JPMORGAN CHASE BANK, as Administrative Agent,
under the Credit Agreement dated as of July 18, 1997, as
amended and restated as of September 26, 1997, among the
Borrower, Holdings, the lenders referred to therein and the
Administrative Agent, as in effect on the date hereof (the
"Existing Credit Agreement").
WHEREAS Holdings and the Borrower have requested, and the Restatement
Lenders and the Administrative Agent have agreed, upon the terms and subject to
the conditions set forth herein, that the Existing Credit Agreement be amended
and restated as provided herein;
NOW, THEREFORE, Holdings, the Borrower, the Restatement Lenders and the
Administrative Agent hereby agree as follows:
SECTION 1. Defined Terms. Capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Restated Credit Agreement
referred to below. As used in this Agreement, "Restatement Lenders" means the
Lenders set forth on Schedule 2.01 hereto.
SECTION 2. Restatement Effective Date. (a) The transactions provided
for in Sections 3 through 5 hereof shall be consummated at a closing to be held
on the Restatement Effective Date at the offices of Cravath, Swaine & Xxxxx, or
at such other time and place as the Borrower and the Administrative Agent shall
agree upon.
(b) The "Restatement Effective Date" shall be a date specified by the
Borrower, (not later than January 24, 2003) as of which all the conditions set
forth or referred to in Section 6 hereof shall have been satisfied. The Borrower
shall give not less than one Business Day's written notice to the Administrative
Agent proposing a date as the Restatement Effective Date, and the Administrative
Agent shall notify the Lenders of the date so proposed. This Agreement shall
terminate at 5:00 p.m., New
2
York City time, on January 27, 2003, if the Restatement Effective Date shall not
have occurred at or prior to such time.
SECTION 3. Amendment and Restatement of the Existing Credit Agreement;
Loans and Letters of Credit. (a) Effective upon the Restatement Effective Date,
the Existing Credit Agreement is hereby amended and restated to read in its
entirety as set forth in Exhibit A hereto (the "Restated Credit Agreement"), and
the Administrative Agent is hereby directed by the Restatement Lenders to enter
into such Loan Documents and to take such other actions as may be required to
give effect to the transactions contemplated hereby. From and after the
effectiveness of such amendment and restatement, the terms "Agreement", "this
Agreement", "herein", "hereinafter", "hereto", "hereof" and words of similar
import, as used in the Restated Credit Agreement, shall, unless the context
otherwise requires, refer to the Existing Credit Agreement as amended and
restated in the form of the Restated Credit Agreement, and the term "Credit
Agreement", as used in the other Loan Documents, shall mean the Restated Credit
Agreement.
(b) All Loans and Letters of Credit outstanding under the Existing
Credit Agreement on the Restatement Effective Date shall continue to be
outstanding under the Restated Credit Agreement, except to the extent that any
such Loans have been repaid as permitted hereunder, and on and after the
Restatement Effective Date, the terms of the Restated Credit Agreement will
govern the rights and obligations of Holdings, the Borrower, the Lenders, the
Issuing Bank and the Administrative Agent with respect thereto.
(c) On and as of the Restatement Effective Date, Lenders under the
Existing Credit Agreement that are not Restatement Lenders shall cease to have
participations in outstanding Letters of Credit and the participations in
outstanding Letters of Credit of Restatement Lenders shall be adjusted in
accordance with their respective Applicable Percentages on such date.
(d) Effective upon the Restatement Effective Date, Schedules 2.01,
3.05, 3.12 and 3.13 of the Existing Credit Agreement are hereby amended and
restated to read in
3
their entirety as set forth in Schedules 2.01, 3.05, 3.12 and 3.13,
respectively, hereto.
(e) Effective upon the Restatement Effective Date, Annex 1 hereto is
hereby added as Annex 1 to the Restated Credit Agreement.
SECTION 4. Waiver. The Restatement Lenders hereby waive the
requirements of Sections 2.10 and 2.17 of the Existing Credit Agreement to the
extent, but only to the extent, necessary to permit the Borrower, on the
Restatement Effective Date, to prepay the Loans and terminate the Commitments of
each Lender under the Existing Credit Agreement that is not a Restatement
Lender, without prepaying the Loans and terminating the commitments of the
Restatement Lenders.
SECTION 5. Amendment Fee. In consideration of the agreements of the
Restatement Lenders contained in this Agreement, the Borrower agrees to pay to
the Administrative Agent, for the account of each Restatement Lender an
amendment fee (the "Amendment Fee") in the amount of 0.75% of such Lender' s
outstanding Loans, LC Exposure and unused Commitments as of the Restatement
Effective Date; provided that the Amendment Fee shall not be payable unless and
until this Amendment becomes effective as provided in Section 6 below. The
Amendment Fee shall be payable on the Restatement Effective Date.
SECTION 6. Conditions. The consummation of the transactions set forth
in Sections 3 and 4 of this Agreement shall be subject to the satisfaction (or
waiver in accordance with Section 7 below) of the following conditions
precedent:
(a) The Administrative Agent (or its counsel) shall have received from
Holdings, the Borrower and each Restatement Lender either (i) a counterpart of
this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy or other
electronic transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
4
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Restatement Lenders and
dated the Restatement Effective Date) of Xxxx X. Xxxx, counsel for the Borrower,
substantially in the form of Exhibit B hereto, and covering such other matters
relating to the Loan Parties, the Loan Documents or the Restatement Transactions
as the Administrative Agent shall reasonably request. The Borrower hereby
requests such counsel to deliver such opinion.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Loan Party,
the authorization of the Restatement Transactions and any other legal matters
relating to the Loan Parties, the Loan Documents or the Restatement
Transactions, all in form and substance satisfactory to the Administrative Agent
and its counsel.
(d) The Administrative Agent shall have received a certificate, dated
the Restatement Effective Date and signed by the President, a Vice President or
a Financial Officer of the Borrower, confirming compliance with the conditions
set forth in paragraphs (a) and (b) of Section 4.01 of the Restated Credit
Agreement.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Restatement Effective Date, including
the Amendment Fees and, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including reasonable fees, charges and disbursements of
counsel) required to be reimbursed or paid by any Loan Party hereunder or under
any other Loan Document
(f) The Administrative Agent shall have received evidence satisfactory
to it that the Borrower shall have prepaid all Loans, together with all interest
thereon, fees and other amounts owed with respect thereto, and terminated all
Commitments of all Lenders under the Existing Credit Agreement that are not
Restatement Lenders.
5
The Administrative Agent shall notify the Borrower and the Restatement Lenders
of the Restatement Effective Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the consummation of the transactions set
forth in Sections 3 and 4 of this Agreement shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section 7
below) at or prior to 5:00 p.m., New York City time, on January 27, 2003 (and,
in the event such conditions are not so satisfied or waived, the Existing Credit
Agreement shall remain in effect without giving effect to any provisions of this
Agreement).
SECTION 7. Effectiveness; Counterparts; Amendments. Except as provided
in Section 6 above, this Agreement shall become effective when copies hereof
which, when taken together, bear the signatures of Holdings, the Borrower, the
Administrative Agent and the Restatement Lenders shall have been received by the
Administrative Agent. This Agreement may not be amended nor may any provision
hereof be waived except pursuant to a writing signed by Holdings, the Borrower,
the Administrative Agent and the Restatement Lenders. This Agreement may be
executed in two or more counterparts, each of which shall constitute an original
but all of which when taken together shall constitute a single contract.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy or other electronic transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 8. No Novation. This Agreement shall not extinguish the
Indebtedness outstanding under the Existing Credit Agreement. Nothing herein
contained shall be construed as a substitution or novation of the Indebtedness
outstanding under the Existing Credit Agreement, which (except to the extent
paid as provided herein) shall remain outstanding after the Restatement
Effective Date as modified hereby. Notwithstanding any provision of this
Agreement, the provisions of Sections 2.14, 2.15, 2.16 and 9.03 of the Existing
Credit Agreement as in effect immediately prior to the Restatement Effective
Date will continue to be effective as to all matters arising out of or in any
way related to facts or events existing or occurring prior to the Restatement
Effective Date.
6
SECTION 9. Notices. All notices hereunder shall be given in accordance
with the provisions of Section 9.01 of the Restated Credit Agreement.
SECTION 10. APPLICABLE LAW; WAIVER OF JURY TRAIL. (A) THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.
(B) EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTION 9.10 OF THE
RESTATED CREDIT AGREEMENT AS IF SUCH SECTION WERE SET FORTH IN FULL HEREIN
EXCEPT THAT THE TERM "AGREEMENT" THEREIN SHALL BE DEEMED TO REFER TO THIS
AGREEMENT.
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first written above.
AT HOLDINGS CORPORATION,
by /s/ XXXX X. XXXX
-------------------------
Name: Xxxx X. Xxxx
Title: Vice President
ARGO-TECH CORPORATION,
by /s/ XXXXXXX X. ST. CLAIR
-------------------------
Name: Xxxxxxx X. St. Clair
Title: Vice President
JPMORGAN CHASE BANK, formerly
known as The Chase Manhattan
Bank, individually and as
Administrative Agent,
by
-------------------------
Name:
Title:
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first written above.
AT HOLDINGS CORPORATION,
by
-------------------------
Name:
Title:
ARGO-TECH CORPORATION,
by
-------------------------
Name:
Title:
JPMORGAN CHASE BANK, formerly
known as The Chase Manhattan
Bank, individually and as
Administrative Agent,
by /s/ XXXXXXX X. XXXXXX
-------------------------
Name: XXXXXXX X. XXXXXX
Title: MANAGING DIRECTOR
SIGNATURE PAGE TO AMENDMENT AND
RESTATEMENT AGREEMENT DATED AS OF
JANUARY 24, 2003, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS PARTY
HERETO AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, UNDER THE
CREDIT AGREEMENT DATED AS OF JULY
18, 1997, AS AMENDED AND RESTATED AS
OF SEPTEMBER 26, 1997, AS FURTHER
AMENDED, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS REFERRED TO
THEREIN AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, AS IN EFFECT
ON THE DATE HEREOF.
To Approve Amendment
and Restatement Agreement:
Institution COMERICA BANK
---------------------
by /s/ XXXXXXX X. JUDGE
-----------------------
Name: Xxxxxxx X. Judge
Title: Vice President
SIGNATURE PAGE TO AMENDMENT AND
RESTATEMENT AGREEMENT DATED AS OF
JANUARY 24, 2003, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS PARTY
HERETO AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, UNDER THE
CREDIT AGREEMENT DATED AS OF JULY
18, 1997, AS AMENDED AND RESTATED AS
OF SEPTEMBER 26, 1997, AS FURTHER
AMENDED, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS REFERRED TO
THEREIN AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, AS IN EFFECT
ON THE DATE HEREOF.
To Approve Amendment
and Restatement Agreement:
Institution General Electric Capital Corporation
------------------------------------
by /s/ W. XXXXXX XxXXXXXXX
-----------------------
Name: W. XXXXXX XxXXXXXXX
Title: DULY AUTHORIZED SIGNATORY
SIGNATURE PAGE TO AMENDMENT AND
RESTATEMENT AGREEMENT DATED AS OF
JANUARY 24, 2003, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS PARTY
HERETO AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, UNDER THE
CREDIT AGREEMENT DATED AS OF JULY
18, 1997, AS AMENDED AND RESTATED AS
OF SEPTEMBER 26, 1997, AS FURTHER
AMENDED, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS REFERRED TO
THEREIN AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, AS IN EFFECT
ON THE DATE HEREOF.
To Approve Amendment
and Restatement Agreement:
Institution XXXXXX TRUST AND SAVINGS BANK
-----------------------------
by /s/ XXXXX X. LAW
---------------------
Name: XXXXX X. LAW
Title: VICE PRESIDENT
SIGNATURE PAGE TO AMENDMENT AND
RESTATEMENT AGREEMENT DATED AS OF
JANUARY 24, 2003, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS PARTY
HERETO AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, UNDER THE
CREDIT AGREEMENT DATED AS OF JULY
18, 1997, AS AMENDED AND RESTATED AS
OF SEPTEMBER 26, 1997, AS FURTHER
AMENDED, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS REFERRED TO
THEREIN AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, AS IN EFFECT
ON THE DATE HEREOF.
To Approve Amendment
and Restatement Agreement:
Institution Xxxxxx Financial Inc.
---------------------
by /s/ W. XXXXXX XxXXXXXXX
--------------------------------
Name: W. XXXXXX XxXXXXXXX
Title: DULY AUTHORIZED SIGNATORY
SIGNATURE PAGE TO AMENDMENT AND
RESTATEMENT AGREEMENT DATED AS OF
JANUARY 24, 2003, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS PARTY
HERETO AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, UNDER THE
CREDIT AGREEMENT DATED AS OF JULY
18, 1997, AS AMENDED AND RESTATED AS
OF SEPTEMBER 26, 1997, AS FURTHER
AMENDED, AMONG ARGO-TECH
CORPORATION, AT HOLDINGS
CORPORATION, THE LENDERS REFERRED TO
THEREIN AND JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AGENT, AS IN EFFECT
ON THE DATE HEREOF.
To Approve Amendment
and Restatement Agreement:
Institution NATIONAL CITY BANK
------------------
by /s/ XXXXXXX X. XXXXXX
----------------------
Name: XXXXXXX X. XXXXXX
Title: VP
SCHEDULES AND EXHIBITS
Schedules
Schedule 2.01 -- Restatement Lenders and Commitments
Schedule 3.05 -- Real Property
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Exhibits
Exhibit A -- Amended and Restated Credit Agreement
Exhibit B -- Form of Opinion of Xxxx X. Xxxx, Counsel for
the Borrower
Annex
Annex 1 -- Terms of Holdings Preferred Stock
SCHEDULE 2.01
COMMITMENTS AND ADDRESSES FOR NOTICES
Delayed Draw
Revolving Credit Acquisition
Lender Commitment Tranche A Term Loan Term Loan
------ ---------- ------------------- ---------
JPMorgan Chase Bank 4,628,737 6,360,926 1,010,338
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
National City Bank 5,785,921 7,951,157 1,262,922
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Comerica Bank 1,870,781 2,570,874 408,345
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: (000) 000-0000
Tel: (000) 000-0000
2
Delayed Draw
Revolving Credit Acquisition
Lender Commitment Trnached A Term Loan Term Loan
----------------------- ---------------- -------------------- -------------
Xxxxxx Bank 3,085,824 4,240,617 673,558
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Law
Tel: (000) 000-0000
Fax: (000) 000-0000
GE Capital 4,628,737 6,360,926 1,010,338
0 Xxxx Xxxxx Xxxx
XXXX 0X
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxx
Tel: (000) 000-0000
Schedule 3.05
to
Credit Agreement dated as of July 18, 1997
Amended and Restated as of January 24, 2003
Real Estate
Argo-Tech (HBP)
Argo-Tech Corporation (HBP) owns real estate located at 00000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx, 00000 referred to in the Agreement as the "Specified
Real Estate."
Argo-Tech Corporation (HBP) leases a facility in Inglewood, California:
000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000.
Argo-Tech Corporation Costa Mesa
Argo-Tech Corporation Costa Mesa ("ATCM") owns real estate located at
000 X. Xxxxxxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000.
X.X. Xxxxxx Japan K.K., a subsidiary of ATCM, leases office space at
the following location:
0-0-00, Xxxxx-xxx,
Xxxxx-xx, Xxxx 000-0000
Xxxxx
Xxxxxx Ground Fueling, Ltd., a subsidiary of ATCM, leases office space
at the following location:
Xxx Xxxxxxxx Xxxxxx
Xxxxx Xxxxx Xxxx
Xxxxxxxxxxx Greys
Xxxxxx-xx-Xxxxxx
Xxxxxxxxxxx XX0 0XX
Xxxxxxx
Durodyne, Inc., a subsidiary of ATCM, leases manufacturing and office
space at the following location:
000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
Schedule 3.12
to
Loan Agreement as of July 18, 1997
Amended and Restated as of January 24, 2003
Subsidiaries
Argo-Tech Corporation owns 100% of the outstanding capital stock of the
companies set out below. Each company which is a "Subsidiary Loan Party" for
purposes of the Agreement is marked with an asterisk.
Argo-Tech Corporation (HBP)*
Argo-Tech Corporation (QEM)*
Argo-Tech Corporation (Aftermarket)*
A-T Export Company, Inc.
Argo-Tech Corporation Costa Mesa (formerly X.X. Xxxxxx Company, Inc.)*
Argo-Tech Corporation Costa Mesa owns 100% of the outstanding capital
stock of Durodyne, Inc.*, an Arizona company.
The outstanding capital stock of Xxxxxx Ground Fueling, Ltd., an
English company, is owned 100% by Argo-Tech Corporation Costa Mesa.
Argo-Tech Corporation Costa Mesa owns 100% of the outstanding capital
stock of X.X. Xxxxxx Japan, K.K., a Japanese company.
Schedule 3.13
AT HOLDINGS CORPORATION
ARGO-TECH CORPORATION AND SUBSIDIARIES
ARGO-TECH CORPORATION COSTA MESA AND SUBSIDIARIES
INSURANCE SUMMARY
2002-2003 POLICY YEAR
EFFECTIVE DATES ANNUAL
LINE OF COVERAGE FROM TO CARRIER POLICY NUMBER LIMITS DEDUCTIBLE PREMIUM
---------------- --------- --------- --------------------------- ------------- --------------- ---------- -------
PROPERTY 00-Xxx-00 00-Xxx-00 XXXXXX ERP9307148 350,315,825 100,000 425,000
PROPERTY - QUAKE EXCESS 00-Xxx-00 00-Xxx-00 XXX & OTHERS CPP5903879 5,000,000 0 29,450
ACG3303879 5,000,000 0 8,550
TRANSIT 00-Xxx-00 00-Xxx-00 XXXXX XXX0000000 250,000 5,000 12,000
AGR 750,000
GENERAL LIABILITY 00-Xxx-00 00-Xxx-00 XXXXX 35283720 1,000,000 1,000 54,294
(FEDERAL INS. CO.) AGR 2,000,000
FOREIGN LIABILITY 00-Xxx-00 00-Xxx-00 XXXXX 73227233 1,000,000 NONE 15,725
(GREAT NORTHERN) AGR 1,000,000
BUSINESS AUTO 00-Xxx-00 00-Xxx-00 XXXXXX F3D058159-00 1,000,000 500 35,739
LUMBERMAN'S MUTUAL CASUALTY
WORKERS COMP (NON-OHIO) 00-Xxx-00 00-Xxx-00 XXXXXX 3CL890386-00 1,000,000 100,000 171,180
LUMBERMAN'S MUTUAL CASUALTY RETENTION
EXCESS WORK COMP (DH) 01-Nov-02 01-Nov-03 MIDWEST EMPLOYERS CASUALTY 2943-50-CH 1,000,000 450,000 31,755
RETENTION
UMBRELLA LIABILITY 00-Xxx-00 00-Xxx-00 XX. AMERICAN ASSURANCE UMB5747319 20,000,000 NONE 63,000
NON-AIRCRAFT PRODUCTS 00-Xxx-00 00-Xxx-00 XXXXXXXXX (XXXXXX) SPO3569731-03 2,000,000 10,000 56,135
AIRCRAFT PRODUCTS LIAB 00-Xxx-00 00-Xxx-00 XXX/XXXXXX/XXXXXX XX0000000 300,000,000 NONE 342,000
PROFESSIONAL LIAB 00-Xxx-00 00-Xxx-00 XXXXXXXX EO813443 1,000,000 25,000 27,370
FIDELITY/CRIME 01-Nov-02 01-Nov-03 NATIONAL UNION (AIG) 4953766 3,000,000 10,000 22,950
XXXXXXXXX 00-Xxx-00 00-Xxx-00 NATIONAL UNION (AIG) 4953754 3,000,000 25,000 35,000
DIRECTORS & OFFICERS 01-Nov-02 01-Nov-03 NATIONAL UNION (AIG) 4953776 15,000,000 100,000 125,000
SPECIAL 00-Xxx-00 00-Xxx-00 XXXXXX/XXX 000000-000 5,000,000 NONE 2,200
EXCESS LIABILITY 00-Xxx-00 00-Xxx-00 XXXX XXXXXXXXX XX. XX0000000 25,000,000 NONE 37,500
TRAVEL (SALARIED) 00-Xxx-00 00-Xxx-00 XXX XX00000000 500,000 NONE 9,583
AGR 2,500,000
TRAVEL (HOURLY) 00-Xxx-00 00-Xxx-00 XXX XX00000000 100,000 NONE 1,000
AGR 500,000
EXHIBIT A
================================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 18, 1997,
Amended and Restated as of January 24, 2003
Among
ARGO-TECH CORPORATION,
as Borrower,
AT HOLDINGS CORPORATION,
The Lenders Party Hereto
and
JPMORGAN CHASE BANK,
as Administrative Agent
-----------------------------------------
X.X. XXXXXX SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner
NATIONAL CITY BANK,
as Syndication Agent
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Defined Terms ..........................................................................1
SECTION 1.02. Classification of Loans and Borrowings.................................................32
SECTION 1.03. Terms Generally........................................................................32
SECTION 1.04. Accounting Terms; GAAP.................................................................32
ARTICLE II
The Credits
SECTION 2.01. Commitments; Outstanding Loans.........................................................33
SECTION 2.02. Loans and Borrowings...................................................................34
SECTION 2.03. Requests for Borrowings................................................................34
SECTION 2.04. Letters of Credit......................................................................36
SECTION 2.05. Funding of Borrowings..................................................................41
SECTION 2.06. Interest Elections.....................................................................42
SECTION 2.07. Termination and Reduction of Commitments...............................................44
SECTION 2.08. Repayment of Loans; Evidence of Debt...................................................45
SECTION 2.10. Prepayment of Loans....................................................................47
SECTION 2.11. Fees...................................................................................49
SECTION 2.12. Interest...............................................................................50
SECTION 2.13. Alternate Rate of Interest.............................................................51
SECTION 2.14. Increased Costs........................................................................52
SECTION 2.15. Break Funding Payments.................................................................54
SECTION 2.16. Taxes..................................................................................54
SECTION 2.17. Payments Generally; Pro Rata Treatment;
Sharing of Setoffs.....................................................................56
SECTION 2.18. Mitigation Obligations; Replacement of
Lenders................................................................................58
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers...................................................................59
SECTION 3.02. Authorization; Enforceability..........................................................59
SECTION 3.03. Governmental Approvals; No Conflicts...................................................60
SECTION 3.04. Financial Condition; No Material Adverse
Change.................................................................................60
SECTION 3.05. Properties.............................................................................61
SECTION 3.06. Litigation and Environmental Matters...................................................62
SECTION 3.07. Compliance with Laws and Agreements....................................................62
SECTION 3.08. Investment and Holding Company Status..................................................62
SECTION 3.09. Taxes..................................................................................63
SECTION 3.10. ERISA..................................................................................63
SECTION 3.11. Disclosure.............................................................................63
SECTION 3.12. Subsidiaries...........................................................................64
SECTION 3.13. Insurance..............................................................................64
SECTION 3.14. Labor Matters..........................................................................64
SECTION 3.15. Solvency...............................................................................64
SECTION 3.16. Security Documents.....................................................................65
SECTION 3.17. Federal Reserve Regulations............................................................66
SECTION 3.18. TRW Agreement..........................................................................66
SECTION 3.19. Tax Status of ESOP.....................................................................66
SECTION 3.20. Certain Agreements.....................................................................66
ARTICLE IV
Conditions
SECTION 4.01. Each Credit Event......................................................................66
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information.............................................68
SECTION 5.02. Notices of Material Events.............................................................70
SECTION 5.03. Information Regarding Collateral.......................................................70
SECTION 5.04. Existence; Conduct of Business.........................................................71
SECTION 5.05. Payment of Obligations.................................................................71
SECTION 5.06. Maintenance of Properties..............................................................72
SECTION 5.07. Insurance..............................................................................72
SECTION 5.08. Casualty and Condemnation..............................................................74
SECTION 5.09. Books and Records; Inspection and Audit Rights.........................................74
SECTION 5.10. Compliance with Laws...................................................................75
SECTION 5.11. Use of Proceeds and Letters of Credit .................................................75
SECTION 5.12. Additional Subsidiaries................................................................76
SECTION 5.13. Further Assurances.....................................................................77
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities................................................78
SECTION 6.02. Liens..................................................................................80
SECTION 6.03. Fundamental Changes....................................................................81
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions...........................................................................82
SECTION 6.05. Asset Sales............................................................................85
SECTION 6.06. Sale and Lease-Back Transactions.......................................................85
SECTION 6.07. Hedging Agreements.....................................................................86
SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness...........................................................................86
SECTION 6.09. Transactions with Affiliates...........................................................88
SECTION 6.10. Restrictive Agreements.................................................................88
SECTION 6.11. Amendment of Material Documents........................................................89
SECTION 6.12. Capital Expenditures...................................................................90
SECTION 6.13. Senior Leverage Ratio..................................................................90
SECTION 6.14. Consolidated Interest Expense Coverage Ratio...........................................90
SECTION 6.15. Consolidated Fixed Charge Coverage Ratio...............................................90
SECTION 6.16. Certain Actions under Senior Subordinated Note Documents...............................90
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices................................................................................97
SECTION 9.02. Waivers; Amendments....................................................................98
SECTION 9.03. Expenses; Indemnity; Damage Waiver.....................................................99
SECTION 9.04. Successors and Assigns................................................................101
SECTION 9.05. Survival..............................................................................105
SECTION 9.06. Counterparts; Integration; Effectiveness..............................................106
SECTION 9.07. Severability..........................................................................106
SECTION 9.08. Right of Setoff.......................................................................107
SECTION 9.09. Governing Law; Jurisdiction; Consent to
Service of Process....................................................................107
SECTION 9.10. WAIVER OF JURY TRIAL..................................................................108
SECTION 9.11. Headings..............................................................................108
SECTION 9.12. Confidentiality.......................................................................108
SECTION 9.13. Interest Rate Limitation..............................................................109
SECTION 9.14. Existing Credit Agreement; Effectiveness of
Amendment and Restatement.............................................................110
SCHEDULES:
Schedule 1.01(b) -- Immaterial Subsidiaries
Schedule 2.01 -- Commitments
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.04 -- Investments
Schedule 6.05 -- Real Estate
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B(i) -- Form of Opinion of Xxxx X. Xxxx
Exhibit B(ii) -- Form of Opinion of Xxxxx, Day, Xxxxxx & Xxxxx
Exhibit C -- Form of Parent Guarantee Agreement
Exhibit D -- Form of Subsidiary Guarantee Agreement
Exhibit E -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit F -- Form of Pledge Agreement
Exhibit G -- Form of Security Agreement
Exhibit H -- Form of Amendment to Security Agreement
AMENDED AND RESTATED CREDIT AGREEMENT dated as of
July 18, 1997, as amended and restated as of January 24, 2003,
among ARGO-TECH CORPORATION, AT HOLDINGS CORPORATION, the
LENDERS party hereto, and JPMORGAN CHASE BANK, as successor to
JPMorgan Chase Bank, as Administrative Agent.
The Borrower, Holdings, the Lenders and the Administrative
Agent entered into this Agreement as of July 18, 1997 (the "Original
Agreement"), as amended and restated as of September 26, 1997 (as
amended, the "Existing Credit Agreement"), as in effect immediately
prior to the Restatement Effective Date (as defined herein).
The Borrower, Holdings, the Restatement Lenders (as defined
therein) and JPMorgan Chase Bank, as administrative agent, are parties
to an Amendment and Restatement Agreement dated as of January 24, 2003
(the "Amendment and Restatement Agreement").
Subject to the satisfaction of the conditions set forth in the
Amendment and Restatement Agreement, the Existing Credit Agreement
shall be amended and restated as provided herein.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Alternate
Base Rate.
"Account Debtor" has the meaning assigned to such term in the
Security Agreement.
"Accounts" has the meaning assigned to such term in the
Security Agreement.
"Acquisition" means the acquisition by the Borrower of X.X.
Xxxxxx pursuant to the Stock Purchase Agreement.
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"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means JPMorgan Chase Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that (a) directly, or indirectly through one or more intermediaries, Controls or
is Controlled by or is under common Control with the Person specified or (b)
owns, directly or indirectly, 10% or more of the voting securities of the Person
specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Amendment and Restatement Agreement" has the meaning given such term
in the recitals hereto.
"Applicable Percentage" means, with respect to any Revolving Lender,
the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day with respect to any ABR Loan or
Eurodollar Loan, or with respect to the commitment fees payable hereunder, as
the case may be, the applicable rate per annum set forth below under the caption
"ABR Spread" "Eurodollar Spread" or "Commitment Fee Rate", as the case may be,
based upon the Leverage Ratio as of the most recent determination date; provided
that until the delivery to the Administrative Agent, pursuant to
3
Section 5.01(b), of Borrower's consolidated financial statements for Borrower's
first full fiscal quarter commencing after the Effective Date, the "Applicable
Rate" shall be the applicable rate per annum set forth below in Category 1:
ABR EURODOLLAR COMMITMENT FEE
LEVERAGE RATION SPREAD SPREAD RATE
------------------------------------- ------ ---------- --------------
CATEGORY 1
GREATER THAN OR EQUAL TO 6.00 TO 1.00 2.50 3.50 0.75
CATEGORY 2
GREATER THAN OR EQUAL TO 4.00 TO 1.00
BUT LESS THAN 6.00 TO 1.00 2.25 3.25 0.50
CATEGORY 3
LESS THAN 4.00 TO 1.00 1.75 2.75 0.50
For purposes of the foregoing, (i) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of Borrower's fiscal year based
upon Borrower's consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent of such
consolidated financial statements indicating such change and ending on the date
immediately preceding the effective date of the next such change; provided that
the Leverage Ratio shall be deemed to be in Category 1 (A) at any time that an
Event of Default has occurred and is continuing or (B) if the Borrower fails to
deliver the consolidated financial statements required to be delivered by it
pursuant to Section 5.01(a) or (b), during the period from the expiration of the
time for delivery thereof until such consolidated financial statements are
delivered.
"Argo-Tech Notes" means the senior unsecured subordinated notes issued
by the Borrower, at a discount, for cash consideration of up to $50,000,000, the
proceeds of which were used to pay dividends to Holdings and which dividends
were used by Holdings to purchase Common Stock from AT Holdings, LLC.
"Argo-Tech Notes Documents" means the indenture under which the
Argo-Tech Notes were issued and all other agreements and documents evidencing,
guaranteeing or providing for the terms and conditions of the Argo-Tech Notes.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a
4
member of the Bank Insurance Fund classified as "well-capitalized" and within
supervisory subgroup "B" (or a comparable successor risk classification) within
the meaning of 12 C.F.R. Part 327 (or any successor provision) to the Federal
Deposit Insurance Corporation for insurance by such Corporation of time deposits
made in dollars at the offices of such member in the United States; provided
that if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the
Administrative Agent to be representative of the cost of such insurance to the
Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means Argo-Tech Corporation, a Delaware corporation.
"Borrowing" means Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
"Borrowing Base" means, as of any date of determination, an amount
equal to the sum of (a) 80% of the aggregate amount of the Eligible Accounts
Receivable as of such date, plus (b) 60% of the Eligible Inventory Value as of
such date. The Borrowing Base shall be computed as of the end of each fiscal
month during which the Revolving Exposure equals or exceeds $10,000,000 by the
Borrower and a Borrowing Base Certificate presenting the Borrower's computation
of the Borrowing Base will be delivered to the Administrative Agent promptly,
but in no event later than the 15th day of the following month; provided that
the Borrower may, at its option, deliver a Borrowing Base Certificate at any
time (but not more frequently than once in any week) in order to establish a new
Borrowing Base. The Borrowing Base at any time in effect shall be determined
5
by reference to the Borrowing Base Certificate most recently delivered
hereunder, absent any error in such Borrowing Base Certificate.
"Borrowing Base Certificate" means a certificate in a form approved by
the Administrative Agent, together with all attachments contemplated thereby.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Borrower Subordinated Notes" means the $5,006,700 of floating rate
Subordinated Notes due December 31, 2007, of the Borrower payable to the order
of Xxxxxx Xxxxxx, as trustee under the Irrevocable Trust Agreement dated
December 16, 1988.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in
New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Borrower and
its consolidated Subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP and (b) Capital Lease Obligations incurred by the Borrower and its
consolidated Subsidiaries during such period.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person other than Holdings of any
shares of capital stock of the Borrower; (b) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
6
Securities and Exchange Commission thereunder as in effect on the date hereof),
other than Permitted Owners of shares representing more than 20% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of Holdings; (c) occupation of a majority of the seats (other than
vacant seats) on the board of directors of Holdings by Persons who were neither
(i) nominated by AT Holdings LLC or the chief executive officer of the Borrower
nor (ii) appointed by directors so nominated; (d) the acquisition of direct or
indirect Control of Holdings by any Person or group other than Permitted Owners;
or (e) any "Change of Control" as defined in the Senior Subordinated Notes
Documents.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.14(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Tranche A Term Loans or Delayed Draw Acquisition Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means the "Collateral Agent", as defined in the
Security Agreement.
"Commitment" means a Revolving Commitment.
"Common Stock" means shares of Common Stock, par value $.001 per
shares, of Holdings.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period (adjusted to exclude any non-cash items attributable to purchase
accounting for any acquisition transactions consummated subsequent to the
Effective Date), plus, without duplication and to the extent deducted from
revenues in determining Consolidated Net
7
Income, the sum of (a) the aggregate amount of Consolidated Interest Expense for
such period, (b) the aggregate amount of letter of credit fees accrued during
such period, (c) the aggregate amount of income tax expense for such period, (d)
all amounts attributable to depreciation and amortization for such period and
(e) all extraordinary charges during such period and all non-cash charges
associated with ESOP compensation and stock options issued to management, and
minus, without duplication and to the extent added to revenues in determining
Consolidated Net Income for such period, all extraordinary gains during such
period, all as determined on a consolidated basis with respect to the Borrower
and its Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the interest
expense, both expended and capitalized (including the interest component in
respect of Capital Lease Obligations, but excluding any amortization of deferred
financing costs and prepayment fees), accrued or paid by the Borrower and its
Subsidiaries during such period, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, net income or loss of
the Borrower and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP, provided that there shall be excluded (a) the
income of any Person in which any other Person (other than the Borrower or any
of the Subsidiaries or any director holding qualifying shares in compliance with
applicable law) has a joint interest, except income shall be included to the
extent of the amount of dividends or other distributions actually paid to the
Borrower or any of its Subsidiaries by such Person during such period and (b)
the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any of its
Subsidiaries or the date that Person's assets are acquired by the Borrower or
any of its Subsidiaries (except, in the case of X.X. Xxxxxx, which income (or
loss) (excluding the effect of expenses of the office of the president on such
income or (loss)) shall not be excluded for purposes of determining Consolidated
EBITDA for purposes of the Leverage Ratio and Senior Leverage Ratio only).
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
8
"Controlling" and "Controlled" have meanings correlative thereto.
"Corporation's Notes" shall have the meaning set forth in Section 5.4
of the Stockholders' Agreement.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Delayed Draw Acquisition Loan" has the meaning set forth in Section
2.01(b).
"Delayed Draw Acquisition Loan Lender" means a Lender with an
outstanding Delayed Draw Acquisition Loan.
"Delayed Draw Acquisition Loan Maturity Date" means October 28, 2005.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Distributorship Agreement" means the Distributorship Agreement dated
as of December 15, 2000, among the Borrower, Upsilon International Corporation
and Yamada Corporation.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means July 18, 1997.
"Eligible Accounts Receivable" means, as of any date of determination,
all Accounts that satisfy the following criteria as of such date:
(a) all payments on such Account are by the terms of such
Account due not later than 90 days after the date of the original
invoice relating thereto;
(b) such Account is both (i) owing from an Account Debtor with
a principal place of business in the United States of America and (ii)
payable from an office located in the United States of America;
(c) such Account has been invoiced and is not more than 90
days past the original invoice date (and, for purposes of determining
the aggregate amount of such Accounts that are more than 90 days past
the original
9
invoice date, any net credit balances owing to the applicable Account
Debtor and its Affiliates in respect of such Accounts shall be
disregarded);
(d) such Account is denominated in dollars;
(e) such Account arose from a completed, outright and lawful
sale of goods or from the completed performance and acceptance of
services rendered by the Borrower or a Subsidiary Loan Party;
(f) such Account is owned solely by the Borrower or a
Subsidiary Loan Party, is subject to a perfected first priority
security interest in favor of the Collateral Agent for the benefit of
the Secured Parties pursuant to the Security Agreement and is not
subject to any other Lien;
(g) such Account arose in the ordinary course of business of
the Borrower or a Subsidiary Loan Party and, to the best knowledge of
the Borrower, no event of death, bankruptcy, insolvency or inability to
pay creditors generally of the Account Debtor thereunder has occurred,
and no notice thereof has been received;
(h) with respect to such Account, the Account Debtor is not
Holdings, the Borrower, a Subsidiary or an Affiliate of any thereof;
(i) such Account constitutes an "account" or "chattel paper"
within the meaning of the Uniform Commercial Code of the state in which
the Account is located;
(j) such Account complies in all material respects with the
requirements of all applicable laws and regulations;
(k) such Account is in full force and effect and constitutes a
legal, valid and binding obligation of the Account Debtor enforceable
in accordance with its terms;
(l) such Account is not for goods sold or services rendered
under a purchase order or pursuant to an agreement or understanding
(written or oral) indicating that any Person other than the Borrower or
a Subsidiary Loan Party has or has had or is purported to have or have
had an ownership interest in such goods or to have rendered such
services, as subcontractor or otherwise;
10
(m) the Account Debtor with respect to such Account (i) is not
a creditor of the Borrower or any Subsidiary (other than the Lenders)
unless such Account Debtor has executed a no-offset letter reasonably
satisfactory to the Administrative Agent and (ii) has not asserted that
such Account is, and the Borrower is not aware of any basis upon which
such Account could be, subject to any defense, offset, deduction,
credit or dispute (but an Account shall not be excluded pursuant to
this clause (ii) to the extent, if any, of any portion thereof that is
not asserted to be, and the Borrower is not aware of any basis upon
which such portion of such Account could be, so subject);
(n) such Account is not payable from an office located in
Minnesota or New Jersey unless the Borrower or the applicable
Subsidiary Loan Party (i) has received a certificate of authority to do
business in and is in good standing in such state or (ii) has filed a
notice of business activities report with the appropriate office or
agency of such state for the current year; and
(o) such Account is not subject to any credit for advance
payments or deposits of any Account (but any Account that is so subject
shall be excluded only to the extent of the amount of such advance
payments or deposits).
"Eligible Inventory" means, as of any date of determination, all
Inventory that satisfies the following criteria as of such date:
(a) such Inventory is owned solely by the Borrower or a
Subsidiary Loan Party, is subject to a perfected first priority
security interest in favor of the Collateral Agent for the benefit of
the Secured Parties pursuant to the Security Agreement and is not
subject to any other Lien;
(b) such Inventory is located in the United States of America
and is in the possession of the Borrower or a Subsidiary Loan Party,
except Inventory which is not located in the United States or is not in
the possession of the Borrower or a Subsidiary Loan Party as a result
of manufacturing processes in the ordinary course of business; and
(c) such Inventory constitutes "inventory" within the meaning
of the Uniform Commercial Code of the state in which such Inventory is
located.
11
"Eligible Inventory Value" means, as of any date of determination, the
gross book value of all Eligible Inventory as of such date.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, handling, treatment, storage, disposal, release or
threatened release of any Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, natural resource damage, costs of
environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of Holdings, the Borrower or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA
12
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"ESOP" means the employee stock ownership plan created pursuant to the
terms of the ESOP Plan and Trust Document.
"ESOP Documentation" means the ESOP Plan and Trust Document, the ESOP
Loan Agreement, the ESOP Term Note and the ESOP Pledge Agreement.
"ESOP Loan" means the loan made by the Borrower to the ESOP Trust
pursuant to the terms of the ESOP Loan Agreement.
"ESOP Loan Agreement" means the ESOP Loan Agreement, dated May 17,
1994, between the Borrower and the ESOP Trust.
"ESOP Plan and Trust Document" means the Argo-Tech Corporation Employee
Stock Ownership Plan and Trust Agreement, dated May 17, 1994, between the
Borrower and State Street Bank and Trust in its capacity as ESOP Trustee.
"ESOP Pledge Agreement" means the ESOP Pledge Agreement, dated May 17,
1994, executed by the ESOP Trust in favor of the Borrower.
"ESOP Put Option" means, collectively, the put option created pursuant
to Section 7.05 of the ESOP Plan and Trust Document and the put option payments
corresponding to such section created by the Argo-Tech Corporation Employee
Stock Ownership Plan Excess Benefit Plan.
"ESOP Term Note" means the Term Note, dated the date of the ESOP Loan,
in the original principal amount of $16,800,000, executed and delivered by the
ESOP Trust to the Borrower pursuant to the ESOP Loan Agreement, and also means
all other promissory notes accepted from time to time in substitution thereof or
renewal thereof.
13
"ESOP Trust" means the Argo-Tech Employee Stock Ownership Trust
created pursuant to the terms of the ESOP Plan and Trust Document.
"ESOP Trustee" means State Street Bank and Trust, in its capacity as
trustee of the ESOP, and any successor thereto in such capacity.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excess Cash Flow" means, for any period, the sum (without duplication)
of:
(a) the consolidated net income (or loss) of the Borrower and
its consolidated Subsidiaries for such period, adjusted to exclude any
gains or losses attributable to Prepayment Events; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such consolidated net income (or loss)
for such period; plus
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such period plus (ii) the amount, if any, by
which the consolidated deferred revenues of the Borrower and its
consolidated Subsidiaries increased during such period plus (iii) the
aggregate principal amount of Capital Lease Obligations and other
Indebtedness incurred during such period to finance Capital
Expenditures, to the extent that mandatory principal payments in
respect of such Indebtedness would not be excluded from clause (f)
below when made;
(d) the sum of (i) any non-cash gains included in determining
such consolidated net income (or loss) for such period plus (ii) the
amount, if any, by which Net Working Capital increased during such
period plus (iii) the amount, if any, by which the consolidated
deferred revenues of the Borrower and its Subsidiaries decreased during
such period; minus
(e) Capital Expenditures permitted under Section 6.12 and made
during such period; minus
14
(f) the aggregate principal amount of Indebtedness repaid or prepaid by
the Borrower and its consolidated Subsidiaries during such period,
excluding (i) Indebtedness in respect of Revolving Loans and Letters of
Credit, (ii) Term Loans prepaid pursuant to Section 2.10(c) or (e), (iii)
repayments or prepayments of Indebtedness financed by incurring other
Indebtedness, to the extent that mandatory principal payments in respect of
such other Indebtedness would not be excluded from this clause (f) when
made and (iv) Indebtedness referred to in clauses (v), (vi), (ix) and (x)
of Section 6.01(a).
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.18(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.16(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.16(a).
"Existing Credit Agreement" has the meaning given such term in the
recitals hereto.
"Existing Credit Agreement Effective Date" means the date the Existing
Credit Agreement became effective in accordance with its terms.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of
New York, or, if such rate is not so
published for any day
15
that is a Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Financial Officer" means the chief financial officer or treasurer of
the Borrower.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (a)
(i) Consolidated EBITDA, minus (ii) Capital Expenditures, minus (iii) the
aggregate amount of income tax expense paid in cash net of refunds received to
(b) the sum of (i) Consolidated Interest Expense (net of interest income), plus
(ii) scheduled payments of Term Loans after the Restatement Effective Date, in
each case for such period; provided that, for purposes of determining the amount
to be calculated pursuant to clause (b) (ii) of this definition, for periods
ending on or prior to October 24, 2003, the amount of scheduled payments of Term
Loans after the Restatement Effective Date during such period shall be (A) the
scheduled amount of Term Loans to be paid in the fiscal quarter ending April 25,
2003 multiplied by 4, in the case of the period ended January 24, 2003 and (B)
multiplied by (l) 4, in the case of the period of four fiscal quarters ending
April 25, 2003, (2) 2, in the case of the period of four fiscal quarters ending
July 25, 2003 and (3) 4/3, in the case of the period of four fiscal quarters
ending October 24, 2003.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive,
16
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Holdings" means AT Holdings Corporation, a Delaware corporation.
"Holdings Preferred Stock" means up to $30,000,000 of cumulative
exchangeable redeemable preferred stock issued by Holdings with warrants to
purchase common stock of Holdings (on terms and conditions substantially as set
forth on Annex 1 hereto), the proceeds of which are used to purchase Common
Stock from AT Holdings, LLC.
17
"Holdings Subordinated Notes" means the $41,100,000 of 11.25%
Subordinated Notes due December 31, 2007, of Holdings payable to AT Holdings,
LLC.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable thereof or as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E, among the Borrower, Holdings, the Subsidiary Loan Parties and the
Administrative Agent.
"Information Memorandum" means the Confidential Information Memorandum
dated June 1997 relating to the Borrower, the Loan Documents, the borrowing of
Loans, the use of proceeds thereof and the issuance of Letters of Credit
hereunder.
18
"Interest Election Request" means a request by the Borrower to convert
or continue a Revolving Borrowing or Term Borrowing in accordance with Section
2.06.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December, and (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
"Inventory" has the meaning assigned to such term in the Security
Agreement.
"Issuing Bank" means JPMorgan Chase Bank, in its capacity as the issuer
of Letters of Credit hereunder, and its successors in such capacity as provided
in Section 2.04(i). The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term "Issuing Bank" shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
"X.X. Xxxxxx" means Argo-Tech Corporation Costa Mesa, formerly known as
X.X. Xxxxxx Company, Inc., a California corporation.
19
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Revolving Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Leverage Ratio" means, on any date, the ratio of (a) Total Debt as of
such date to (b) Consolidated EBITDA for the period of four consecutive fiscal
quarters of the Borrower most recently ended as of such date (including the
Consolidated EBITDA (excluding the effect of expenses of the office of the
president on such Consolidated EBITDA) for such four fiscal quarters of X.X.
Xxxxxx for the period of four consecutive fiscal quarters of the Borrower most
recently ended) (or, if such date is not the last day of a fiscal quarter, then
most recently ended prior to such date), all determined on a consolidated basis
in accordance with GAAP.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such
20
Interest Period are offered by the principal London office of the Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the promissory notes, if any,
executed and delivered pursuant to Section 2.08(e), the Parent Guarantee
Agreement, the Subsidiary Guarantee Agreement, the Indemnity, Subrogation and
Contribution Agreement, the Security Documents and the Amendment and Restatement
Agreement.
"Loan Parties" means Holdings, the Borrower and the Subsidiary Loan
Parties.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Management Put Options" means the put option created pursuant to
Section 5 of the Stockholders' Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of Holdings,
the Borrower and the Subsidiaries taken as a whole, (b) the ability of one or
more Loan Parties to perform any of their obligations under the Loan Documents
that, taken as a whole, are material or (c)) the rights of or benefits available
to the Lenders under one or more Loan Documents that, taken as a whole, are
material.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of Holdings, the Borrower and its Subsidiaries in an
aggregate principal amount exceeding $2,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of Holdings,
the
21
Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall
be the maximum aggregate amount (giving effect to any netting agreements) that
Holdings, the Borrower or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be
satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means each parcel of real property and
improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by Holdings, the Borrower and
the Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction or a casualty or
other insured damage or condemnation or similar proceeding), the amount of all
payments required to be made by Holdings, the Borrower and the Subsidiaries as a
result of such event to repay Indebtedness (other than Loans) secured by such
asset or otherwise subject to mandatory prepayment as a result of such event,
and (iii) the amount of all taxes paid (or reasonably estimated to be payable)
by Holdings, the Borrower and the Subsidiaries, and the amount of any reserves
established by Holdings, the Borrower and the Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, in each case during the year
that such event occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good faith by the
chief financial officer of the Borrower).
"Net Working Capital" means, at any date, (a) the consolidated current
assets of the Borrower and its
22
consolidated Subsidiaries as of such date (excluding cash and Permitted
Investments) minus (b) the consolidated current liabilities of the Borrower and
its consolidated Subsidiaries as of such date (excluding current liabilities in
respect of Indebtedness). Net Working Capital at any date may be a positive or
negative number. Net Working Capital increases when it becomes more positive or
less negative and decreases when it becomes less positive or more negative.
"Obligations" has the meaning assigned to such term in the Security
Agreement.
"Original Credit Agreement" has the meaning given such term in the
recitals hereto.
"Other Taxes" means any and all current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"Parent Guarantee Agreement" means the Parent Guarantee Agreement,
substantially in the form of Exhibit C, made by Holdings in favor of the
Administrative Agent for the benefit of the Secured Parties.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 1 to
the Security Agreement or any other form approved by the Collateral Agent.
"Permitted Acquisition" means any acquisition by the Borrower or a
Subsidiary Loan Party of all or substantially all the assets of, or all the
shares of capital stock of or other equity interests in, a Person or division or
line of business of a Person if, immediately after giving effect thereto, (i) no
Default has occurred and is continuing or would result therefrom, (ii) all
transactions related thereto are consummated in accordance with applicable laws,
(iii) all the capital stock of any Subsidiary formed for the purpose of or
resulting from such acquisition are owned directly by the Borrower or a
Subsidiary Loan Party and all actions required to be taken, if any, with respect
to such acquired or newly formed Subsidiary under Sections 5.12 and 5.13 have
been taken, (iv) the Borrower and its Subsidiaries are in compliance, on
23
a pro forma basis after giving effect to such acquisition (and taking into
account all appropriate assets, liabilities and items of income and expense of
any acquired entity or acquired assets for any applicable period prior to the
acquisition thereof) with the covenants contained in Sections 6.01, 6.12, 6.13,
6.14 and 6.15 recomputed as at the last day of the most recently ended fiscal
quarter of the Borrower, as if such acquisition had occurred on the first day of
each relevant period for testing such compliance, (v) in the case of an
acquisition of assets, such assets are to be used, and in the case of an
acquisition of capital stock or other equity interests, the Person so acquired
is engaged in, the same or a related line of business as the Borrower and the
Subsidiaries and other business activities incidental thereto, (vi) the Borrower
has delivered to the Administrative Agent an officers' certificate to the effect
set forth in clauses (i) and (iv) above, together with all relevant financial
information for the Person or assets to be acquired, and (vii) neither Holdings,
the Borrower nor any Subsidiary, including any acquired or newly formed
Subsidiary, shall be liable for any Indebtedness other than as permitted by
Section 6.01; provided that the Acquisition shall not be deemed to constitute a
Permitted Acquisition for purposes of this Agreement.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
24
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary;
and
(g) rights of the government of the United States of America or any
agency or instrumentality thereof in inventory or equipment, arising out of
any contract between the Borrower or any Subsidiary and such government,
agency or instrumentality or pursuant to any contract entered into with, or
received from, any higher-tier subcontractor or prime contractor of such
government, agency or instrumentality, whether by operation of law or the
terms of such contract, or by virtue of the receipt by the Borrower or its
predecessor or such Subsidiary of progress or advance payments or
reimbursement of costs in connection therewith.
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America
(or by any agency thereof to the extent such obligations are backed by the
full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Xxxxx'x;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, (i) any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof that has
25
a combined capital and surplus and undivided profits of not less than
$500,000,000, (ii) any domestic office of any commercial bank organized
under the laws of a foreign jurisdiction that has a rating of at least AA
by S&P or Aa by Xxxxx'x and (iii) any Lender; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above.
"Permitted Owners" means (a) Xx. Xxxxxxx Xxxxxx and members of his
immediate family, (b) corporations and other entities that are Controlled by one
or more of the persons referred to in clause (a), (c) trusts for the sole
benefit of one or more of the persons referred to in clause (a), (d) the ESOP
and (e) individuals who are members of management of Holdings or the Borrower as
of the Effective Date.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially in the
form of Exhibit F, among the Borrower, Holdings, the Subsidiaries party thereto
and the Collateral Agent for the benefit of the Secured Parties.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset (including capital
stock) of Holdings, the Borrower or any Subsidiary, other than (i)
dispositions described in clauses (a), (b) and (d) of Section 6.05 and (ii)
other dispositions resulting in aggregate Net Proceeds not exceeding
$2,500,000; or
26
(b) any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property
or asset of Holdings, the Borrower or any Subsidiary, but only to the
extent that the Net Proceeds therefrom have not been applied to repair,
restore or replace such property or asset within 90 days after such event
(or any longer period provided for in Section 5.08(C) with respect to
events referred to in such Section); or
(c) the issuance by Holdings, the Borrower or any Subsidiary of any
equity securities, or the receipt by Holdings, the Borrower or any
Subsidiary of any capital contribution, other than any such issuance of
equity securities to, or receipt of any such capital contribution from,
Holdings, the Borrower or a Subsidiary and the issuance of any class of
common stock by Holdings provided the proceeds of such issuance are used to
redeem Holdings Preferred Stock; or
(d) the incurrence by Holdings, the Borrower or any Subsidiary of any
Indebtedness, other than Indebtedness permitted under Section 6.01.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank as its prime rate in effect at its
principal office in
New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Put Options" means, collectively, the ESOP Put Option and the
Management Put Options.
"Register" has the meaning set forth in Section 9.04.
"Regulation G" means Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
27
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing more than 55% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"Restatement Effective Date" has the meaning given such term in the
Amendment and Restatement Agreement.
"Restatement Transactions" means the execution and delivery of the
Amendment and Restatement Agreement by each Person party thereto, the
satisfaction of the conditions to the effectiveness thereof, and the
consummation of the transactions contemplated thereby, including the amendments
to the Existing Credit Agreement effected by the restatement thereof.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of Holdings, the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
Holdings, the Borrower or any Subsidiary or any option, warrant or other right
to acquire any such shares of capital stock of Holdings, the Borrower or any
Subsidiary.
"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The amount of each
Lender's Revolving Commitment as of the Restatement Effective Date is set forth
on Schedule 2.01 and thereafter, the initial amount of each Lender's Revolving
Commitment is
28
set forth in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Revolving Commitment. The initial aggregate amount of the
Lenders' Revolving Commitments as of the Effective Date was $20,000,000.
"Revolving Exposure" means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Revolving Loans and its
LC Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to Section 2.01(a).
"Revolving Maturity Date" means October 28, 2005.
"S&P" means Standard & Poor's.
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
"Security Agreement" means the Security Agreement, substantially in the
form of Exhibit G, among the Borrower, the Subsidiary Loan Parties and the
Collateral Agent for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement, the Pledge
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.12 or 5.13 to secure
any of the Obligations.
"Senior Debt" means, with respect to the Borrower and its Subsidiaries
on a consolidated basis at any time, all Indebtedness of the Borrower and its
Subsidiaries (other than the Subordinated Notes and the Senior Subordinated
Notes) which at such time would be required to be reflected as a liability for
borrowed money on a consolidated balance sheet of the Borrower and its
consolidated Subsidiaries prepared in accordance with GAAP.
"Senior Leverage Ratio" means, on any date, the ratio of (a) Senior
Debt as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters of the Borrower most recently ended as of such date
(including the Consolidated EBITDA (excluding the effect of expenses of the
office of the president on such Consolidated EBITDA) for such four fiscal
quarters of X.X. Xxxxxx for the period of
29
four consecutive fiscal quarters of the Borrower most recently ended) (or, if
such date is not the last day of a fiscal quarter, then most recently ended
prior to such date), all determined on a consolidated basis in accordance with
GAAP.
"Senior Subordinated Notes" means the 8 5/8% Senior Subordinated Notes
due 2007 issued on the Existing Credit Agreement Effective Date in the aggregate
principal amount of $140,000,000 and shall include any substantially identical
notes issued in exchange therefore after the Existing Credit Agreement Effective
Date, pursuant to the Senior Subordinated Notes Documents.
"Senior Subordinated Notes Documents" means the indenture under which
the Senior Subordinated Notes are issued and all other instruments, agreements
and documents evidencing, guaranteeing or providing for the terms and conditions
of the Senior Subordinated Notes.
"Specified Real Estate" means the real estate owned by Argo-Tech
Corporation (HBP) as of the Effective Date identified on Schedule 6.05.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Stockholders' Agreement" means the Stockholders' Agreement dated as of
December 17, 1998, by and among Holdings, AT Holdings, LLC, YC International
Inc., Sunhorizon International, Inc., Chase Venture Capital
30
Associates, LP and the Management Investors (as defined therein).
"Stock Purchase Agreement" means the Stock Purchase Agreement, dated as
of August 1, 1997, by and among X.X. Xxxxxx, Xxxxxx X. Xxxxx, individually and
as trustee, Xxxxxxx X. Xxxxx, individually and as trustee, Xxxxx X. Derbyshire,
individually and as trustee, Xxxxx X. Derbyshire, individually and as trustee,
Xxxxxxx Xxxxx, Xxxxxxxxx Xxxxxxxx and Xxxxxxx Xxxxxx, as trustee and the
Borrower.
"Subordinated Notes" means the Borrower Subordinated Notes and Holdings
Subordinated Notes.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of Holdings or the Borrower, as the
context requires.
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit D, made by the Subsidiary Loan
Parties in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Subsidiary Loan Party" means any Subsidiary of the Borrower other than
(a) any Foreign Subsidiary that, if it were to Guarantee the Obligations, would
result in adverse tax consequences to Holdings or the Borrower, and (b)
immaterial subsidiaries set forth on Schedule 1.01(b) so long as such immaterial
subsidiaries have no operating assets or earnings other than operating assets
and earnings as of the Effective Date.
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"Sumitomo Credit Agreement" means (a) the Amended and Restated Loan
Agreement dated as of September 21, 1995, as amended, among Holdings, the
Borrower, the Subsidiaries named therein and The Sumitomo Bank, Ltd., and (b)
the Subordinated Loan Agreement dated as of December 24, 1990, as amended,
between Holdings and The Sumitomo Bank, Ltd.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loan" means a Tranche A Term Loan or a Delayed Draw Acquisition
Loan.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of
New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15 (519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in
New York City
received at approximately 10:00 a.m.,
New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Total Debt" means, with respect to the Borrower and its Subsidiaries
on a consolidated basis at any time, all Indebtedness of the Borrower and its
Subsidiaries which at such time would be required to be reflected as a liability
for borrowed money on a consolidated balance sheet of the Borrower and its
consolidated Subsidiaries prepared in accordance with GAAP.
"Tranche A Term Loan" has the meaning set forth in Section 2.01(b).
"Tranche A Term Loan Lender" means a Lender with an outstanding Tranche
A Term Loan.
"Tranche A Term Loan Maturity Date" means October 28, 2005.
"Transactions" means (a) the execution, delivery and performance by
each Loan Party of the Loan Documents to
32
which it is to be a party, (b) the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder, (a) the making of the
Acquisition and (d) the issuance of the Senior Subordinated Notes.
"TRW" means TRW mc, an Ohio corporation, and its successors and
permitted assigns under the TRW Agreement.
"TRW Agreement" means that certain Agreement of Purchase and Sale
between Agnem Holdings, Inc. and TRW, dated as of August 5, 1986, as amended by
(a) that certain letter agreement dated September 5, 1986, (b) that certain
Agreement dated as of September 16, 1986, (c) that certain Agreement dated as of
September 26, 1986, (d) that certain Agreement dated as of October 1, 1986, (e)
that certain letter agreement dated as of October 10, 1986, (f) that certain
letter agreement dated October 15, 1986, and (g) that certain Amendment No. 6 to
Purchase Agreement dated as of October 20, 1986; such term shall also include
any other amendments or modifications thereof entered into in accordance with
Section 6.11.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word
33
"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms: GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments; Outstanding Loans. (a) Subject to the terms
and conditions set forth herein, each Lender agrees to make Revolving Loans to
the Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount that (i) will not result in such Lender's Revolving
Exposure exceeding such Lender's Revolving Commitment and (ii) on any date that
the total
34
Revolving Exposures would exceed $10,000,000 after giving effect to the
Revolving Loans requested on such date, will not result in the total Revolving
Exposures exceeding the Borrowing Base then in effect. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans.
(b) Term loans (the "Tranche A Term Loans") in an initial aggregate
amount of $100,000,000 were made to the Borrower on the Effective Date, and no
Lender shall have an obligation to make any additional Tranche A Term Loan. The
outstanding principal amount of each Lender's Tranche A Term Loan as of the
Restatement Effective Date is set forth on Schedule 2.01. Delayed draw
acquisition loans (the "Delayed Draw Acquisition Loans") in an initial aggregate
amount of $15,000,000 were made to the Borrower on the Existing Credit Agreement
Effective Date, and no Lender shall have an obligation to make any additional
Delayed Draw Acquisition Loan. The outstanding principal amount of each Lender's
Delayed Draw Acquisition Loan as of the Restatement Effective Date is set forth
on Schedule 2.01. Amounts repaid in respect of Term Loans may not be reborrowed.
(c) All Tranche A Term Loans, Delayed Draw Acquisition Loans, Revolving
Loans and Letters of Credit outstanding under the Existing Credit Agreement on
the Restatement Effective Date shall remain outstanding hereunder on the terms
set forth herein.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans of the same Class and Type made by the
Lenders ratably in accordance with their respective Commitments of the
applicable Class. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.13, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement.
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(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $2,500,000. At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $100,000 and not less than $1,000,000; provided that
an ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Revolving Commitments or that is required to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e). Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of six
Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Maturity Date, Tranche A Term Loan Maturity Date or Delayed Draw
Acquisition Loan Maturity Date, as applicable.
SECTION 2.03. Requests for Borrowings. To request a Revolving Borrowing
or Term Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m.,
New York City time, three Business Days before the date of the
proposed Borrowing, or (b) in the case of an ABR Borrowing, not later than 11:00
a.m.,
New York City time, one Business Day before the date of the proposed
Borrowing; provided that any such notice of an ABR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Borrowing,
Tranche A Term Borrowing or Delayed Draw Acquisition Borrowing;
(ii) the aggregate amount of such Borrowing;
36
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) subject to the second sentence of Section 2.02(b), whether such
Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Revolving Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or
37
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $5,000,000, (ii) the total
Revolving Exposures shall not exceed the total Revolving Commitments and (iii)
on any date that the total Revolving Exposures would exceed $10,000,000, the
total Revolving Exposures shall not exceed the Borrowing Base then in effect.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and
38
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 that such payment be financed with an
ABR Revolving Borrowing in an equivalent amount and, to the extent so financed,
the Borrower's obligation to make such payment shall be discharged and replaced
by the resulting ABR Revolving Borrowing. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Revolving Lender of
the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender's Applicable Percentage thereof. Promptly
following receipt of such notice, each Revolving Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.05 with respect to Loans
made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the
payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests may
appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC
39
Disbursement (other than the funding of ABR Revolving Loans as contemplated
above) shall not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the
40
generality thereof, the parties agree that, with respect to documents presented
that appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.12(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.11(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing
41
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to 105% of the LC Exposure
as of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Article VII. Each such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Revolving
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Borrower under
42
this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
SECTION 2.05. Funding of Borrowings. (a) Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
New York City and designated by the Borrower in the applicable Borrowing
Request; provided that ABR Revolving Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.04(e) shall be remitted by the
Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.06. Interest Elections. (a) Each Revolving Borrowing
and Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial
43
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
44
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or
continued as a Eurodollar Borrowing if after giving effect thereto (i) the
Interest Period therefor would commence before and end after a date on which any
principal of the Loans of such Class is scheduled to be repaid and (ii) the sum
of the aggregate principal amount of outstanding Eurodollar Borrowings of such
Class with Interest Periods ending on or prior to such scheduled repayment date
plus the aggregate principal amount of outstanding ABR Borrowings of such Class
would be less than the aggregate principal amount of Loans of such Class
required to be repaid on such scheduled repayment date.
SECTION 2.07. Termination and Reduction of Commitments. (a)
Unless previously terminated, the Revolving Commitments shall terminate on the
Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class; provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$100,000 and not less than $2,500,000 and (ii) the Borrower shall not terminate
or reduce the Revolving Commitments if, after giving effect to any concurrent
prepayment of the
45
Revolving Loans in accordance with Section 2.10, the sum of the Revolving
Exposures would exceed the total Revolving Commitments.
(c) In the event that, on the date on which any prepayment would
be required pursuant to Section 2.10(c) or 2.10(e), no Term Borrowings remain
outstanding or the amount of the prepayment required by Section 2.10(c) or
2.10(e), as the case may be, exceeds the aggregate principal amount of Term
Borrowings then outstanding, the Borrower shall reduce the Revolving Commitments
by an amount equal to the excess of the required prepayment over the principal
amount, if any, of Term Borrowings actually prepaid.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section, or any required reduction of the Revolving Commitments under paragraph
(c) of this Section, at least three Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
commitments of such Class.
SECTION 2.08. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Maturity Date and (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2.09.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
46
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.09. Amortization of Term Loans. (a) Subject to
adjustment pursuant to paragraph (d) of this
47
Section, the Borrower shall repay Tranche A Term Borrowings on each date set
forth below in the aggregate principal amount set forth opposite such date:
Date Amount
---- ------
January 24, 2003 $8,629,000
April 25, 2003 $1,725,800
July 25, 2003 $1,725,800
October 24, 2003 $1,725,800
January 30, 2004 $2,588,700
April 30, 2004 $2,588,700
July 30, 2004 $2,588,700
October 29, 2004 $2,588,700
January 28, 2005 $3,020,150
April 29, 2005 $3,020,150
July 29, 2005 $3,020,150
October 28, 2005 $2,891,850
The foregoing amortization schedule reflects all prepayments
of the Tranche A Term Borrowings made on or prior to the Restatement Effective
Date.
(b) Subject to adjustment pursuant to paragraph (d) of this
Section, the Borrower shall repay Delayed Draw Acquisition Borrowings on each
date set forth below in the aggregate principal amount set forth opposite such
date:
Date Amount
---- ------
January 24, 2003 $1,371,000
April 25, 2003 $ 274,200
July 25, 2003 $ 274,200
October 24, 2003 $ 274,200
January 30, 2004 $ 411,300
April 30, 2004 $ 411,300
July 30, 2004 $ 411,300
October 29, 2004 $ 411,300
January 28, 2005 $ 479,850
April 29, 2005 $ 479,850
July 29, 2005 $ 479,850
October 28, 2005 $ 458,150
The foregoing amortization schedule reflects all prepayments of
the Delayed Draw Acquisition Borrowings on or made prior to the Restatement
Date.
(c) To the extent not previously paid, (i) all
Tranche A Term Loans shall be due and payable on the Tranche A Term Loan
Maturity Date and (ii) all Delayed Draw
48
Acquisition Loans shall be due and payable on the Delayed Draw Acquisition Loan
Maturity Date.
(d) Any prepayment of a Term Borrowing on or after the
Restatement Effective Date of either Class shall be applied to reduce the
subsequent scheduled repayments of the Term Borrowings of such Class to be made
pursuant to this Section ratably.
(e) Prior to any repayment of any Term Borrowings of either
Class hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date of such
repayment; provided that each repayment of Term Borrowings of either Class shall
be applied to repay any outstanding ABR Term Borrowings of such Class before any
Eurodollar Term Borrowings of such Class. Each repayment of a Borrowing shall be
applied ratably to the Loans included in the repaid Borrowing. Repayments of
Term Borrowings shall be accompanied by accrued interest on the amount repaid.
SECTION 2.10. Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) On any date that the total Revolving Exposures exceed
$10,000,000, in the event and on each occasion that the total Revolving
Exposures exceed the Borrowing Base then in effect, the Borrower shall prepay
Revolving Borrowings in an aggregate amount equal to such excess.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of Holdings, the Borrower or any Subsidiary in respect
of any Prepayment Event, the Borrower shall, immediately after such Net Proceeds
are received apply an aggregate amount equal to such Net Proceeds (i) first, to
the prepayment in full of all outstanding Term Borrowings and (ii) second, to
the reduction of the Revolving Commitments. The Borrower will, in any event,
prepay Term Borrowings at such times and in such amounts as shall be necessary
in order to avoid any requirement under the Senior Subordinated Notes Documents
to offer to purchase any Senior Subordinated Notes.
(d) In the event of any partial reduction of the Revolving
Commitments, then (i) at or prior to the date of
49
such reduction, the Administrative Agent shall notify the Borrower and the
Lenders of the Revolving Exposure after giving effect thereto and (ii) if such
Revolving Exposure would exceed the Revolving Commitments after giving effect to
such reduction, then the Borrower shall, on the date of such reduction, repay or
prepay Revolving Borrowings in an amount sufficient to eliminate such excess.
(e) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending October 25, 1997, the Borrower shall
prepay Term Borrowings in an aggregate amount equal to 50% (or, in the case of
the fiscal year ending October 25, 1997, 12.5%) of Excess Cash Flow for such
fiscal year; provided that if the Senior Leverage Ratio as of the end of such
fiscal year is less than 2.10 to 1.00, no prepayment shall be required pursuant
to this paragraph in respect of such fiscal year. Each prepayment pursuant to
this paragraph shall be made on or before the date on which financial statements
are delivered pursuant to Section 5.01 with respect to the fiscal year for which
Excess Cash Flow is being calculated (and in any event within 90 days after the
end of such fiscal year).
(f) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (g) of this Section; provided that each prepayment of Borrowings of
any Class shall be applied to prepay ABR Borrowings of such Class before any
other Borrowings of such Class. In the event of any optional or mandatory
prepayment of Term Borrowings made at a time when Term Borrowings of both
Classes remain outstanding, the Borrower shall select Term Borrowings to be
prepaid so that the aggregate amount of such prepayment is allocated between the
Tranche A Term Borrowings and Delayed Draw Acquisition Borrowings pro rata based
on the aggregate principal amount of outstanding Borrowings of each such Class.
(g) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
provided that,
50
if a notice of optional prepayment is given in connection with a conditional
notice of termination of the Revolving Commitments as contemplated by Section
2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.12.
SECTION 2.11. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at the Applicable Rate on the average daily unused amount of
the Revolving Commitment of such Lender during the period from and including the
Effective Date to but excluding the date on which such Revolving Commitment
terminates. Accrued commitment fees shall be payable in arrears on the last day
of March, June, September and December of each year and on the date on which the
Revolving Commitments terminate, commencing on the first such date to occur
after the Effective Date. All commitment fees shall be computed on the basis of
a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees, a Revolving Commitment of a Lender shall be deemed to be used
to the extent of the outstanding Revolving Loans and LC Exposure of such Lender.
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as interest on Eurodollar Revolving Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at 1/4 of 1% per annum on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to unreimbursed LC
51
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's standard fees (other than fronting fees, which shall be payable as
specified above) with respect to the issuance, amendment, renewal or extension
of any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Revolving Commitments terminate and any such fees accruing after the
date on which the Revolving Commitments terminate shall be payable on demand.
Any other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as
52
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section or (ii) in the case of any
other amount, 2% plus the rate applicable to ABR Revolving Loans as provided in
paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Revolving Loan prior to the end of the Revolving Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13. Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or
53
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.14. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or
54
the Letters of Credit issued by the Issuing Bank, to a level below that which
such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's or the Issuing Bank's policies and the policies of
such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation thereof or; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.15. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.10(g) and is revoked in accordance therewith), or (d)
the assignment
55
of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to Section
2.18, then, in any such event, the Borrower shall compensate each Lender for the
loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.16. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
56
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error. If the Administrative Agent, any Lender or the Issuing
Bank (as the case may be) receives a refund of any Indemnified Taxes or Other
Taxes for which the Borrower has made a payment hereunder, it shall promptly
notify the Borrower thereof and shall promptly upon receipt repay such refund to
the Borrower, without interest and net of any expenses incurred; provided that
the Borrower, upon the request of the Administrative Agent, such Lender or the
Issuing Bank (as the case may be), agrees to return the amount of such refund
(plus any penalties, interest or other charges required to be paid) to the
Administrative Agent, such Lender or the Issuing Bank (as the case may be) in
the event the Administrative Agent, such Lender or the Issuing Bank (as the case
may be) is required to repay such refund to the relevant Governmental Authority.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.
57
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of
Setoffs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.14,
2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (i) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Revolving Loans, Term Loans and participations
in LC Disbursements and accrued interest thereon than the
58
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participation's in the
Revolving Loans, Term Loans and participation's in LC Disbursements of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Revolving Loans, Term
Loans and participations in LC Disbursements; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
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(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.04 (d) or (e), 2.05(b), 2.17(d) or 9.03 (c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.18. Mitigation Obligations: Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.14, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other
60
amounts) and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.14 or payments required to be made pursuant to
Section 2.16, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
ARTICLE III
Representations and Warranties
Each of Holdings and the Borrower represents and warrants to the
Lenders that:
SECTION 3.01. Organization; Powers. Each of Holdings, the Borrower and
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions and
Restatement Transactions to be entered into by each Loan Party are within such
Loan Party's corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by each of Holdings and the Borrower and constitutes, and
each other Loan Document to which any Loan Party is to be a party, when executed
and delivered by such Loan Party, will constitute, a legal, valid and binding
obligation of Holdings, the Borrower or such Loan Party (as the case may be),
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
and Restatement Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental
61
Authority, except such as have been obtained or made and are in full force and
effect and except filings necessary to perfect Liens created under the Loan
Documents, (b) will not violate any applicable law or regulation or the charter,
bylaws or other organizational documents of Holdings, the Borrower or any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon Holdings, the Borrower or any of its Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made by Holdings, the
Borrower or any of its Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of Holdings, the Borrower or any of its
Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended October 27, 2001, reported on by Deloitte & Touche LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended July 27, 2002, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.
(b) The Borrower has heretofore furnished to the Lenders its pro forma
consolidated balance sheet as of August 2, 1997, prepared giving effect to the
Transactions as if the Transactions had occurred on such date. Such pro forma
consolidated balance sheet (i) has been prepared in good faith based on the same
assumptions used to prepare the pro forma financial statements included in the
information package distributed to the Lenders in August 1997 (which assumptions
are believed by the Borrower to be reasonable), (ii) is based on the best
information available to the Borrower after due inquiry, (iii) accurately
reflects all adjustments necessary to give effect to the Transactions and (iv)
presents fairly, in all material respects, the pro forma financial position of
the Borrower and its consolidated Subsidiaries as of August 2, 1997 as if the
Transactions had occurred on such date.
(c) Except as disclosed in the financial statements referred to above
or the notes thereto or in the
62
Information Memorandum and except for the Disclosed Matters, after giving effect
to the Transactions and Restatement Transactions, none of Holdings, the Borrower
or its Subsidiaries has, as of the Restatement Effective Date, any material
contingent liabilities, unusual long-term commitments or unrealized losses.
(d) Since October 27, 2001, there has been no material adverse change
in the business, assets, operations, prospects or condition, financial or
otherwise, of Holdings, the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of Holdings, the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of Holdings, the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by Holdings,
the Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05 sets forth the address of each real property that is
owned or leased by the Borrower or any of its Subsidiaries as of the Restatement
Effective Date after giving effect to the Restatement Transactions. As of the
Restatement Effective Date, after giving effect to the Restatement Transactions,
neither Holdings, the Borrower nor any of its Subsidiaries owns any real
property other than the real property set forth in Schedule 3.05.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings or the Borrower,
threatened against or affecting Holdings, the Borrower, any of its Subsidiaries
or the ESOP (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, (ii)
that involve any of the Loan Documents or the Transactions or (iii) in the case
of the ESOP, as
63
which there is a reasonable possibility of an adverse decision that could
adversely effect the status of the ESOP.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither Holdings, the Borrower
nor any of its Subsidiaries (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of Holdings,
the Borrower and its Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither Holdings,
the Borrower nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of Holdings, the Borrower and its
Subsidiaries has timely filed or caused to be filed all income, franchise and
other material Tax returns and reports required to have been filed and has paid
or caused to be paid all Taxes required to have been paid by it, except Taxes
that are being contested in good faith by appropriate proceedings and for which
Holdings, the Borrower or such Subsidiary, as applicable, has set aside on its
books adequate reserves; provided, that no representation or warranty can be
made with respect to X.X. Xxxxxx prior to the Acquisition, other than that the
sellers of X.X. Xxxxxx
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have indemnified the Borrower for any such failure to file or pay taxes prior to
the Acquisition.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of all the assets of such Plan by an amount that could reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect. Each Plan is in compliance in all material respects with the
requirements under ERISA and the Code.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which Holdings,
the Borrower or any of its Subsidiaries is subject, and all other matters known
to any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the other reports, financial statements, certificates or
other information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, Holdings and the Borrower represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.
SECTION 3.12. Subsidiaries. Holdings do not have any Subsidiaries other
than the Borrower and the Borrower's Subsidiaries. Schedule 3.12 sets forth the
name and jurisdiction of organization of, and the ownership interest of the
Borrower in, each Subsidiary of the Borrower and identifies each Subsidiary that
is a Subsidiary Loan Party, in each case as of the Restatement Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Borrower and its Subsidiaries as of
the
65
Restatement Effective Date. As of the Restatement Effective Date, all premiums
in respect of such insurance have been paid.
SECTION 3.14. Labor Matters. As of the Restatement Effective Date,
there are no strikes, lockouts or slowdowns against Holdings, the Borrower or
any Subsidiary pending or, to the knowledge of Holdings or the Borrower,
threatened. The hours worked by and payments made to employees of Holdings, the
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters, except where such violations, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. All material payments due from Holdings, the Borrower or any Subsidiary,
or for which any material claim may be made against Holdings, the Borrower or
any Subsidiary, on account of wages and employee health and welfare insurance
and other benefits, have been paid or accrued as a liability on the books of
Holdings, the Borrower or such Subsidiary. The consummation of the Transactions
will not give rise to any right of termination or right of renegotiations on the
part of any union under any collective bargaining agreement to which Holdings,
the Borrower or any Subsidiary is bound.
SECTION 3.15. Solvency. Immediately after the consummation of the
Restatement Transactions to occur on the Restatement Effective Date and
immediately following the making of each Loan made on the Restatement Effective
Date and after giving effect to the application of the proceeds of such Loans
(and taking into consideration the rights and obligations of the Loan Parties
under the Indemnity, Subrogation and Contribution Agreement), (a) the fair value
of the assets of each Loan Party, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Loan Party will be able
to pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) each Loan Party will
not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
following the Restatement Effective Date.
SECTION 3.16. Security Documents. (a) The Pledge Agreement is effective
to create in favor of the
66
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Pledge
Agreement) and, when the Collateral is delivered to the Collateral Agent, the
Pledge Agreement shall constitute a fully perfected first priority Lien on, and
security interest in, all right, title and interest of each pledgor thereunder
in such Collateral, in each case prior and superior in right to any other
Person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property (as defined in the Security Agreement), in
each case prior and superior in right to any other Person, other than with
respect to Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the Intellectual Property
(as defined in the Security Agreement) in which a security interest may be
perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the United States Patent and Trademark Office
or the United States Copyright Office, as applicable, in each case prior and
superior in right to any other Person other than Liens expressly permitted by
Section 6.02 (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a Lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after the date hereof).
SECTION 3.17. Federal Reserve Regulations. (a) Neither Holdings, the
Borrower nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and
67
whether immediately, incidentally or ultimately, for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations of
the Board, including Regulation G, U or K.
SECTION 3.18. TRW Agreement. The provisions of the TRW Agreement
pursuant to which TRW is obligated to perform any "Environmental Remediation"
and/or indemnify, defend and hold harmless the Borrower, with respect to
"Excluded Environmental Obligations", TRW's share of "Shared Environmental
Obligations", or otherwise with respect to "Environmental Activities", are in
full force and effect in accordance with the terms of the TRW Agreement and no
party has waived any material rights thereunder. Terms contained in quotation
marks in this Section 3.18 shall have the respective meanings ascribed to such
terms in the TRW Agreement.
SECTION 3.19. Tax Status of ESOP. The ESOP, together with the ESOP Plan
and Trust Document, complies with all the requirements necessary to be an
"employee stock ownership plan" within the meaning of Section 4975(e) (7) of the
Code. The ESOP is a qualified plan and trust under Section 401(a) of the Code,
exempt from the tax under Section 501 of the Code and in compliance with all
applicable requirements of the Code and ERISA.
SECTION 3.20. Certain Agreements. The Stockholders' Agreement and the
Distributorship Agreement are in full force and effect.
ARTICLE IV
Conditions
SECTION 4.01. Each Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
(a) The representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as
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applicable, no Default shall have occurred and be continuing.
(c) In the case of any Borrowing of a Revolving Loan or issuance of any
Letter of Credit, at the time of and immediately after giving effect to
such Borrowing or issuance of Letter of Credit, if the total Revolving
Exposures exceed $10,000,000, the Borrower shall have delivered a Borrowing
Base Certificate as of the most recent month that ended more than 15 days
prior to such date of Borrowing or issuance of Letter of Credit.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Holdings
and the Borrower on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender (directly or through
the Administrative Agent):
(a) within 90 days after the end of each fiscal year of the Borrower
(or in the case of the Borrower's fiscal year ended October 26, 2002,
within 100 days after the end of such year), the Borrower's audited
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by Deloitte & Touche LLP or other independent
public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such
consolidated financial
69
statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP
consistently (except as noted therein) applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, the Borrower's
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the
end of) the previous fiscal year, all certified by one of the Borrower's
Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently (except as noted therein) applied, subject to normal
year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
6.12, 6.13, 6.14 and 6.15 and (iii) stating whether any change in GAAP
or in the application thereof has occurred since the date of the
Borrower's audited financial statements referred to in Section 3.04 and,
if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any
Default (which certificate may be limited to the extent required by
accounting rules or guidelines);
(e) within 30 days after the commencement of each fiscal year of
the Borrower, a detailed consolidated
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budget for such fiscal year (including a projected consolidated balance
sheet and related statements of projected operations and cash flow as of
the end of and for such fiscal year) and, promptly when available, any
significant revisions of such budget;
(f) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by Holdings, the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any
or all of the functions of said Commission, or with any national
securities exchange, or distributed by Holdings to its shareholders
generally, as the case may be;
(g) at least five days prior to the first date that the total
Revolving Exposures exceed $10,000,000 and within 15 days after the end
of each month in which the total Revolving Exposures exceeded
$10,000,000 at any time during such month, a completed Borrowing Base
Certificate calculating and certifying the Borrowing Base as of the last
day of such month (or in the case of the first date that the total
Revolving Exposures exceed $10,000,000, as of the last day of the most
recent month that ended more than 15 days prior to such date), and
signed on behalf of the Borrower by a Financial Officer and accompanied
by the reports and supporting information contemplated thereby; and
(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of Holdings, the Borrower or any Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent or any
Lender may reasonably request.
Delivery to the Administrative Agent and each Lender (directly
or through the Administrative Agent) of a copy of the Borrower's Form 10-K or
1O-Q, as the case may be, filed with the Securities and Exchange Commission will
satisfy the requirements set forth in clause (a) and (b) above, as the case may
be, provided that the contents thereof satisfy such requirements.
SECTION 5.02. Notices of Material Events. Holdings and the
Borrower will furnish to the Administrative Agent and each Lender (directly or
through the Administrative Agent) prompt written notice of the following:
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(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or
affecting Holdings, the Borrower or any Affiliate thereof that could
reasonably be expected to result in either (i) liability in excess of
$1,500,000 or (ii) a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of Holdings, the Borrower and its
Subsidiaries in an aggregate amount exceeding $750,000; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral.
(a) The Borrower will furnish to the Administrative Agent prompt written notice
of any change (i) in any Loan Party's name, (ii) in the jurisdiction of
incorporation or organization of any Loan Party, (iii) in the location of the
chief executive office of any Loan Party, (iii) in any Loan Party's identity or
type of organization or corporate structure or (iv) in any Loan Party's
Organizational Identification Number. Each Grantor agrees to promptly provide
the Administrative Agent with certified organizational documents reflecting any
of the changes described in the first sentence of this paragraph. The Borrower
agrees not to effect or permit any change referred to in the first sentence of
this paragraph unless all filings have been made under the Uniform Commercial
Code or otherwise that are required in order for the Administrative Agent to
continue at all times following such change to have a valid, legal and perfected
security interest in all the collateral. The Borrower also agrees promptly to
notify the Administrative Agent if any material portion of the Collateral is
damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal
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year pursuant to clause (a) of Section 5.01, the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer of the Borrower and
the chief legal officer of the Borrower setting forth the information required
pursuant to Section 2 of the Perfection Certificate or confirming that there has
been no change in such information since the date of the Perfection Certificate
delivered on the Effective Date or the date of the most recent certificate
delivered pursuant to this Section. Each certificate delivered pursuant to this
Section 5.03(b) shall identify in the format of Schedule II, III, IV or V. as
applicable, of the Security Agreement all Intellectual Property (as defined in
the Security Agreement) of any Loan Party in existence on the date thereof and
not then listed on such Schedules as previously so identified to the Collateral
Agent.
SECTION 5.04. Existence; Conduct of Business. Each of Holdings
and the Borrower will, and will cause each of its Subsidiaries to, do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and tradenames material to the
conduct of its business; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. Each of Holdings and the
Borrower will, and will cause each of its Subsidiaries to, pay its Indebtedness
and other obligations, including material Tax liabilities, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) Holdings, the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation and (d) the failure to make payment pending such contest could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. Each of Holdings and
the Borrower will, and will cause each of its Subsidiaries to, keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
SECTION 5.07. Insurance. (a) Each of Holdings and the Borrower
will, and will cause each of its
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Subsidiaries to, maintain, with financially sound and reputable insurance
companies:
(i) fire and extended coverage insurance, on a replacement cost
basis, with respect to all personal property and improvements to real
property, in such amounts as are customarily maintained by companies
in the same or similar business operating in the same or similar
locations;
(ii) commercial general liability insurance against claims for
bodily injury, death or property damage occurring upon, about or in.
connection with the use of any properties owned, occupied or
controlled by it, providing coverage on an occurrence basis with a
combined single limit of not less than $1,000,000 (plus $35,000,000 of
additional coverage under umbrella and similar policies) and including
the broad form CGL endorsement;
(iii) business interruption insurance, insuring against loss of
gross earnings for a period of not less than 12 months arising from
any risks or occurrences required to be covered by insurance pursuant
to clause (i) above; and
(iv) such other insurance of the type and in the amount described
in Schedule 3.13 or as may be required by law.
Deductibles or self-insured retention shall not exceed $100,000 for fire and
extended coverage policies, $0 for commercial general liability policies or
$100,000 for business interruption policies.
(b) Fire and extended coverage policies (and any policies
required to be maintained pursuant to paragraph (c) below) maintained with
respect to any Collateral shall be endorsed or otherwise amended to include (i)
a non-contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause (regarding personal property), in each case in
favor of the Administrative Agent and providing for losses thereunder to be
payable to the Administrative Agent or its designee, (ii) a provision to the
effect that neither the Borrower, the Administrative Agent nor any other party
shall be a coinsurer and (iii) such other provisions as the Administrative Agent
may reasonably require from time to time to protect the interests of the
Lenders. Commercial general liability policies shall be endorsed to name the
Administrative Agent as an additional insured. Business
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interruption policies shall name the Administrative Agent as loss payee. Each
such policy referred to in this paragraph also shall provide that it shall not
be canceled, modified or not renewed (i) by reason of nonpayment of premium
except upon not less than 10 days' prior written notice thereof by the insurer
to the Administrative Agent (giving the Administrative Agent the right to cure
defaults in the payment of premiums) or (ii) for any other reason except upon
not less than 30 days' prior written notice thereof by the insurer to the
Administrative Agent. The Borrower shall deliver to the Administrative Agent,
prior to the cancellation, modification or nonrenewal of any such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Administrative Agent) together
with evidence satisfactory to the Administrative Agent of payment of the premium
therefor.
(c) If at any time the area in which any Mortgaged Property is
located is designated (i) a "flood hazard area" in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency (or any successor agency),
the Borrower shall obtain flood insurance in such total amount as the
Administrative Agent or the Required Lenders may from time to time require, and
otherwise comply with the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973, as amended from time to time, or (ii) a
"Zone 1" area, the Borrower shall obtain earthquake insurance in such total
amount as the Administrative Agent or the Required Lenders may from time to time
require.
SECTION 5.08. Casualty and Condemnation. (a) The Borrower will
furnish to the Administrative Agent and the Lenders prompt written notice of any
casualty or other insured damage to any portion of any material Collateral or
the commencement of any action or proceeding for the taking of any material
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds, condemnation
award or otherwise), the Administrative Agent is authorized to collect such Net
Proceeds and, if received by Holdings, the Borrower or any Subsidiary, such Net
Proceeds shall be paid over to the Administrative Agent; provided that (i) if
the aggregate Net Proceeds in respect of such event (other than proceeds of
business income insurance) are less than $2,000,000, such Net Proceeds shall be
paid over to the Borrower unless a
75
Default has occurred and is continuing, and (ii) all proceeds of business income
insurance shall be paid over to the Borrower unless a Default has occurred and
is continuing. All such Net Proceeds retained by or paid over to the
Administrative Agent shall be held by the Administrative Agent and released from
time to time to pay the costs of repairing, restoring or replacing the affected
property in accordance with the terms of the applicable Security Document,
subject to the provisions of the applicable Security Document regarding
application of such Net Proceeds during a Default.
(c) If any Net Proceeds retained by or paid over to the
Administrative Agent as provided above continue to be held by the Administrative
Agent on the date that is two years after the occurrence of the event resulting
in such Net Proceeds, then such Net Proceeds shall be applied to prepay Term
Borrowings as provided in Section 2.10(c).
SECTION 5.09. Books and Records: Inspection and Audit Rights.
Each of Holdings and the Borrower will, and will cause each of its Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries are made of all dealings and transactions in relation to its business
and activities. Each of Holdings and the Borrower will, and will cause each of
its Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
(b) Each of Holdings and the Borrower will, and will cause each
of its Subsidiaries to, permit the Administrative Agent and any representatives
designated by the Administrative Agent (including any consultants, accountants,
lawyers and appraisers retained by the Administrative Agent) to conduct
evaluations and audits of the computation of the Borrowing Base and the assets
included in the Borrowing Base, all at such reasonable times and (i) within 90
days following the first date that the total Revolving Exposures exceed
$10,000,000 and (ii) as often as reasonably requested; Provided that, unless a
Default has occurred and is continuing, such evaluations and audits shall not be
conducted on more than two occasions in any calendar year. In addition, Holdings
and the Borrower will, and will cause each of the Subsidiaries to, permit the
Administrative Agent and such representatives to conduct appraisals of the
assets constituting Eligible Inventory,
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all at such reasonable times and as often as reasonably requested; provided that
(i) it is understood that such an appraisal will be conducted at least (A) once
within 90 days following the first date that the total Revolving Exposures
exceed $10,000,000 and (B) once during each calendar year, (ii) unless a Default
has occurred and is continuing, such appraisals shall not be conducted more than
once in any calendar year. The Borrower shall pay the reasonable fees and
expenses of the Administrative Agent and any representatives retained by the
Administrative Agent to conduct any such evaluation, audit or appraisal.
SECTION 5.10. Compliance with Laws. Each of Holdings and the
Borrower will, and will cause each of its Subsidiaries to, comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The
proceeds of the Tranche A Term Loans were used solely to repay in full the
principal amount of, and accrued interest with respect to, the two existing term
loans under the Sumitomo Credit Agreement in an aggregate principal amount of
$100,000,000. The proceeds of the Delayed Draw Acquisition Loans were used
solely to pay for a portion of the purchase price payable in connection with the
Acquisition and fees and expenses in connection therewith. The proceeds of the
Revolving Loans have been and will be used solely (a) for working capital
purposes, including the repayment in full of the principal amount of, and all
accrued interest with respect to, loans outstanding under the Borrower's
revolving credit facility under the Sumitomo Credit Agreement, (b) to finance
redemptions of Subordinated Notes and (c) in an amount not in excess of
$10,000,000 at any time outstanding and to the extent permitted by clause (b) of
Section 6.04, (i) to fund distributions from the ESOP in accordance with the
terms of the ESOP Plan and Trust Document, (ii) to fund repurchases of the
Common Stock to fulfill its obligations with respect to the Put Options, (iii)
to fund repurchases of Common Stock (and options to acquire Common Stock) from
directors and employees of Holdings, the Borrower and the Subsidiaries and (iv)
to finance Permitted Acquisitions; provided that the Borrower shall provide
notice to the Administrative Agent no later than five Business Days after the
date on which proceeds are used pursuant to clause (i), (ii), (iii) or (iv)
above. No part of the proceeds of any Loan has been or will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board,
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including Regulations G, U and X. Letters of Credit will be issued only for
general corporate purposes (other than to finance acquisitions).
SECTION 5.12. Additional Subsidiaries. If any additional
Subsidiary is formed or acquired after the Effective Date, the Borrower will
notify the Administrative Agent and the Lenders thereof and (a) if such
Subsidiary is a Subsidiary Loan Party, the Borrower will cause such Subsidiary
to become a party to the Subsidiary Guarantee Agreement, the Indemnity,
Subrogation and Contribution Agreement and each applicable Security Document in
the manner provided therein within three Business Days after such Subsidiary is
formed or acquired and promptly take such actions to create and perfect Liens on
such Subsidiary's assets to secure the Obligations as the Administrative Agent
or the Required Lenders shall reasonably request and (b) if any shares of
capital stock or Indebtedness of such Subsidiary are owned by or on behalf of
any Loan Party, the Borrower will cause such shares and promissory notes
evidencing such Indebtedness to be pledged pursuant to the Pledge Agreement
within three Business Days after such Subsidiary is formed or acquired (except
that, if such Subsidiary is a Foreign Subsidiary, shares of common stock of such
Subsidiary to be pledged pursuant to the Pledge Agreement may be limited to 65%
of the outstanding shares of common stock of such Subsidiary).
SECTION 5.13. Further Assurances. (a) Each of Holdings and the
Borrower will, and will cause each Subsidiary Loan Party to, execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or that the Administrative Agent
or the Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created or intended to be created by the Security Documents or the
validity or priority of any such Lien, all at the expense of the Loan Parties.
Holdings and the Borrower also agree to provide to the Administrative Agent,
from time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party
78
after the Effective Date (other than assets constituting Collateral under the
Security Agreement that become subject to the Lien of the Security Agreement
upon acquisition thereof), the Borrower will notify the Administrative Agent and
the Lenders thereof, and, if requested by the Administrative Agent or the
Required Lenders, the Borrower will cause such assets to be subjected to a Lien
securing the Obligations and will take, and cause the Subsidiary Loan Parties to
take, such actions as shall be necessary or reasonably requested by the
Administrative Agent to grant and perfect such Liens, including actions
described in paragraph (a) of this Section, all at the expense of the Loan
Parties.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) the Borrower Subordinated Notes;
(iii) in the case of the Borrower, the Guarantee of the Holdings
Subordinated Notes;
(iv) in the case of the Borrower, the Senior Subordinated Notes;
(v) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary; provided that
Indebtedness of any Subsidiary that is not a Loan Party to the
Borrower or any Subsidiary Loan Party shall be subject to Section
6.04;
(vi) Guarantees by the Borrower of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Borrower or any other
Subsidiary; provided that (A)
79
the Indebtedness so guaranteed is permitted by this Section, (B)
Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness
of any Subsidiary that is not a Loan Party shall be subject to Section
6.04 and (C) the Senior Subordinated Notes shall not be Guaranteed by any
Subsidiary that is not a guarantor under the Subsidiary Guarantee
Agreement;
(vii) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured
by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof or result in an
earlier maturity date or decreased weighted average life thereof;
provided that (A) such Indebtedness is incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement and (B) the aggregate principal amount of Indebtedness
permitted by this clause (vii) shall not exceed $3,000,000 at any time
outstanding;
(viii) Indebtedness of any Person that becomes a Subsidiary after
the date hereof; provided that (A) such Indebtedness exists at the time
such Person becomes a Subsidiary and is not created in contemplation of
or in connection with such Person becoming a Subsidiary and (B) the
aggregate principal amount of Indebtedness permitted by this clause
(viii) shall not exceed $1,500,000 at any time outstanding;
(ix) other unsecured Indebtedness in an aggregate principal amount
not exceeding $2,500,000 at any time outstanding;
(x) Indebtedness of Argo-Tech Corporation (HBP) secured by Liens
on any Specified Real Estate; provided that such Indebtedness and all
related obligations are, by the express terms of the agreements and
instruments creating and securing such Indebtedness, recourse solely to
the Specified Real Estate securing such Indebtedness and are not
Guaranteed by Holdings, the Borrower or any other Subsidiary; and
(xi) in the case of the Borrower, the Argo-Tech Notes; provided
that the representations, warranties, covenants, events of default and
other terms of the
80
Argo-Tech Notes shall be no more restrictive than the representations,
warranties, covenants, events of default and other terms contained in the
Senior Subordinated Notes.
(b) Holdings will not create, incur, assume or permit to exist
any Indebtedness except (i) Indebtedness created under the Loan Documents, (ii)
Indebtedness in respect of the Corporation's Notes, subject to Section 6.08(a),
(iii) the Holdings Subordinated Notes and (vi) Indebtedness owing to the
Borrower in respect of loans made by the Borrower to Holdings in lieu of
dividends that the Borrower would have been entitled to pay to Holdings pursuant
to Section 6.08; provided that (A) any such loans made by the Borrower to
Holdings shall be made at the same times, in the same amounts and for the same
purposes as the Borrower would be permitted to pay dividends to Holdings
pursuant to Section 6.08 and (B) such loans shall be treated as dividends paid
to Holdings for purposes of determining compliance with Section 6.08.
(c) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, issue any preferred stock or be or become liable in respect
of any obligation (contingent or otherwise) to purchase, redeem, retire, acquire
or make any other payment in respect of any shares of capital stock of Holdings,
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such shares of capital stock, except pursuant to the Put Options and any
agreement entered into between the Borrower and AT Holdings, LLC pursuant to
which the Borrower agrees to purchase Common Stock from AT Holdings, LLC with
the proceeds derived from the issuance of the Argo-Tech Notes and the Holdings
Preferred Stock. Holdings may, however, issue the Holdings Preferred Stock.
SECTION 6.02. Liens. (a) The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable, other than sales of
delinquent accounts receivable for collection purposes in the ordinary course of
business) or rights in respect of any thereof, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any
81
Subsidiary or existing on any property or asset of any Person that
becomes a Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary; provided that (A) such Lien is not created
in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (B) such Lien shall
not apply to any other property or assets of the Borrower or any
Subsidiary and (c) such Lien shall secure only those obligations that
it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal
amount thereof;
(iv) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (A) such
security interests secure Indebtedness permitted by clause (vii) of
Section 6.01(a), (B) such security interests and the Indebtedness
secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (C)
the Indebtedness secured thereby does not exceed 100% of the cost of
acquiring, constructing or improving such fixed or capital assets and
(D) such security interests shall not apply to any other property or
assets of the Borrower or any Subsidiary;
(v) Liens on Specified Real Estate and the income and proceeds
thereof to the extent such Liens secure Indebtedness permitted by
clause (x) of Section 6.01(a) and such Liens do not apply to any other
property or assets of the Borrower or any Subsidiary; and
(vi) Liens in the form of options on the common Stock held by
the Borrower and Holdings issued to directors and employees of
Holdings, the Borrower and the Subsidiaries.
(b) Holdings will not create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect thereof, except Liens created under the Loan Documents and Permitted
Encumbrances.
SECTION 6.03. Fundamental Changes. (a) Neither Holdings nor
the Borrower will, nor will they permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
82
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary Loan Party in a transaction in which
the surviving entity is a Subsidiary Loan Party, (iii) any Subsidiary that is
not a Loan Party may merge into any Subsidiary that is not a Loan Party and (iv)
any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders; provided that any
such merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Section
6.04.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
(c) Holdings will not engage in any business or activity other
than the ownership of all the outstanding shares of capital stock of the
Borrower and activities incidental thereto. Holdings will not own or acquire any
assets (other than shares of its capital stock, capital stock of the Borrower,
cash and Permitted Investments) or incur any liabilities (other than
Indebtedness expressly permitted under Section 6.01(b), other liabilities under
the Loan Documents, liabilities imposed by law, including tax liabilities, and
other liabilities incidental to its existence and permitted business and
activities).
(d) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, (i) permit the ESOP Trustee to be other than an
independent financial institution or (ii) permit any accumulated funding
deficiency to occur with respect to any Plan.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. Neither Holdings nor the Borrower will, nor will they permit any
of the Subsidiaries to, purchase, hold or acquire (including pursuant to any
merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances
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to, Guarantee any obligations of, or make or permit to exist any investment or
any other interest in, any other Person, or purchase or otherwise acquire (in
one transaction or a series of transactions) any assets of any other Person
constituting a business unit, except:
(a) the Borrower will be permitted to make the Acquisition so
long as (i) no Default has occurred and is continuing or would result
therefrom, (ii) the Acquisition is consummated in accordance with the
Stock Purchase Agreement and related documentation, applicable law and
on terms otherwise satisfactory to the Required Lenders, (iii) the
conditions to the Borrower's obligations set forth in the Stock
Purchase Agreement shall have been satisfied without giving effect to
any waiver or amendment in any manner adverse to the Lenders that was
not approved by the Required Lenders, (iv) all actions required to be
taken with respect to X.X. Xxxxxx and its subsidiaries pursuant to
Sections 5.12 and 5.13 shall have been taken, (v) the Borrower and the
Subsidiaries are in compliance, on a pro forma basis after giving
effect to the Acquisition, with the covenants contained in Sections
6.01, 6.12, 6.13, 6.14 and 6.15 recomputed as of the last day of the
most recently ended fiscal quarter of the Borrower, as if the
Acquisition had occurred on the first day of each relevant period for
testing such compliance, and (vi) the Borrower has delivered to the
Administrative Agent an officers' certificate to the effect set forth
in clauses (i) and (v) above.
(b) if no Default has occurred and is continuing or would
result therefrom, the Borrower (and, in the case of clauses (ii), (iii)
and (iv) below, Holdings) will be permitted to (i) fund distributions
by the ESOP in accordance with the terms of the ESOP Plan and Trust
Document, (ii) repurchase Common Stock pursuant to the Put Options,
(iii) repurchase Common Stock (and options to acquire Common Stock)
from directors and employees of Holdings, the Borrower and the
Subsidiaries and (iv) make Permitted Acquisitions (other than the
Acquisition); Provided that (A) the aggregate amount expended pursuant
to this clause (b), on a cumulative basis, during the period commencing
on the Effective Date and ending on any date of determination
immediately prior to the date of delivery of financial statements
pursuant to Section 5.01 with respect to the fiscal year ending October
25, 1597, shall not exceed an amount equal to $1,000,000, and on or
after the date of delivery of such financial statements, the aggregate
amount expended pursuant to this clause (b), on a
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cumulative basis, during the period commencing on the Effective Date and
ending on any date of determination, shall not exceed an amount equal to
the sum of 50% (or in the case of the fiscal year ending October 25,
1997, 12.5%) (which percentage shall be increased to 75% for any fiscal
year if the Senior Leverage Ratio is less than 2.10 to 1.00 as of the
last day of such fiscal year) of Excess Cash Flow for each fiscal year
of the Borrower ending on or after October 25, 1997, and ending prior to
such date of determination, (B) consideration in respect of Permitted
Acquisitions shall consist solely of cash consideration and, subject to
compliance with Section 6.01, assumption or incurrence of Indebtedness
and (C) for purposes of determining compliance with the limitations of
clause (A), the aggregate principal amount of Indebtedness assumed,
incurred or otherwise resulting from Permitted Acquisitions shall be
deemed to constitute amounts expended for such purpose;
(c) Permitted Investments;
(d) investments existing on the Effective Date and set forth
on Schedule 6.04, to the extent such investments would not be permitted
under any other clause of this Section;
(e) investments by the Borrower in the capital stock of the
Subsidiaries; provided that (i) any such shares of capital stock shall
be pledged pursuant to the Pledge Agreement (subject to the limitations
applicable to common stock of a Foreign Subsidiary referred to in
Section 5.12) and (ii) the aggregate amount of investments in, and
loans and advances to, and Guarantees of Indebtedness of, Subsidiaries
that are not Loan Parties shall not exceed $100,000 in the aggregate at
any time outstanding;
(f) loans or advances made by the Borrower to any Subsidiary
and made by any Subsidiary to the Borrower or any other Subsidiary;
provided that (i) any such loans and advances made by a Loan Party
shall be evidenced by a promissory note pledged pursuant to the Pledge
Agreement and (ii) the amount of all such loans and advances by Loan
Parties to Subsidiaries that are not Loan Parties shall be subject to
the limitation set forth in clause (e) (ii) above;
(g) Guarantees constituting Indebtedness permitted by Section
6.01; provided that the aggregate principal amount of Indebtedness of
Subsidiaries that are not
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Loan Parties Guaranteed by any Loan Party shall be subject to the
limitation set forth in clause (e) (ii) above;
(h) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(i) loans to directors and employees of the Borrower and the
Subsidiaries in their capacity as such, in an aggregate principal
amount not to exceed $3,500,000 at any time outstanding;
(j) Hedging Agreements permitted under Section 6.07;
(k) the ESOP Loan in a principal amount not exceeding
$12,600,000 at any time outstanding;
(1) contributions to the ESOP in accordance with the terms of
the ESOP Plan and Trust Document;
(m) loans by the Borrower to Holdings to the extent Holdings
is permitted to incur such Indebtedness pursuant to Section 6.01(b);
and
(n) Holdings may purchase up to 650,000 shares of Common Stock
from AT Holdings, LLC with the proceeds of the Argo-Tech Notes and
Holdings Preferred Stock.
SECTION 6.05. Asset Sales. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of
any asset, including any capital stock, nor will the Borrower permit any of its
Subsidiaries to issue any additional shares of its capital stock or other
ownership interest in such Subsidiary, except:
(a) sales of inventory, used or surplus equipment and
Permitted Investments in the ordinary course of business;
(b) sales, transfers and dispositions to the Borrower or a
Subsidiary; provided that any such sales, transfers or dispositions
involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;
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(c) sales, transfers and dispositions of assets (other than
capital stock of a Subsidiary) that are not permitted by any other
clause of this Section; provided that the aggregate fair market value
of all assets sold, transferred or otherwise disposed of in reliance
upon this clause (c) shall not exceed $7,500,000 in the aggregate
during the term of this Agreement;
(d) sales of Specified Real Estate; and
(e) pursuant to stock options issued to directors and
employees of Holdings, the Borrower and the Subsidiaries, sales of
Common Stock purchased and held by the Borrower.
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and solely for cash consideration.
SECTION 6.06. Sale and Lease-Back Transactions. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred, except the Specified Real
Estate.
SECTION 6.07. Hedging Agreements. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.
SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness. (a) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:
(i) Holdings may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its common stock;
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(ii) Subsidiaries of the Borrower may declare and pay
dividends ratably with respect to their capital stock;
(iii) subject to the limitations set forth in Section 6.04(b),
if at the time thereof and after giving effect thereto no Default has
occurred and is continuing, (A) Holdings and the Borrower may make the
Restricted Payments contemplated by and permitted under Section 6.04(b)
and (B) Holdings may make Restricted Payments consisting of the
issuance of the Corporation's Notes pursuant to the Stockholders'
Agreement (subject to and to be counted towards the dollar limitations
set forth with respect to distributions, repurchases and acquisitions
in Section 6.04(b));
(iv) if at the time thereof and after giving effect thereto no
Default has occurred and is continuing, the Borrower may pay cash
dividends to Holdings at such times and in such amounts as shall be
necessary, after giving effect to the application by Holdings of any
other cash resources available to it (including Permitted Investments),
to permit Holdings to (A) pay taxes imposed upon it and liabilities
incidental to its existence when due, (B) pay directors' fees to its
directors when due and (C) make Restricted Payments to be made by
Holdings that are permitted by clause (iii) above; provided that any
dividends permitted to be paid to Holdings shall not be paid prior to
the date that Holdings will apply the proceeds of such dividends to the
purposes for which such dividends are permitted;
(v) The Borrower may pay dividends to Holdings from the
proceeds of the Argo-Tech Notes, and the proceeds of such dividends
shall be used to make the Restricted Payments contemplated by and
permitted under Section 6.04(n);
(vi) if at the time thereof and after giving effect thereto no
Default has occurred and is continuing, the Borrower may pay cash
dividends to Holdings at such times and in such amounts as shall be
necessary, after giving effect to the application by Holdings of any
other cash resources available to it (including Permitted Investments),
to permit Holdings to pay dividends with respect to the Holdings
Preferred Stock described in clause (a) (vii) (B) of this Section; and
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(vii) Holdings may declare and pay dividends with respect to
the Holdings Preferred Stock (A) solely in additional shares of such
stock and (B) in an aggregate amount not exceeding $5,000,000 in 2004
and $7,000,000 in 2005.
(b) Neither Holdings nor the Borrower will, nor will they
permit any Subsidiary to, make or agree to pay or make, directly or indirectly,
any payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of or interest on any Indebtedness, or
any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness (subject, in
the case of the Senior Subordinated Notes, to the restrictions on
payments set forth in the indenture governing the Senior Subordinated
Notes); provided that principal payments in respect of the Senior
Subordinated Notes shall not be permitted; and
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01.
SECTION 6.09. Transactions with Affiliates. Neither Holdings
nor the Borrower will, nor will they permit any Subsidiary to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business that do not involve Holdings and are at prices and
on terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Borrower and the Subsidiary Loan Parties
not involving any other Affiliate, (c) any Restricted Payment permitted by
Section 6.08, (d) director and employee loans permitted by clause (h) of Section
6.04, (e) transactions between the Borrower, Holdings or a Subsidiary and an
Affiliate that is an employee of the Borrower or such Subsidiary that (i) are in
the nature of employment agreements or otherwise related to such employee's
89
employment or compensation and (ii) are at prices and on terms and conditions
not materially less favorable to the Borrower, Holdings or such Subsidiary than
are customarily obtained by other similarly situated employees from their
employers, (f) the Distributorship Agreement and (g) Holding's purchase of up to
650,000 shares of Common Stock from AT Holdings, LLC with the proceeds of the
Argo-Tech Notes and Holdings Preferred Stock.
SECTION 6.10. Restrictive Agreements. Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of Holdings,
the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Borrower or any other Subsidiary or
to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the Existing Credit Agreement Effective Date identified
on Schedule 6.10 (but shall apply to any extension or renewal of, or any
amendment or modification expanding the scope of, any such restriction or
condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause
(a) of the foregoing shall not apply to restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness, (v) clause (a) of the foregoing shall not apply to customary
provisions in leases restricting the assignment thereof, (vi) the foregoing
shall not apply to restrictions and conditions imposed by the Argo-Tech Notes
Documents provided that the restrictions and conditions imposed by the Argo-Tech
Notes Documents shall be no more restrictive than the restrictions and
conditions contained in the Senior Subordinated Notes and (vii) the foregoing
shall not apply to restrictions on dividends under the Holdings Preferred Stock.
SECTION 6.11. Amendment of Material Documents. Neither
Holdings nor the Borrower will, nor will they permit any Subsidiary to (a)
amend, modify or waive any of its
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rights under its certificate of incorporation, by-laws or other organizational
documents; provided that the certificate of incorporation, by-laws and other
organizational documents of X.X. Xxxxxx may be amended or modified to the extent
necessary to conform them to the organizational documents of the Borrower and
its other Subsidiaries (including to allow for reincorporation in Delaware) and
the organizational documents of Holdings may be amended so long as (i) such
amendment does not have a material adverse effect on the interests of the
Lenders under this Agreement and (ii) the Administrative Agent and its counsel
have had an opportunity to review such amendment, (b) amend, supplement or
modify any of the terms or provisions contained in the TRW Agreement or
Stockholders' Agreement provided that the Stockholders' Agreement may be amended
so long as (i) such amendment does not have a material adverse effect on the
interests of the Lenders under this Agreement and (ii) the Administrative Agent
and its counsel have had an opportunity to review such amendment, (c) amend,
supplement or modify any of the terms or provisions contained in the
Distributorship Agreement, except for such amendments, supplements and
modifications that do not (individually or in the aggregate) have a Material
Adverse Effect, (d) terminate, amend or modify the ESOP Plan and Trust Document
except for amendments required by law or which do not have a material adverse
effect on the cost of the ESOP to the Borrower or are required by the Internal
Revenue Service as a condition of obtaining a favorable determination letter,
(e) terminate, amend or modify the ESOP Loan Agreement, the ESOP Term Note or
the ESOP Pledge Agreement or (f) amend, modify or supplement any terms or
provisions contained in the Senior Subordinated Note Documents and the Argo-Tech
Notes Documents.
SECTION 6.12. Capital Expenditures. The Borrower will not
permit the aggregate amount of Capital Expenditures made by the Borrower and the
Subsidiaries in any fiscal year to exceed $6,000,000; provided that, to the
extent Capital Expenditures made in any fiscal year are less than the amount set
forth above for such fiscal year, 50% of such unused amount may be carried
forward to the immediately succeeding fiscal year.
SECTION 6.13. Senior Leverage Ratio. The Borrower will not
permit the Senior Leverage Ratio as of any date to be in excess of 1.50:1.00.
SECTION 6.14 Consolidated Interest Expense Coverage Ratio. The
Borrower will not permit its ratio of (a) Consolidated EBITDA to (b)
Consolidated Interest Expense
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(net of interest income), in each case for any period of four consecutive fiscal
quarters of the Borrower ending on the last day of any fiscal quarter on any
date or during any period referred to below to be less than the ratio set forth
below opposite such date or period:
Fiscal Quarter Ending: Ratio:
---------------------- ------
October 26, 2002 1.75:1.0
January 24, 2003 1.60:1.00
April 25, 2003 1.60:1.00
July 25, 2003 1.70:1.00
October 24, 2003 1.70:1.00
January 30, 2004 1.80:1.00
April 30, 2004 1.90:1.00
July 30, 2004 1.95:1.00
October 29, 2004 2.10:1.00
Thereafter 2.15:1.00
SECTION 6.15 Fixed Charge Coverage Ratio. The Borrower will
not permit the Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending on the last day of any fiscal quarter
ending on any date or during any period referred to below to be less than the
ratio set forth below opposite such date or period:
Fiscal Quarter Ending: Ratio:
---------------------- ------
January 24, 2003 0.95:1.00
April 25, 2003 0.95:1.00
Thereafter 1.00:1.00
SECTION 6.16. Certain Actions under Senior Subordinated Note
Documents. The Borrower will not designate any Indebtedness (other than the
Indebtedness hereunder) as "Designated Senior Indebtedness" within the meaning
of the Senior Subordinated Note Documents. The Borrower will not take any
action, or fail to take any action, that would result in any Indebtedness
hereunder not constituting "Senior Indebtedness" within the meaning of the
Senior Subordinated Note Documents.
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ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of Holdings, the Borrower or any Subsidiary in or in
connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect when made or deemed
made;
(d) Holdings or the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in Section 5.02, 5.04
(with respect to the existence of Holdings or the Borrower) or 5.11 or
in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender);
(f) Holdings, the Borrower or any Subsidiary shall fail to
make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable;
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(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of Holdings, the Borrower or
any Subsidiary or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any
Subsidiary or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) Holdings, the Borrower or any Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
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(j) Holdings, the Borrower or any Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $1,500,000 shall be rendered against
Holdings, the Borrower, any Subsidiary or any combination thereof and
the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon
any assets of Holdings, the Borrower or any Subsidiary to enforce any
such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
(i) $750,000 in any year or (ii) $1,500,000 for all periods;
(m) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not
to be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document, except (i) as a result of
the sale or other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents or (ii) as a result of
the Administrative Agent's failure to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it
under the Pledge Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and
95
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent (which term for purposes of this Article shall
be deemed to refer to the Administrative Agent and the Collateral Agent) as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the Administrative Agent
hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders
96
as shall be necessary under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Holdings, the Borrower or any
of its Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall not be deemed to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by Holdings, the Subsidiaries, the Borrower or a Lender,
and the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may
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perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of each
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent that
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or
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related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to Holdings or the Borrower, to it at Argo-Tech
Corporation, 00000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000, Attention
of Xxxxxxx St Clair (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent or the Collateral Agent, to
JPMorgan Chase Bank, Loan and Agency Services Group, One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xxxxx Xxxxxx (Telecopy No. (000) 000-0000), with a copy to JPMorgan
Chase Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xxxxxxx Xxxxx (Telecopy No. (000) 000-0000);
(c) if to the Issuing Bank, to it at Standby Letter of Credit
Department, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxx 0000, Xxx Xxxx, New York
10041, Attention of Xxxxxx Xxxxxx (Telecopy No. (000) 000-0000), with a
copy to JPMorgan Chase Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention of Xxxxxxx Xxxxx (Telecopy No. (000) 000-0000);
(d) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
the Administrative Agent, the Collateral
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Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Collateral Agent, the Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, the Collateral Agent,
any Lender or the Issuing Bank may have had notice or knowledge of such Default
at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrower and the Required Lenders or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent or the Collateral Agent, as applicable,
and the Loan Party or Loan Parties that are parties thereto, in each case with
the consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Loan Document
specifying the number or
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percentage of Lenders (or Lenders of any Class) required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender (or each Lender of such
Class, as the case may be), (vi) release Holdings or any Subsidiary Loan Party
from its Guarantee under the Parent Guarantee Agreement or the Subsidiary
Guarantee Agreement, as applicable (except as expressly provided in the Parent
Guarantee Agreement or the Subsidiary Guarantee Agreement, as applicable), or
limit its liability in respect of such Guarantee, without the written consent of
each Lender, (vii) except in strict accordance with the express provisions
thereof, release all or any substantial part of the Collateral from the Liens of
the Security Documents, without the written consent of each Lender, or (viii)
change any provisions of any Loan Document in a manner that by its terms
adversely affects the rights in respect of payments due to Lenders holding Loans
of any Class differently than those holding Loans of any other Class, without
the written consent of Lenders holding a majority in interest of the outstanding
Loans and unused Commitments of each affected Class (in addition to any consents
required under the foregoing provisions of this Section); provided further that
(A) no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Collateral Agent or the Issuing Bank
without the prior written consent of the Administrative Agent, the Collateral
Agent or the Issuing Bank, as the case may be, and (B) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Revolving Lenders (but not the Tranche A Term Loan
Lenders and Delayed Draw Acquisition Loan Lenders), the Tranche A Term Loan
Lenders (but not the Revolving Lenders and Delayed Draw Acquisition Loan
Lenders) or the Delayed Draw Acquisition Loan Lenders (but not the Revolving
Lenders and Tranche A Term Loan Lenders) may be effected by an agreement or
agreements in writing entered into by Holdings, the Borrower and requisite
percentage in interest of the affected Class of Lenders.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent and their Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and the Collateral Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
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consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent, the Collateral Agent,
the Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Borrower shall indemnify the Administrative Agent, the
Collateral Agent, the Issuing Bank and each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any Mortgaged Property or any other property
currently or formerly owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence or wilful misconduct of such
Indemnitee.
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(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Collateral Agent or
the Issuing Bank under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Collateral Agent or the
Issuing Bank, as the case may be, such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent, the Collateral
Agent or the Issuing Bank in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum of
the total Revolving Exposures, outstanding Term Loans and unused Commitments at
the time.
(d) To the extent permitted by applicable law, neither
Holdings nor the Borrower shall assert, and each hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), except that
(i) the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the Collateral
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Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)
(ii) below, any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:
(A) the Borrower; provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund (as defined below) or, if an Event of Default
under paragraph (a), (b), (h) or (i) of Article VII has occurred and is
continuing, any other assignee; and
(B) the Administrative Agent; provided that no consent of the
Administrative Agent shall be required for an assignment of any
Revolving Commitment to an assignee that is a Lender with a Revolving
Commitment immediately prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount
of the assigning Lender's Commitment or Loans of any Class, the amount
of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $3,000,000, unless each of the Borrower
and the Administrative Agent otherwise consent; provided that no such
consent of the Borrower shall be required if an Event of Default under
paragraph (a), (b), (h) or (i) of Article VII has occurred and is
continuing;
(B) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, provided that this clause shall not
be construed to prohibit the assignment of a proportionate part of all
the assigning Lender's rights and obligations in respect of one Class
of Commitments or Loans;
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(C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500;
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire; and
(E) in the case of an assignment to a CLO (as defined below),
the assigning Lender shall retain the sole right to approve any
amendment, modification or waiver of any provision of this Agreement,
provided that the Assignment and Acceptance between such Lender and
such CLO may provide that such Lender will not, without the consent of
such CLO, agree to any amendment, modification or waiver described in
the first proviso to Section 9.02(b) that affects such CLO.
For purposes of this Section 9.04(b), the terms "Approved
Fund" and "CLO" have the following meanings:
"Approved Fund" means (a) a CLO and (b) with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit,
any other fund that invests in bank loans and similar extension of
credit and is managed by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b) (iv) of this Section, from and after the effective date specified
in each Assignment and Acceptance the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a
Lender of rights
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or obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and Holdings, the Borrower, the Administrative Agent, the
Issuing Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent or the Issuing Bank sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); Provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) Holdings, the Borrower, the Administrative Agent, the
Collateral Agent, the Issuing Bank and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells
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such a participation shall provide that such Lender shall retain the sole right
to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant. Subject to
paragraph (c) (ii) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.17(c)
as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made
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by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts: Integration: Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Document and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
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SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set of f and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction: Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against Holdings, the Borrower or its properties in
the courts of any jurisdiction.
(c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to
109
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
110
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than Holdings or the Borrower. For the
purposes of this Section, "Information" means all information received from
Holdings or the Borrower relating to Holdings or the Borrower or its business,
other than any such information that is available to the Administrative Agent,
the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
Holdings or the Borrower; provided that, in the case of information received
from Holdings or the Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor)
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until such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such
Lender.
SECTION 9.14. Existing Credit Agreement: Effectiveness of
Amendment and Restatement. Until this Agreement becomes effective in accordance
with the terms of the Amendment and Restatement Agreement, the Existing Credit
Agreement shall remain in full force and effect and shall not be affected
hereby. After the Restatement Effective Date, all obligations of the Borrower
under the Existing Credit Agreement shall become obligations of the Borrower
hereunder, secured by the Security Documents, and the provisions of the Existing
Credit Agreement shall be superseded by the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
AT HOLDINGS CORPORATION,
by
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Name:
Title:
ARGO-TECH CORPORATION,
by
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Name:
Title:
JPMORGAN CHASE BANK, individually and as
Administrative Agent,
by
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Name:
Title:
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(THE OTHER LENDERS AND ISSUING BANK THAT ARE
SIGNATORIES TO THE AMENDMENT AND RESTATEMENT
AGREEMENT)
by
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Name:
Title:
