Attached files

file filename
10-K - 10-K - TRIUMPH GROUP INCa2198795z10-k.htm
EX-21.1 - EXHIBIT 21.1 - TRIUMPH GROUP INCa2198795zex-21_1.htm
EX-23.1 - EXHIBIT 23.1 - TRIUMPH GROUP INCa2198795zex-23_1.htm
EX-31.1 - EXHIBIT 31.1 - TRIUMPH GROUP INCa2198795zex-31_1.htm
EX-32.2 - EXHIBIT 32.2 - TRIUMPH GROUP INCa2198795zex-32_2.htm
EX-31.2 - EXHIBIT 31.2 - TRIUMPH GROUP INCa2198795zex-31_2.htm
EX-32.1 - EXHIBIT 32.1 - TRIUMPH GROUP INCa2198795zex-32_1.htm

Exhibit 10.14

 

$535,000,000 REVOLVING CREDIT FACILITY

 

CREDIT AGREEMENT

 

by and among

 

TRIUMPH GROUP, INC.,

 

and

 

THE OTHER BORROWERS PARTY HERETO

 

and

 

THE GUARANTORS PARTY HERETO

 

and

 

THE BANKS PARTY HERETO

 

and

 

PNC BANK, NATIONAL ASSOCIATION

 

as Administrative Agent

 

PNC CAPITAL MARKETS LLC, as Lead Arranger

 

SOVEREIGN BANK, as Documentation Agent

 

CITIZENS BANK OF PENNSYLVANIA AND U.S. BANK NATIONAL ASSOCIATION, as Syndication Agent

 

JPMORGAN CHASE BANK, N.A., ROYAL BANK OF CANADA,
BRANCH BANKING & TRUST COMPANY, AND
MANUFACTURERS AND TRADERS TRUST COMPANY, as Managing Agents

 

Dated as of May 10, 2010

 



 

TABLE OF CONTENTS

 

1.

CERTAIN DEFINITIONS

 

5

 

1.1

Certain Definitions

 

5

 

1.2

Construction

 

39

 

1.3

Accounting Principles

 

41

 

 

 

 

 

2.

REVOLVING CREDIT FACILITY

 

41

 

2.1

Revolving Credit Commitments

 

41

 

2.2

Nature of Banks’ Obligations with Respect to Revolving Credit Loans

 

42

 

2.3

Commitment Fees

 

42

 

2.4

Revolving Credit Loan Requests

 

43

 

2.5

Making Revolving Credit Loans

 

43

 

2.6

Revolving Credit Notes

 

44

 

2.7

Use of Proceeds

 

44

 

2.8

Letter of Credit Subfacility

 

44

 

2.9

Swing Loans

 

51

 

2.10

Utilization of Commitments in Optional Currencies

 

55

 

2.11

Currency Repayments

 

57

 

2.12

Optional Currency Amounts

 

58

 

2.13

Provisions Relating to Fronting of Optional Currency Loans

 

58

 

2.14

Defaulting Banks

 

63

 

 

 

 

 

3.

INTEREST RATES

 

64

 

3.1

Interest Rate Options

 

64

 

3.2

Interest Periods

 

65

 

3.3

Interest After Default

 

65

 

3.4

Euro-Rate Unascertainable

 

66

 

3.5

Selection of Interest Rate Options

 

67

 

 

 

 

 

4.

PAYMENTS

 

68

 

4.1

Payments

 

68

 

4.2

Pro Rata Treatment of Banks

 

68

 

4.3

Interest Payment Dates

 

69

 

4.4

Voluntary Prepayments and Commitment Reductions

 

69

 

4.5

Additional Compensation in Certain Circumstances

 

72

 

4.6

Mandatory Prepayments

 

73

 

4.7

Interbank Market Presumption

 

74

 

4.8

Taxes

 

74

 

4.9

Judgment Currency

 

76

 

 

 

 

 

5.

REPRESENTATIONS AND WARRANTIES

 

76

 

5.1

Representations and Warranties

 

76

 

i



 

 

5.2

Updates to Schedules

 

87

 

 

 

 

 

6.

CONDITIONS OF LENDING

 

87

 

6.1

First Loans

 

87

 

6.2

Each Additional Loan

 

92

 

 

 

 

 

7.

COVENANTS

 

92

 

7.1

Affirmative Covenants

 

92

 

7.2

Negative Covenants

 

99

 

7.3

Reporting Requirements

 

112

 

 

 

 

 

8.

DEFAULT

 

117

 

8.1

Events of Default

 

117

 

8.2

Consequences of Event of Default

 

121

 

 

 

 

 

9.

THE AGENT

 

123

 

9.1

Appointment

 

123

 

9.2

Delegation of Duties

 

124

 

9.3

Nature of Duties; Independent Credit Investigation

 

124

 

9.4

Actions in Discretion of Administrative Agent; Instructions from the Banks

 

124

 

9.5

Reimbursement and Indemnification of Administrative Agent by the Borrowers

 

125

 

9.6

Exculpatory Provisions

 

126

 

9.7

Reimbursement and Indemnification of Administrative Agent by Banks

 

126

 

9.8

Reliance by Administrative Agent

 

126

 

9.9

Notice of Default

 

127

 

9.10

Notices

 

127

 

9.11

Banks in Their Individual Capacities

 

127

 

9.12

Holders of Notes

 

127

 

9.13

Equalization of Banks

 

128

 

9.14

Successor Administrative Agent

 

128

 

9.15

Administrative Agent’s Fee

 

129

 

9.16

Availability of Funds

 

129

 

9.17

Calculations

 

129

 

9.18

No Reliance on Agent’s Customer Identification Program

 

129

 

9.19

Beneficiaries

 

130

 

9.20

Authorization to Release Collateral and Guarantors

 

130

 

 

 

 

 

10.

MISCELLANEOUS

 

131

 

10.1

Modifications, Amendments or Waivers

 

131

 

10.2

No Implied Waivers; Cumulative Remedies; Writing Required

 

132

 

10.3

Reimbursement and Indemnification of Banks by the Borrowers; Taxes

 

132

 

10.4

Holidays

 

133

 

ii



 

 

10.5

Funding by Branch, Subsidiary or Affiliate

 

134

 

10.6

Notices

 

134

 

10.7

Severability

 

135

 

10.8

Governing Law

 

136

 

10.9

Prior Understanding

 

136

 

10.10

Duration; Survival

 

136

 

10.11

Successors and Assigns

 

136

 

10.12

Confidentiality

 

138

 

10.13

Counterparts

 

138

 

10.14

Administrative Agent’s or Bank’s Consent

 

139

 

10.15

Exceptions

 

139

 

10.16

Consent to Forum; Waiver of Jury Trial

 

139

 

10.17

Certifications From Banks and Participants

 

139

 

10.18

Public Filings

 

141

 

10.19

Agent Titles

 

141

 

10.20

Joinder of Borrowers and Guarantors

 

141

 

10.21

USA Patriot Act

 

143

 

10.22

Intercreditor Agreement

 

143

 

iii



 

LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES

 

SCHEDULE 1.1(B)

 

-

 

COMMITMENTS OF BANKS

SCHEDULE 1.1(C)

 

-

 

ADJUSTMENTS TO CONSOLIDATED EBITDA FOR ACQUISITION EXPENSES

SCHEDULE 1.1(E)

 

-

 

VOUGHT EXCLUDED LETTERS OF CREDIT

SCHEDULE 1.1(M)

 

-

 

REAL PROPERTY TO BE MORTGAGED

SCHEDULE 1.1(P)

 

-

 

PERMITTED LIENS

SCHEDULE 2.8.1

 

-

 

EXISTING LETTERS OF CREDIT

SCHEDULE 2.13.1

 

-

 

NON-FRONTING BANKS AS OF CLOSING DATE

SCHEDULE 5.1.2

 

-

 

CAPITALIZATION

SCHEDULE 5.1.3

 

-

 

SUBSIDIARIES

SCHEDULE 5.1.7

 

-

 

LITIGATION

SCHEDULE 5.1.8

 

-

 

TITLE TO PROPERTY

SCHEDULE 5.1.20

 

-

 

EMPLOYEE BENEFIT PLAN DISCLOSURES

SCHEDULE 5.1.21

 

-

 

EMPLOYMENT MATTERS

SCHEDULE 5.1.22

 

-

 

ENVIRONMENTAL MATTERS

SCHEDULE 5.1.25

 

-

 

PERFECTION ACTIONS

SCHEDULE 5.1.26

 

-

 

PARTNERSHIP AGREEMENTS AND LIMITED LIABILITY COMPANY AGREEMENTS

SCHEDULE 7.2.1

 

-

 

EXISTING INDEBTEDNESS

SCHEDULE 7.2.4

 

-

 

EXISTING INVESTMENTS

SCHEDULE 7.2.7

 

-

 

RECEIVABLES SALES

 

 

 

 

 

EXHIBITS

 

 

 

 

 

 

 

 

 

EXHIBIT 1.1(A)

 

-

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

EXHIBIT 1.1(B)

 

-

 

BANK JOINDER

EXHIBIT 1.1(G)

 

-

 

GUARANTEE AND COLLATERAL AGREEMENT

EXHIBIT 1.1(I)

 

-

 

INTERCOMPANY SUBORDINATION AGREEMENT

EXHIBIT 1.1(I)(2)

 

-

 

INTERCREDITOR AGREEMENT

EXHIBIT 1.1(P)

 

-

 

PRICING GRID

EXHIBIT 1.1(R)

 

-

 

REVOLVING CREDIT NOTE

EXHIBIT 1.1(S)(2)

 

-

 

SWING LOAN NOTE

EXHIBIT 2.4

 

-

 

LOAN REQUEST

EXHIBIT 2.9.2

 

-

 

SWING LOAN REQUEST

EXHIBIT 7.3.3

 

-

 

COMPLIANCE CERTIFICATE

EXHIBIT 10.20(A)

 

-

 

FORM OF BORROWER JOINDER

EXHIBIT 10.20(B)

 

-

 

FORM OF GUARANTOR JOINDER

 

iv


 

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT is dated as of May 10, 2010, and is made by and among TRIUMPH GROUP, INC., a Delaware corporation (“TGI”), the other BORROWERS (as hereinafter defined), the GUARANTORS (as hereinafter defined), the BANKS (as hereinafter defined), PNC BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent for the Banks under this Agreement (hereinafter referred to in such capacity as the “Administrative Agent”), CITIZENS BANK OF PENNSYLVANIA and U.S. BANK NATIONAL ASSOCIATION, in their capacity as syndication agents for the Banks under this Agreement (hereinafter referred to in such capacity as the “Syndication Agent”), SOVEREIGN BANK, in its capacity as documentation agent for the Banks under this Agreement (herein referred to in such capacity as the “Documentation Agent”), and JPMORGAN CHASE BANK, N.A., ROYAL BANK OF CANADA, BRANCH BANKING & TRUST COMPANY, MANUFACTURERS AND TRADERS TRUST COMPANY AND U.S. BANK NATIONAL ASSOCIATION, in their capacity as managing agents for the Banks under this Agreement (each hereinafter individually referred to in such capacity as the “Managing Agent” and collectively referred to in such capacity as the “Managing Agents”).

 

WITNESSETH:

 

WHEREAS, the Borrowers have requested the Banks to provide a revolving credit facility to the Borrowers in an aggregate principal amount not to exceed $535,000,000; and

 

WHEREAS, the Banks are willing to provide such facility on the terms and conditions set forth below;

 

NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, covenant and agree as follows:

 

1.             CERTAIN DEFINITIONS

 

1.1                                 Certain Definitions.

 

In addition to words and terms defined elsewhere in this Agreement, the following words and terms shall have the following meanings, respectively, unless the context hereof clearly requires otherwise:

 

Acquisition means, the acquisition of all of the equity ownership interests of Vought by TGI pursuant to the Acquisition Agreement.

 

Acquisition Agreement means the Agreement and Plan of Merger dated as of March 23, 2010 by and among Vought Aircraft Industries, Inc., TGI, Spitfire Merger Corporation and TC Group, L.L.C.

 

5



 

Additional Bank shall have the meaning assigned to that term in Section 10.11 [Successors and Assigns].

 

Administrative Agent shall mean PNC Bank, National Association, and its successors and assigns, as Administrative Agent.

 

Administrative Agent’s Fee shall have the meaning assigned to that term in Section 9.15.

 

Administrative Agent’s Letter shall have the meaning assigned to that term in Section 9.15.

 

Affiliate as to any Person shall mean any other Person (i) which directly or indirectly controls, is controlled by, or is under common control with such Person, (ii) which beneficially owns or holds 10% or more of any class of the voting or other equity interests of such Person, or (iii) 10% or more of any class of voting interests or other equity interests of which is beneficially owned or held, directly or indirectly, by such Person.  “Control”, as used in this definition, shall mean 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 ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be.

 

Adjusted Funding Target Attainment Percentage shall mean the adjusted funding target attainment percentage as defined in Sections 206(g)(9) of ERISA and 436(j)(2) of the Internal Revenue Code.

 

Agreement shall mean this Credit Agreement, as the same may be supplemented or amended from time to time, including all schedules and exhibits.

 

Ancillary Security Documents shall mean title insurance, existing or otherwise available surveys, lien searches, flood insurance certifications, phase I environmental assessments or phase II environmental assessments, as applicable, opinions of counsel and such other documents and certifications as may be reasonably requested by the Administrative Agent, all as of a recent date and reasonably satisfactory to the Administrative Agent.

 

Anti-Terrorism Laws shall mean any Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed, extended, or replaced).

 

Applicable Pro Forma Reporting Period shall mean with respect to any Permitted Acquisition, the most recent 4-quarter period ending prior to the date of such Permitted Acquisition for which financial statements have been delivered (or were due to be delivered) by the Borrowers in accordance with Sections 7.3.1 or 7.3.2.

 

6



 

Assignment and Assumption Agreement shall mean an Assignment and Assumption Agreement by and among a Purchasing Bank, the Transferor Bank and the Administrative Agent, as Administrative Agent and on behalf of the remaining Banks, substantially in the form of Exhibit 1.1(A).

 

Authorized Officer shall mean those individuals, designated by written notice to the Administrative Agent from TGI, as agent for each Borrower, authorized to execute notices, reports and other documents on behalf of such Borrower required hereunder.  Any Borrower may amend such list of individuals from time to time by having TGI give written notice of such amendment on its behalf to the Administrative Agent.

 

Availability shall mean the sum of (i) the difference between (a) the lesser of (1) the Commitments and (2) the maximum amount of Loans that may be borrowed hereunder while maintaining compliance with each of the Total Leverage Ratio covenant under Section 7.2.16 and the Senior Leverage Ratio covenant under Section 7.2.17, and (b) the Revolving Facility Usage, plus (ii) cash and Cash Equivalents held by TGI or another Domestic Loan Party and maintained or managed at a Bank or an Affiliate of a Bank.

 

Bank-Provided Hedge shall mean an Interest Rate Hedge or other hedging transaction which is provided by any Bank and meets the following requirements: such Interest Rate Hedge or other hedging transaction (i) is documented in a standard International Swap Dealer Association agreement, (ii) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner, and (iii) is entered into for hedging (rather than speculative) purposes.  The liabilities of any Borrower or any Guarantor to the provider of any Bank-Provided Hedge (the “Hedge Liabilities”) shall be “Obligations” hereunder, guaranteed obligations under the Guarantee and Collateral Agreement and otherwise treated as Obligations for purposes of each of the other Loan Documents.  The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the other Loan Documents.

 

Banks shall mean the financial institutions named on Schedule 1.1(B) and their respective successors and assigns as permitted hereunder, each of which is referred to herein as a Bank.

 

Base Rate shall mean the greatest of (i) the interest rate per annum announced from time to time by the Administrative Agent at its Principal Office as its then prime rate, which rate may not be the lowest rate then being charged commercial borrowers by the Administrative Agent, (ii) the Federal Funds Open Rate plus 1/2% per annum, or (iii) the Daily Euro-Rate plus 1% per annum.

 

Base Rate Option shall mean the option of the Borrowers, exercisable by TGI as their agent, to have Revolving Credit Loans bear interest at the rate under the terms and conditions set forth in Section 3.1.1(i).

 

7



 

Benefit Arrangement shall mean at any time any material “employee benefit plan,” within the meaning of Section 3(3) of ERISA, which is neither a Plan nor a Multiemployer Plan and which is maintained, sponsored or otherwise contributed to by any member of the ERISA Group.

 

Blocked Person shall have the meaning assigned to such term in Section 5.1.24.2.

 

Borrower Joinder shall have the meaning assigned to such term in Section 10.20.

 

Borrowers shall mean collectively TGI and each of TGI’s Subsidiaries which have executed this Agreement as a Borrower, or which becomes a Borrower pursuant to Section 10.20 hereof, and, if a Foreign Borrower, has not terminated its status as a Borrower pursuant to Section 10.21(ii).

 

Borrowing Date shall mean, with respect to any Loan, the date for the making thereof or the renewal or conversion thereof to the same or a different Interest Rate Option, which shall be a Business Day.

 

Borrowing Tranche shall mean specified portions of Loans outstanding as follows:  (i) any Loans to which a Euro-Rate Option applies which become subject to the same Interest Rate Option under the same Loan Request by TGI, on behalf of the Borrowers, and which have the same Interest Period and which are denominated either in Dollars or in the same Optional Currency shall constitute one Borrowing Tranche, (ii) all Loans (other than Swing Loans) to which a Base Rate Option applies shall constitute one Borrowing Tranche, and (iii) all Swing Loans shall constitute one Borrowing Tranche.

 

Business Day shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in Pittsburgh, Pennsylvania and (i) if the applicable Business Day relates to any Loan to which the Euro-Rate Option applies, such day must also be a day on which dealings are carried on in the London interbank market, (ii) with respect to advances or payments of Loans or any other matters relating to Loans denominated in an Optional Currency, such day also shall be a day on which dealings in deposits in the relevant Optional Currency are carried on in the applicable interbank market, and (iii) with respect to advances or payments of Loans denominated in an Optional Currency, such day shall also be a day on which all applicable banks into which Loan proceeds may be deposited are open for business and foreign exchange markets are open for business in the principal financial center of the country of such currency.

 

B&R Promissory Note shall mean that Promissory Note issued by TGI to B. & R. Machine & Tool Corp. in an aggregate principal amount not to exceed $9,500,000.

 

Capital Lease Obligations shall mean any obligation under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP; and the amount of Indebtedness represented by such obligations shall be the capitalized amount of such obligation determined in accordance with GAAP; and the stated maturity thereof shall be the date of the last

 

8



 

payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.

 

Capital Stock shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing.

 

Cash Collateralize shall mean, with respect to Letters of Credit Outstanding, that the Borrowers shall deposit with the Administrative Agent, as cash collateral for its Obligations under the Loan Documents, an amount equal to the Letters of Credit Outstanding.

 

Cash Equivalents shall mean, at any time, (i) any evidence of Indebtedness with a maturity date of ninety (90) days or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof; provided, that the full faith and credit of the United States of America is pledged in support thereof; (ii) certificates of deposit or bankers’ acceptances with a maturity of (a) ninety (90) days or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500,000,000.00 and (b) twenty-four months or less of any financial institution that meets the requirements of clause (ii)(a) and is a Bank hereunder; (iii) commercial paper (including variable rate demand notes) with a maturity of ninety (90) days or less issued by a corporation (except any Borrower, any Guarantor or any Affiliate of any of them) organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc. or at least P-1 by Moody’s Investors Service, Inc.; (iv) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause (i) above entered into with any financial institution having combined capital and surplus and undivided profits of not less than $500,000,000.00; (v) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any governmental agency thereof and backed by the full faith and credit of the United States of America, in each case maturing within ninety (90) days or less from the date of acquisition; provided, that, the terms of such agreements comply with the guidelines set forth in the Federal Financial Agreements of Depository Institutions with Securities Dealers and Others, as adopted by the Comptroller of the Currency on October 31, 1985; and (vi) investments in money market funds and mutual funds which invest substantially all of their assets in securities of the types described in clauses (i) through (v) above.

 

Cash Management Agreements shall have the meaning assigned to such term in Section 2.9.9.

 

Closing Date shall mean the date on which the initial Loans are made hereunder.

 

Collateral shall mean the Pledged Collateral, the UCC Collateral, the Intellectual Property Collateral and the Real Property Collateral.

 

9



 

Collateral Agent shall have the meaning assigned to such term in Section 8.2.5.2.

 

Collateral Documents shall mean the Guarantee and Collateral Agreement the Mortgages and any other documents delivered under this Agreement granting Liens in favor of the Administrative Agent as collateral security for the Obligations.

 

Commitment shall mean as to any Bank its Revolving Credit Commitment, and as to the Administrative Agent, also its Swing Loan Commitment.  Commitments shall mean the aggregate of the Revolving Credit Commitments of all of the Banks and Swing Loan Commitment of the Administrative Agent. The amount of the Commitment available for Revolving Credit Loans shall be reduced by the amount of the outstanding Swing Loan provided in Section 2.9.1.

 

Commitment Fee shall have the meaning assigned to that term in Section 2.3.

 

Computation Date shall have the meaning assigned to that term in Section 2.10.1.

 

Consideration shall mean with respect to any Permitted Acquisition, the aggregate of (i) the cash paid by any Loan Party, or a Subsidiary thereof, directly or indirectly, to the seller in connection therewith, (ii) the Indebtedness incurred or assumed by any Loan Party or a Subsidiary thereof, whether in favor of the seller or otherwise and whether fixed or contingent, (iii) any Guaranty (whether or not constituting Indebtedness) given or incurred by any Loan Party or a Subsidiary thereof, in connection therewith, and (iv) any other consideration given or obligation incurred by any Loan Party or a Subsidiary thereof in connection therewith.

 

Consolidated Adjusted EBITDA shall mean, for any period of determination, Consolidated EBITDA of TGI and its Subsidiaries subject to the following adjustments:

 

(1)           For any period in which TGI or one of its Subsidiaries has completed a Permitted Acquisition, the calculation of Consolidated Adjusted EBITDA for such period shall reflect, on a pro forma basis, the financial performance of the acquired entity or assets, as though the acquisition had been completed at the beginning of the period of determination, provided that any of the following conditions is met with respect to such acquisition:

 

(i)            Either: (a) the financial statements of the Person acquired for the fiscal year immediately preceding the date of such Permitted Acquisition have been audited or (b) the financial statements of the Person acquired for the Applicable Pro Forma Reporting Period have been supported by a third party due diligence report, provided that such audit or due diligence report was performed by a nationally recognized firm (or another firm acceptable to the Administrative Agent) and is in form and substance reasonably satisfactory to the Administrative Agent;

 

OR

 

10



 

(ii)           the acquired EBITDA for the Applicable Pro Forma Reporting Period is less than (15%) of the Consolidated Adjusted EBITDA for such period, excluding such acquired EBITDA;

 

OR

 

(iii)          the Required Banks shall have approved the inclusion of such acquired EBITDA in the computation of “Consolidated Adjusted EBITDA” for the Applicable Pro Forma Reporting Period and subsequent fiscal periods of the Borrowers.

 

(2)           For any period in which TGI or one of its Subsidiaries has completed a sale or disposition permitted under Sections 7.2.7(v) or 7.2.7(vii) [Dispositions of Assets or Subsidiaries], the calculation of Consolidated Adjusted EBITDA for such period shall omit the financial performance of the entity or assets sold or disposed of, as though the acquisition or a sale or disposition had been completed at the beginning of the period of determination.

 

Consolidated Adjusted EBITDA shall be determined at the end of each fiscal quarter for the previous four quarters.

 

Notwithstanding the definition of Consolidated Adjusted EBITDA, and in order to give effect to the Acquisition, on a pro forma basis, in determining Consolidated Adjusted EBITDA for all purposes under this Agreement, (i) the following amounts: shall be added to Consolidated Adjusted EBITDA for the following fiscal quarters completed immediately preceding the Closing Date:  $61,300,000 for the fiscal quarter ended March 31, 2010, $70,900,000 for the fiscal quarter ended December 31, 2009, $62,400,000 for the fiscal quarter ended September 30, 2009 and $63,100,000 for the fiscal quarter ended June 30, 2009  and (ii) up to $40,000,000 of nonrecurring, third party expenses directly incurred in connection with the Acquisition and the financing thereof, identified on Schedule 1.1(C) to be delivered prior to the date of required delivery of the first Compliance Certificate following the Closing Date, shall be added to Consolidated Adjusted EBITDA for the fiscal quarter in which the Closing Date occurs, but only to the extent that such expenses were actually expensed during such fiscal quarter.

 

Consolidated EBITDA shall mean with respect to any Person for any period

 

(i) the sum of, without duplication, the amounts for such period, taken as a single accounting period (in each case (other than clause (a) below), to the extent the same was deducted in computing Consolidated Net Income):

 

(a)           Consolidated Net Income;

 

(b)           Consolidated Non-cash Charges;

 

(c)           Consolidated Interest Expense;

 

(d)           Consolidated Income Tax Expense;

 

11



 

(e)           any non-recurring expenses or charges related to any equity offering, investments permitted under Section 7.2.4(v) (but only if such investment is made in a Joint Venture), (vi), (viii) and (x), recapitalization or Indebtedness permitted to be made under this Agreement (whether or not successful); less

 

(ii)           the amount of extraordinary, non-recurring or unusual gains, including gains from asset sales outside the ordinary course of business and pension income recognized under FAS 87 or otherwise, to the extent the same were included in calculating Consolidated Net Income.

 

Consolidated Income Tax Expense shall mean, with respect to any Person for any period, the provision for federal, state, local and foreign income taxes of such Person and its Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP paid or accrued during such period, including any penalties and interest related to such taxes or arising from any tax examinations, to the extent the same were deducted in computing Consolidated Net Income.

 

Consolidated Interest Expense shall mean, with respect to any Person for any period, without duplication, the sum of:

 

(i)            the total interest expense of such Person and its Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP, including, without limitation:

 

(a)           any amortization of Indebtedness discount;

 

(b)           the net cost under any Interest Rate Hedge (including any amortization of discounts);

 

(c)           the interest portion of any deferred payment obligation;

 

(d)           all commissions, discounts and other fees and charges owed with respect to letters of credit, bankers’ acceptances, financing activities or similar activities; and

 

(e)           all accrued interest;

 

(ii)           the interest component of Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Subsidiaries during such period determined on a consolidated basis in accordance with GAAP; and

 

(iii)          all capitalized interest of such Person and its Subsidiaries for such period;

 

provided, however, that Consolidated Interest Expense will exclude (I) the amortization or write-off of debt issuance costs and deferred financing fees, commissions, fees and expenses, (II) any expensing of interim loan commitment and other financing fees and (III) any interest on the Convertible Notes to the extent not paid in cash.

 

12



 

Consolidated Net Income shall mean for any fiscal period the net income of TGI and its Subsidiaries for such period determined and consolidated in accordance with GAAP; provided that:

 

(i)            the net income (but not loss) of any Person that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the specified Person or a Subsidiary thereof;

 

(ii)           the net income of any Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its equity holders;

 

(iii)          the net income of any Person acquired during the specified period for any period prior to the date of such acquisition shall be excluded, except to the extent permitted in the definition of Consolidated Adjusted EBITDA;

 

(iv)          gains or losses on asset sales (other than sales of inventory and other assets in the ordinary course of business) shall be excluded;

 

(v)           the cumulative effect of a change in accounting principles shall be excluded; and

 

(vi)          notwithstanding clause (i) above, the net income (or loss) attributable to any discontinued operations shall be excluded;

 

(vii)         settlement or curtailment charges recognized under FAS 88 shall be excluded.

 

Consolidated Net Worth shall mean as of any date of determination total stockholders’ equity of TGI and its Subsidiaries as of such date determined and consolidated in accordance with GAAP.

 

Consolidated Non-cash Charges shall mean, with respect to any Person for any period, the aggregate depreciation, amortization (including amortization of goodwill, other intangibles, deferred financing fees, debt issuance costs, commissions, fees and expenses) and non-cash charges and non-cash expenses of such Person and its Subsidiaries, including, without limitation, non-cash charges and non-cash expenses related to stock-based compensation, goodwill impairments or fixed asset writedowns and non-cash pension expense, reducing Consolidated Net Income of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding such charges constituting an extraordinary item of loss or any charge which requires an accrual of or a reserve for cash charges for any future period).

 

13


 

 

Consolidated Senior Net Indebtedness shall mean Consolidated Total Net Indebtedness less Subordinated Indebtedness.

 

Consolidated Total Net Indebtedness shall mean as of any date of determination the aggregate of all Indebtedness of TGI and its Subsidiaries as of such date determined and consolidated in accordance with GAAP minus unrestricted cash and Cash Equivalents in excess of $25,000,000.00 which are held by TGI or other Domestic Loan Party and maintained or managed by a Bank or an Affiliate of a Bank or a lender under the Vought Term Loans or any Affiliate thereof.  Consolidated Total Net Indebtedness shall be measured at the end of each fiscal quarter.

 

Convertible Debt Documents shall mean the Convertible Note Indenture and the Convertible Notes, in each case as amended, supplemented or modified from time to time.

 

Convertible Notes shall mean the $179,050,000 Senior Subordinated Notes due 2026 of the Borrower.

 

Convertible Note Indenture shall mean the indenture pursuant to which the Convertible Notes are issued.

 

Cumulative Credit shall mean, as of any date of determination, $50,000,000.00 plus 25% of cumulative Consolidated Net Income (excluding nonrecurring, noncash charges to Consolidated Net Income) from and including the first full fiscal quarter after the Closing Date through and including the last full fiscal quarter for which financial statements have been delivered in accordance with Section 7.3.1 [Quarterly Financial Statements] or Section 7.3.2 [Annual Financial Statements] as of such date of determination, less (i) any amounts thereof used to make repurchases or pay dividends pursuant to clause (ii) Section 7.2.5 [Dividends and Related Distributions], (ii) any amounts thereof used to make investments pursuant to clause (x) of Section 7.2.4 [Loans and Investments] and (iii) any amounts thereof used to make payments of Indebtedness pursuant to clause (z) of the second paragraph of Section 7.2.20 [Repayment of Convertible Notes; Repayment of other Indebtedness], in each case after the Closing Date and prior to such date of determination.

 

Currency Participation shall have the meaning assigned to such term in Section 2.13.1.

 

Daily Euro-Rate shall mean, for any day, the rate per annum determined by the Administrative Agent by dividing (i) the Published Rate by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage on such day.

 

Debt Rating shall mean the corporate / family credit rating assigned to TGI by Standard & Poor’s and the Issuer Rating assigned to TGI by Moody’s.

 

Defaulting Bank means any Bank that has (a) failed to fund any portion of the Revolving Loans, participations with respect to Letters of Credit (as provided in Section 2.8.3), or participations in Swing Line Loans (as provided in Section 2.9.5) required to be funded by it

 

14



 

hereunder within one Business Day of the date required to be funded by it hereunder unless such failure has been cured and all interest accruing as a result of such failure has been fully paid in accordance with the terms hereof, (b) otherwise failed to pay over to the Administrative Agent or any other Bank any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute or unless such failure has been cured and all interest accruing as a result of such failure has been fully paid in accordance with the terms hereof, (c) notified the Borrowers, the Administrative Agent, or any Issuing Bank in writing or has made any public statement to the effect that it does not intend to comply with any of its funding obligations under this Agreement or under any other agreements in which it commits to extend credit, (d) failed, within one Business Day after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit or Swing Line Loans or (e) has or has a parent company that has been deemed insolvent or become the subject of an Insolvency Proceeding.

 

Documentation Agent shall mean Sovereign Bank, and its successors and assigns, as Documentation Agent.

 

Dollar Equivalent shall mean, with respect to any amount of any currency, the Equivalent Amount of such currency expressed in Dollars.

 

Dollar Equivalent Revolving Facility Usage shall mean at any time the sum of the Dollar Equivalent amount of Revolving Credit Loans then outstanding, the Dollar Equivalent amount of Swing Loans then outstanding, and the Dollar Equivalent amount of Letters of Credit Outstanding.

 

Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money of the United States of America.

 

Domestic shall mean with respect to a Loan Party or a Subsidiary, one which is organized under the laws of the United States of America, any state thereof or the District of Columbia, other than a Loan Party or Subsidiary described in clause (ii) of the definition of “Foreign”.

 

Environmental Complaint shall mean any written complaint setting forth a cause of action for personal or property damage or natural resource damage or equitable relief, order, notice of violation, citation, request for information issued pursuant to any Environmental Laws by an Official Body, subpoena or other written notice asserting or threatening a claim relating to, arising out of, or issued pursuant to any of the Environmental Laws or any Environmental Conditions, as the case may be.

 

Environmental Conditions shall mean any conditions of the environment, including the workplace, the ocean, natural resources (including flora or fauna), soil, surface water, groundwater, any actual or potential drinking water supply sources, substrata or the ambient air, relating to or arising out of, or caused by the use, handling, storage, treatment, recycling, generation, transportation, release, spilling, leaking, pumping, emptying, discharging, injecting,

 

15



 

escaping, leaching, disposal, dumping, threatened release or other management or mismanagement of Regulated Substances resulting from the use of, or operations on, the Property.

 

Environmental Laws shall mean all federal, state, local and foreign Laws and regulations, including permits, licenses, authorizations, bonds, orders, judgments, consent decrees issued, or entered into, pursuant thereto, relating to pollution or protection of human health or the environment or employee safety in the workplace.

 

Equivalent Amount shall mean, at any time, as determined by the Administrative Agent or Fronting Bank, as the situation may require (which determination shall be conclusive absent manifest error), with respect to an amount of any currency (the “Reference Currency”) which is to be computed as an equivalent amount of another currency (the “Equivalent Currency”): (i) if the Reference Currency and the Equivalent Currency are the same, the amount of such Reference Currency, or (ii) if the Reference Currency and the Equivalent Currency are not the same, the amount of such Equivalent Currency converted from such Reference Currency at the Administrative Agent’s spot selling rate (based on the market rates then prevailing and available to the Administrative Agent) for the sale of such Equivalent Currency for such Reference Currency at a time determined by the Administrative Agent on the second Business Day immediately preceding the event for which such calculation is made.

 

Equivalent Currency shall have the meaning assigned to such term in the definition of Equivalent Amount.

 

ERISA shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

 

ERISA Group shall mean, at any time, each Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with such Borrower, are treated as a single employer under Section 414 of the Internal Revenue Code.

 

Euro-Rate shall mean the following:

 

(A)  with respect to Dollar Loans comprising any Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the average of the London interbank offered rates for U.S. Dollars quoted by the British Bankers’ Association as set forth on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market) or the rate which is quoted by another source selected by the Administrative Agent which has been approved by the British Bankers’

 

16



 

Association as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternate Source”) two (2) Business Days prior to the first day of such Interest Period for an amount comparable to such Borrowing Tranche and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent as such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.  Such Euro-Rate may also be expressed by the following formula:

 

 

 

Average of London interbank offered rates quoted by Bloomberg or appropriate successor as shown on

Euro-Rate =

 

Bloomberg Page BBAM1

 

 

1.00 - Euro-Rate Reserve Percentage

 

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate Option applies that is outstanding on the effective date of any change in the Euro-Rate Reserve Percentage as of such effective date.  The Administrative Agent shall give prompt notice to TGI, as agent for all of the Borrowers, of the Euro-Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

 

(B)  with respect to Optional Currency Loans in currency other than Euro comprising any Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (i) the rate of interest per annum determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the rate of interest per annum for deposits in the relevant Optional Currency which appears on the relevant Bloomberg Page (or, if no such quotation is available on such Bloomberg Page, on the appropriate such other substitute Bloomberg page that displays rates at which the relevant Optional Currency deposits are offered by leading banks in the Relevant Interbank Market) or the rate which is quoted by another source selected by the Administrative Agent which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates at which such Optional Currency deposits are offered by leading banks in the London interbank deposit market (an “Optional Currency Alternate Source”), at approximately 9:00 a.m., Pittsburgh time, two (2) Business Days prior to the commencement of such Interest Period as the Relevant Interbank Market offered rate for deposits in the relevant Optional Currency for an amount comparable to the principal amount of such Borrowing Tranche and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.  Such Euro-Rate may also be expressed by the following formula:

 

17



 

 

 

Relevant Interbank Market offered rate quoted by Bloomberg or appropriate successor as shown on

 

 

 

 

Euro-Rate =

Bloomberg Page BBAM1

 

 

 

1.00 - Euro-Rate Reserve Percentage

 

 

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate Option applies that is outstanding on the effective date of any change in the Euro-Rate Reserve Percentage as of such effective date.  The Administrative Agent shall give prompt notice to the Borrowers of the Euro-Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.  The Euro-Rate for any Loans shall be based upon the Euro-Rate for the currency in which such Loans are requested.

 

(C)           with respect to Optional Currency Loans denominated in Euro comprising any Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period, the interest rate per annum determined by Administrative Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which deposits in Euro are offered by leading banks in the Relevant Interbank Market) or the rate which is quoted by an Alternate Source, at approximately 11:00 a.m., Brussels time, two (2) TARGET Days prior to the commencement of such Interest Period as the Relevant Interbank Market offered rate for deposits in Euro for an amount comparable to the principal amount of such Borrowing Tranche and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.  Such Euro-Rate may also be expressed by the following formula:

 

 

 

London interbank offered rate quoted by Bloomberg or appropriate successor as shown on

 

 

 

 

Euro-Rate =

Bloomberg Page BBAM1

 

 

 

1.00 - Euro-Rate Reserve Percentage

 

 

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate Option applies that is outstanding on the effective date of any change in the Euro-Rate Reserve Percentage as of such effective date.  The Administrative Agent shall give prompt notice to the Borrowers of the Euro-Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.  The Euro-Rate for any Loans shall be based upon the Euro-Rate for the currency in which such Loans are requested.

 

Euro-Rate Option shall mean the option of the Borrowers, exercisable by TGI as their agent, to have Revolving Credit Loans bear interest at the rate and under the terms and conditions set forth in Section 3.1.1(ii).

 

18



 

Euro-Rate Reserve Percentage shall mean the maximum percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined by the Administrative Agent which is in effect during any relevant period, (i) as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”) of a member bank in such System; and (ii) to be maintained by a Bank as required for reserve liquidity, special deposit, or a similar purpose by any governmental or monetary authority of any country or political subdivision thereof (including any central bank), against (A) any category of liabilities that includes deposits by reference to which a Euro-Rate is to be determined, or (B) any category of extension of credit or other assets that includes Loans or Borrowing Tranches to which a Euro-Rate applies.

 

Event of Default shall mean any of the Events of Default described in Section 8.1.

 

Executive Order No. 13224 shall mean the Executive Order No. 13224 on Terrorist Financing,  effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

 

Existing Vought LCs shall mean the letters of credit issued for the account of Vought and its Subsidiaries and outstanding on the date of the Acquisition, which shall be identified on Schedule 2.8.1 hereto prior to the Closing Date.

 

Expiration Date shall mean, with respect to the Revolving Credit Commitments, the date that is four (4) years following the Closing Date.

 

Federal Funds Effective Rate for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

 

Federal Funds Open Rate shall mean the rate per annum determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the “open” rate for federal funds transactions as of the opening of business for federal funds transactions among members of the Federal Reserve System arranged by federal funds brokers on such day, as quoted by Garvin Guybutler, any successor entity thereto, or any other broker selected by the Administrative Agent, as set forth on the applicable Telerate display page; provided, however; that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding

 

19



 

Business Day, or if no such rate shall be quoted by a Federal funds broker at such time, such other rate as determined by the Administrative Agent in accordance with its usual procedures.

 

Flood Insurance Laws shall mean, collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto and (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto.

 

Foreign shall mean with respect to a Loan Party or a Subsidiary, (i) one which is organized under the laws of a jurisdiction other than the United States of America, any state thereof or the District of Columbia and (ii) any Subsidiary of a Loan Party or Subsidiary that is described in clause (i) of this definition that is organized under the laws of the United States of America, any state of, or the District of Columbia and is not treated as a corporation for United States federal tax purposes.

 

Fronting Bank shall mean PNC Bank, National Association so long as it remains the Administrative Agent, and its successors and assigns.

 

GAAP shall mean United States generally accepted accounting principles as are in effect in the United States from time to time, subject to the provisions of Section 1.3, and applied on a consistent basis both as to classification of items and amounts.

 

Governmental Acts shall have the meaning assigned to that term in Section 2.8.8.

 

Guarantee and Collateral Agreement shall mean the Guarantee and Collateral Agreement dated the Closing Date in substantially the form of Exhibit 1.1(G).

 

Guarantor shall mean a guarantor under the Guarantee and Collateral Agreement and the other Loan Documents, provided that no Foreign Loan Party nor Foreign Subsidiary shall be required to guarantee any Obligation of a Domestic Loan Party.

 

Guarantor Joinder shall have the meaning assigned to such term in Section 10.20.

 

Guaranty of any Person shall mean any obligation of such Person guaranteeing any liability or obligation of any other Person in any manner, whether directly or indirectly, including any performance bond or other suretyship arrangement and any other form of assurance against loss.

 

Historical Statements shall have the meaning assigned to that term in Section 5.1.9(i).

 

IDB’s shall have the meaning assigned to such term in clause (xi) of the definition of “Permitted Liens”.

 

20



 

Immaterial Subsidiary shall mean (i) Triumph Group Charitable Foundation, (ii) while the Receivables Facility remains in place and so long as the SP Sub owns no assets other than trade accounts receivable, related rights, related lock-box bank accounts and proceeds thereof and sufficient other assets that, when added to the foregoing, enables it to satisfy the minimum tangible net worth test set forth in the Receivables Purchase Agreement and any such immaterial other assets that are necessary or appropriate for the SP Sub to maintain an arm’s-length relationship with the Borrowers and Guarantors, the SP Sub, and (iii) any Subsidiary (a) in which the aggregate Investment (without duplication) by the Loan Parties is less than $10,000,000.00 and (b) which represented less than 5% of Consolidated Adjusted EBITDA for the most recently ended four (4) fiscal quarters; provided, however, that all Immaterial Subsidiaries described in clause (iii) of this definition shall not represent, in the aggregate, (x) more than 5% of Consolidated Adjusted EBITDA or (y) more than 5% of Consolidated total assets of TGI and its Subsidiaries.

 

Incremental Term Loan Parameters shall mean, such term loans which and which continue to (i) have a maximum aggregate principal amount of $100,000,000; (ii) rank no higher than pari passu with the Obligations, (iii) do not have the benefit of security or collateral which is not also granted to the Administrative Agent for the benefit of the Banks as security or collateral under the Loan Documents (and any security or collateral for the benefit of the lenders under the Incremental Term Loans shall be subject to the Intercreditor Agreement), (iv) are not guaranteed by or in favor a borrower or other obligor thereunder unless such Person is also a Borrower or a Guarantor of the Obligations, (v) have a weighted average life to maturity not shorter than the remaining weighted average life to maturity (based on scheduled amortization and final maturity) of the Vought Term Loans, (vi) contain a final maturity date not earlier than one year after the Expiration Date hereunder (as such Expiration Date exists on the date hereof); and (vii) are not incurred unless, after giving effect to such incurrence, the Borrowers would be in pro forma compliance with (x) the Total Leverage Ratio and Senior Leverage Ratio set forth in Sections 7.2.16 and 7.2.17 hereof assuming that the maximum permitted ratio is 0.25 to 1.00 lower than otherwise permitted pursuant to such Section and (y) the Interest Coverage Ratio set forth in Section 7.2.15.

 

Incremental Term Loans shall mean term loans made after the Closing Date under the documents evidencing the Vought Term Loans, provided to the Loan Parties that meet the Incremental Term Loan Parameters.

 

Indebtedness shall mean, as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of all of the following, without duplication:  (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (iii) reimbursement obligations under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, (iv) any other transaction (including forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital

 

21



 

requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business which are not more than 90 days overdue and not including the Payment Discount Arrangements), or (v) any Guaranty of Indebtedness for borrowed money.  Without limiting the generality of the foregoing, Indebtedness of TGI and its Subsidiaries, determined on a consolidated basis, shall include, without duplication and without limitation, the obligations of TGI and/or its Subsidiaries (including without limitation, the SP Sub) under the Transaction Documents (as defined in the Receivables Purchase Agreement); provided however that the provisions of this sentence shall not apply for purposes of calculation of the Senior Secured First Lien Leverage Ratio.

 

Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Official Body under any bankruptcy, insolvency, reorganization or other similar Law now or hereafter in effect, or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of such Person or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, of (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other, similar arrangement in respect of such Person’s creditors or any substantial portion of its creditors; undertaken under any Law.

 

Intellectual Property Collateral shall mean all of the Intellectual Property, as defined in the Guarantee and Collateral Agreement.

 

Intercompany Subordination Agreement shall mean a Subordination Agreement among the Loan Parties in the form attached hereto as Exhibit 1.1(I).

 

Intercreditor Agreement shall mean that Intercreditor Agreement among the Administrative Agent, Royal Bank of Canada and other parties thereto from time to time in substantially the form attached hereto as Exhibit 1.1(I)(2), as the same may be amended, modified, supplemented or restated from time to time.

 

Interest Coverage Ratio shall mean, with respect to any Test Period, the ratio of (i) Consolidated EBITDA for such Test Period to (ii) Consolidated Interest Expense for such period.

 

Interest Period shall have the meaning assigned to such term in Section 3.2.

 

Interest Rate Hedge shall mean an interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor or similar agreements entered into by any Borrower or any Guarantor or their Subsidiaries in order to provide protection to, or minimize the impact upon, the Borrowers, the Guarantors and/or their Subsidiaries of increasing floating rates of interest applicable to Indebtedness.

 

Interest Rate Option shall mean any Euro-Rate Option or Base Rate Option.

 

22



 

Internal Revenue Code shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

 

Investment shall mean, with respect to any Subsidiary of TGI or Joint Venture in which the Loan Parties or their Subsidiaries hold an interest, (i) all consideration (whether cash, property, assumption of liabilities or otherwise) paid or given by the Loan Parties or their Subsidiaries for the ownership interests or assets of such Subsidiary or Joint Venture, (ii) any cash or other property contributed by the Loan Parties or their Subsidiaries to the capital of such Subsidiary of Joint Venture, (iii)  any loans made by the Loan Parties or their Subsidiaries to such Subsidiary or Joint Venture, (iv) any Guaranty made by or on behalf of such Loan Party or their Subsidiaries for the benefit of such Subsidiaries or Joint Venture, or (v) any other consideration paid to or provided for the benefit of such Subsidiary or Joint Venture by the Loan Parties or their Subsidiaries in the nature of an equity contribution or loan.

 

Issuing Bank means PNC Bank, in its individual capacity as issuer of Letters of Credit hereunder other than the Existing Vought LCs, and JPMorgan Chase Bank as issuer of the Existing Vought LCs hereunder.

 

Joint Venture shall mean any entity in which the Loan Parties or their Subsidiaries, directly or indirectly, hold an ownership interest and the total of the ownership interests held by the Loan Parties and their wholly-owned Subsidiaries is less than 100%.

 

Labor Contracts shall mean all material employment agreements, material employment contracts, collective bargaining agreements and other material agreements among TGI or any Subsidiary of TGI and its employees.

 

Law shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree or award of any Official Body.

 

Letter of Credit shall have the meaning assigned to that term in Section 2.8.1.

 

Letter of Credit Borrowing shall have the meaning assigned to such term in Section 2.8.3.4.

 

Letter of Credit Fee shall have the meaning assigned to that term in Section 2.8.3.

 

Letters of Credit Outstanding shall mean at any time the sum of (i) the aggregate undrawn face amount of outstanding Letters of Credit and (ii) the aggregate amount of all unpaid and outstanding Reimbursement Obligations and Letter of Credit Borrowings (without duplication).

 

Lien shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any

 

23



 

assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing).

 

LLC Interests shall have the meaning given to such term in Section 5.1.3.

 

Loan Documents shall mean this Agreement, the Notes, the Guarantee and Collateral Agreement, the Intercompany Subordination Agreement, the Mortgages and the Intercreditor Agreement each executed by the Borrowers or the Guarantors or both, as applicable, and the other parties thereto, and any other instruments, certificates or documents delivered or contemplated to be delivered hereunder or thereunder or in connection herewith or therewith, as the same may be supplemented or amended from time to time in accordance herewith or therewith, and Loan Document shall mean any of the Loan Documents.

 

Loan Party shall mean either any Borrower or any Guarantor and Loan Parties shall mean collectively the Borrowers and the Guarantors.

 

Loan Request shall mean a request for Revolving Credit Loans made in accordance with Section 2.4 or a request to select, convert to or renew a Euro-Rate Option in accordance with Section 3.2.

 

Loans shall mean collectively and Loan shall mean separately all Revolving Credit Loans and Swing Loans or any Revolving Credit Loan or Swing Loan.

 

Long-Term Issue Credit Rating shall mean the long-term unenhanced rating assigned to the senior secured debt of TGI as determined from time to time by Moody’s and Standard & Poor’s.

 

Managing Agent shall mean individually JPMorgan Chase Bank, N.A., Royal Bank of Canada, Branch Banking & Trust Company and Manufacturers and Traders Trust Company and their successors and assigns, as a Managing Agent or Managing Agents shall mean collectively JPMorgan Chase Bank, N.A., Royal Bank of Canada, Branch Banking & Trust Company and Manufacturers and Traders Trust Company and their successors and assigns, as Managing Agents.

 

Material Adverse Change shall mean any set of circumstances or events which (a) has or is reasonably expected to have any material adverse effect whatsoever upon the validity or enforceability of this Agreement or any other Loan Document, (b) has or is reasonably expected to have a material and adverse effect on the business, properties, assets, financial condition or results of operations of TGI and its Subsidiaries taken as a whole, (c) impairs materially or is reasonably expected to impair materially the ability of TGI and its Subsidiaries taken as a whole to duly and punctually pay or perform its Indebtedness, or (d) impairs materially or is reasonably expected to impair materially the ability of the Administrative Agent or any of the Banks, to the extent permitted, to enforce their legal remedies pursuant to this Agreement or any other Loan Document.

 

24


 

 

Material Subsidiary means any Subsidiary of TGI other than an Immaterial Subsidiary.

 

Month, with respect to an Interest Period under the Euro-Rate Option, shall mean the interval between the days in consecutive calendar months numerically corresponding to the first day of such Interest Period.  If any Euro-Rate Interest Period begins on a day of a calendar month for which there is no numerically corresponding day in the month in which such Interest Period is to end, the final month of such Interest Period shall be deemed to end on the last Business Day of such final month.

 

Mortgage shall mean each mortgage in form and substance reasonably satisfactory to the Administrative Agent (modified as appropriate to conform with the specific requirements of the jurisdiction in which recorded) with respect to the Real Property Collateral executed and delivered by the relevant Loan Party to the Administrative Agent for the benefit of the Banks.

 

Multiemployer Plan shall mean any employee benefit plan which is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to which any Borrower or any member of the ERISA Group is then making or accruing an obligation to make contributions or, within the preceding five plan years, has made or had an obligation to make such contributions.

 

Multiple Employer Plan shall mean a Plan which has two or more contributing sponsors (including TGI or any member of the ERISA Group) at least two of whom are not under common control, as such a plan is described in Sections 4063 and 4064 of ERISA.

 

Non-Fronting Bank shall mean a Bank party hereto which (i) is incapable of obtaining an Optional Currency in the ordinary course of its business, (ii) has requested that the Fronting Bank obtain and front its Ratable Share of Optional Currency Loans to the applicable Borrower as required by § 2.13.2, and (iii) has been approved in advance in writing by the Fronting Bank in the Fronting Bank’s sole and absolute discretion, provided however if at any time a Bank’s Ratable Share of the sum of Optional Currency Loans and Letters of Credit Outstandings denominated in Optional Currencies outstanding at any time plus such Loans and Letters of Credit then being requested exceeds the amount approved for such Bank by the Fronting Bank in connection with the approval of such Bank as a Non-Fronting Bank, as indicated in the written approval referenced in clause (iii), as such amount may be from time to time increased in writing from the Fronting Bank, in its sole and absolute discretion, such Bank shall be a Non-Fronting Bank only up to such approved amount.

 

Notes shall mean the Revolving Credit Notes and the Swing Loan Note.

 

Notices shall have the meaning assigned to that term in Section 10.6.

 

Obligation shall mean any obligation or liability of any of the Borrowers or the Guarantors to the Administrative Agent or any of the Banks, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under or in connection with this Agreement, the Notes, the Letters of Credit, the Administrative Agent’s Letter or any other Loan Document.  Obligations shall include the

 

25



 

Hedge Liabilities but shall not include the liabilities to other Persons under any other Interest Rate Hedge.  Obligations shall also include any liabilities of any Loan Party in respect of any Other Bank Provided Financial Service Product.

 

Official Body shall mean any national, federal, state, local or other government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court or tribunal in each case whether foreign or domestic, with jurisdiction to act with the force of law with respect to pertinent matters.

 

Optional Currency shall mean any of the following currencies: British Pounds Sterling, Euros, Canadian Dollars, Mexican Pesos and any other currency approved by the Administrative Agent and all of the Banks pursuant to Section 2.10.4.

 

Original Currency shall have the meaning assigned to such term in Section 4.9.1.

 

Other Currency shall have the meaning assigned to such term in Section 4.9.1.

 

Other Financial Service Product shall mean agreements or other arrangements under which any Person provides any of the following products or services to any of the Loan Parties: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including controlled disbursement, accounts or services, or (g) foreign currency exchange.

 

Other Bank Provided Financial Service Product shall mean an Other Financial Service Product under which any Bank or Affiliate of a Bank provides the applicable service to any of the Loan Parties.

 

Other Term Lender Provided Financial Service Product shall mean an Other Financial Service Product provided to a Loan Party by a lender (or an Affiliate of a lender) under the Vought Term Loans or Incremental Term Loans, to the extent the obligations thereunder are secured jointly with the Vought Term Loan Obligations.

 

Overnight Rate shall mean for any day with respect to any Loans in an Optional Currency, the rate of interest per annum as determined by the Administrative Agent at which overnight deposits in the such currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day in the applicable offshore interbank market.

 

Participation Advance shall mean, with respect to any Bank, such Bank’s payment in respect of its participation in a Letter of Credit Borrowing according to its Ratable Share pursuant to Section 2.8.3.4.

 

Partnership Interests shall have the meaning given to such term in Section 5.1.3.

 

Payment Discount Arrangements shall mean the arrangements among the Subsidiaries of TGI and Citibank, N.A. and TGI and General Electric Capital Corporation - Trade Payables

 

26



 

Services Division as described on Schedule 7.2.7 [Receivables Sales] or similar arrangements, provided that in each case the receivables sold under such arrangements shall be sold without recourse to TGI or any of its Subsidiaries.

 

PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.

 

Permitted Acquisition shall have the meaning assigned to such term in Section 7.2.6.

 

Permitted Investments shall mean:

 

(i)            direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America maturing in twelve (12) months or less from the date of acquisition;

 

(ii)           commercial paper maturing in 180 days or less rated not lower than A-1, by Standard & Poor’s Corporation or P-1 by Moody’s Investors Service, Inc. on the date of acquisition;

 

(iii)          demand deposits, time deposits, money market account deposits or certificates of deposit maturing within one year in commercial banks whose obligations are rated A-1, A or the equivalent or better by Standard & Poor’s Corporation on the date of acquisition;

 

(iv)          investments in Cash Equivalents;

 

(v)           shares of money market mutual funds that (a) invest substantially all of their assets in the investments described in clauses (i) through (iv) above and/or (b) are otherwise rated at least AAA by Standard & Poor’s or at least Aaa by Moody’s;

 

(vi)          investments made under the Cash Management Agreements;

 

(vii)         Interest Rate Hedges, any Bank-Provided Hedge or Term Lender Provided Hedge, in each case, otherwise permitted hereunder;

 

(viii)        investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; and

 

(ix)           debt obligations received as consideration in connection with a sale of assets which is permitted hereunder.

 

Permitted Liens shall mean:

 

(i)            Liens for taxes, assessments, custom duties or similar charges, incurred in the ordinary course of business and which are not yet due and payable;

 

27



 

(ii)           Pledges or deposits made in the ordinary course of business to secure payment of worker’s compensation, or to participate in any fund in connection with worker’s compensation, unemployment insurance, old-age pensions or other social security programs;

 

(iii)          Liens of mechanics, materialmen, warehousemen, carriers, or other like Liens, securing obligations incurred in the ordinary course of business that are not yet due and payable and Liens of landlords securing obligations to pay lease payments that are not yet due and payable or in default;

 

(iv)          Good-faith pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, not in excess of the aggregate amount due thereunder, or to secure statutory obligations, or surety, appeal, indemnity, performance or other similar bonds required in the ordinary course of business;

 

(v)           Encumbrances consisting of zoning restrictions, easements or other restrictions on or with respect to the use of real property, none of which materially impairs the use of such property for the purposes intended by TGI and its Subsidiaries, and none of which is violated in any material respect by existing or proposed structures or land use;

 

(vi)          (a) Liens, security interests and mortgages in favor of the Administrative Agent for the benefit of the Banks securing the Obligations, including Hedge Liabilities and any Other Bank Provided Financial Service Product and (b) Liens under the 2009 Credit Agreement until the Closing Date, at which time the obligations under the 2009 Credit Agreement shall terminate;

 

(vii)         Liens on property leased by any Borrower or Subsidiary of any Borrower under operating leases securing obligations of such Borrower or Subsidiary to the lessor under such leases;

 

(viii)        Any Lien existing on the date of this Agreement and described on Schedule 1.1(P); provided that the principal amount secured thereby is not hereafter increased, and no additional assets (other than proceeds and products of such assets and after acquired assets pursuant to customary after acquired property provisions) become subject to such Lien;

 

(ix)           Purchase Money Security Interests and Liens on property leased by any Borrower or Subsidiary of any Borrower under capital leases securing obligations of such Borrower or Subsidiary to the lessor under such leases, provided that the aggregate amount of loans and Capital Lease Obligations secured by such Purchase Money Security Interests and Liens on such leased property shall not exceed the amount permitted under Section 7.2.1(i)(g) (excluding for the purpose of this computation any loans or deferred payments secured by Liens described on Schedule 1.1(P));

 

(x)            The following, (a) if the validity or amount thereof is being contested in good-faith by appropriate and lawful proceedings diligently conducted so long as levy and execution thereon have been stayed and continue to be stayed or (b) if a final judgment is entered and such

 

28



 

judgment is discharged within sixty (60) days of entry, and in either case they do not materially impair the Collateral or, in the aggregate, materially impair the ability of the Loan Parties to perform their Obligations hereunder or under the other Loan Documents:

 

(1)           Claims or Liens for taxes, assessments or charges due and payable and subject to interest or penalty, provided that the appropriate Loan Party maintains such reserves or other appropriate provisions as shall be required by GAAP and pays all such taxes, assessments or charges forthwith upon the commencement of proceedings to foreclose any such Lien;

 

(2)           Claims, Liens or encumbrances upon, and defects of title to, real or personal property other than the Collateral, including any attachment of personal or real property or other legal process prior to adjudication of a dispute on the merits; or

 

(3)           Claims or Liens of mechanics, materialmen, warehousemen, carriers, or other statutory nonconsensual Liens.

 

(4)           Liens resulting from final judgments or orders for the payment of money that do not constitute and Event of Default pursuant to Section 8.1.6 [Final Judgments or Orders];

 

(xi)           subject to Section 7.2.1, Liens on fixed assets securing tax-exempt, fixed-rate industrial development bonds (“IDB’s”) or notes or similar financing;

 

(xii)          Liens on accounts receivable sold pursuant to Payment Discount Arrangements;

 

(xiii)         Liens on the Pool Assets granted by the SP Sub and the Liens granted by the Originators on the Receivables and the Related Rights in accordance with the Receivables Purchase and Sale Agreement, in each case in connection with the Receivables Facility;

 

(xiv)        the Triumph Excluded LC Liens;

 

(xv)         the Vought Financing Liens;

 

(xvi)        Permitted Refinancing Liens;

 

(xvii)       Liens on assets to the extent that (a) the Banks do not have a Lien on such assets pursuant to the Loan Documents (and the Loan Documents do not purport to grant a Lien on such assets) or in the case of Liens on Collateral, such Liens are involuntary Liens arising by operation of law that are bonded or discharged within 45 days after entry thereof and (b) the aggregate amount of Indebtedness secured by such Liens does not exceed $25,000,000; and

 

(xviii)      Liens securing obligations described under clauses (d), (e) and (m) of Section 7.2.1(i); provided that such Liens securing obligations described in such clause (m) shall be solely on assets owned by non-Loan Parties.

 

29



 

Permitted Refinancing Debt shall mean Indebtedness that refunds, refinances, renews, replaces or extends Indebtedness (such refunded, refinanced, renewed, replaced or extended Indebtedness referred to in this definition as “Refinanced Debt”) permitted to be incurred pursuant to the terms of Section 7.2.1 [Indebtedness] whether involving the same or any other lender or creditor or group of lenders or creditors, but only to the extent that (i) such Indebtedness is scheduled to mature either (a) no earlier than the Refinanced Debt or (b) at least 91 days after the Expiration Date, and, in either case, such Indebtedness has a weighted average life to maturity equal to or greater than the weighted average life to maturity of the Refinanced Debt; (ii) such Indebtedness is in an aggregate principal amount that is less than or equal to the amount of the then currently outstanding Refinanced Debt (plus any unpaid, accrued interest, fees or premia in connection with such Refinanced Debt and any reasonable costs associated with such refinancing); (iii) such Indebtedness is not secured by Liens on any assets other than such assets that secured the Refinanced Debt and provided that such Liens are permitted by this Agreement; (iv) if the Refinanced Debt is subordinated to the Obligations, such Indebtedness shall be subordinated to the Obligations on terms not less favorable to the Banks; and (v) no obligor shall be liable with respect to such Indebtedness other than an obligor that was liable in respect of such Refinanced Debt; and (vi) no Event of Default exists at the time of such refinancing or results after giving effect to such refinancing.

 

Permitted Refinancing Liens shall mean Liens on assets of TGI or any Subsidiary of TGI securing Permitted Refinancing Debt; provided that such Liens were otherwise permitted by this Agreement with respect to the Indebtedness which was refunded, refinanced or extended and that no other assets (other than proceeds and products thereof and after acquired assets pursuant to customary after acquired property provisions) are subject to such Liens.

 

Person shall mean any individual, natural person, corporation, partnership, association, joint-stock company, trust, unincorporated organization, joint venture, government or political subdivision or agency thereof, or any other entity.

 

Plan shall mean at any time an employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the ERISA Group for employees of any entity which was at such time a member of the ERISA Group.

 

Pledged Collateral shall mean all Pledged Notes and Pledged Stock, in each case as such terms are defined in the Guarantee and Collateral Agreement.

 

PNC Bank shall mean PNC Bank, National Association, its successors and assigns.

 

Pool Assets has the meaning given to such term in the Receivables Purchase Agreement.

 

30



 

Potential Default shall mean any event or condition which with notice, the passage of time or both, would constitute an Event of Default.

 

Pricing Grid means the chart attached hereto as Exhibit 1.1(P) which sets forth the rates at which Commitment Fees, Letter Credit Fees and interest rate margins are calculated on the basis of the Total Leverage Ratio.

 

Principal Office shall mean the main banking office of the Administrative Agent in Pittsburgh, Pennsylvania.

 

Prior Security Interest shall mean a valid and enforceable perfected first-priority security interest in the Collateral; provided that (i) the Vought Term Loan Obligations (and any Permitted Refinancing Debt in respect thereof), and the obligations under the B&R Promissory Note shall be permitted to be secured by the Collateral on a pari passu basis with such security interest in the Collateral securing the Obligations and (ii) Liens which both (a) are Permitted Liens and (b) have priority over the Liens granted to the Administrative Agent pursuant to the Loan Documents by operation of Law shall be permitted on the Collateral.

 

Prohibited Transaction shall mean any prohibited transaction as defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA which is not covered by a statutory exemption and for which neither an individual nor a class exemption has been issued by the United States Department of Labor.

 

Property shall mean all real property, both owned and leased, of any Loan Party.

 

PTC Filings shall mean the short form security agreements for U.S. Intellectual Property registrations and applications.

 

Published Rate shall mean the rate of interest published each Business Day in The Wall Street JournalMoney Rates” listing under the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the eurodollar rate for a one month period as published in another publication selected by the Administrative Agent).

 

Purchase Money Security Interest shall mean Liens upon tangible personal property securing loans to TGI or any Subsidiary or deferred payments by TGI or such Subsidiary for the purchase of such tangible personal property.

 

Purchasing Bank shall mean a Bank which becomes a party to this Agreement by executing an Assignment and Assumption Agreement.

 

Ratable Share shall mean the proportion that a Bank’s Revolving Credit Commitment bears to the Revolving Credit Commitments of all of the Banks; provided, that in the case of Section 2.14 when a Defaulting Bank shall exist, “Ratable Share” shall mean the proportion that

 

31



 

a Bank’s Revolving Credit Commitment bears to the Revolving Credit Commitments of all of the Banks, other than the Revolving Credit Commitment of each Defaulting Bank.

 

Real Property shall mean the real estate owned by the respective Loan Parties and located in the respective locations identified on Schedule 5.1.8 hereto, which shall be delivered as of the Closing Date, and any real estate acquired by any Loan Party after the Closing Date.

 

Real Property Collateral shall mean the Real Property of the Loan Parties identified on Schedule 1.1(M) in which Liens are to be granted under the Mortgages and such other Real Property as is required to be mortgaged pursuant to Section 7.1.16 hereof.

 

Receivables Facility means (a) the receivables financing facility structured by PNC Capital Markets LLC and administered by PNC Bank dated on or about August 7, 2008, evidenced by the Receivables Purchase Agreement and the other Transaction Documents (as defined in the Receivables Purchase Agreement) whereby TGI and certain of its Subsidiaries (collectively, with TGI, the “Originators”) from time to time shall sell, transfer, convey, assign or contribute the Receivables (as defined in the Receivables Purchase Agreement) and the Related Rights (as defined in the Receivable Purchase and Sale Agreement) to the SP Sub, which, in turn, shall sell undivided variable percentage interests in the Purchased Interests (as defined in the Receivables Purchase Agreement) to the Purchasers (as defined in the Receivables Purchase Agreement); provided that the receivables of Vought and its Subsidiaries other than Contour Aerospace Corporation shall be excluded from such receivables financing facility unless the Required Banks agree in writing to include such receivables in such receivables financing facility and (b) to the extent the existing Receivables Facility is terminated, any other similar replacement facility entered into on market terms (as determined in the reasonable good faith judgment of the Administrative Agent), subject to the proviso in clause (a) above, and so long as such terms are not materially adverse to the Banks compared with the terms of the facility described in clause (a) above (as determined in the reasonable good faith judgment of the Administrative Agent).

 

Receivables Performance Guaranty means (a) the Performance Guaranty executed by TGI on or about August 7, 2008, as a performance guarantor, in favor of PNC Bank, as the Administrator under the Receivables Facility, as the same may be amended, supplemented, restated or otherwise modified from time to time and (b) to the extent the existing Receivables Facility is terminated, any other similar guaranty relationship entered into on market terms (as determined in the reasonable good faith judgment of the Administrative Agent), so long as such terms are not materially adverse to the Banks compared with the terms of the agreement described in clause (a)above (as determined in the reasonable good faith judgment of the Administrative Agent).

 

Receivables Purchase Agreement means (a) that certain Receivables Purchase Agreement, dated on or about August 7, 2008, among the SP Sub, the Borrower, as the Servicer thereunder, PNC Bank, as the Administrator thereunder, and the Purchasers, as the same may be amended, supplemented, restated or otherwise modified from time to time and (b) to the extent the existing Receivables Facility is terminated, any other similar agreement entered into on

 

32



 

market terms (as determined in the reasonable good faith judgment of the Administrative Agent), so long as such terms are not materially adverse to the Banks compared with the terms of the agreement described in clause (a) above (as determined in the reasonable good faith judgment of the Administrative Agent).

 

Receivables Purchase and Sale Agreement means (a) that certain Purchase and Sale Agreement, dated on or about August 7, 2008, amount the SP Sub, the Originators and the Borrower, as the initial Servicer thereunder, as the same may be amended, supplemented, restated or otherwise modified from time to time and (b) to the extent the existing Receivables Facility is terminated, any other similar agreement entered into on market terms (as determined in the reasonable good faith judgment of the Administrative Agent), so long as such terms are not materially adverse to the Banks compared with the terms of the agreement described in clause (a) above.

 

Reference Currency shall have the meaning assigned to such term in the definition of Equivalent Amount.

 

Refinanced Debt shall have the meaning assigned to such term in the definition of Permitted Refinancing Debt.

 

Regulated Substances shall mean any substance, including any solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material, refuse, garbage, wastes, chemicals, petroleum products, by-products, coproducts, impurities, dust, scrap, heavy metals, any substance defined as a “hazardous substance,” “pollutant,” “pollution,” “contaminant,” “hazardous or toxic substance,” “extremely hazardous substance,” “toxic chemical,” “toxic waste,” “hazardous waste,” “industrial waste,” “residual waste,” “solid waste,” “municipal waste,” “mixed waste,” “infectious waste,” “chemotherapeutic waste,” “medical waste,” “regulated substance” or any related materials, substances or wastes as now or hereafter defined pursuant to any Environmental Laws, ordinances, rules, regulations or other directives of any Official Body, the generation, manufacture, extraction, processing, distribution, treatment, storage, disposal, transport, recycling, reclamation, use, reuse, spilling, leaking, dumping, injection, pumping, leaching, emptying, discharge, escape, release or other management or mismanagement of which is regulated by the Environmental Laws.

 

Regulation U shall mean Regulation U, T or X as promulgated by the Board of Governors of the Federal Reserve System, as amended from time to time.

 

Reimbursement Obligation shall have the meaning assigned to such term in Section 2.8.3.1.

 

Relevant Interbank Market shall mean in relation to Euro, the European Interbank Market and, in relation to any other currency, the London Interbank Market.

 

Reportable Event means a reportable event described in Section 4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer Plan.

 

33



 

Required Banks shall mean (i) if there are no Revolving Credit Loans, Reimbursement Obligations or Letter of Credit Borrowings outstanding, Banks other than Defaulting Banks whose Revolving Credit Commitments aggregate at least 51% of the Revolving Credit Commitments of all of the Banks (other than Defaulting Banks), or (ii) if there are Revolving Credit Loans, Reimbursement Obligations, or Letter of Credit Borrowings outstanding, any Bank or group of Banks other than Defaulting Banks if the sum of the Revolving Credit Loans, Reimbursement Obligations and Letter of Credit Borrowings of such Banks then outstanding aggregates at least 51% of the total amount of the Revolving Credit Loans, Reimbursement Obligations and Letter of Credit Borrowings then outstanding (other than those held by Defaulting Banks).  Reimbursement Obligations and Letter of Credit Borrowings shall be deemed, for purposes of this definition, to be in favor of the Administrative Agent and not a participating Bank if such Bank has not made its Participation Advance in respect thereof and shall be deemed to be in favor of such Bank to the extent of its Participation Advance if it has made its Participation Advance in respect thereof.

 

Revolving Credit Commitment shall mean, as to any Bank at any time, the amount initially set forth opposite its name on Schedule 1.1(B) in the column labeled “Amount of Commitment for Revolving Credit Loans,” and thereafter on Schedule I to the most recent applicable Assignment and Assumption Agreement, and Revolving Credit Commitments shall mean the aggregate Revolving Credit Commitments of all of the Banks.  The aggregate amount of the Revolving Credit Commitments is subject to the provisions of Section 2.1.2.

 

Revolving Credit Loans shall mean collectively and Revolving Credit Loan shall mean separately all Revolving Credit Loans or any Revolving Credit Loan made by the Banks or one of the Banks to the Borrowers pursuant to Section 2.1 or 2.8.4(i) hereof.

 

Revolving Credit Notes shall mean collectively and Revolving Credit Note shall mean separately all the Revolving Credit Notes of the Borrowers in the form of Exhibit 1.1(R) evidencing the Revolving Credit Loans together with all amendments, extensions, renewals, replacements, refinancings or refundings thereof in whole or in part.

 

Revolving Facility Usage shall mean at any time the sum of the Revolving Credit Loans and Swing Loans outstanding and the Letters of Credit Outstanding.

 

Senior Leverage Ratio shall mean, with respect to any Test Period, the ratio of Consolidated Senior Net Indebtedness as of the last day of such Test Period to Consolidated Adjusted EBITDA for such Test Period.

 

Senior Secured First Lien Leverage Ratio shall mean, with respect to any Test Period, the ratio of Consolidated Senior Net Indebtedness (other than Indebtedness in respect of the Receivables Facility) minus Indebtedness not secured by a first priority Lien on any assets of TGI or any of its Subsidiaries, all as of the last day of the Test Period, to Consolidated Adjusted EBITDA for such Test Period.

 

Settlement shall have the meaning assigned to such term in Section 2.13.2.

 

34


 

Shares shall have the meaning assigned to that term in Section 5.1.2.

 

SP Sub means Triumph Receivables, LLC, a wholly owned, bankruptcy remote Subsidiary of the Borrower.

 

Standard Securitization Undertakings shall mean representations, warranties, covenants and indemnities entered into by TGI or any Subsidiary which are reasonable and customary in an accounts receivable securitization transaction as determined in good faith by TGI, including Guaranties by TGI or any Subsidiary of any of the foregoing obligations of TGI or a Subsidiary.

 

Subordinated Indebtedness shall mean (i) Indebtedness of TGI under the Convertible Debt Documents (provided that such Indebtedness shall at all times be subordinated pursuant to the subordination provisions contained therein), (ii) subordinated Indebtedness incurred under Section 7.2.1(ii)(b) and (iii) any other subordinated Indebtedness of the Loan Parties provided that such Indebtedness is subordinated to the Indebtedness under the Loan Documents on typical market terms for similar subordinated Indebtedness (including maturity dates which extend beyond 365 days after the Expiration Date, and other appropriate provisions), reasonably acceptable to, and approved in writing by, the Administrative Agent.

 

Subsidiary of any Person at any time shall mean (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding capital stock or shares of beneficial interest normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s Subsidiaries, or (ii) any partnership of which such Person is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person’s Subsidiaries, (iii) any limited liability company of which such Person is a managing member or of which 50% or more of the limited liability company interests is at the time directly or indirectly owned by such Person or one or more of such Person’s Subsidiaries, or (iv) any corporation, trust, partnership, limited liability company or other entity which is controlled or capable of being controlled by such Person or one or more of such Person’s Subsidiaries.

 

Subsidiary Shares shall have the meaning assigned to that term in Section 5.1.3.

 

Swing Loan Commitment shall mean PNC Bank’s commitment to make Swing Loans to the Borrowers in an aggregate Dollar Equivalent principal amount of up to $50,000,000.

 

Swing Loan Conversion Date shall have the meaning assigned to such term in Section 2.9.4.

 

Swing Loan Note shall have the meaning assigned to such term in Section 2.9.3.

 

Swing Loan Repayment Date shall have the meaning assigned to such term in Section 2.9.2.

 

35



 

Swing Loan Request shall mean a request for Swing Loans made in accordance with Section 2.9.2.

 

Swing Loans shall have the meaning assigned to such term in Section 2.9.1.

 

Syndication Agent shall mean individually Citizens Bank of Pennsylvania and U.S. Bank National Association, and their successors and assigns, as a Syndication Agent or Syndication Agents shall mean collectively Citizens Bank of Pennsylvania and U.S. Bank National Association and their successors and assigns, as Syndication Agents.

 

TARGET2 shall mean the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on 19 November 2007.

 

TARGET Day shall mean any day on which TARGET2 is open for the settlement of payment in Euro.

 

Term Lender Provided Hedge shall mean an Interest Rate Hedge or other hedging transaction which is provided by any lender under the Vought Term Loans or Incremental Term Loans to the extent that the obligations of the Loan Parties thereunder are secured jointly with the Vought Term Loans or Incremental Term Loans, respectively and provided, that each such Interest Rate Hedge or other hedging transaction meets the following requirements: such Interest Rate Hedge or other hedging transaction (i) is documented in a standard International Swap Dealer Association agreement, (ii) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner, and (iii) is entered into for hedging (rather than speculative) purposes.

 

Test Period in effect at any time shall mean the most recent period of four consecutive fiscal quarters of TGI ended on or prior to such time (taken as one accounting period) in respect of which financial statements for each quarter or fiscal year in such period have been or are required to be delivered pursuant to Section 7.3.1 or 7.3.2; provided that, prior to the first date that financial statements have been or are required to be delivered pursuant to Section 7.3.1 or 7.3.2, the Test Period in effect shall be the period of four consecutive fiscal quarters ended March 31, 2010.  A Test Period may be designated by reference to the last day thereof (i.e., the “March 31, 2010 Test Period” refers to the period of four consecutive fiscal quarters of TGI ended March 31, 2010), and a Test Period shall be deemed to end on the last day thereof.

 

TGI shall have the meaning assigned to such term in the introductory paragraph of this Agreement.

 

Total Leverage Ratio shall mean, for any date of determination, the ratio of Consolidated Total Net Indebtedness as of such date to Consolidated Adjusted EBITDA for the four fiscal quarters then ended.

 

36



 

Transferor Bank shall mean the selling Bank pursuant to an Assignment and Assumption Agreement.

 

Triumph Excluded LCs shall mean the letters of credit identified on Schedule 1.1(E) issued for the account of Triumph and its Subsidiaries and outstanding on the Closing Date hereof which will not be Letters of Credit deemed issued under this Agreement.

 

Triumph Excluded LC Liens shall mean cash collateral in an amount not exceeding 105% of the aggregate face amount of the Triumph Excluded LCs deposited with the issuer of such Triumph Excluded LCs solely to secure repayment of the reimbursement obligations under the Triumph Excluded LCs.

 

UCC Collateral shall mean the property of the Loan Parties in which security interests are to be granted under the Guarantee and Collateral Agreement.

 

USA Patriot Act shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

 

U.S.-Owned DRE shall mean any entity that (A) is organized under the laws of the United States, any State thereof or the District of Columbia; (B) is disregarded as an entity separate from its owner for U.S. federal tax purposes; (C) is directly owned by a Domestic Loan Party; and (D) owns stock or interests in a Foreign Subsidiary.

 

Vought shall mean Vought Aircraft Industries, Inc., a Delaware corporation.

 

Vought Acquisition Debt shall mean the 2010 Bonds, the Vought Bridge Loans or any of them; provided the aggregate principal amount thereof does not exceed $400,000,000, plus or minus, as the case may be, the amount by which the aggregate initial principal amount of the Vought Term Loans is less than or greater than, respectively, $300,000,000; provided, further, that each of the 2010 Bonds and the Vought Bridge Loans shall, in any case, meet the Vought Financing Parameters.

 

Vought Bridge Loans shall mean bridge loans to be used by TGI to finance a portion of the Acquisition and any other Indebtedness which the Vought Bridge Loans are, by their terms, exchanged for or converted into.

 

Vought Excluded LCs shall mean the letters of credit identified on Schedule 1.1(E) issued for the account of Vought and its Subsidiaries and outstanding on the date of the Acquisition which are not issued by an Issuing Bank and will not be Letters of Credit deemed issued under this Agreement.

 

Vought Financing shall mean, the (i) the Vought Term Loans which shall meet each of the conditions set forth in the definition of Vought Financing Parameters with respect to the Vought Term Loans, and (ii) the Vought Acquisition Debt, which shall meet each of the

 

37



 

conditions set forth in the definition of Vought Financing Parameters with respect to the Vought Acquisition Debt.

 

Vought Financing Liens shall mean (a) a security interest in the Collateral in favor of the collateral agent or the administrative agent, as applicable under the Vought Term Loans, provided that such security interest is subject to the Intercreditor Agreement and secures solely the payment and performance of the Vought Term Loan Obligations and the B&R Promissory Note and (b) cash collateral in an amount not exceeding 105% of the aggregate face amount of the Vought Excluded LCs deposited with the issuer of such Vought Excluded LCs solely to secure repayment of the reimbursement obligations under the Vought Excluded LCs; and (c) Liens securing the Vought Acquisition Debt that are junior in priority to those securing the Obligations pursuant to intercreditor arrangements reasonably satisfactory to the Administrative Agent.

 

Vought Financing Parameters shall mean the following terms and conditions, except to the extent that any such term or condition is expressly waived or amended in writing by the Required Banks and notwithstanding anything to the contrary contained herein, the aggregate principal amount of the Vought Term Loans and the Vought Acquisition Debt taken together shall not exceed $700,000,000:

 

(A) with respect to the Vought Term Loans, such loans shall and shall continue to (i) have a maximum aggregate principal amount of $300,000,000; provided however that up to an additional $200,000,000 may be allocated from the Vought Acquisition Debt to the Vought Term Loans,  (ii) rank no higher than pari passu with the Obligations, (iii) not be secured by Liens on any asset which (a) does not constitute Collateral for the Obligations under the Loan Documents and (b) is not subject to the Intercreditor Agreement, (iv) not be guaranteed by or be in favor of a borrower or other obligor thereunder unless such Person is also a Borrower, Guarantor or obligor of the Obligations, (v) contain scheduled amortization consistent with current market terms prevailing on the date that the definitive documentation governing the Vought Term Loans is entered into, (vi) contain a final maturity date not earlier than one year after the Expiration Date hereunder (as such Expiration Date exists on the date hereof).

 

(B) with respect to the Vought Acquisition Debt, such Indebtedness shall and shall continue to (i) have a maximum aggregate principal amount of $400,000,000; provided that any such amount may be increased or decreased by the amount by which the Vought Term Loan is decreased or increased below or in excess of, as the case may be, of $300,000,000, (ii) be unsecured or secured by Liens junior in priority to those securing the Obligations pursuant to intercreditor arrangements reasonably satisfactory to the Administrative Agent, (iii) not be guaranteed by or be in favor of a borrower or other obligor thereunder unless such Person is also a Borrower, Guarantor or obligor of the Obligations, and (iv) either (a) have a maturity date not earlier than one year after the Expiration Date hereunder (as such Expiration Date exists on the date hereof) or (b) upon its maturity date, be, by its terms, convertible into or exchangeable for Indebtedness that has such a maturity date.

 

38


 

 

Vought Purchase Parameters shall mean that the aggregate of (a) all indebtedness for borrowed money assumed by the Loan Parties in connection with the Acquisition, (b) all indebtedness of Vought and its subsidiaries satisfied in connection with the Acquisition and (c) all cash consideration paid by TGI to the shareholders of Vought in connection with the Acquisition, shall not exceed $1,150,000,000.

 

Vought Term Loan Obligations shall mean the obligations of the Loan Parties in respect of (a) the Vought Term Loans and Incremental Term Loans and any liability of a Loan Party in respect thereof, including without limitation principal, interest and agency fees thereunder, (b) Term Lender Provided Hedges, and (c) Other Term Lender Provided Financial Service Products.

 

Vought Term Loans shall mean the senior, secured term loans in a principal amount not to exceed $300,000,000 provided to TGI by a syndicate of lenders initially agented by Royal Bank of Canada to be used by TGI to finance a portion of the Acquisition; provided however that up to an additional $200,000,000 may be allocated from the Vought Acquisition Debt to the Vought Term Loans on or prior to the date which is 45 days following the Closing Date.

 

Withdrawal Liability shall have the meaning assigned to such term under Part I of Subtitle E of Title IV of ERISA.

 

2009 Bonds shall mean TGI’s 8% Senior Subordinated Notes due 2017.

 

2009 Credit Agreement shall mean that Amended and Restated Credit Agreement dated as of August 14, 2009, as amended among certain of the Banks as defined therein, the Loan Parties and PNC Bank, National Association as administrative agent.

 

2010 Bonds shall mean notes issued by TGI to finance a portion of the Acquisition or to refinance the Vought Bridge Loans.

 

1.2                                 Construction.

 

Unless the context of this Agreement otherwise clearly requires, the following rules of construction shall apply to this Agreement and each of the other Loan Documents:

 

1.2.1                        Number; Inclusion.

 

references to the plural include the singular, the plural, the part and the whole; “or” has the inclusive meaning represented by the phrase “and/or,” and “including” has the meaning represented by the phrase “including without limitation”;

 

1.2.2                        Determination.

 

references to “determination” of or by the Administrative Agent or the Banks shall be deemed to include good-faith estimates by the Administrative Agent or the Banks (in the case of quantitative determinations) and good-faith beliefs by the Administrative Agent or the Banks

 

39



 

(in the case of qualitative determinations) and such determination shall be conclusive absent manifest error;

 

1.2.3                        Administrative Agent’s Discretion and Consent.

 

whenever the Administrative Agent or the Banks are granted the right herein to act in its or their sole discretion or to grant or withhold consent such right shall be exercised in good-faith;

 

1.2.4                        Documents Taken as a Whole.

 

the words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document as a whole and not to any particular provision of this Agreement or such other Loan Document;

 

1.2.5                        Headings.

 

the section and other headings contained in this Agreement or such other Loan Document and the Table of Contents (if any), preceding this Agreement or such other Loan Document are for reference purposes only and shall not control or affect the construction of this Agreement or such other Loan Document or the interpretation thereof in any respect;

 

1.2.6                        Implied References to this Agreement.

 

article, section, subsection, clause, schedule and exhibit references are to this Agreement or other Loan Document, as the case may be, unless otherwise specified;

 

1.2.7                        Persons.

 

reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement or other Loan Document, as the case may be, and reference to a Person in a particular capacity excludes such Person in any other capacity;

 

1.2.8                        Modifications to Documents.

 

reference to any agreement (including this Agreement and any other Loan Document together with the schedules and exhibits hereto or thereto), document or instrument means such agreement, document or instrument as amended, modified, replaced, substituted for, superseded or restated;

 

1.2.9                        From, To and Through.

 

relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding,” and “through” means “through and including”; and

 

40



 

1.2.10                  Shall; Will.

 

references to “shall” and “will” are intended to have the same meaning.

 

1.3                                 Accounting Principles.

 

Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, this shall be done in accordance with GAAP as in effect on the Closing Date, to the extent applicable, except as otherwise expressly provided in this Agreement. If there are any changes in GAAP after the Closing Date that would affect the computation of the Total Leverage Ratio, Senior Leverage Ratio, Senior Secured First Lien Leverage Ratio or Interest Coverage Ratio, such changes shall only be followed, with respect to such financial covenants, from and after the date this Agreement shall have been amended to take into account any such changes.

 

2.             REVOLVING CREDIT FACILITY

 

2.1                                 Revolving Credit Commitments.

 

2.1.1                        General.

 

Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Bank severally agrees to make Revolving Credit Loans in either Dollars or one or more Optional Currencies to the Borrowers at any time or from time to time on or after the date hereof to the Expiration Date provided that (i) after giving effect to each such Loan the aggregate Dollar Equivalent amount of Revolving Credit Loans from such Bank shall not exceed such Bank’s Revolving Credit Commitment minus such Bank’s Ratable Share of the Dollar Equivalent amount of the then outstanding Swing Loans and the Dollar Equivalent amount of Letters of Credit Outstanding, (ii) the aggregate Dollar Equivalent amount of Loans in Optional Currencies outstanding shall not exceed $200,000,000, and (iii) no Loan to which the Base Rate Option applies shall be made in an Optional Currency.  Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrowers may borrow, repay and reborrow pursuant to this Section 2.1.

 

2.1.2                        Right to Increase Commitments.

 

Provided that there is not continuing any Event of Default or Potential Default, if the Borrowers wish to increase the Revolving Credit Commitments, TGI, as agent for the Borrowers, shall notify the Administrative Agent thereof, provided that any such increase shall be a one time increase and shall be in a minimum of $10,000,000 and a maximum of $15,000,000.  Each Bank shall have the right at any time within thirty (30) days following such notice to increase its respective Revolving Credit Commitment so as to provide such added commitment pro rata in accordance with such Bank’s Ratable Share, and any portion of such requested increase which is not provided by any Bank shall be available to the other Banks, and

 

41



 

thereafter, to the extent not provided by the Banks, to any additional bank proposed by TGI, which is approved by the Administrative Agent (which approval shall not be unreasonably withheld) and which becomes a party to this Agreement pursuant to Section 10.11.  In the event of any such increase in the aggregate Revolving Credit Commitments effected pursuant to the terms of this subsection 2.1.2, new Notes shall, to the extent necessary, be executed and delivered by the Borrowers in exchange for the surrender of the existing Notes.

 

2.2                                 Nature of Banks’ Obligations with Respect to Revolving Credit Loans.

 

Each Bank shall be obligated to participate in each request for Revolving Credit Loans pursuant to Section 2.4 in accordance with its Ratable Share.  The aggregate Dollar Equivalent amount of each Bank’s Revolving Credit Loans outstanding hereunder to the Borrowers at any time shall never exceed its Revolving Credit Commitment minus its Ratable Share of the Dollar Equivalent amount of Letter of Credit Outstandings, subject to Section 4.6.1.  The obligations of each Bank hereunder are several.  The failure of any Bank to perform its obligations hereunder shall not affect the Obligations of the Borrowers to any other party nor the several obligations of the other Banks to the Borrowers; nor shall any other party be liable for the failure of such Bank to perform its obligations hereunder.  Without in any way limiting the immediately preceding sentence, on condition that a Non-Fronting Bank first advances to the Fronting Bank the Dollar Equivalent of such Non-Fronting Bank’s Ratable Share of a Revolving Credit Loan denominated in an Optional Currency and is otherwise in compliance with the provisions of this Agreement relating to Non-Fronting Banks, the Fronting Bank shall fund the Ratable Share of such Revolving Credit Loan denominated in an Optional Currency on behalf of Non-Fronting Bank.  The Banks shall have no obligation to make Revolving Credit Loans hereunder on or after the Expiration Date.

 

2.3                                 Commitment Fees.

 

Accruing from the Closing Date until the Expiration Date, the Borrowers agree to pay to the Administrative Agent in Dollars for the account of each Bank, as consideration for such Bank’s Revolving Credit Commitment hereunder, a nonrefundable commitment fee (the “Commitment Fee”), calculated on a per annum (365 or 366 days, as appropriate, and actual days elapsed) basis under the Pricing Grid, on the average daily difference between the amount of (i) such Bank’s Revolving Credit Commitment as the same may be constituted from time to time and (ii) the principal amount of such Bank’s Ratable Share of Revolving Facility Usage, in each case, as determined for the immediately preceding fiscal quarter (or shorter period commencing with the Closing Date or ending with the Expiration Date); provided, however, that any Commitment Fee accrued with respect to the Revolving Credit Commitment of a Defaulting Bank during the period prior to the time such Bank became a Defaulting Bank and unpaid at such time shall not be payable by the Borrowers so long as such Bank is a Defaulting Bank except to the extent that such Commitment Fee shall otherwise have been due and payable by the Borrowers prior to such time; and provided further that no Commitment Fee shall accrue on the Revolving Credit Commitment of a Defaulting Bank so long as such Bank is a Defaulting Bank.  All Commitment Fees shall be payable quarterly in arrears on the first Business Day of each

 

42



 

October, January, April and July for the immediately preceding quarter and on the Expiration Date or upon acceleration of the Notes.  For purposes of this computation, PNC Bank’s outstanding Swing Loans shall be deemed to be borrowed amounts under its Revolving Credit Commitment.

 

2.4                                 Revolving Credit Loan Requests.

 

Except as otherwise provided herein, TGI, on behalf of the Borrowers may from time to time prior to the Expiration Date request the Banks to make Revolving Credit Loans, or renew or convert the Interest Rate Option applicable to existing Revolving Credit Loans pursuant to Section 3.2, by delivering to the Administrative Agent, not later than (i) 2:00 p.m., Pittsburgh time, three (3) Business Days prior to the proposed Borrowing Date with respect to the making of Revolving Credit Loans in Dollars to which the Euro-Rate Option applies or the date of conversion to or the renewal of the Euro-Rate Option for any such Loans and four (4) Business Days prior to the proposed Borrowing Date with respect to the making of Revolving Credit Loans in an Optional Currency or the date of conversion to or renewal of the Euro-Rate Option for Revolving Credit Loans in an Optional Currency; and (ii) 10:30 a.m., Pittsburgh time on either the proposed Borrowing Date with respect to the making of a Revolving Credit Loan to which the Base Rate Option applies or the last day of the preceding Interest Period with respect to the conversion to the Base Rate Option for any Revolving Credit Loan to which the Euro-Rate Option applies, of a duly completed request therefor substantially in the form of Exhibit 2.4 or a request by telephone immediately confirmed in writing by letter, or facsimile in such form (each, a “Loan Request”), it being understood that the Administrative Agent may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation.  Each Revolving Credit Loan Request shall be irrevocable and shall specify (i) the proposed Borrowing Date; (ii) the aggregate amount of the proposed Revolving Credit Loans (expressed in the currency in which such Loans shall be funded) comprising each Borrowing Tranche, the Dollar Equivalent amount of which shall be in integral multiples of $500,000 and not less than $2,000,000 for each Borrowing Tranche to which the Euro-Rate Option applies and not less than the lesser of $200,000 or the maximum amount available for Borrowing Tranches to which the Base Rate Option applies; (iii) whether the Euro-Rate Option or Base Rate Option shall apply to the proposed Revolving Credit Loans comprising the Borrowing Tranche; and (iv) the currency in which such Loans shall be funded if the Borrowers are electing the Euro-Rate Option; and (v) in the case of a Borrowing Tranche to which the Euro-Rate Option applies, an appropriate Interest Period for the proposed Revolving Credit Loans comprising such Borrowing Tranche.  If TGI (i) fails to specify an interest rate option to be applicable to a Borrowing Tranche of Loans, the Borrowers shall be deemed to have requested the Base Rate Option with respect to such Borrowing Tranche, or (ii) elects the Euro-Rate option but fails to specify an Interest Period to apply to the applicable Revolving Credit Loans, such Interest Period shall be 1 month.

 

2.5                                 Making Revolving Credit Loans.

 

The Administrative Agent shall, promptly after receipt by it of a Loan Request pursuant to Section 2.4, notify the Banks of its receipt of such Loan Request specifying: (i) the

 

43



 

proposed Borrowing Date and the time and method of disbursement of such Revolving Credit Loans; (ii) the currencies in which such Revolving Credit Loans are to be made, the amount(s) and type(s) of each and the applicable Interest Period(s) (if any); and (iii) the apportionment among the Banks of the Revolving Credit Loans as determined by the Administrative Agent in accordance with Section 2.2.  Each Bank shall remit the principal amount of each Revolving Credit Loan to the Administrative Agent in the appropriate currencies such that the Administrative Agent shall, to the extent the Banks have made funds available to it for such purposes, fund such Revolving Credit Loans to the Borrowers in U.S. Dollars and/or Optional Currencies, as applicable, and in immediately available funds at the Principal Office prior to 2:00 p.m., Pittsburgh time, on the Borrowing Date, provided that if any Bank fails to remit such funds to the Administrative Agent in a timely manner, the Administrative Agent may elect in its sole discretion to fund with its own funds the Revolving Credit Loans of such Bank on the Borrowing Date and such Bank shall be subject to the repayment obligation in Section 9.16.

 

2.6                                 Revolving Credit Notes.

 

The Obligation of the Borrowers to repay the aggregate unpaid principal amount of the Revolving Credit Loans made by each Bank, together with interest thereon, shall be evidenced by a Revolving Credit Note dated the Closing Date payable to the order of such Bank in a face amount equal to the Revolving Credit Commitment of such Bank.

 

2.7                                 Use of Proceeds.

 

The proceeds of the Revolving Credit Loans shall be used for the purpose of refinancing existing indebtedness, including the obligations under the 2009 Credit Agreement, to finance the Acquisition and for general corporate purposes, including future acquisitions permitted hereunder.

 

2.8                                 Letter of Credit Subfacility.

 

2.8.1                        Issuance of Letters of Credit.

 

TGI, as agent for the Borrowers, may request the issuance of a letter of credit (each a “Letter of Credit”) which may be denominated in either Dollars or an Optional Currency for itself or on behalf of another Loan Party or a non-Loan Party Subsidiary by delivering or having such other Loan Party deliver to the Issuing Bank (with a copy to the Administrative Agent) a completed application and agreement for letters of credit in such form as the Issuing Bank may specify from time to time by no later than 10:00 a.m., Pittsburgh time, at least five (5) Business Days, or such shorter period as may be agreed to by the Issuing Bank, in advance of the proposed date of issuance.  Promptly after receipt of any letter of credit application, the Issuing Bank shall confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit application and if not, such Issuing Bank will provide Administrative Agent with a copy thereof.  All letters of credit which are identified on Schedule 2.8.1 hereto (to be delivered five (5) Business Days prior to the Closing Date), which shall consist of Existing Vought LCs and all letters of credit issued under

 

44



 

the 2009 Credit Agreement which are outstanding on the Closing Date, shall be deemed to have been issued under this Agreement. Subject to the terms and conditions hereof and in reliance on the agreements of the other Banks set forth in this Section 2.8, the Administrative Agent will issue a Letter of Credit provided that each Letter of Credit shall (A) have a maximum maturity of twenty-four (24) months from the date of issuance, and (B) in no event expire later than one Business Day prior to the Expiration Date and provided that in no event shall (i) the Dollar Equivalent amount of Letters of Credit Outstanding exceed, at any one time, $100,000,000 or (ii) the Dollar Equivalent Revolving Facility Usage exceed, at any one time, the Revolving Credit Commitments.

 

Notwithstanding any other provision hereof, the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, if any Bank is at such time a Defaulting Bank hereunder, unless the Issuing Bank has entered into satisfactory arrangements with the Borrowers or such Bank to eliminate the Issuing Bank’s risk with respect to such Bank (it being understood that the Issuing Bank would consider the Borrowers providing cash collateral to the Administrative Agent, for the benefit of the Issuing Bank, to secure the Defaulting Bank’s Ratable Share of the Letter of Credit a satisfactory arrangement).

 

2.8.2                        Letter of Credit Fees.

 

The Borrowers shall pay in Dollars (i) to the Administrative Agent for the ratable account of the Banks a fee (the “Letter of Credit Fee”) at the rate per annum set forth in the Pricing Grid (based on a year of 360 days, and actual days elapsed), and (ii) to the Issuing Bank for its own account a fronting fee equal to 1/8% per annum, which fees shall be computed on the daily average Dollar Equivalent amount of Letters of Credit Outstanding for the immediately preceding fiscal quarter (or shorter period commencing with the Closing Date and or ending on the Expiration Date) and shall be payable quarterly in arrears commencing with the first Business Day of October, January, April and July following issuance of each Letter of Credit and on the Expiration Date.  The Borrowers shall also pay to the Issuing Bank in Dollars for the Issuing Bank’s sole account the Issuing Bank’s then in effect customary fees and administrative expenses payable with respect to the Letters of Credit as the Administrative Agent may generally charge or incur from time to time in connection with the issuance, maintenance, modification (if any), assignment or transfer (if any), negotiation, and administration of Letters of Credit.

 

2.8.3                        Disbursements, Reimbursement.

 

2.8.3.1     Immediately upon the issuance of each Letter of Credit, each Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Bank’s Ratable Share of the maximum amount available to be drawn under such Letter of Credit and the amount of such drawing, respectively.

 

2.8.3.2     In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the Issuing Bank will promptly notify TGI, as agent for the Borrowers and the Administrative Agent.  Provided that it shall have received such notice,

 

45



 

the Borrowers shall reimburse (such obligation to reimburse the Issuing Bank shall sometimes be referred to as a “Reimbursement Obligation”) the Issuing Bank in Dollars prior to 12:00 noon, Pittsburgh time on each date that an amount is paid by the Issuing Bank under any Letter of Credit (each such date, an “Drawing Date”) in an amount equal to the Dollar Equivalent amount so paid by the Issuing Bank.  In the event the Borrowers fail to reimburse the Issuing Bank (through the Administrative Agent) for the full Dollar Equivalent amount of any drawing under any Letter of Credit by 12:00 noon, Pittsburgh time, on the Drawing Date, the Administrative Agent will promptly notify each Bank thereof, and the Borrowers shall be deemed to have requested that Revolving Credit Loans be made by the Banks in Dollars under the Base Rate Option to be disbursed on the Drawing Date under such Letter of Credit, subject to the amount of the unutilized portion of the Revolving Credit Commitment and subject to the conditions set forth in Section 6.2 [Each Additional Loan] other than any notice requirements.  Any notice given by the Administrative Agent or the Issuing Bank pursuant to this Section 2.8.3.2 may be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

2.8.3.3     Each Bank shall upon any notice pursuant to Section 2.8.3.2 make available to the Administrative Agent for the benefit of the Issuing Bank an amount in Dollars in immediately available funds equal to its Ratable Share (as determined in accordance with Section 2.14, if applicable) of the Dollar Equivalent amount of the drawing, whereupon the participating Banks shall (subject to Section 2.8.3.4) each be deemed to have made a Revolving Credit Loan in Dollars to the Borrowers under the Base Rate Option in that amount.  If any Bank so notified fails to make available in Dollars to the Administrative Agent for the account of the Issuing Bank the amount of such Bank’s Ratable Share of such Dollar Equivalent amount by no later than 2:00 p.m., Pittsburgh time on the Drawing Date, then interest shall accrue on such Bank’s obligation to make such payment, from the Drawing Date to the date on which such Bank makes such payment (i) at a rate per annum equal to the Federal Funds Effective Rate during the first three days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Loans under the Base Rate Option on and after the fourth day following the Drawing Date.  The Administrative Agent and the issuing Bank will promptly give notice of the occurrence of the Drawing Date, but failure of the Administrative Agent or the Issuing Bank to give any such notice on the Drawing Date or in sufficient time to enable any Bank to effect such payment on such date shall not relieve such Bank from its obligation under this Section 2.8.3.3.

 

2.8.3.4     With respect to any unreimbursed drawing that is not converted into Revolving Credit Loans to the Borrowers under the Base Rate Option in whole or in part as contemplated by Section 2.8.3.2, because of the Borrowers’ failure to satisfy the conditions set forth in Section 6.2 [Each Additional Loan] other than any notice requirements or for any other reason, the Borrowers shall be deemed to have incurred from the Issuing Bank a borrowing (each a “Letter of Credit Borrowing”) in Dollars equal to the Dollar Equivalent amount of such drawing.  Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum applicable to the Revolving Credit Loans under the Base Rate Option.  Each Bank’s payment to the Administrative Agent for the account of the Issuing Bank pursuant to Section 2.8.3.3 shall be deemed to be a payment in respect of its

 

46



 

participation in such Letter of Credit Borrowing and shall constitute a “Participation Advance” from such Bank in satisfaction of its participation obligation under this Section 2.8.3.

 

2.8.4                        Repayment of Participation Advances.

 

2.8.4.1     Upon (and only upon) receipt by the Administrative Agent for the account of the Issuing Bank of immediately available funds from the Borrowers (i) in reimbursement of any payment made by the Issuing Bank under the Letter of Credit with respect to which any Bank has made a Participation Advance to the Issuing Bank, or (ii) in payment of interest on such a payment made by the Issuing Bank under such a Letter of Credit, the Administrative Agent on behalf of the Issuing Bank will pay to each Bank, in the same funds as those received by the Administrative Agent, the amount of such Bank’s Ratable Share of such funds, except the Administrative Agent shall retain for the account of the Issuing Bank the amount of the Ratable Share of such funds of any Bank that did not make a Participation Advance in respect of such payment by the Issuing Bank.

 

2.8.4.2     If the Administrative Agent is required at any time to return to any Loan Party, or to a trustee, receiver, liquidator, custodian, or any official in any Insolvency Proceeding, any portion of the payments made by any Loan Party to the Administrative Agent for the account of the Issuing Bank pursuant to Section 2.8.4.1 in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each Bank shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent for the account of the Issuing Bank the amount of its Ratable Share of any amounts so returned by the Administrative Agent plus interest thereon from the date such demand is made to the date such amounts are returned by such Bank to the Administrative Agent, at a rate per annum equal to the Federal Funds Effective Rate in effect from time to time.

 

2.8.5                        Documentation.

 

Each Loan Party agrees to be bound by the terms of the Issuing Bank’s application and agreement for letters of credit and the Issuing Bank’s written regulations and customary practices relating to letters of credit, though such interpretation may be different from such Loan Party’s own.  In the event of a conflict between such application or agreement and this Agreement, this Agreement shall govern.  It is understood and agreed that, except in the case of gross negligence or willful misconduct, the Issuing Bank shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following any Loan Party’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.

 

2.8.6                        Determinations to Honor Drawing Requests.

 

In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, the Issuing Bank shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit

 

47



 

have been delivered and that they comply on their face with the requirements of such Letter of Credit.

 

2.8.7                        Nature of Participation and Reimbursement Obligations.

 

Each Bank’s obligation in accordance with this Agreement to make the Revolving Credit Loans or Participation Advances, as contemplated by Section 2.8.3, as a result of a drawing under a Letter of Credit, and the Obligations of the Borrowers to reimburse the Issuing Bank upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.8 under all circumstances, including the following circumstances:

 

(i)            any set-off, counterclaim, recoupment, defense or other right which such Bank may have against the Issuing Bank or any of its Affiliates, any Borrower or any other Person for any reason whatsoever;

 

(ii)           the failure of any Loan Party or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in Section 2.1 [Revolving Credit Commitments], 2.5 [Revolving Credit Loan Requests], 2.6 [Making Revolving Credit Loans] or 6.2 [Each Additional Loan] or as otherwise set forth in this Agreement for the making of a Revolving Credit Loan, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Banks to make Participation Advances under Section 2.8.3;

 

(iii)          any lack of validity or enforceability of any Letter of Credit;

 

(iv)          any claim of breach of warranty that might be made by any Loan Party or any Bank against any beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, cross-claim, defense or other right which any Loan Party or any Bank may have at any time against a beneficiary, successor beneficiary any transferee or assignee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), the Issuing Bank or its Affiliates or any Bank or any other Person or, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between any Loan Party or Subsidiaries of a Loan Party and the beneficiary for which any Letter of Credit was procured);

 

(v)           the lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if the Issuing Bank or any of the Issuing Bank’s Affiliates has been notified thereof;

 

48


 

 

(vi)          payment by the Issuing Bank or any of its Affiliates under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;

 

(vii)         the solvency of, or any acts of omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;

 

(viii)        any failure by the Issuing Bank or any of its Affiliates to issue any Letter of Credit in the form requested by any Loan Party, unless the Issuing Bank has received written notice from such Loan Party of such failure within three Business Days after the Issuing Bank shall have furnished such Loan Party a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;

 

(ix)           any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Loan Party or Subsidiaries of a Loan Party;

 

(x)            any breach of this Agreement or any other Loan Document by any party thereto;

 

(xi)           the occurrence or continuance of an Insolvency Proceeding with respect to any Loan Party;

 

(xii)          the fact that an Event of Default or a Potential Default shall have occurred and be continuing;

 

(xiii)         the fact that the Expiration Date shall have passed or this Agreement or the Commitments hereunder shall have been terminated; and

 

(xiv)        any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

 

2.8.8                        Indemnity.

 

In addition to amounts payable as provided in Section 9.5 [Reimbursement of Administrative Agent by Borrowers, Etc.], the Borrowers hereby agree to protect, indemnify, pay and save harmless the Issuing Bank and any of its Affiliates that has issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) which the Issuing Bank or any of its Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (A) the gross negligence or willful misconduct of the Issuing Bank as determined by a final judgment of a court of competent jurisdiction or (B) the wrongful dishonor by the Issuing Bank or any of its Affiliates

 

49



 

of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority (all such acts or omissions herein called “Governmental Acts”).

 

2.8.9                        Liability for Acts and Omissions.

 

As between any Loan Party and the Issuing Bank, or the Issuing Bank’s Affiliates, such Loan Party assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the foregoing, the Issuing Bank shall not be responsible for any of the following including any losses or damages to any Loan Party or other Person or property relating therefrom:  (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if the Issuing Bank or the its Affiliates shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any Loan Party against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Loan Party and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Issuing Bank or its Affiliates, as applicable, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of the Issuing Bank’s or its Affiliates rights or powers hereunder.  Nothing in the preceding sentence shall relieve the Issuing Bank from liability for the Issuing Bank’s gross negligence or willful misconduct in connection with actions or omissions described in such clauses (i) through (viii) of such sentence.  In no event shall the Issuing Bank or its Affiliates be liable to any Loan Party for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

 

Without limiting the generality of the foregoing, the Issuing Bank and each of its Affiliates (i) may rely on any oral or other communication believed in good faith by the Issuing Bank or such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter

 

50



 

of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by the Issuing Bank or its Affiliate; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on the Issuing Bank or its Affiliate in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in connection with any Letter of Credit that is the subject to such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

 

In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by the Issuing Bank or its Affiliates under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put the Issuing Bank or its Affiliates under any resulting liability to the Borrowers or any Bank.

 

2.9                                 Swing Loans.

 

2.9.1                        Making Swing Loans.

 

Subject to the terms and conditions hereof, PNC Bank may in its discretion make swing line loans in Dollars (the “Swing Loans”) to the Borrowers from time to time prior to the Expiration Date in an aggregate outstanding principal amount up to the amount of the Swing Loan Commitment for periods requested by TGI, as agent for the Borrowers, and agreed to by PNC Bank; provided, that, no Swing Loan shall be made if, after giving effect to the making of such Swing Loan and the simultaneous application of the proceeds thereof, (x) the aggregate Dollar Equivalent Revolving Facility Usage would exceed the aggregate amount of the Revolving Credit Commitments of all of the Banks or (y) the aggregate amount of all outstanding Revolving Credit Loans of a Bank plus such Bank’s Ratable Share of the amount of outstanding Swing Loans and Letter of Credit Outstandings would exceed its Revolving Credit Commitment.  Within the foregoing limits, the Borrowers may, prior to the Expiration Date borrow, repay and reborrow under the Swing Loan Commitment, subject to and in accordance with the terms and limitations hereof.  The interest rate for a Swing Loan shall be the rate that is mutually agreed by TGI, on behalf of the Borrowers, and PNC Bank at the time such Swing Loan is made or, absent such an agreement, at the Base Rate.

 

51



 

2.9.2                        Swing Loan Request.

 

TGI, as agent for the Borrowers, may request a Swing Loan to be made on any Business Day.  Each request for a Swing Loan shall be in the form of a Swing Loan Request (or a request by telephone immediately confirmed in writing, it being understood that PNC Bank may rely on the authority of any individual making such telephonic request without the necessity of receipt of such written confirmation) and received by the Administrative Agent not later than 1:00 p.m. (Pittsburgh time) on the Business Day such Swing Loan is to be made for Swing Loans specifying (i)  the amount to be borrowed, (ii) the requested Borrowing Date, and (iii) the date such Swing Loan is to be repaid, if applicable (the “Swing Loan Repayment Date”).  The request for such Swing Loan shall be irrevocable.  Provided that all applicable conditions precedent contained herein have been satisfied, PNC Bank shall, not later than 4:00 p.m., Pittsburgh time, on the date specified in TGI’s request for such Swing Loan, make such Swing Loan by crediting any Borrower’s deposit account with PNC Bank.

 

2.9.3                        Swing Loan Note.

 

The obligation of the Borrowers to repay the Swing Loans shall be evidenced by a promissory note of the Borrowers dated the date hereof, payable to the order of PNC Bank in the principal amount of the Swing Loan Commitment and substantially in the form of Exhibit 1.1(S)(2) (as amended, supplemented or otherwise modified from time to time, the “Swing Loan Note”).

 

2.9.4                        Repayment.

 

Swing Loans shall be repaid on the earlier of (i) the Expiration Date or (ii) the Swing Loan Repayment Date for such Swing Loan, or in the case of any Swing Loan at any time upon demand by the Administrative Agent (any such date being the “Swing Loan Conversion Date”).  Unless TGI, on behalf of the Borrowers, shall have notified the Administrative Agent prior to 11:00 a.m., Pittsburgh time, on such Swing Loan Conversion Date that the Borrowers intend to repay such Swing Loan with funds other than the proceeds of a Revolving Credit Loan, the Borrowers shall be deemed to have given notice to the Administrative Agent requesting the Banks to make Revolving Credit Loans in U.S. Dollars in an amount determined by PNC Bank in its sole discretion as the U.S. Dollar Equivalent at the prevailing market rate of such Swing Loans, which Revolving Credit Loans shall earn interest at the Base Rate in effect on the Swing Loan Conversion Date in an aggregate amount equal to the amount of such Swing Loan plus interest thereon, and the Banks shall, on the Swing Loan Conversion Date, make Revolving Credit Loans (without the requirement that they comply with the conditions for Revolving Credit Loans in Section 2.4 [Revolving Credit Loan Requests]), which shall earn interest at the Base Rate, in an aggregate amount equal to the amount of such Swing Loan plus interest thereon, the proceeds of which shall be applied directly by the Administrative Agent to repay PNC Bank for such Swing Loan then due plus accrued interest thereon; and provided, further, that if for any reason the proceeds of such Revolving Credit Loans are not received by PNC Bank on the Swing Loan Conversion Date in an aggregate amount equal to the amount of such Swing Loan then due plus accrued interest, the Borrowers shall reimburse PNC Bank on the day immediately

 

52



 

following the Swing Loan Conversion Date, in same day funds, in an amount equal to the excess of the amount of such Swing Loan then due over the aggregate amount of such Revolving Credit Loans, if any, received plus accrued interest thereon.

 

2.9.5                        Participations.

 

In the event that the Borrowers shall fail to repay PNC Bank as provided in Section 2.9.4, the Administrative Agent shall promptly notify each Bank of the unpaid amount of such Swing Loan and of such Bank’s respective participation therein in an amount equal to such Bank’s Ratable Share of such Swing Loan.  Each Bank shall make available to the Administrative Agent for payment to PNC Bank an amount equal to its respective participation therein (including without limitation its Ratable Share of accrued but unpaid interest thereon, provided that the interest rate payable by the participating Banks shall not exceed the Base Rate), in Dollars and in same day funds at the office of the Administrative Agent specified in such notice.  If such notice is delivered by the Administrative Agent by 11:00 a.m., Pittsburgh time, each Bank shall make funds available to the Administrative Agent on that Business Day.  If such notice is delivered after 11:00 a.m., Pittsburgh time, each Bank shall make funds available to the Administrative Agent on the next Business Day.  In the event that any Bank fails to make available to the Administrative Agent the amount of such Bank’s participation in such unpaid amount as provided herein, PNC Bank shall be entitled to recover such amount on demand from such Bank together with interest thereon at a rate per annum equal to the Federal Funds Effective Rate for each day during the period between the date such participation amount is required to be paid and the date on which such Bank makes available its participation in such unpaid amount. The failure of any Bank to make available to the Administrative Agent its Ratable Share of any such unpaid amount shall not relieve any other Bank of its obligations hereunder to make available to the Administrative Agent its Ratable Share of such unpaid amount on the Swing Loan Conversion Date. The Administrative Agent shall distribute to each Bank which has paid all amounts payable by it under this Section 2.9.5 with respect to the unpaid amount of any Swing Loan, such Bank’s Ratable Share (based on its participation in such Swing Loan and interest thereon) of all payments received by the Administrative Agent from any of the Borrowers in repayment of such Swing Loan when such payments are received. Notwithstanding anything to the contrary herein, each Bank which has paid all amounts payable by it under this Section 2.9.5 shall have a direct right to repayment of such amounts from the Borrowers subject to the procedures for repaying Banks set forth in this Section 2.9.5 and the provisions of Section 4.

 

2.9.6                        Termination.

 

In the event the Revolving Credit Commitments are terminated in accordance with the terms hereof, the Swing Loan Commitment shall also be terminated automatically.  In the event the Borrowers reduce the Revolving Credit Commitments to less than the Swing Loan Commitment, the Swing Loan Commitment shall immediately be reduced to an amount equal to the Revolving Credit Commitment.  In the event the Borrowers reduce the Revolving Credit Commitments to less than the outstanding principal amount of the Swing Loans, the Borrowers shall immediately repay the amount by which the outstanding Swing Loans exceeds the Swing Loan Commitment as so reduced plus accrued interest thereon.

 

53



 

2.9.7                        Minimum Amounts.

 

At no time shall there be more than one (1) outstanding Swing Loan, except as to Swing Loans made pursuant to Section 2.9.9.  Each Swing Loan shall be in an original principal amount of $25,000, except as to Swing Loans made pursuant to Section 2.9.9, as to which there shall be no minimum.

 

2.9.8                        Prepayment.

 

The Borrowers shall have the right at any time and from time to time to prepay the Swing Loans, in whole or in part, without premium or penalty (but in any event subject to Section 4.5.2), upon prior written, facsimile or telephonic notice to PNC Bank given by TGI on the Borrowers’ behalf no later than 11:00 a.m., Pittsburgh time, on the date of any proposed prepayment.  Each notice of prepayment shall specify the Swing Loan to be prepaid and the amount to be prepaid, shall be irrevocable and shall commit the Borrowers to prepay such amount on such date, with accrued interest thereon and any other amounts owed hereunder.

 

2.9.9                        Swing Loans Under Cash Management Agreements.

 

In addition to making Swing Loans pursuant to the foregoing provisions of this Section 2.9.9, without the requirement for a specific request from the Borrowers pursuant to Section 2.9.2, PNC Bank may make Swing Loans to the Borrowers in accordance with the provisions of the agreements between TGI and PNC Bank relating to TGI’s deposit, sweep and other accounts at PNC Bank and related arrangements and agreements regarding the management and investment of TGI’s cash assets as in effect from time to time (the “Cash Management Agreements”) to the extent of the daily aggregate net negative balance in TGI’s accounts which are subject to the provisions of the Cash Management Agreements.  Swing Loans made pursuant to this Section 2.9.9 in accordance with the provisions of the Cash Management Agreements shall (i) be subject to the limitations as to aggregate amount set forth in Section 2.9.1, (ii) not be subject to the limitations as to number or individual amount set forth in Sections 2.9.7 or the repayment provisions of Section 2.9.4, (iii) be payable by the Borrowers, both as to principal and interest, at the times set forth in the Cash Management Agreements (but in no event later than the Expiration Date), (iv) not be made at any time after PNC Bank has received written notice of the occurrence of a Potential Default or Event of Default, (v) if not repaid by the Borrowers in accordance with the provisions of the Cash Management Agreements, be subject to each Bank’s obligation to purchase participating interests therein pursuant to Section 2.9.5, and (vi) except as provided in the foregoing subsections (i) through (v), be subject to all of the terms and conditions of this Section 2.9. The Borrowers acknowledge and agree that each Borrower materially benefits from the arrangements made pursuant to this Section 2.9.9 and the Cash Management Agreements, and each Borrower shall be jointly and severally liable, subject to Section 10.20, for all Obligations, including without limitation, those arising from the operation of this Section 2.9.9.

 

54


 

 

2.9.10                  Nature of Obligations.

 

Each Bank’s obligation to purchase participating interests pursuant to Section 2.9.5 in the event that the Borrowers shall fail to repay PNC Bank as provided in Section 2.9.4 in the amount required under such Section shall be absolute and unconditional and shall not be affected by any circumstance including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Bank may have against any other Bank or any Borrower, or any Borrower may have against any Bank or any other Person, as the case may be, for any reason whatsoever; (ii) the occurrence or continuance of a Potential Default or Event of Default; (iii) any adverse change in the condition (financial or otherwise) of any of the Borrowers; (iv) any breach of his Agreement by any party hereto; (v) the failure to satisfy any condition to the making of any Loan hereunder; or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

2.9.11                  Indemnity.

 

Each Bank shall ratably in accordance with its Ratable Share, indemnify PNC Bank, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrowers) against any cost, expense (including reasonable counsel fees and expenses), claim, demand, action, loss or liability (except any of the foregoing that results from the indemnitees’ gross negligence or willful misconduct) that such indemnities may suffer or incur in connection with this Section 2.9 or any action taken or omitted by such indemnities hereunder.

 

2.10                           Utilization of Commitments in Optional Currencies.

 

2.10.1                  Periodic Computations of Dollar Equivalent Amounts of Loans and Letters of Credit Outstanding.

 

The Administrative Agent will determine the Dollar Equivalent amount of (i) proposed Revolving Credit Loans or Letters of Credit to be denominated in an Optional Currency as of the requested Borrowing Date or date of issuance, as the case may be, (ii)  Letters of Credit Outstanding denominated in an Optional Currency as of the last Business Day of each month, and (iii) outstanding Revolving Credit Loans denominated in an Optional Currency as of the end of each Interest Period or on any other Business Day selected by the Administrative Agent and as frequently as the Administrative Agent desires, in the case of Revolving Credit Loans, in consultation with the Fronting Bank (each such date under clauses (i) through (iii), a “Computation Date”).

 

2.10.2                  Notices From Banks That Optional Currencies Are Unavailable to Fund New Loans.

 

The Banks shall be under no obligation to make the Revolving Credit Loans requested by the Borrowers which are denominated in an Optional Currency if any Bank (other than a Non-Fronting Bank) notifies the Administrative Agent by 5:00 p.m. (Pittsburgh time) four

 

55



 

(4) Business Days prior to the Borrowing Date for such Revolving Credit Loans that such Bank cannot provide its share of such Revolving Credit Loans in such Optional Currency because (i) the making, maintenance or funding of such Optional Currency Loan has been made impracticable or unlawful by compliance by such Bank in good-faith with any Law or any interpretation or application thereof by any Official Body or with any request or directive of any such Official Body (whether or not having the force of Law) or (ii) after making all reasonable efforts, deposits of the relevant amount in the relevant Optional Currency for the relevant Interest Period are not available to such Bank with respect to such Loan in the London interbank market.  In the event the Administrative Agent receives a timely notice from a Bank pursuant to the preceding sentence, the Administrative Agent will notify TGI, as agent for the Borrowers, no later than 12:00 noon (Pittsburgh time) three (3) Business Days prior to the Borrowing Date for such Revolving Credit Loans that the Optional Currency is not then available for such Revolving Credit Loans, and the Administrative Agent shall promptly thereafter notify the Banks of the same.  If TGI receives a notice described in the preceding sentence, the Borrowers may, by notice from TGI to the Administrative Agent not later than 5:00 p.m. (Pittsburgh time) three (3) Business Days prior to the Borrowing Date for such Revolving Credit Loans, either (a) withdraw the Loan Request for such Revolving Credit Loans, in which event the Administrative Agent will promptly notify each Bank of the same and the Banks shall not make such Revolving Credit Loans, or (b) request that the Revolving Credit Loans referred to in its Loan Request be made in Dollars or in a different Optional Currency in an amount equal to the Dollar Equivalent or other Optional Currency Equivalent Amount of such Revolving Credit Loans and shall (A) in the case of Revolving Credit Loans denominated in Dollars, bear interest under the Base Rate Option or the Euro-Rate Option, as elected by the Borrowers, or (B) in the case of Revolving Credit Loans denominated in an Optional Currency, bear interest under the Euro-Rate Option, in which event the Administrative Agent shall promptly deliver a notice to each Bank stating: (X) that such Revolving Credit Loans shall be made in the applicable currency and shall bear interest under the Base Rate Option or the Euro-Rate Option, as applicable, (Y) the aggregate amount of such Revolving Credit Loans, and (Z) such Bank’s Ratable Share of such Revolving Credit Loans.  If the Borrowers do not withdraw such Loan Request before such time as provided in clause (a) or request before such time that the requested Revolving Credit Loans referred to in its Loan Request be made in Dollars or a different Optional Currency as provided in clause (b), then (i) the Borrowers shall be deemed to have withdrawn such Loan Request and (ii) the Administrative Agent shall promptly deliver a notice to each Bank thereof and the Banks shall not make such Revolving Credit Loans.

 

2.10.3                  Notices From Banks That Optional Currencies Are Unavailable to Fund Renewals of the Euro-Rate Option.

 

If TGI, as agent for the Borrowers, delivers a Loan Request requesting that the Banks renew the Euro-Rate Option with respect to an outstanding Borrowing Tranche of Revolving Credit Loans denominated in an Optional Currency, the Banks shall be under no obligation to renew such Euro-Rate Option if any Bank (other than a Non-Fronting Bank) delivers to the Administrative Agent a notice by 5:00 p.m. (Pittsburgh time) four (4) Business Days prior to effective date of such renewal that such Bank cannot continue to provide Revolving

 

56



 

Credit Loans in such Optional Currency because (i) the making, maintenance or funding of such Optional Currency Loan has been made impracticable or unlawful by compliance by such Bank in good-faith with any Law or any interpretation or application thereof by any Official Body or with any request or directive of any such Official Body (whether or not having the force of Law) or (ii) after making all reasonable efforts, deposits of the relevant amount in the relevant Optional Currency for the relevant Interest Period are not available to such Bank with respect to such Loan in the London interbank market.  In the event the Administrative Agent receives a timely notice from a Bank pursuant to the preceding sentence, the Administrative Agent will notify TGI, as agent for the Borrowers, no later than 12:00 noon (Pittsburgh time) three (3) Business Days prior to the renewal date that the renewal of such Revolving Credit Loans in such Optional Currency is not then available, and the Administrative Agent shall promptly thereafter notify the Banks of the same.  If the Administrative Agent shall have so notified TGI that any such renewal of Optional Currency Loans is not then available, any notice of renewal with respect thereto shall be deemed withdrawn, and such Optional Currency Loans shall be redenominated into Base Rate Loans in Dollars with effect from the last day of the Interest Period with respect to any such Optional Currency Loans.  The Administrative Agent will promptly notify TGI, as agent for the Borrowers, and the Banks of any such redenomination, and in such notice, the Administrative Agent will state the aggregate Dollar Equivalent amount of the redenominated Optional Currency Loans as of the Computation Date with respect thereto and such Bank’s Ratable Share thereof.

 

2.10.4                  Requests for Additional Optional Currencies.

 

TGI, on behalf of the Borrowers, may deliver to the Administrative Agent and the Fronting Bank a written request that Revolving Credit Loans hereunder also be permitted to be made in any other lawful currency (other than Dollars), in addition to the currencies specified in the definition of “Optional Currency” herein provided that such currency must be freely traded in the offshore interbank foreign exchange markets, freely transferable, freely convertible into Dollars and available to the Banks (other than the Non-Fronting Banks) in the applicable interbank market.  The Administrative Agent will promptly notify the Fronting Bank and the Banks of any such request promptly after the Administrative Agent receives such request.  The Administrative Agent, the Fronting Bank and each Bank (other than the Non-Fronting Banks) may grant or accept such request in their sole discretion.  The Administrative Agent will promptly notify TGI of the acceptance or rejection by the Administrative Agent, the Fronting Bank and each of the Banks of the Borrowers’ request.  The requested currency shall be approved as an Optional Currency hereunder only if the Administrative Agent, the Fronting Bank and all of the Banks (other than the Non-Fronting Banks) approve of the Borrowers’ request.

 

2.11                           Currency Repayments

 

Notwithstanding anything contained herein to the contrary, the entire amount of principal of and interest on any Loan made in an Optional Currency shall be repaid in the same Optional Currency in which such Loan was made, provided, however, that if it is impossible or illegal for the Borrowers to effect payment of a Loan in the Optional Currency in which such Loan was made, or if the Borrowers default in their obligations to do so, the Required Banks may at their option permit such payment to be made (i) at and to a different location, subsidiary, affiliate or

 

57



 

correspondent of the Administrative Agent, or (ii) in the Dollar Equivalent, or (iii) in an Equivalent Amount of such other currency (freely convertible into Dollars) as the Required Banks may solely at their option designate.  Upon any events described in (i) through (iii) of the preceding sentence, the Borrowers shall make such payment. In all events, whether described in such clauses (i) through (iii), whether the Borrowers make such required payments, or otherwise, and (a) the Borrowers, jointly and severally, agree to hold each Bank (including, without limitation, the Fronting Bank) harmless from and against any loss incurred by any Bank arising from the cost to such Bank of any premium, any costs of exchange, the cost of hedging and covering the Optional Currency in which such Loan was originally made, and from any change in the value of Dollars, or such other currency, in relation to the Optional Currency that was due and owing and (b) each Non-Fronting Bank agrees to hold the Fronting Bank harmless from and against any loss incurred by the Fronting Bank arising from the cost to the Fronting Bank of any premium, any costs of exchange, the cost of hedging and covering the Optional Currency in which such Loan was originally made, for such Non-Fronting Bank, and from any change in the value of Dollars or such other currency in relation to the Optional Currency that was due and owing. Such loss shall be calculated for the period commencing with the first day of the Interest Period for such Loan and continuing through the date of payment thereof.  Without prejudice to the survival of any other agreement of the Borrowers or Non-Fronting Banks hereunder, the Borrowers’ and Non-Fronting Banks’ respective obligations under this Section 2.11 shall survive termination of this Agreement.

 

2.12                           Optional Currency Amounts

 

Notwithstanding anything contained herein to the contrary, the Administrative Agent may, with respect to notices by TGI on behalf of the Borrowers for Loans in an Optional Currency or voluntary prepayments of less than the full amount of an Optional Currency Borrowing Tranche, engage in reasonable rounding of the Optional Currency amounts requested to be loaned or repaid; and, in such event, the Administrative Agent shall promptly notify TGI and the Banks of such rounded amounts and Borrowers’ request or notice shall thereby be deemed to reflect such rounded amounts.

 

2.13                           Provisions Relating to Fronting of Optional Currency Loans.

 

2.13.1                  Optional Currency Loan Fronting.

 

(i)            Any Bank that is incapable of obtaining an Optional Currency in the ordinary course of business shall request in writing to the Fronting Bank that the Fronting Bank accept such Bank as a Non-Fronting Bank. Any such acceptance or rejection by the Fronting Bank of such request shall be at the Fronting Bank’s sole and absolute discretion. If the Fronting Bank elects to accept such requesting Bank as a Non-Fronting Bank, the Fronting Bank shall indicate the maximum Dollar Equivalent of aggregate Optional Currencies for which the Fronting Bank will act as Fronting Bank for such Non-Fronting Bank, which amount may be increased only upon written consent of the Fronting Bank, which consent may be given or withheld at the Fronting Bank’s sole and absolute discretion. The Fronting Bank’s agreement to act as Fronting Bank for a Non-Fronting Bank may be subject to any condition, including

 

58



 

without limitation, the payment of fees and/or the granting of security, all of which shall be as described in a separate agreement between the Fronting Bank and the Non-Fronting Bank, which separate agreement, if any, together with this Agreement shall govern the relationship between the Fronting Bank and such Non-Fronting Bank, provided however that any such separate agreement shall not affect the Borrowers’ right and duties hereunder. Upon written request from TGI, on behalf of the Borrowers, the Fronting Bank will provide to TGI a list of all Non-Fronting Banks as of such date, together with the maximum Dollar Equivalent which the Fronting Bank has agreed to front for each.  As of the Closing Date, the Non-Fronting Banks shall be those Banks set forth on Schedule 2.13.1 hereto and the maximum Dollar Equivalent which the Fronting Bank has agreed to fund for such Non-Fronting Bank shall be the amount set forth on such schedule opposite the applicable Non-Fronting Bank’s name.  Notwithstanding anything else in this Agreement or in any separate agreement with any Non-Fronting Bank to the contrary, the Fronting Bank shall have no obligation to act as Fronting Bank for any request for a Loan denominated in an Optional Currency made after the Fronting Bank ceases to be the Administrative Agent hereunder.

 

(ii)           Upon receipt of notice from the Administrative Agent to the Banks pursuant to Section 2.5 [Making Revolving Credit Loans], with respect to the request for each Optional Currency Loan, the Fronting Bank will determine the Dollar Equivalent amount of each such Non-Fronting Bank’s Ratable Share of such Optional Currency Loan and will notify the Administrative Agent and each Non-Fronting Bank (by 2:00 p.m. two (2) Business Day prior to the date such Loan is to be borrowed) thereof. Each Non-Fronting Bank shall make available to the Fronting Bank its Ratable Share of the Optional Currency Loan in same day funds, on or before 11:00 a.m., Pittsburgh time, on the proposed Borrowing Date, except that such Non-Fronting Bank shall remit its Ratable Share of such Loan in the Dollar Equivalent of such Optional Currency Loan amount at prevailing market rates as determined by the Fronting Bank and identified in the notice to such Non-Fronting Bank provided above in this Section 2.13.1 (such required payment, referred to herein as a “Currency Participation”). The Fronting Bank shall have no obligation to make any advance of Optional Currencies on behalf of a Non-Fronting Bank with respect to a Loan Request unless and until the Fronting Bank has received the corresponding payment in immediately available funds from the Non-Fronting Bank as described in the preceding sentence. Unless the Fronting Bank shall have been notified by a Non-Fronting Bank (by no later than 5:00 p.m. on the day that is two (2) Business Days prior to the date such Optional Currency Loan is to be borrowed, that such Non-Fronting Bank will not make available to the Fronting Bank the amount which would constitute the Dollar Equivalent amount of such Non-Fronting Bank’s Ratable Share of the requested Loan, the Fronting Bank may (but shall have no obligation to) assume that such Non-Fronting Bank will make such amount available to the Fronting Bank on the date the Fronting Bank makes such amount available to the Borrowers and, in reliance upon such assumption, the Fronting Bank may make available to the Administrative Agent a corresponding amount. The giving of any notification referred to in the immediately preceding sentence by a Non-Fronting Bank shall not relieve such Non-Fronting Bank of its obligation to make the Dollar Equivalent amount of its Ratable Share of each Optional Currency Loan hereunder. In the event that any Non-Fronting Bank fails to make available to the Fronting Bank such Non-Fronting Bank’s Currency Participation as provided

 

59



 

herein, the Fronting Bank shall be entitled to recover such Currency Participation on demand from such Non-Fronting Bank together with interest thereon at a rate per annum equal to (a) for the first three (3) Business Days after such demand, the Federal Funds Effective Rate, and (b) thereafter, the rate then applicable to such Revolving Credit Loan for each day during the period between the date such Currency Participation is required to be paid and the date on which such Non-Fronting Bank makes such Currency Participation.  If any Non-Fronting Bank fails to timely pay to the Fronting Bank its Currency Participation, such Non-Fronting Bank shall be deemed to have assigned to the Fronting Bank any and all payments of principal and interest owing by the Borrowers to such Non-Fronting Bank with respect to Loans made by such Non-Fronting Bank and any other amount owing by the Borrowers to such Non-Fronting Bank under this Agreement, in an amount equal to the Dollar Equivalent amount of the relevant Currency Participation plus accrued interest thereon as provided in the immediately preceding sentence.  The failure of any Non-Fronting Bank to make a Currency Participation shall not relieve any other Non-Fronting Bank of its obligations hereunder to make a Currency Participation on the Borrowing Date or any Computation Date.

 

(iii)          The Administrative Agent shall distribute to the Fronting Bank all payments attributable to each Non-Fronting Bank’s Ratable Share of each Optional Currency Loan fronted by the Fronting Bank which were received by the Administrative Agent from the Borrowers as interest on or repayment of such Optional Currency Loan when such payments are received, and thereupon, the Fronting Bank shall promptly remit payment to each Non-Fronting Bank which has paid all amounts payable by it under this Section 2.13.1 and Section 2.13.2 with respect to the Currency Participation, the Dollar Equivalent of the portion of such payments so received from the Administrative Agent in an amount which such Non-Fronting Bank would have received if it had funded its Ratable Share of such Optional Currency Loan directly (subject to any arrangements for compensation of the Fronting Bank by the Non-Fronting Bank pursuant to a separate agreement among them).

 

(iv)          Notwithstanding anything to the contrary herein, each Non-Fronting Bank which has paid all amounts payable by it under this Section 2.13.1 shall have a direct right to repayment from the Borrowers of such Non-Fronting Bank’s Ratable Share of the Optional Currency Loans made on behalf of such Non-Fronting Bank by the Fronting Bank under this Section 2.13, subject to the procedures for repaying Non-Fronting Banks set forth in this Section 2.13 and the provisions of Section 4.  Nothing contained in this Section 2.13.1 shall alter the Revolving Credit Commitments of the Non-Fronting Banks hereunder or that such Commitments are the several obligations of the Non-Fronting Banks which had made them, and the Fronting Bank shall in no manner be obligated to or be responsible for any Non-Fronting Bank’s Commitment.

 

2.13.2                  Settlement.

 

On each Computation Date with respect to Optional Currency Loans, the Fronting Bank shall notify each Non-Fronting Bank of the Dollar Equivalent of its Ratable Share of the total of the Optional Currency Loans (each a “Required Share”). Prior to 11:00 a.m., Pittsburgh

 

60



 

time, on such Computation Date, each Non-Fronting Bank shall pay to the Fronting Bank the amount, if any, by which its Required Share exceeded its then funded Currency Participations, and the Fronting Bank shall pay to each Non-Fronting Bank the amount, if any, by which such Non-Fronting Bank’s then funded Currency Participation exceeded its Required Share (such payment herein called “Settlement”). The Fronting Bank shall also effect Settlement in accordance with the foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans denominated in an Optional Currency and on Computation Dates and may at its option effect Settlement on any other Business Day. These Settlement procedures are established solely as a matter of administrative convenience, and nothing contained in this Section 2.13.2 shall relieve the Non-Fronting Banks of their obligations to fund Revolving Credit Loans or Currency Participations on dates other than a Borrowing Date or Computation Date pursuant to Section 2.10.1 or 2.13.1, as applicable.

 

2.13.3                  Non-Fronting Banks’ Obligations Absolute.

 

Each Non-Fronting Bank’s obligation in accordance with this Agreement to participate in Optional Currency Loans made by the Fronting Bank on behalf of such Non-Fronting Bank, as contemplated by Section 2.13.1, and the Obligations of the Non-Fronting Bank to indemnify the Fronting Bank for currency and other risks associated with such Optional Currency Loans, as contemplated by Sections 2.11 and 2.13.4, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.13 under all circumstances, including the following circumstances:

 

(i) any set-off, counterclaim, recoupment, defense or other right which such Non-Fronting Bank may have against the Fronting Bank or any of its Affiliates, any Borrower or any other Person for any reason whatsoever;

 

(ii) the failure of any Loan Party or any other Person to comply, in connection with a Revolving Credit Loan, with the conditions set forth in Section 2.1 [Revolving Credit Commitments], 2.4 [Revolving Credit Loan Requests], 2.5 [Making Revolving Credit Loans] or 6.2 [Each Additional Loan] or as otherwise set forth in this Agreement for the making of a Revolving Credit Loan, it being acknowledged that such conditions are not required for the obligation of the Non-Fronting Banks to participate in Optional Currency Loans under Section 2.13.1;

 

(iii) any claim of breach of warranty that might be made by any Loan Party or any Bank against any Loan Party, or the existence of any claim, set-off, recoupment, counterclaim, cross-claim, defense or other right which any Bank may have at any time against any Loan Party, the Administrative Agent or its Affiliates, the Fronting Bank or any other Bank or any other Person or, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction;

 

(iv) the lack of power or authority of any Person making a Loan Request (or any defect in or forgery of any signature on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness thereof, or any fraud or alleged fraud in

 

61



 

connection with any Optional Currency Loan, in each case even if the Administrative Agent, the Fronting Bank or any of their respective Affiliates has been notified thereof;

 

(v) the solvency of, or any acts of omissions by, any Loan Party, Fronting Bank or any other Person;

 

(vi) any failure by the Administrative Agent, Fronting Bank or any of their respective Affiliates to issue or provide any notice required hereunder;

 

(vii) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Loan Party or Subsidiaries of a Loan Party;

 

(viii) any breach of this Agreement or any other Loan Document by any party thereto;

 

(ix) the occurrence or continuance of an Insolvency Proceeding with respect to any Loan Party;

 

(x) the fact that an Event of Default or a Potential Default shall have occurred and be continuing;

 

(xi) the fact that the Expiration Date shall have passed or this Agreement or the Commitments hereunder shall have been terminated; and

 

(xii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

 

2.13.4                  Indemnity of Fronting Bank by Non-Fronting Bank and the Borrowers.

 

In addition to amounts payable as provided in Sections 9.5 [Reimbursement of Administrative Agent by Borrowers, Etc.], 9.7 [Reimbursement and Indemnification of Administrative Agent by Banks], and 2.11 [Currency Repayments], as applicable, each Borrower and each Non-Fronting Bank hereby agrees to protect, indemnify, pay and save harmless the Administrative Agent, the Fronting Bank and any of their respective Affiliates in connection with the fronting of an Optional Currency Loan for a Non-Fronting Bank from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) and including, without limitation, costs, expenses, losses and liabilities resulting from currency hedging in connection with the provision of Loans in Optional Currencies and the early termination of any contracts relating thereto (except in the case of such early termination, where the repayment of the Loans in Optional Currencies are made on the last day of the applicable Interest Period), which the Administrative Agent, the Fronting Bank or any of Administrative Agent’s Affiliates may incur or be subject to as a consequence, direct or

 

62



 

indirect, of fronting such Loan (except to the extent any of the foregoing results from the indemnitees’ gross negligence or willful misconduct as determined in a final order by a court of competent jurisdiction).

 

2.14                           Defaulting Banks.

 

Notwithstanding anything contained in Sections 2.8, 2.9 or any other provision of this Agreement to the contrary, if any Bank becomes a Defaulting Bank then: all Letters of Credit Outstanding and Swing Line Loan outstanding at such time, and all Letters of Credit issued or Swing Line Loans made while there exists a Defaulting Bank shall be reallocated among the non-Defaulting Banks in accordance with their respective Ratable Shares (such Ratable Shares shall be determined without reference to each Defaulting Lender’s Ratable Share) but only to the extent (a) the sum of all non-Defaulting Banks’ Ratable Share of all Loans outstanding, Swing Loans outstanding and Letters of Credit outstanding does not exceed the total of all non-Defaulting Banks’ Commitments and (b) the aggregate obligation of each non-Defaulting Bank to acquire, refinance or fund any participations in Letters of Credit and Swing Line Loans shall not exceed the positive difference (i) the Commitment of such Bank minus (ii) such Bank’s Ratable Share of the Dollar Equivalent of all outstanding Revolving Credit Loans Swing Line Loans and Letters of Credit outstanding.  If the reallocation described in the preceding sentence cannot, or can only partially, be effected, the Borrowers shall within one Business Day following notice by the Administrative Agent, (1) first, prepay outstanding Swing Loans and (2) second, cash collateralize such Defaulting Bank’s portion of Letters of Credit outstanding (after giving effect to any partial reallocation pursuant the immediately preceding sentence).  To the extent such Letters of Credit Outstanding and Swing Line Loans are reallocated pursuant to this Section 2.14, then the fees payable to the Banks pursuant to Section 2.8.2 (but not Section 2.3) shall be adjusted in accordance with such non-Defaulting Banks’ Ratable Shares.  To the extent such Letters of Credit Outstanding are not reallocated pursuant to this Section 2.14, or the Defaulting Bank’s Ratable Share of Letters of Credit Outstanding have not been cash collateralized, then, without prejudice to any rights or remedies of the Issuing Bank or any Bank hereunder, all Commitment Fees that otherwise would have been payable to such Defaulting Bank (solely with respect to the portion of such Defaulting Bank’s Commitment that was utilized by such Letters of Credit Outstanding) and Letter of Credit Fees with respect to such Defaulting Bank’s Ratable Share of the Letters of Credit Outstanding shall be payable to the Issuing Bank.  Nothing contained in this Section or elsewhere in this Agreement and no reallocation of any Defaulting Bank’s Ratable Share of any obligation hereunder shall relieve such Defaulting Bank of its obligation to fund any portion of any amount owed by such Defaulting Bank hereunder.

 

In the event that the Administrative Agent, the Borrower, and the Issuing Banks each agree that a Defaulting Bank has adequately remedied all matters that caused such Bank to be a Defaulting Bank, then the Letters of Credit Outstanding and the Swing Loans outstanding shall be readjusted to reflect the inclusion of such Bank’s Commitment and on such date, such Bank shall purchase at par such of the Loans of the other Banks as the Administrative Agent shall determine may be necessary in order for such Bank to hold such Loans in accordance with its Ratable Share.

 

63



 

3.             INTEREST RATES

 

3.1                                 Interest Rate Options.

 

The Borrowers shall pay interest in respect of the outstanding unpaid principal amount of the Loans as selected by them from the Base Rate Option or Euro-Rate Option set forth below applicable to the Loans, it being understood that, subject to the provisions of this Agreement, the Borrowers may select different Interest Rate Options and different Interest Periods to apply simultaneously to the Loans comprising different Borrowing Tranches and may convert to or renew one or more Interest Rate Options with respect to all or any portion of the Loans comprising any Borrowing Tranche, provided that there shall not be at any one time outstanding more than ten (10) Borrowing Tranches in the aggregate among all of the Loans.  If at any time the designated rate applicable to any Loan made by any Bank exceeds such Bank’s highest lawful rate, the rate of interest on such Bank’s Loan shall be limited to such Bank’s highest lawful rate.  The interest rate applicable to the Swing Loans shall be governed by Section 2.9.  Interest on the principal amount of each Loan made in an Optional Currency shall be paid by the Borrowers in such Optional Currency.

 

3.1.1                        Revolving Credit Interest Rate Options.

 

The Borrowers shall have the right to select from the following Interest Rate Options applicable to the Revolving Credit Loans, except that no Loan to which the Base Rate Option shall apply may be made in an Optional Currency:

 

(i)            Base Rate Option:  A fluctuating rate per annum (computed on the basis of a year of 365/366 days, as the case may be, or, if the Base Rate is measured by reference to the Daily Euro Rate, 360 days, and in each case and actual days elapsed) equal to the Base Rate plus the applicable number of basis points calculated under the Pricing Grid, such interest rate to change automatically from time to time effective as of the effective date of each change in the Base Rate; or

 

(ii)           Euro-Rate Option:  A rate per annum (computed on the basis of a year of 360 days and actual days elapsed, provided that, for Loans made in an Optional Currency for which a 365-day basis is the only market practice available to the Administrative Agent, such rate shall be calculated on the basis of a year of 365 for the actual days elapsed) equal to the Euro-Rate plus the applicable number of basis points calculated under the Pricing Grid.

 

3.1.2                        Rate Quotations.

 

TGI, on behalf of the Borrowers, may call the Administrative Agent on or before the date on which a Loan Request is to be delivered to receive an indication of the interest rates and the applicable currency exchange rates then in effect, but it is acknowledged that such projection shall not be binding on the Administrative Agent or the Banks nor affect the rate of interest or the calculation of Equivalent Amounts which thereafter are actually in effect when the election is made.

 

64


 

3.2                                 Interest Periods.

 

At any time when the Borrowers shall select, convert to or renew a Euro-Rate Option, TGI, on behalf of the Borrowers, shall notify the Administrative Agent thereof by delivering a Loan Request at least four (4) Business Days prior to the effective date of such Interest Rate Option, with respect to an Optional Currency Loan, and three (3) Business Days prior to the effective date of such Euro-Rate Option, with respect to a Dollar Loan.  The notice shall specify an interest period (the “Interest Period”) during which such Interest Rate Option shall apply, such Interest Period to be one, two, three or six Months, provided that, the sole Interest Periods applicable to Optional Currency Loans shall be one or two Months, and provided further, that:

 

3.2.1                        Ending Date and Business Day.

 

Any Interest Period which would otherwise end on a date which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

3.2.2                        Amount of Borrowing Tranche.

 

The Dollar Equivalent amount of each Borrowing Tranche of Euro-Rate Loans shall be in integral multiples of $500,000 and not less than $2,000,000;

 

3.2.3                        Termination Before Expiration Date.

 

The Borrowers shall not select, convert to or renew an Interest Period for any portion of the Loans that would end after the Expiration Date; and

 

3.2.4                        Renewals.

 

In the case of the renewal of a Euro-Rate Option at the end of an Interest Period, the first day of the new Interest Period shall be the last day of the preceding Interest Period, without duplication in payment of interest for such day.

 

3.3                                 Interest After Default.

 

To the extent permitted by Law, upon the occurrence of an Event of Default and until such time such Event of Default shall have been cured or waived and to the extent the Administrative Agent at the request of the Required Banks (or PNC Bank alone with respect to Swing Loans which are not converted to Revolving Credit Loans) elect (which election may be made without prior notice to the Borrowers):

 

65



 

3.3.1                        Letter of Credit Fees, Interest Rate.

 

The Letter of Credit Fees and the rate of interest borne by each Loan shall equal the sum of (i) the interest rate per annum applicable under the Base Rate Option plus (ii) 2.0% per annum; and

 

3.3.2                        Other Obligations.

 

Each other Obligation hereunder if not paid when due shall bear interest at a rate per annum equal to the sum of the rate of interest applicable under the Base Rate Option plus an additional 2.0% per annum from the time such Obligation becomes due and payable and until it is paid in full.

 

3.3.3                        Acknowledgment.

 

Each Borrower acknowledges that such increased rates reflect, among other things, the fact that such Loans or other amounts have become a substantially greater risk given their default status and that the Banks are entitled to additional compensation for such risk; and, all such interest shall be payable by the Borrowers upon demand by Administrative Agent.

 

3.4                                 Euro-Rate Unascertainable.

 

3.4.1                        Unascertainable.

 

If on any date on which a Euro-Rate would otherwise be determined, the Administrative Agent shall have determined that:

 

(i)            adequate and reasonable means do not exist for ascertaining such Euro-Rate, or

 

(ii)           a contingency has occurred which materially and adversely affects the London interbank eurodollar market relating to the Euro-Rate, then the Administrative Agent shall have the rights specified in Section 3.4.3.

 

3.4.2                        Illegality; Increased Costs; Deposits Not Available.

 

If at any time any Bank shall have determined that:

 

(i)            the making, maintenance or funding of any Loan to which a Euro-Rate Option applies has been made impracticable or unlawful by compliance by such Bank in good-faith with any Law or any interpretation or application thereof by any Official Body or with any request or directive of any such Official Body (whether or not having the force of Law), or

 

(ii)           such Euro-Rate Option will not adequately and fairly reflect the cost to such Bank of the establishment or maintenance of any such Loan, or

 

66



 

(iii)          after making all reasonable efforts, deposits of the relevant amount in Dollars or in the Optional Currency (as applicable) for the relevant Interest Period for a Loan to which a Euro-Rate Option applies are not available to such Bank with respect to such Loan in the London interbank market, then the Administrative Agent shall have the rights specified in Section 3.4.3.

 

3.4.3                        Administrative Agent’s and Banks’ Rights.

 

In the case of any event specified in subsection 3.4.1 above, the Administrative Agent shall promptly so notify the Banks and TGI, on behalf of the Borrowers, thereof, and in the case of an event specified in subsection 3.4.2 above, such Bank shall promptly so notify the Administrative Agent and endorse a certificate to such notice as to the specific circumstances of such notice, and the Administrative Agent shall promptly send copies of such notice and certificate to the other Banks and TGI on behalf of the Borrowers.  Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given), the obligation of (A) the Banks, in the case of such notice given by the Administrative Agent, or (B) such Bank, in the case of such notice given by such Bank, to allow the Borrowers to select, convert to or renew a Euro-Rate Option or select an Optional Currency (as applicable) shall be suspended until the Administrative Agent shall have later notified TGI, on behalf of the Borrowers, or such Bank shall have later notified the Administrative Agent, of the Administrative Agent’s or such Bank’s, as the case may be, determination that the circumstances giving rise to such previous determination no longer exist.  If at any time the Administrative Agent makes a determination under subsection 3.4.1 of this Section 3.4 and TGI, on behalf of the Borrowers, has previously notified the Administrative Agent of their selection of, conversion to or renewal of a Euro-Rate Option and such Interest Rate Option has not yet gone into effect, such notification shall be deemed to provide for selection of, conversion to or renewal of the Base Rate Option otherwise available with respect to such Loans.  If any Bank notifies the Administrative Agent of a determination under subsection 3.4.2 of this Section 3.4, the Borrowers shall, subject to the Borrowers’ indemnification Obligations under Section 4.5.2, as to any Loan of the Bank to which a Euro-Rate Option applies, on the date specified in such notice either (i) as applicable, convert such Loan to the Base Rate Option otherwise available with respect to such Loan or select a different Optional Currency or Dollars, or (ii) prepay such Loan in accordance with Section 4.4.  Absent due notice from TGI, on behalf of the Borrowers, of conversion or prepayment, such Loan shall automatically be converted to the Base Rate Option otherwise available with respect to such Loan upon such specified date.

 

3.5                                 Selection of Interest Rate Options.

 

If the Borrowers fail to select a new Interest Period or Optional Currency to apply to any Borrowing Tranche of Euro-Rate Loans at the expiration of an existing Interest Period applicable to such Borrowing Tranche in accordance with the provisions of Section 3.1, the Borrowers shall be deemed to have (a) with respect to Dollar Loans, converted such Borrowing Tranche to the Base Rate Option, commencing upon the last day of the existing Interest Period and (b) with respect to any such Optional Currency Loan Borrowing Tranche, continued the same Optional

 

67



 

Currency therefor, but selected a one Month Interest Period therefor, commencing upon the last day of the existing Interest Period.

 

4.             PAYMENTS

 

4.1                                 Payments.

 

All payments and prepayments to be made in respect of principal, interest, Commitment Fees, Letter of Credit Fees, Administrative Agent’s Fee or other fees or amounts due from the Borrowers hereunder shall be payable prior to 1:00 p.m., Pittsburgh time, on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrowers, and without set-off, counterclaim or other deduction of any nature, and an action therefor shall immediately accrue.  Such payments shall be made to the Administrative Agent at the Principal Office for the ratable accounts of the Banks with respect to the Loans in U.S. Dollars except that payments of principal or interest shall be made in the currency in which such Loan was made, and in immediately available funds, and the Administrative Agent shall promptly distribute such amounts to the Banks in immediately available funds, provided that in the event payments are received by 1:00 p.m., Pittsburgh time, by the Administrative Agent with respect to the Loans and such payments are not distributed to the Banks on the same day received by the Administrative Agent, the Administrative Agent shall pay the Banks the Federal Funds Effective Rate in the case of Loans or other amounts due in Dollars, or the Overnight Rate in the case of Loans or other amounts due in an Optional Currency with respect to the amount of such payments for each day held by the Administrative Agent and not distributed to the Banks.  The Administrative Agent’s and each Bank’s statement of account, ledger or other relevant record shall, in the absence of manifest error, be conclusive as the statement of the amount of principal of and interest on the Loans and other amounts owing under this Agreement (including the Equivalent Amounts of the applicable currencies where such computations are required) and shall be deemed an “account stated.”

 

4.2                                 Pro Rata Treatment of Banks.

 

Subject to Section 2.14, each borrowing shall be allocated to each Bank according to its Ratable Share, and each selection of, conversion to or renewal of any Interest Rate Option and each payment or prepayment by the Borrowers with respect to principal, interest, Commitment Fees, Letter of Credit Fees, or other fees (except for the Administrative Agent’s Fee and the Issuing Banks’ fronting fee) or amounts due from the Borrowers hereunder to the Banks with respect to the Loans, shall (except as provided in Section 3.4.2 [Illegality; Increased Costs; Deposits not Available] in the case of an event specified in Section 3.4.1 [Euro-Rate Unascertainable], 4.4 [Voluntary Prepayments and Commitment Reductions] or 4.5 [Additional Compensation in Certain Circumstances]) be made in proportion to the applicable Loans outstanding from each Bank and, if no such Loans are then outstanding, in proportion to the Ratable Share of each Bank.  Subject to Section 2.14, notwithstanding any of the foregoing, each borrowing or payment, repayment or prepayment by the Borrowers of principal, interest, fees or other amounts from the Borrowers with respect to Swing Loans shall be made by or to PNC Bank according to Section 2.9.

 

68



 

4.3                                 Interest Payment Dates.

 

Interest on Loans to which the Base Rate Option applies shall be due and payable in arrears on the first Business Day of each October, January, April and July and on the date such Loans are repaid in full.  Interest on Loans to which the Euro-Rate Option applies shall be due and payable in the currency in which such Loan was made on the last day of each Interest Period for those Loans and, if such Interest Period is longer than three (3) months, also on each day that interest would have been payable had successive Interest Periods of three months’ duration been applicable to such Loans.  Interest on mandatory prepayments of principal under Section 4.5 shall be made in the currency in which such Loan was made and shall be due on the date such mandatory prepayment is due.  Interest on the principal amount of each Loan or other monetary Obligation shall be due and payable in the currency in which such Loan was made on demand after such principal amount or such other monetary Obligation becomes due and payable (whether on the stated maturity date, upon acceleration or otherwise).

 

4.4                                 Voluntary Prepayments and Commitment Reductions.

 

4.4.1                        Right to Prepay.

 

The Borrowers shall have the right at their option from time to time to prepay the Loans in whole or part without premium or penalty (except as provided in subsection 4.4.2 below or in Section 4.5) in the currency in which such Loan was made:

 

(i)            at any time with respect to any Loan to which the Base Rate Option applies,

 

(ii)           on the last day of the applicable Interest Period with respect to Loans to which a Euro-Rate Option applies, provided however the Borrowers may otherwise prepay such Loans upon payment of all amounts owing under Section 4.5.2 resulting from such prepayment,

 

(iii)          on the date specified in a notice by any Bank pursuant to Section 3.4.3 [Administrative Agent’s and Banks’ Rights] with respect to any Loan to which a Euro-Rate Option applies.

 

Whenever the Borrowers desire to prepay any part of the Loans, TGI shall provide a prepayment notice to the Administrative Agent on behalf of the Borrowers on or before (and in the case of Optional Currency Loans, four (4) days before) the date of prepayment of Loans setting forth the following information:

 

(a)           the date, which shall be a Business Day, on which the proposed prepayment is to be made;

 

(b)           a statement indicating the application of the prepayment; and

 

(c)           the total principal amount and currency of such prepayment, the Dollar Equivalent amount of which shall not be less than $200,000 for the Revolving Credit Loans.

 

69



 

Notwithstanding the foregoing to the contrary, whenever the Borrowers desire to prepay any part of the Swing Loans TGI shall provide notice thereof on behalf of the Borrowers no later than 12:00 noon, Pittsburgh time, on the date of prepayment of Swing Loans setting forth the following information:

 

(x)            the date, which shall be a Business Day, on which the proposed prepayment is to be made; and

 

(y)           a statement indicating the application of the prepayment between the Swing Loans.

 

The amount of the payment shall not be less than $25,000 for any Swing Loan except for Swing Loans made pursuant to Section 2.9.9, as to which there shall be no minimum.

 

All prepayment notices shall be irrevocable.  The principal amount of the Loans for which a prepayment notice is given, together with interest on such principal amount, shall be due and payable on the date specified in such prepayment notice as the date on which the proposed prepayment is to be made in the currency in which such Loan was made.  Except as provided in Section 3.3.3, if the Borrowers prepay a Loan but fails to specify the applicable Borrowing Tranche which the Borrowers are prepaying, the prepayment shall be applied first to Loans to which the Base Rate Option applies, then to Dollar Loans to which the Euro-Rate Option applies, and then to Optional Currency Loans.  Any prepayment hereunder shall be subject to the Borrowers’ obligation to indemnify the Banks under Section 4.5.2.

 

4.4.2                        Replacement of a Bank.

 

In the event any Bank (i) gives notice under Section 3.4.2 or Section 4.5.1, or fails to make its Currency Participation and shall be deemed to have assigned its interest in the Optional Currency Loan to the Fronting Bank, in either case, as set forth in Section 2.13, (ii) becomes a Defaulting Bank or otherwise does not fund Revolving Credit Loans in breach of its obligations under Section 2.5 or because the making of such Loans would contravene any Law applicable to such Bank, (iii) does not approve any action as to which its consent is required (other than the consent of the Administrative Agent under Section 10.1.1) and the consent of the Required Banks is obtained hereunder, (iv) becomes subject to the control of an Official Body (other than normal and customary supervision), or (v) which is not a Non-Fronting Bank, gives notice under Section 2.10.2 or Section 2.10.3, or fails to fund an Optional Currency Loan, then the Borrowers shall have the right at their option, with the consent of the Administrative Agent, which shall not be unreasonably withheld, to prepay the Loans of such Bank in whole, together with all interest accrued thereon, and terminate such Bank’s Commitment within ninety (90) days after (v) receipt of such Bank’s notice under Section 3.4.2 or 4.5.1, (w) the date such Bank has become a Defaulting Bank or otherwise has failed to fund Revolving Credit Loans in breach of its obligations under Section 2.5 or because the making of such Loans would contravene Law applicable to such Bank, (x) the date of obtaining the consent which such Bank has not approved, (y) the date such Bank became subject to the control of an Official Body, (z) receipt of such Bank’s notice under Sections 2.10.2 or 2.10.3, as applicable; provided that the Borrowers shall

 

70



 

also pay to such Bank at the time of such prepayment any amounts required under Section 4.5 and any accrued interest due on such amount and any related fees; provided, however, that the Commitment of such Bank shall be provided by one or more of the remaining Banks or a replacement bank reasonably acceptable to the Administrative Agent; provided, further, the remaining Banks shall have no obligation hereunder to increase their Commitments; provided further, in the event none of the Banks or any replacement bank acquire the Commitments of the Defaulting Bank the Borrower may terminate such Defaulting Bank’s Commitment and reduce the aggregate Commitments of all of the Banks by the amount of such Defaulting Bank’s terminated Commitment subject to the provisions (other than the pro rata provisions) set for the in Section 4.4.3 below; provided that the Borrowers shall prepay the Loans of the Defaulting Bank and any amount required by Section 4.5 and any accrued interest due on such amount and any related fees.  Notwithstanding the foregoing, the Administrative Agent may only be replaced subject to the requirements of Section 9.14 and an Issuing Bank may only be replaced if all applicable Letters of Credit which it has issued have expired, been terminated or replaced or cash collateral or backup letters of credit shall have been deposited.

 

4.4.3                        Right to Reduce Commitments.

 

The Borrowers shall have the right at their option from time to time to reduce permanently the Revolving Credit Commitments upon at least one Business Day’s advance notice to the Administrative Agent.  Each such permanent reduction shall be in the minimum amount of $5,000,000 and shall reduce the Revolving Credit Commitment of each Bank in proportion to its Ratable Share.  Upon the effective date of each permanent reduction in the Revolving Credit Commitments, the Borrowers shall also prepay, with interest and with any additional compensation required under Section 4.5.2, the amount (if any) by which the Revolving Facility Usage at the time of the reduction exceeds the amount of the Revolving Commitments as reduced.

 

4.4.4                        Change of Lending Office.

 

Each Bank agrees that upon the occurrence of any event giving rise to increased costs or other special payments under Section 3.4.2 [Illegality; Increased Costs; Deposits Not Available] with respect to such Bank, it will, if requested by TGI on behalf of the Borrowers, use reasonable efforts (subject to overall policy considerations of such Bank) to designate another Lending Office for any Loans or Letters of Credit affected by such event, provided that such designation is made on such terms that such Bank and its Lending Office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of such Section.  Nothing in this Section 4.4.4 shall affect or postpone any of the Obligations of the Borrowers or any other Loan Party or the rights of the Administrative Agent or any Bank provided in this Agreement.

 

71



 

4.5                                 Additional Compensation in Certain Circumstances.

 

4.5.1                        Increased Costs or Reduced Return Resulting From Reserves, Capital Adequacy Requirements, Expenses, Etc.

 

If any Law, guideline or interpretation or any change in any Law, guideline or interpretation or application thereof by any Official Body charged with the interpretation or administration thereof or compliance with any request or directive (whether or not having the force of Law) of any central bank or other Official Body:

 

(i)            imposes, modifies or deems applicable any reserve, special deposit or similar requirement against credits or commitments to extend credit extended by, or assets (funded or contingent) of, deposits with or for the account of, or other acquisitions of funds by, any Bank or any Lending Office of any Bank or the Issuing Bank, or

 

(iii)          imposes, modifies or deems applicable any capital adequacy or similar requirement (A) against assets (funded or contingent) of, or letters of credit, other credits or commitments to extend credit extended by, any Bank or Issuing Bank, or (B) otherwise applicable to the obligations of any Bank or any Lending Office of any Bank or any Issuing Bank under this Agreement, and the result of any of the foregoing is to increase the cost to, reduce the income receivable by, or impose any expense (including loss of margin) upon any Bank or its Lending Office or any Issuing Bank with respect to this Agreement, the Notes or the making, maintenance or funding of any part of the Loans (or, in the case of any capital adequacy or similar requirement, to have the effect of reducing the rate of return on any Bank’s or Issuing Bank’s capital, taking into consideration such Bank’s or Issuing Bank’s customary policies with respect to capital adequacy) by an amount which such Bank or Issuing Bank in its sole discretion deems to be material, such Bank or Issuing Bank shall from time to time notify TGI, as agent for the Borrowers, and the Administrative Agent of the amount determined in good-faith (using any reasonable averaging and attribution methods) by such Bank or Issuing Bank to be necessary to compensate such Bank or Issuing Bank for such increase in cost, reduction of income or additional expense (to the extent not reflected in the determination of Base Rate).  Such notice shall set forth in reasonable detail the basis for such determination.  Such amount shall be due and payable by the Borrowers to such Bank or Issuing Bank ten (10) Business Days after such notice is given.

 

For the avoidance of doubt, this Section 4.5.1 shall not apply to taxes, which shall be governed by Section 4.8 [Taxes].

 

4.5.2                        Indemnity.

 

In addition to the compensation required by subsection 4.5.1 of this Section 4.5, each Borrower shall indemnify each Bank and each Issuing Bank against all liabilities, losses or expenses (including loss of margin, any loss or expense incurred in liquidating or employing deposits from third parties and any loss or expense incurred in connection with funds acquired by

 

72



 

a Bank or Issuing Bank to fund or maintain Loans subject to the Euro-Rate Option) which such Bank or Issuing Bank actually sustains or incurs as a consequence of any

 

(i)            payment, prepayment, conversion or renewal of any Loan to which the Euro-Rate Option applies on a day other than the last day of the corresponding Interest Period (whether or not such payment or prepayment is mandatory, voluntary or automatic and whether or not such payment or prepayment is then due),

 

(ii)           attempt by any Borrower to revoke (expressly, by later inconsistent notices or otherwise) in whole or part any notice relating to Loan Requests under Section 2.4 or Section 3.2 or prepayments under Section 4.4,

 

(iii)          default by any Borrower in the performance or observance of any covenant or condition contained in this Agreement or any other Loan Document, including any failure of the Borrowers to pay when due (by acceleration or otherwise) any principal, interest, Commitment Fee or any other amount due hereunder, or

 

(iv)          the assignment of any Revolving Credit Loans under the Euro-Rate Option other than on the last day of the Interest Period or maturity date applicable thereto as a result of a request by the Borrowers pursuant to Section 4.4.2.

 

If any Bank or Issuing Bank actually sustains or incurs any such loss or expense, it shall from time to time notify TGI, as agent for the Borrowers, of the amount determined in good-faith by such Bank (which determination may include such reasonable assumptions, allocations of costs and expenses and averaging or attribution methods as such Bank or Issuing Bank shall determine) to be necessary to indemnify such Bank or Issuing Bank for such loss or expense.  Such notice shall set forth in reasonable detail the basis for such determination.  Such amount shall be due and payable by the Borrowers to such Bank or Issuing Bank, as the case may be, ten (10) Business Days after such notice is given.

 

4.6                                 Mandatory Prepayments.

 

4.6.1                        Currency Fluctuations.

 

If on any Computation Date (i) the Dollar Equivalent Revolving Facility Usage is greater than the Revolving Credit Commitments, (ii) the Dollar Equivalent of Loans in Optional Currencies shall exceed $200,000,000, or (iii) the Dollar Equivalent of Letters of Credit Outstanding shall exceed $100,000,000, as a result of a change in exchange rates between one (1) or more Optional Currencies and Dollars, then the Administrative Agent shall notify TGI, as agent for the Borrowers of the same.  The Borrowers shall pay or prepay Loans (subject to Borrowers’ indemnity obligations under Sections 4.4 [Voluntary Prepayments] and 4.5 [Additional Compensation in Certain Circumstances]) within one (1) Business Day after TGI receives such notice such that after giving effect to such payments or prepayments, (a) the Dollar Equivalent Revolving Facility Usage shall not exceed the Revolving Credit Commitments, and (b) the Dollar Equivalent of Loans in Optional Currencies shall not exceed $200,000,000.  With

 

73



 

respect to the circumstance identified in clause (iii) of the first sentence of this paragraph, the Borrowers shall Cash Collateralize the Letters of Credit Outstanding to the extent of the amount by which the Dollar Equivalent of Letters of Credit Outstanding exceeds $100,000,000.

 

4.6.2                        Application Among Interest Rate Options.

 

All prepayments required pursuant to this Section 4.6 [Mandatory Prepayments] shall first be applied among the Interest Rate Options to the principal amount of the Loans subject to the Base Rate Option, then to Dollar Loans subject to a Euro-Rate Option and then to Optional Currency Loans subject to the Euro-Rate Option.  In accordance with Section 4.5.2 [Indemnity], each Borrower shall indemnify the Banks for any loss or expense, including loss of margin, incurred with respect to any such prepayments applied against Loans subject to a Euro-Rate Option on any day other than the last day of the applicable Interest Period.

 

4.7                                 Interbank Market Presumption.

 

For all purposes of this Agreement and each Note with respect to any aspects of the Euro-Rate, any Loan under the Euro-Rate Option or any Optional Currency, each Bank and the Administrative Agent shall be presumed to have obtained rates, funding, currencies, deposits, and the like in the applicable interbank market regardless whether it did so or not; and, each Bank’s and the Administrative Agent’s determination of amounts payable under, and actions required or authorized by, Sections 3.4 [Euro-Rate Unascertainable] and 4.5 [Additional Compensation in Certain Circumstances] shall be calculated, at each Bank’s and the Administrative Agent’s option, as though each Bank and the Administrative Agent funded its each Borrowing Tranche of Loans under the Euro-Rate Option through the purchase of deposits of the types and maturities corresponding to the deposits used as a reference in accordance with the terms hereof in determining the Euro-Rate applicable to such Loans, whether in fact that is the case.

 

4.8                                 Taxes.

 

4.8.1                        No Deductions.

 

All payments made by or on behalf of the Loan Parties hereunder and under each Note or under any other Loan Document shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges, or withholdings, and all liabilities with respect thereto, excluding (i) any taxes imposed on (or measured by)  the net income of any Bank (ii) any taxes imposed pursuant to the laws of the United States or any political subdivision thereof or therein that would apply to any payment to a Bank, the Administrative Agent or the Issuing Bank on the day that such Bank, the Administrative Age or the Issuing Bank becomes a party to this Agreement (or designates a new lending office); (iii) any withholding tax that would apply to any payment to any Bank, the Administrative Agent or the Issuing Bank on the day that such Bank, the Administrative Agent or the Issuing Bank becomes a party to this Agreement (or designates a new lending office); and (iv) any tax that is attributable to the failure of a Bank, the Administrative Agent or the Issuing Bank to comply with

 

74



 

Section 10.17 of this Agreement after having received any notice required to have been given by the relevant Borrower pursuant to such Section (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings, and liabilities being hereinafter referred to as “Indemnified Taxes”).  If any such Indemnified Taxes are required by Law to be withheld or deducted from or in respect of any sum payable hereunder or under any Note or any other Loan Document, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.8) each Bank, the Administrative Agent or the 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) such Borrower shall make such deductions and (iii) the Borrowers shall timely pay the full amount deducted to the relevant tax authority or other authority in accordance with applicable Law.

 

4.8.2                        Stamp Taxes.

 

In addition, the Borrowers agree to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges, or similar levies which arise from any payment made hereunder or from the execution, delivery, or registration of, or otherwise with respect to, this Agreement or any Loan Document (hereinafter referred to as “Other Taxes”).

 

4.8.3                        Indemnification for Taxes Paid by a Bank.

 

Each Borrower shall indemnify each Bank, the Administrative Agent and any Issuing Bank for the full amount of Indemnified Taxes or Other Taxes (including, without limitation, any Indemnified Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 4.8) paid by any Bank, the Administrative Agent or Issuing Bank, as the case may be, and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be made within 30 days from the date a Bank, the Administrative Agent or Issuing Bank makes written demand therefor, which demand shall, upon request, be supplemented by written evidence of the payment for which the Bank, the Administrative Agent or Issuing Bank seeks indemnification pursuant to this Section 4.8.3 [Indemnification for Taxes Paid by a Bank].

 

4.8.4                        Certificate.

 

Within 30 days after the date of any payment of any Taxes or Other Taxes by any Borrower, such Borrower shall furnish to each Bank, at its address referred to herein, the original or a certified copy of a receipt evidencing payment thereof.  If no Taxes are payable in respect of any payment by any Borrower, such Borrower shall, if so requested by a Bank, provide a certificate of an officer of such Borrower to that effect.

 

75


 

 

4.8.5                        Survival.

 

Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in Sections 4.8.1 through 4.8.4 shall survive the payment in full of principal and interest hereunder and under any instrument delivered hereunder.

 

4.8.6                        Refunds.

 

If a Bank, the Administrative Agent or the Issuing Bank receives a refund of any amount as to which a Borrower has made any payments pursuant to this Section 4.8 [Taxes], such Bank, the Administrative Agent or the Issuing Bank shall pay over any such refund to such Borrower; provided that such Borrower, upon the request of such Bank, the Administrative Agent or the Issuing Bank, agrees to repay the amount paid over to the Borrower in the event that such Bank, the Administrative Agent or the Issuing Bank is required to repay such refund to the relevant Official Body.

 

4.9                                 Judgment Currency.

 

4.9.1                        Currency Conversion Procedures for Judgments.

 

If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder or under a Note in any currency (the “Original Currency”) into another currency (the “Other Currency”), the parties hereby agree, to the fullest extent permitted by Law, that the rate of exchange used shall be that at which in accordance with normal banking procedures each Bank could purchase the Original Currency with the Other Currency after any premium and costs of exchange on the Business Day preceding that on which final judgment is given.

 

4.9.2                        Indemnity in Certain Events.

 

The obligation of the Borrowers in respect of any sum due from the Borrowers to any Bank hereunder shall, notwithstanding any judgment in an Other Currency, whether pursuant to a judgment or otherwise, be discharged only to the extent that, on the Business Day following receipt by any Bank of any sum adjudged to be so due in such Other Currency, such Bank may in accordance with normal banking procedures purchase the Original Currency with such Other Currency.  If the amount of the Original Currency so purchased is less than the sum originally due to such Bank in the Original Currency, each Borrower agrees, as a separate obligation and notwithstanding any such judgment or payment, to indemnify such Bank against such loss.

 

5.             REPRESENTATIONS AND WARRANTIES

 

5.1                                 Representations and Warranties.

 

Each Borrower represents and warrants to the Administrative Agent and each of the Banks as follows:

 

76



 

5.1.1                        Organization and Qualification.

 

TGI and each Subsidiary of TGI: (i) is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) has the lawful power to own or lease its properties and to engage in the business it presently conducts or proposes to conduct, and (iii) is duly licensed or qualified and in good standing in each jurisdiction where the property owned or leased by it or the nature of the business transacted by it or both makes such licensing or qualification necessary, except with respect to each of (i) and (iii) above, for exceptions which would not reasonably be expected to result in a Material Adverse Change.

 

5.1.2                        Capitalization and Ownership.

 

Schedule 5.1.2, which shall be delivered on or prior to the Closing Date, states, as of the Closing Date, the authorized capital stock of TGI, the issued and outstanding shares (referred to herein as the “Shares”) of such stock, and the names of any parties beneficially owning, individually or through affiliates, more than 5% thereof.  All of the Shares have been validly issued and are fully paid and nonassessable.  As of the Closing Date, there are no options, warrants or other rights outstanding to purchase any such Shares except as disclosed in Schedule 5.1.2.

 

5.1.3                        Subsidiaries.

 

Schedule 5.1.3 which shall be delivered on or prior to the Closing Date, states, as of the Closing Date, the name of each of TGI’s Subsidiaries, its jurisdiction of incorporation or organization, its authorized capital stock, the issued and outstanding shares (referred to herein as the “Subsidiary Shares”) and the owners thereof if it is a corporation, its outstanding partnership interests (the “Partnership Interests”) if it is a partnership and its outstanding limited liability company interests, interests assigned to managers thereof and the voting rights associated therewith (the “LLC Interests”) if it is a limited liability company.  TGI and each Subsidiary of TGI has good and marketable title to all of the Subsidiary Shares, Partnership Interests and LLC Interests it purports to own, free and clear in each case of any Lien other than the Vought Financing Liens and Permitted Refinancing Liens related thereto, non-consensual Liens arising by operation of Law which are identified under the definition of Permitted Liens herein and Liens in favor of the Administrative Agent for the benefit of the Banks hereunder.  All Subsidiary Shares, Partnership Interests and LLC Interests have been validly issued, and all Subsidiary Shares are fully paid and nonassessable.  All capital contributions and other consideration required to be made or paid in connection with the issuance of the Partnership Interests and LLC Interests have been made or paid, as the case may be.  There are no options, warrants or other rights outstanding to purchase any such Subsidiary Shares, Partnership Interests or LLC Interests outstanding as of the Closing Date except as indicated on Schedule 5.1.3.

 

77



 

5.1.4                        Power and Authority.

 

TGI and each other Loan Party has full power to enter into, execute, deliver and carry out this Agreement and the other Loan Documents to which it is a party, to incur the Indebtedness contemplated by the Loan Documents and to perform its Obligations under the Loan Documents to which it is a party, and all such actions have been duly authorized by all necessary proceedings on its part.

 

5.1.5                        Validity and Binding Effect.

 

This Agreement has been duly and validly executed and delivered by each Borrower, and each other Loan Document which TGI or any other Loan Party is required to execute and deliver on or after the date hereof will have been duly executed and delivered by TGI and each other Loan Party on the required date of delivery of such Loan Document.  This Agreement and each other Loan Document to which any Borrower or any other Loan Party is a party constitutes, or will constitute, legal, valid and binding obligations of each such party, enforceable against each such party, in accordance with its terms, except to the extent that enforceability of any of such Loan Document may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally or limiting the right of specific performance.

 

5.1.6                        No Conflict.

 

Neither the execution and delivery of this Agreement or the other Loan Documents by the Borrowers and any other Loan Party nor the consummation of the transactions herein or therein contemplated or compliance with the terms and provisions hereof or thereof by them will conflict with, constitute a default under or result in any breach of (i) the terms and conditions of the certificate of incorporation, bylaws or other organizational documents of any Borrower or any Subsidiary or (ii) any Law or of any material agreement, instrument, order, writ, judgment, injunction or decree to which any Borrower or any Subsidiary is a party or by which it is bound or to which it is subject, or result in the creation or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of any Borrower or any Subsidiary other than the Liens granted to the Administrative Agent, for the benefit of the Banks, pursuant to the Loan Documents.

 

5.1.7                        Litigation.

 

Except as set forth on Schedule 5.1.7, there are no actions, suits, proceedings or investigations pending or, to the knowledge of any Borrower, threatened against any Borrower or any Subsidiary of any Borrower at law or equity before any Official Body which would, individually or in the aggregate, be reasonably likely to result in any Material Adverse Change.  Neither the Borrowers nor any Subsidiaries of any Borrower is in violation of any order, writ, injunction or any decree of any Official Body which would reasonably be expected to result in any Material Adverse Change.

 

78



 

5.1.8                        Title to Properties.

 

The real property owned or leased (other than residential leases for use by employees) by any Borrower and each Subsidiary of any Borrower as of the Closing Date is described on Schedule 5.1.8 which shall be delivered on or prior to the Closing Date.  Each Borrower and each Subsidiary of each Borrower has good and marketable title to or valid leasehold interests in all properties, assets and other rights which it purports to own or lease or which are reflected as owned or leased on its books and records, free and clear of all Liens and encumbrances except Permitted Liens, and subject to the terms and conditions of the applicable leases.  All leases of property are in full force and effect without the necessity for any consent which has not previously been obtained in respect of the transactions contemplated hereby.

 

5.1.9                        Financial Statements.

 

(i)            Historical Statements.  TGI has delivered to the Administrative Agent copies of (a) its audited consolidated and unaudited consolidating year-end financial statements for and as of the end of the fiscal year ended March 31, 2009;  (b) its unaudited consolidated financial statements for each fiscal quarter thereafter through and including the quarter ended December 31, 2009; and (c) Vought’s audited consolidated and unaudited consolidating year-end financial statements for and as of the end of the fiscal year ended December 31, 2009  (collectively, the “Historical Statements”).  The Historical Statements were compiled from the books and records maintained by TGI’s or Vought’s management, as the case may be, are correct and complete and present fairly in all material respects the financial condition of TGI and its Subsidiaries or Vought and its Subsidiaries, as the case may be, as of their dates and the results of operations for the fiscal periods then ended and have been prepared in accordance with GAAP consistently applied.

 

(ii)           Accuracy of Financial Statements.  Neither TGI nor Vought had, as of the date of the most recent Historical Statements for TGI and Vought respectively, any liabilities, contingent or otherwise,  that could reasonably be expected to result in a Material Adverse Change and which were not disclosed in the Historical Statements or in the notes thereto.  Since March 31, 2009, no Material Adverse Change has occurred.

 

5.1.10                  Margin Stock.

 

Neither TGI nor any of its Subsidiaries engages or intends to engage principally, or as one of its important activities, in the business of extending credit for the purpose, immediately, incidentally or ultimately, of purchasing or carrying margin stock (within the meaning of Regulation U).  No part of the proceeds of any Loan has been or will be used, immediately, incidentally or ultimately, to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or to refund Indebtedness originally incurred for such purpose, or for any purpose which entails a violation of or which is inconsistent with the provisions of Regulation U of the Board of Governors of the Federal Reserve System.  Neither TGI nor any of its Subsidiaries holds or intends to hold margin stock in such amounts that more than 25% of the reasonable value of the assets of TGI or any of its

 

79



 

Subsidiaries are or will be represented by margin stock.  If requested by the Administrative Agent, TGI will furnish to the Administrative Agent a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

 

5.1.11                  Full Disclosure.

 

Neither the confidential information memorandum provided to the Banks in connection with this Agreement nor any other Loan Document, nor any certificate, statement, agreement or other documents furnished to the Administrative Agent or any Bank in connection herewith or therewith, contains any untrue statement of a material fact or, considered in the aggregate, omits to state a material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which they were made, not misleading.  On the Closing Date, there is no fact known to any Borrower which materially adversely affects the business, property, assets, financial condition or results of operations of such Borrower or any Subsidiary of such Borrower which has not been set forth in such confidential information memorandum, this Agreement or in the certificates, statements, agreements or other documents furnished in writing to the Administrative Agent and the Banks prior to or at the date hereof in connection with the transactions contemplated hereby or previously been publicly disclosed in TGI’s and Vought’s most recently filed Form 10-K and any Form 10-Q or Form 8-K filed subsequently with the Securities and Exchange Commission prior to the Closing Date.

 

5.1.12                  Taxes.

 

All federal, state, material local, material foreign and material other tax returns required to have been filed with respect to TGI and each Subsidiary of TGI have been filed (subject to the timely filing of any extensions therefor), and payment or adequate provision has been made for the payment of all taxes, fees, assessments and other governmental charges which have or may become due pursuant to said returns or to assessments received, except to the extent that such taxes, fees, assessments and other charges are being contested in good faith by appropriate proceedings diligently conducted and for which such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made.  Other than extensions of tax return filing deadlines for which the Borrowers have applied in the ordinary course of business, there are no agreements or waivers extending the statutory period of limitations applicable to any federal income tax return of TGI or any of its Subsidiaries for any period in which the underlying potential liability could reasonably be expected to result in a Material Adverse Change.

 

5.1.13                  Consents and Approvals.

 

No consent, approval, exemption, order or authorization of, or a registration or filing with, any Official Body or any other Person is required by any Law or any agreement in connection with the execution, delivery and carrying out of this Agreement and the other Loan Documents by any Borrower, except as shall have been obtained or made on or prior to the Closing Date.

 

80



 

5.1.14                  No Event of Default; Compliance with Instruments.

 

No event has occurred and is continuing and no condition exists or will exist after giving effect to the borrowings to be made on the Closing Date under the Loan Documents which constitutes an Event of Default or Potential Default.  Neither any Borrower nor any of their Subsidiaries is in violation of (i) any term of its certificate of incorporation, bylaws, or other organizational documents or (ii) any material agreement or instrument to which it is a party or by which it or any of its properties may be subject or bound where such violation would constitute a Material Adverse Change.

 

5.1.15                  Patents, Trademarks, Copyrights, Licenses, Etc.

 

TGI and each Subsidiary of TGI owns or possesses all the material patents, trademarks, service marks, trade names, copyrights, licenses, registrations, franchises, permits, intellectual property and rights necessary to own and operate its properties and to carry on its business as presently conducted and planned to be conducted by TGI and its Subsidiaries, without known conflict with the rights of others that could reasonably be expected to result in a Material Adverse Change.

 

5.1.16                  Insurance.

 

All insurance policies and other bonds to which TGI and each of its Subsidiaries is a party are valid and in full force and effect to the extent necessary to comply with Section 7.1.3 [Maintenance of Insurance].  No notice has been given or claim made and no grounds exist to cancel or avoid any of such policies or bonds or to reduce the coverage provided thereby, except as would not impair the accuracy of the following sentence or could reasonably be expected to result in a breach of Section 7.1.3 [Maintenance of Insurance].  Such policies and bonds provide adequate coverage from reputable and financially sound insurers in amounts sufficient to insure the assets and risks of TGI and each Subsidiary of TGI in accordance with prudent business practice in the industries of TGI and its Subsidiaries.

 

5.1.17                  Compliance with Laws.

 

TGI and its Subsidiaries are in compliance in all material respects with all applicable Laws (other than Environmental Laws which are specifically addressed in subsection 5.1.22) in all jurisdictions in which TGI and its Subsidiaries do business except where the failure to so comply would not constitute a Material Adverse Change.

 

5.1.18                  Material Contracts.

 

Except as otherwise publicly disclosed in TGI’s and Vought’s most recent Form 10-K and any Form 10Q or Form 8-K subsequently filed with the Securities and Exchange Commission, all material contracts publicly filed or required to be publicly filed by TGI or Vought pursuant to applicable securities law, are valid, binding and enforceable in all material respects upon TGI, Vought or each Subsidiary and each of the other parties thereto in accordance

 

81



 

with their respective terms, and there is no default thereunder by TGI, Vought or any such Subsidiary or, to the Borrowers’ knowledge, with respect to parties other than TGI, Vought or any such Subsidiary, which would result in a Material Adverse Change.

 

5.1.19                  Investment Companies.

 

Neither TGI nor any of its Subsidiaries is an “investment company” registered or required to be registered under the Investment Company Act of 1940 or under the “control” of an “investment company” as such terms are defined in the Investment Company Act of 1940 and shall not become such an “investment company” or under such “control.”

 

5.1.20                  Plans and Benefit Arrangements.

 

Except as set forth on Schedule 5.1.20:

 

(i)            Each Borrower and each member of each of their ERISA Groups are in compliance with any applicable provisions of ERISA with respect to all Benefit Arrangements and Plans, except where the failure to do so could not reasonably be expected to result in a Material Adverse Change.  There has been no Prohibited Transaction with respect to any Benefit Arrangement or any Plan, which could result in a Material Adverse Change.  Each Borrower and, to the knowledge of any Borrower, all members of each of their ERISA Groups have made when due any and all material payments required to be made under any agreement relating to a Multiemployer Plan or a Multiple Employer Plan or any Law pertaining thereto.  Except where the failure to do so could not result in a Material Adverse Change, with respect to each Plan and Multiemployer Plan, each Borrower and each member of each of its ERISA Group (a) have fulfilled their obligations under the minimum funding standards of ERISA, (b) have not incurred any liability to the PBGC other than required premiums under Sections 4006 and 4007 of ERISA, and (c) have not had asserted against them any penalty for failure to fulfill the minimum funding requirements of ERISA.

 

(ii)           To each Borrower’s knowledge, each Plan is able to pay benefits thereunder when due (without regard to a termination basis).

 

(iii)          Neither the Borrowers nor any other member of any of its ERISA Group has instituted proceedings or taken formal action to terminate any Plan.

 

(iv)          No Plan has an actual or deemed Adjusted Funding Target Attainment Percentage that would subject the Plan to the benefit limitations imposed under Section 436(b), (d)(1) or (e) of the Internal Revenue Code.

 

(v)           Neither any Borrower nor any other member of any of its ERISA Group has incurred or reasonably expects to incur any material Withdrawal Liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.  Neither any Borrower nor any other member of its ERISA Group has been notified by any Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan or Multiple Employer Plan has been terminated within the

 

82



 

meaning of Title IV of ERISA and, to the knowledge of each Borrower, no Multiemployer Plan or Multiple Employer Plan is reasonably expected to be reorganized or terminated, within the meaning of Title IV of ERISA in a manner that can reasonably be expected to result in a Material Adverse Change.

 

(vi)          (a) To the extent that any Benefit Arrangement is insured, all Borrowers and all members of each of their ERISA Groups have paid when due all material premiums required to be paid for all periods through the Closing Date and (b) to the extent that any Benefit Arrangement is funded other than with insurance, all Borrowers and all members of each of their ERISA Groups have made when due all material contributions required to be paid for all periods through the Closing Date.

 

(vii)         All Plans, Benefit Arrangements have been administered in accordance with their terms and the applicable provisions of ERISA except where the failure to do so could not reasonably be expected to result in a Material Adverse Change.

 

5.1.21                  Employment Matters.

 

Except as set forth on Schedule 5.1.21, TGI and each of its Subsidiaries are in compliance with the Labor Contracts and all applicable federal, state and local labor and employment Laws including those related to equal employment opportunity and affirmative action, labor relations, minimum wage, overtime, child labor, medical insurance continuation, worker adjustment and relocation notices, immigration controls and worker and unemployment compensation where the failure to comply would, individually or in the aggregate, likely constitute a Material Adverse Change.  To the best of each Borrower’s knowledge, there are no outstanding grievances, arbitration awards or appeals therefrom arising out of the Labor Contracts or current or threatened strikes, picketing, handbilling or other work stoppages or slowdowns at facilities of any Borrower or any of its Subsidiaries which in any case would constitute a Material Adverse Change.

 

5.1.22                  Environmental Matters.

 

Except as disclosed on Schedule 5.1.22:

 

(i)            Neither TGI nor any Subsidiary of TGI has received any material Environmental Complaint from any Official Body alleging that TGI or such Subsidiary or, with respect to the Property, any prior or subsequent owner of the Property is a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq., and the Borrowers have no reason to believe that such an Environmental Complaint is likely to be received.  Except as would not reasonably be expected to result in a Material Adverse Change, neither TGI nor any Subsidiary of TGI has received any Environmental Complaint described in the immediately preceding sentence, from a private Person (as opposed to receipt thereof from an Official Body).  There are no pending or, to any Borrower’s knowledge, threatened Environmental Complaints relating to TGI or any Subsidiary of TGI or, to any Borrower’s knowledge with respect to the Property, any prior or subsequent

 

83



 

owner of the Property pertaining to, or arising out of, any Environmental Conditions, in any case that would reasonably be expected to result in a Material Adverse Change.

 

(ii)           There are no circumstances at, on or under the Property that constitute a material breach of or non-compliance with any of the Environmental Laws. There are no Environmental Conditions at, on or under the Property or, to the knowledge of any Borrower, at, on or under adjacent property, that prevent compliance with the Environmental Laws at the Property in a manner that would reasonably be expected to result in a Material Adverse Change.

 

(iii)          Neither the Property nor any structures, improvements, equipment, fixtures, activities or facilities thereon or thereunder contain or use Regulated Substances except in material compliance with Environmental Laws.  There are no processes, facilities, operations, equipment or any other activities at, on or under the Property, or, to the knowledge of any Borrower, at, on or under adjacent property, that currently result in the release or threatened release of Regulated Substances onto the Property, except to the extent that such releases or threatened releases are not a breach of or otherwise not a violation of the Environmental Laws or would not result in a Material Adverse Change.

 

(iv)          TGI and each Subsidiary of TGI has all material permits, licenses, authorizations, plans and approvals required under the Environmental Laws for the conduct of the business of TGI and its Subsidiaries as presently conducted. TGI and each Subsidiary of TGI has submitted all material notices, reports and other filings required by the Environmental Laws to be submitted to an Official Body which pertain to past and current operations on the Property.

 

(v)           All past and present on-site generation, storage, processing, treatment, recycling, reclamation, disposal or other use or management of Regulated Substances at, on, or under the Property and all off-site transportation, storage, processing, treatment, recycling, reclamation, disposal or other use or management of Regulated Substances has been performed by TGI and its Subsidiaries in material accordance with the Environmental Laws.

 

5.1.23                  Senior Debt Status.

 

The Obligations of each Loan Party under this Agreement, the Notes, the Guarantee and Collateral Agreement and each of the other Loan Documents to which it is a party do rank and will rank at least pari passu in priority of payment with all other secured senior Indebtedness (including, without limitation, Indebtedness under the Vought Term Loans, as in effect from time to time) of the Loan Parties.  The obligations of any Loan Party under the Convertible Note Indenture and the Convertible Notes are and shall remain at all times unsecured and subordinated in right of payment to the Obligations hereunder and under the other Loan Documents.  Without limiting the foregoing, each Loan Party shall take all steps necessary to provide that (i) its Obligations under this Agreement, the Notes, the Guarantee and Collateral Agreement and the other Loan Documents shall be senior to, or pari passu with, any outstanding Indebtedness, and (ii) any Indebtedness of any Loan Party, now existing or hereafter incurred that is in any manner subordinated in right of payment or security to any other Indebtedness is subordinated to the Obligations on the same terms and conditions.

 

84



 

5.1.24                  Anti-Terrorism Laws.

 

5.1.24.1   General.

 

None of the Loan Parties nor any Subsidiary of a Loan Party, nor, to the knowledge of any Loan Party,  any other Affiliate of any Loan Party,  is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

5.1.24.2   Executive Order No. 13224.

 

None of the Loan Parties, nor any Subsidiary of a Loan Party, nor, to the knowledge of any Loan Party, any other Affiliate of any Loan Party,  or their respective agents acting or benefiting in any capacity in connection with the Loans, Letters of Credit or other transactions hereunder, is any of the following (each a “Blocked Person”):

 

(i)            a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

 

(ii)           a Person owned or controlled by, or acting for or on behalf of,  any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

 

(iii)          a Person or entity with which any Bank is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(iv)          a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224;

 

(v)           a Person or entity that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list, or

 

(vi)          a person or entity who is affiliated or associated with a person or entity listed above.

 

No Loan Party or to the knowledge of any Loan Party, any of its agents acting in any capacity in connection with the Loans, Letters of Credit or other transactions hereunder (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.

 

85


 

5.1.25                  Security Interests; Mortgage Liens.

 

(i)                                     From and after the Closing Date, the Guarantee and Collateral Agreement will be effective to create in favor of the Administrative Agent, for the benefit of the Banks, a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof.  In the case of the Pledged Notes described in the Guarantee and Collateral Agreement, when the original of such instruments are delivered to the Administrative Agent, and in the case of the Pledged Stock described in the Guarantee and Collateral Agreement, when stock certificates representing such Pledged Collateral are delivered to the Administrative Agent (together, in each case, with a properly completed and signed stock power or endorsement), and in the case of the other Collateral described in the Guarantee and Collateral Agreement, when financing statements and other filings specified on Schedule 5.1.25(a), which may be delivered not later than five (5) Business Days prior to the Closing Date, in appropriate form are filed in the offices specified on Schedule 5.1.25(a), the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and Prior Security Interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations.  Notwithstanding the requirement for delivery of possession of the Pledged Collateral to the Administrative Agent required pursuant to the Loan Documents, so long as the Intercreditor Agreement is in force and effect, possession of such Pledged Collateral by the collateral agent or the administrative agent, as applicable, for the lenders under the Vought Term Loans or Incremental Term Loans, as applicable, shall be deemed to be possession by the Administrative Agent thereof for purposes of perfection of the Administrative Agent’s Lien thereon.

 

(ii)                                  From and after the Closing Date, each of the Mortgages is effective to create in favor of the Administrative Agent, for the benefit of the Banks, a legal, valid and enforceable Lien on the Real Property Collateral described therein and proceeds thereof, and when the Mortgages are filed in the offices specified on Schedule 5.1.25(b) (with respect to the Real Property Collateral owned as of the Closing Date), which may be delivered not later than five (5) Business Days prior to the Closing Date or in the appropriate filing offices (with respect to Real Property Collateral acquired after the Closing Date), each such Mortgage shall constitute a fully perfected Lien on, and Prior Security Interest in, all right, title and interest of the Loan Parties in the Real Property Collateral and the proceeds thereof, as security for the Obligations.  Schedule 1.1(M) lists, as of the Closing Date, each parcel of owned real property and each leasehold interest in real property located in the United States and held by TGI or any of its Subsidiaries that has a value, in the reasonable opinion of TGI, in excess of $10,000,000 and shall be delivered no later than five (5) Business Days prior to the Closing Date.

 

5.1.26                  Status of the Pledged Collateral.

 

All the shares of capital stock, Partnership Interests or LLC Interests included in the Pledged Collateral to be pledged pursuant to the Guarantee and Collateral Agreement are or will be upon issuance validly issued and nonassessable and owned beneficially and of record by the applicable pledgor free and clear of any Lien or restriction on transfer, except (i) as otherwise permitted by the Guarantee and Collateral Agreement or this

 

86



 

Agreement, (ii) as the right of the Banks to dispose of the Subsidiary Shares, Partnership Interests or LLC Interests may be limited by the Securities Act of 1933, as amended, and the regulations promulgated by the Securities and Exchange Commission thereunder and by applicable state securities laws and (iii) restrictions on asset sales and like contractual provisions that would not impair the ability of the Collateral Agent to realize on its Lien in accordance with the Guarantee and Collateral Agreement (subject to the Intercreditor Agreement).  There are no shareholder, partnership, limited liability company or other agreements or understandings with respect to the shares of capital stock, Partnership Interests or LLC Interests included in the Pledged Collateral except for the partnership agreements and limited liability company agreements described on Schedule 5.1.26, which may be delivered as of the Closing Date.  The Loan Parties have delivered true and correct copies of such partnership agreements and limited liability company agreements to the Administrative Agent not later than the Closing Date.

 

5.2                                 Updates to Schedules.

 

Should any of the information or disclosures provided on any of the Schedules attached hereto become outdated or incorrect in any material respect, the Borrowers shall promptly provide the Administrative Agent in writing with such revisions or updates to such Schedule as may be necessary or appropriate to update or correct same; provided, however, that no Schedule shall be deemed to have been amended, modified or superseded by any such correction or update, nor shall any breach of warranty or representation resulting from the inaccuracy or incompleteness of any such Schedule be deemed to have been cured thereby, unless and until the Required Banks, in their sole and absolute discretion, shall have accepted in writing such revisions or updates to such Schedule.

 

6.                                       CONDITIONS OF LENDING

 

The obligation of each Bank to make Loans and of the Issuing Banks to issue Letters of Credit hereunder is subject to the performance by the Borrowers of their Obligations to be performed hereunder at or prior to the making of any such Loans or issuance of such Letters of Credit and to the satisfaction of the following further conditions:

 

6.1                                 First Loans

 

On the Closing Date:

 

6.1.1                        Closing Representations.

 

The representations and warranties of each Borrower contained in Article 5 shall be true and accurate on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of such date (except representations and warranties which relate solely to an earlier date or time, which representations and warranties shall be true and correct on and as of the specific dates or times referred to therein), no Event of Default or Potential Default under this Agreement shall have occurred and be continuing or shall exist.

 

87



 

6.1.2                        Secretary’s Certificate.

 

There shall be delivered to the Administrative Agent for the benefit of each Bank a certificate dated the Closing Date and signed by the Secretary or an Assistant Secretary of each Loan Party, certifying as appropriate as to:

 

(i)                                     all requisite corporate, limited liability company or partnership, as the case may be, action taken by such Loan Party in connection with this Agreement and the other Loan Documents;

 

(ii)                                  the names of the officer or officers authorized to sign this Agreement and the other Loan Documents and the true signatures of such officer or officers and specifying the Authorized Officers permitted to act on behalf of such Borrower and the other Loan Parties for purposes of this Agreement and the true signatures of such officers, on which the Administrative Agent and each Bank may conclusively rely; and

 

(iii)                               with respect to each Loan Party, (a) copies of the organizational documents, including certificates of incorporation and bylaws (or comparable documents, if applicable) as in effect on the Closing Date, of such Loan Party, (b) certificates of incorporation (or comparable documents) certified by the appropriate state official where such documents are filed in a state office (to the extent such state office provides certified copies of such documents) and (c) together with certificates, as of a reasonably recent date, from the appropriate state officials as to the continued existence and good standing of such Loan Party in each state where organized (to the extent state officials in such state provide such certificates).

 

6.1.3                        Delivery of Loan Documents.

 

This Agreement, the Notes, the Guarantee and Collateral Agreement, the Intercompany Subordination Agreement, the Mortgages, the Intercreditor Agreement each shall have been duly executed by the parties thereto and such documents shall have been delivered to the Administrative Agent for the benefit of the Banks; provided that the condition precedent requiring the execution and delivery of a Mortgage with respect to Real Property for which an equivalent mortgage has not been executed and delivered in favor of the lenders under the Vought Term Loans shall be automatically waived; provided that in such case, the execution and delivery of such Mortgage shall become an affirmative covenant and be delivered in accordance with the terms of Section 7.1.16.

 

6.1.4                        Amendments to Convertible Debt Documents.

 

The Borrowers shall have delivered to the Administrative Agent true and correct copies of the waivers, consents or amendments to the Convertible Debt Documents and 2009 Bonds, if any, made in connection with this Agreement and such amendments shall be acceptable to the Administrative Agent.

 

88



 

6.1.5                        Opinion of Counsel.

 

There shall be delivered to the Administrative Agent for the benefit of each Bank customary written opinions of counsel to each Loan Party and opinions of local real estate counsel in each of the jurisdictions in which Real Property Collateral is located to the extent a Mortgage is being delivered in respect of such Real Property Collateral on the Closing Date, in each case, addressing such matters as reasonably requested by the Administrative Agent, all in form and substance satisfactory to the Administrative Agent.

 

6.1.6                        Legal Details.

 

All material legal details and proceedings in connection with the transactions contemplated by the Agreement and the other Loan Documents shall be in form and substance satisfactory to the Administrative Agent, and the Administrative Agent shall have received all such other counterpart originals or certified or other copies of such documents and proceedings in connection with such transactions, in form and substance satisfactory to the Administrative Agent, as the Administrative Agent or said counsel may reasonably request.  The Loan Parties shall have delivered all Schedules to this Agreement and the other Loan Documents on the time frames to have been delivered hereunder and shall deliver on the Closing Date all such remaining schedules which have not been not delivered at signing of this Agreement or otherwise prior to the Closing Date.

 

6.1.7                        Payment of Fees.

 

The Borrowers shall pay or cause to be paid to the Administrative Agent for itself and for the account of the Banks all fees identified herein or set forth in the Administrative Agent’s Letter or any other commitment letters with any of the Banks required to be paid prior to or upon the Closing Date and all costs and expenses for which the Administrative Agent and the Banks are entitled to be reimbursed, and such other fees and expenses as are due and payable on or before the Closing Date.

 

6.1.8                        Consents.

 

All material consents and approvals (including those of an Official Body) required to effectuate the transactions contemplated hereby shall have been obtained on terms reasonably satisfactory to the Administrative Agent.

 

6.1.9                        Officer’s Certificate Regarding MACs.

 

Since March 31, 2009, no Material Adverse Change shall have occurred; prior to the Closing Date, there shall be delivered to the Administrative Agent for the benefit of each Bank a certificate dated the Closing Date and signed by the Chief Executive Officer, President or Chief Financial Officer of TGI to such effect.

 

89



 

6.1.10                  No Violation of Laws.

 

The making of the Loans shall not contravene any Law applicable to the Borrowers or any of the Banks.

 

6.1.11                  No Actions or Proceedings.

 

No action, proceeding, investigation, regulation or legislation shall be pending before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of this Agreement or the consummation of the transactions contemplated hereby.

 

6.1.12                  Lien Search; Filing Receipts; Pledged Shares.

 

The Administrative Agent shall have received (1) Lien searches with respect to each Loan Party, including title searches with respect to the Real Property to be subject to a Mortgage that do not show Liens other than Permitted Liens and Liens with respect to liabilities that have been demonstrated to the reasonable satisfaction of the Administrative Agent to have been discharged, or that will be discharged contemporaneously with the Closing Date, (2) such UCC financing statements as are necessary or appropriate, in the Administrative Agent’s reasonable discretion, to perfect the security interests in the UCC Collateral to the extent any such security interest can be perfected by filing a UCC financing statement, (3) original instruments evidencing the Pledged Notes required to be delivered under the Guarantee and Collateral Agreement and accompanying endorsements thereof and (4) stock certificates or limited liability company certificates evidencing the Pledged Collateral (to the extent that such shares are certificated) and accompanying stock powers.  Notwithstanding the requirement for delivery of possession or control of the Pledged Collateral to the Administrative Agent required pursuant to the Loan Documents, so long as the Intercreditor Agreement is in force and effect, possession or control of such Pledged Collateral by the collateral agent or administrative agent, as applicable, for the lenders under the Vought Term Loans shall be deemed to be possession or control, respectively, by the Administrative Agent thereof for purposes of this condition precedent and perfection of the Administrative Agent’s Lien thereon.

 

6.1.13                  Refinancing of Existing Debt.

 

The Loan Parties shall have repaid all loans and other amounts outstanding under the 2009 Credit Agreement, subject to the obligations under Section 4.5.2 [Indemnity] of the 2009 Credit Agreement on the Closing Date and terminated the commitments thereunder and satisfactory evidence thereof shall be delivered to the Administrative Agent.

 

6.1.14                  Vought Acquisition.

 

The Acquisition shall be consummated simultaneously with the funding of the initial Loans hereunder, which shall occur on or before September 23, 2010, on the terms and conditions set forth in the Acquisition Agreement, which must meet the Vought Purchase

 

90



 

Parameters, without any amendment, modification, waiver or material consents by TGI thereto, that are materially adverse to the interests of the Banks and that are not consented to by the Administrative Agent in its reasonable discretion.  The Loan Parties shall provide evidence to the satisfaction of the Administrative Agent that the Vought Purchase Parameters have been met.

 

6.1.15                  Vought Financing.

 

The Vought Financing shall have been consummated in accordance with the terms and conditions of the Vought Financing Parameters.

 

6.1.16                  Environmental Matters.

 

The Loan Parties shall provide the Administrative Agent with such environmental reports and audits with respect to the Real Property Collateral as reasonably requested by the Administrative Agent; provided that the condition precedent requiring the delivery of environmental reports with respect to Real Property Collateral for which equivalent reports have not been delivered in favor of the lenders under the Vought Term Loans shall be automatically waived; provided that in such case, the delivery of such reports shall become an affirmative covenant and be delivered in accordance with the terms of Section 7.1.16.

 

6.1.17                  Insurance Policies, Certificates of Insurance; Endorsements.

 

The Loan Parties shall have delivered evidence acceptable to the Agent that adequate insurance in compliance with Section 7.1.3 [Maintenance of Insurance] is in full force and effect and that all premiums then due thereon have been paid.

 

6.1.18                  Closing Date Compliance.

 

The Loan Parties shall demonstrate that on the Closing Date, after giving effect to the transactions contemplated on the Closing Date including the Vought Financing, the Senior Secured First Lien Leverage Ratio shall not exceed 2.0 to 1.0.

 

6.1.19                  Joinder of Subsidiaries.

 

Each of (i) the Subsidiaries of Vought Aircraft Industries, Inc. which are Domestic Material Subsidiaries and not themselves merged into a Loan Party on the Closing Date and (ii) the Domestic Material Subsidiaries (direct or indirect) of TGI, shall have executed and delivered either a Borrower Joinder or a Guarantor Joinder pursuant to which such Subsidiary joins the Loan Documents and otherwise complied with Section 10.20 hereof.

 

6.1.20                  Title Insurance.

 

(a)                                  The Administrative Agent shall have received a fully paid mortgagee title insurance policy (each a “Mortgage Policy”) to be delivered with respect to each Mortgage on all of the Real Property Collateral of the Loan Parties in standard ALTA form, issued by a title insurance company satisfactory to the Administrative Agent, each in an amount equal to not less

 

91



 

than the fair market value of the Real Property subject to such Mortgage, insuring such Mortgage to create a valid lien on such Real Property, with no exceptions other than Permitted Liens of the type described in clause (v) of the definition thereof and such exceptions as the Administrative Agent shall have approved in writing in its reasonable discretion; provided that the condition precedent requiring the delivery of a title insurance with respect to Real Property for which title insurance has not been delivered in favor of the lenders under the Vought Term Loans shall be automatically waived; provided that in such case, the delivery of such title insurance shall become an affirmative covenant and be delivered in accordance with the terms of Section 7.1.16.

 

(b)                                 To the extent reasonably requested by the Administrative Agent and required by the respective title company to remove all standard exceptions from the respective Mortgage Policy relating to a particular Real Property Collateral and issue any endorsements to such Mortgage Policy as may be reasonably required by the Administrative Agent, the Administrative Agent shall have received any existing survey of such Real Property Collateral (and all improvements thereon).

 

(c)                                  The Administrative Agent shall have received a completed “Life-of Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with respect to each parcel of Real Property Collateral (together with a notice about special flood hazard area status and flood disaster assistance duly executed by the applicable Loan Party relating thereto).

 

6.2                                 Each Additional Loan.

 

At the time of making any new Loans or issuing any new Letters of Credit hereunder and after giving effect to the proposed borrowings: the representations and warranties of the Borrowers contained in Article 5 shall be true on and as of the date of such additional Loan or Letter of Credit with the same effect as though such representations and warranties had been made on and as of such date (except representations and warranties which expressly relate solely to an earlier date or time, which representations and warranties shall be true and correct on and as of the specific dates or times referred to therein); no Event of Default or Potential Default shall have occurred and be continuing or shall exist; the making of the Loans or issuance of such Letter of Credit shall not contravene any Law applicable to the Borrowers or any Subsidiary of any Borrower or any of the Banks; and TGI, on behalf of the Borrowers, shall have delivered to the Issuing Bank a duly executed and completed Loan Request or application for a Letter of Credit as the case may be.

 

7.                                       COVENANTS

 

7.1                                 Affirmative Covenants.

 

Each Borrower covenants and agrees that until payment in full of the Loans and interest thereon, expiration or termination of all Letters of Credit, satisfaction of all of the Borrowers’ other Obligations under the Loan Documents and termination of the Revolving Credit Commitments, the Borrowers shall comply at all times with the following affirmative covenants:

 

92



 

7.1.1                        Preservation of Existence, Etc.

 

Each Borrower shall, and shall cause each of its Subsidiaries to, maintain its corporate existence (except that with 30 calendar days prior written notice to the Administrative Agent and taking all steps requested by the Administrative Agent to continue the Prior Security Interest in the Collateral, a Borrower or its Subsidiaries may change its form of organization as provided in Section 7.2.14) and its license or qualification and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary except (a) as expressly permitted by Section 7.2.6 and (b) for exceptions (other than exceptions with respect to corporate existence) which are not materially adverse to the business of the Loan Parties and their Subsidiaries in the aggregate.

 

7.1.2                        Payment of Liabilities, Including Taxes, Etc.

 

Each Borrower shall, and shall cause each of its Subsidiaries to, duly pay and discharge all liabilities to which it is subject or which are asserted against it, promptly as and when the same shall become due and payable, including all taxes (subject to the timely filing of an extension therefor), assessments and governmental charges upon it or any of its properties, assets, income or profits, prior to the date on which penalties attach thereto, except to the extent that such liabilities, including taxes, assessments or charges, are being contested in good-faith and by appropriate and lawful proceedings diligently conducted and for which such reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made.  TGI and its Subsidiaries will pay all such liabilities forthwith upon the commencement of proceedings to foreclose any Lien which may have attached as security therefor, except to the extent that TGI or its relevant Subsidiary is contesting such liabilities in good faith and has posted an appropriate bond therefor or taken such other actions as are necessary to suspend such foreclosure proceedings.

 

7.1.3                        Maintenance of Insurance.

 

Each Loan Party shall, and shall cause each of its Subsidiaries to, insure its properties and assets against loss or damage by fire and such other insurable hazards as such assets are commonly insured (including fire, extended coverage, property damage, workers’ compensation, public liability and business interruption insurance) and against other risks in such amounts as similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses, and with reputable and financially sound insurers, including self-insurance to the extent customary, all as reasonably determined by the Administrative Agent.  TGI shall deliver (x) on the Closing Date and annually thereafter original certificates of insurance describing and certifying as to the existence of the insurance required to be maintained by this Agreement and the other Loan Documents, together with a copy of the endorsement described in the next sentence attached to such certificate and (y) at the request of the Administrative Agent, from time to time a summary schedule indicating all insurance then in force with respect to TGI and its Subsidiaries.  From and after the Closing Date, such policies of insurance shall contain special endorsements, in form and substance acceptable to the Administrative Agent, which shall (i) specify the Administrative Agent as an additional insured,

 

93



 

mortgagee and lender loss payee as its interests may appear, with the understanding that any obligation imposed upon the insured (including the liability to pay premiums) shall be the sole obligation of TGI or relevant Subsidiary and not that of the Administrative Agent, (ii) include effective waivers by the insurer of all claims for insurance premiums against the Administrative Agent, (iii) provide that no cancellation of such policies for any reason (including non-payment of premium) shall be effective until at least thirty (30) days after receipt by the Administrative Agent of written notice of such cancellation (except that the prior notice period to the Administrative Agent may be 10 days prior to cancellation resulting from non-payment of premium), (iv) be primary without right of contribution of any other insurance carried by or on behalf of any additional insureds, and (v) provide that inasmuch as the policy covers more than one insured, all terms, conditions, insuring agreements and endorsements (except limits of liability) shall operate as if there were a separate policy covering each insured, (vi) provide that the interest of the Banks shall be insured regardless of any breach or violation by the applicable Loan Parties of any warranties, declarations or conditions contained in such policies or any action or inaction of the applicable Loan parties or others insured under such policies and (vii) provide a waiver of any right to set off or counterclaim or any other deduction and provide that any rights of subrogation which the insurers may have or acquire shall be adjusted in accordance with the “mortgagee” and “lender loss payee” clauses of each such policy, which in each case shall be reasonably satisfactory to the Administrative Agent. TGI shall notify the Administrative Agent promptly of any occurrence causing a material loss or decline in value of insured assets and the estimated (or actual, if available) amount of such loss or decline.

 

If any Real Property Collateral is at any time from and after the Closing Date located in an area identified by the Federal Emergency Management Agency (or any successor agency as a “Special Flood Hazard Area” with respect to which flood insurance has been made available under the National Flood Insurance Act of 1968 (as no or hereafter in effect or successor act thereto), the Borrowers shall, or shall cause the applicable Loan party to (i) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws and (ii) deliver to the Administrative Agent evidence of such compliance in form and substance reasonably acceptable to the Administrative Agent.

 

7.1.4                        Maintenance of Properties and Leases.

 

Each Borrower shall, and shall cause each other Loan Party and their Subsidiaries to, maintain in good repair, working order and condition (ordinary wear and tear excepted) in accordance with the general practice of other businesses of similar character and size, all of those properties useful or necessary to its business, and from time to time, the Borrowers will make or cause to be made all appropriate repairs, renewals or replacements thereof except, in each case, where the failure to do so, individually or in the aggregate, would not constitute a Material Adverse Change.

 

94


 

7.1.5                        Maintenance of Patents, Trademarks, Etc.

 

Each Borrower shall, and shall cause each of its Subsidiaries to, maintain in full force and effect all patents, trademarks, trade names, copyrights, licenses, franchises, permits, intellectual property and other authorizations necessary for the ownership and operation of its properties and business if the failure so to maintain the same would constitute a Material Adverse Change.

 

7.1.6                        Visitation Rights.

 

Each Borrower shall, and shall cause each of its Subsidiaries to, permit any of the officers or authorized employees or representatives of the Administrative Agent or any of the Banks to visit and inspect any of its properties and to examine and make excerpts from its books and records and discuss its business affairs, finances, properties, operations and accounts with its officers, all in such detail and at such times during normal business hours and as often as any of the Banks may reasonably request, provided that, except during the existence of an Event of Default, each Bank shall provide TGI, as agent for the Borrowers, and the Administrative Agent with reasonable notice prior to any visit or inspection and such visitation and inspection shall not unreasonably interfere with the conduct of the business of any Borrower or such Subsidiary.  In the event any Bank desires to conduct an audit of any Borrower, such Bank shall make a reasonable effort to conduct such audit contemporaneously with any audit to be performed by the Administrative Agent.  The Borrowers shall not be obligated to reimburse the Administrative Agent and the Banks for more than one audit per year in the absence of a continuing Event of Default.

 

7.1.7                        Keeping of Records and Books of Account.

 

Each Borrower shall, and shall cause each of its Subsidiaries to, maintain and keep proper books of record and account which enable such Borrower and its Subsidiaries to issue financial statements in accordance with GAAP and as otherwise required by applicable Laws of any Official Body having jurisdiction over any Borrower or any Subsidiary of any Borrower, and in which full, true and correct entries shall be made in all material respects of all its dealings and business and financial affairs.

 

7.1.8                        Plans and Benefit Arrangements.

 

Each Borrower shall, and shall cause each member of its ERISA Group to, comply with the provisions of ERISA and the Internal Revenue Code applicable to each Plan and Benefit Arrangement except where such failure, alone or in conjunction with any other failure, would not result in a Material Adverse Change.

 

7.1.9                        Compliance with Laws.

 

Each Borrower shall, and shall cause each of its Subsidiaries to, comply with (i) its organizational documents (including certificates of incorporation, bylaws and comparable

 

95



 

documents) and (ii) all applicable Laws, including all Environmental Laws, in all respects, provided that it shall not be deemed to be a violation of this Section 7.1.9 if any failure to comply with any Law would not result in fines, penalties, remediation costs, other similar liabilities or injunctive relief which in the aggregate would constitute a Material Adverse Change.

 

7.1.10                  Use of Proceeds.

 

The Borrowers will use the proceeds of the Loans only for lawful purposes in accordance with Section 2.7 as applicable and such uses shall not contravene any applicable Law or any other provision hereof.

 

7.1.11                  Subsidiary Dividends.

 

To the extent permitted by applicable Law, the Borrowers shall cause one or more of their Subsidiaries to pay cash dividends to the Borrowers (directly or through one or more Subsidiaries) from time to time, in aggregate amounts as necessary to permit the Borrowers to pay and satisfy the Obligations when due and payable (by acceleration or otherwise).

 

7.1.12                  Subordination of Intercompany Loans.

 

From and after the Closing Date, each Borrower and each Guarantor shall cause any inter-company Indebtedness, loans or advances owed by any of them to one another or to any other of their Subsidiaries to be subordinated pursuant to the terms of the Intercompany Subordination Agreement.

 

7.1.13                  Anti-Terrorism Laws.

 

The Loan Parties and their respective Affiliates and agents shall not (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including the making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224; or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law.  The Borrowers shall deliver to Banks any certification or other evidence requested from time to time by any Bank in its sole discretion, confirming the Borrowers’ compliance with this Section 7.1.13.

 

7.1.14                  Further Assurances.

 

Each Loan Party shall, from time to time, at its expense, faithfully preserve and protect the Administrative Agent’s Lien on and Prior Security Interest in the Collateral as a continuing Lien and Prior Security Interest, and shall do such other acts and things as the Administrative Agent in its reasonable discretion may deem necessary or advisable from time to

 

96



 

time in order to preserve, perfect and protect the Liens granted under the Loan Documents and to exercise and enforce its rights and remedies thereunder with respect to the Collateral.

 

7.1.15                  Incorporation of Terms.

 

Each Loan Party shall cooperate with the Administrative Agent and shall execute from time to time, at any time within 120 days following (x) the Closing Date with respect to the Vought Financing and (y) the date of the making of such loan with respect to the Incremental Term Loans, in each case, as requested by the Administrative Agent any amendment or supplement to any Loan Document for the purpose of incorporating into this Agreement or any of the other Loan Documents any affirmative or negative covenants or events of default (including any financial covenant and any applicable definition) which is either not contained in the Loan Documents or which is more restrictive than those contained in the Loan Documents and that is contained in any of the documents relating to the Vought Financing as of the date that is 45 days after the Closing Date or the Incremental Term Loans as of the date that is 45 days after the making thereof, as applicable, all as the Administrative Agent in its sole discretion shall request.

 

7.1.16     Collateral and Additional Collateral; Execution and Delivery of Additional Security Documents.

 

(a) With respect to any property intended to be Collateral acquired after the Closing Date by any Loan Party (other than any property described in paragraph (b), (c) or (d) below ), promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative Agent deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Banks, a security interest in such property intended to be Collateral and (ii) take all actions necessary or advisable to grant to the Administrative Agent, for the benefit of the Banks, a Prior Security Interest in such property intended to be Collateral, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Administrative Agent.

 

(b)   With respect to any fee interest in any Real Property having a value (together with improvements thereof) of at least $10,000,000 acquired after the Closing Date by any Loan Party, promptly (i) execute and deliver a Mortgage constituting a Prior Security Interest, in favor of the Administrative Agent, for the benefit of the Banks, covering such Real Property, (ii) if requested by the Administrative Agent, provide the Banks with all Ancillary Security Documents as the Administrative Agent shall request (provided that the Administrative Agent in its sole discretion may agree in writing not to take or to defer taking of a Mortgage with respect to any Real Property otherwise required to be subject to a Mortgage hereunder).

 

(c)  With respect to any new Subsidiary that is a Domestic Subsidiary created or acquired after the Closing Date by any Loan Party (which, for the purposes of this paragraph (c), shall include any existing Subsidiary that ceases to be a Foreign Subsidiary), promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement or Borrower or Guarantor Joinders as the Administrative Agent deems necessary or

 

97



 

advisable to grant to the Administrative Agent, for the benefit of the Banks, a  Prior Security Interest in the Capital Stock of such new Subsidiary that is owned by any Loan Party, (ii) deliver to the Administrative Agent the certificates representing such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Loan Party, (iii) to the extent required by Section 10.20 [Joinder of Borrowers and Guarantors] cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, (B) to take such actions necessary or advisable to grant to the Administrative Agent for the benefit of the Banks a Prior Security Interest in the Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Administrative Agent and (C) to deliver to the Administrative Agent a certificate of such Subsidiary, substantially in a form reasonably acceptable to the Administrative Agent, certifying as to organizational documents and resolutions of such Loan Party and containing an incumbency certificate of such Loan Party, with appropriate insertions and attachments, and (iv) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

 

(d) With respect to any new Foreign Subsidiary created or acquired after the Closing Date by any Loan Party, promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral Agreement as the Administrative Agent deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Banks, a Prior Security Interest in the Capital Stock of such new Subsidiary that is owned by any such Loan Party (provided that any pledge of stock or other equity interest in a Foreign Subsidiary shall be limited to 66% of the voting stock or equity interest in such Foreign Subsidiary and that any pledge of more than 66% of the equity interest in any U.S.-Owned DRE shall be treated for this purpose as a pledge of such U.S.-Owned DRE’s voting stock or equity interest in each Foreign Subsidiary in which it has an ownership interest), (ii) deliver to the Administrative Agent the certificates representing such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Loan Party, and take such other action as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the Administrative Agent’s security interest therein, and (iii) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

 

Notwithstanding the requirement for delivery of possession or control of the Pledged Collateral to the Administrative Agent required pursuant to the Loan Documents, so long as the Intercreditor Agreement is in force and effect, possession or control of such Pledged Collateral by the collateral agent or the administrative agent, as applicable for the lenders under the Vought Term Loans, or Incremental Term Loans, as applicable, shall be deemed to be possession or control, respectively, by the Administrative Agent thereof for purposes of this condition precedent and perfection of the Administrative Agent’s Lien thereon.

 

98



 

7.1.17                  Maintenance of Credit Rating.

 

TGI shall use commercially reasonable efforts to acquire as promptly as practicable and to maintain, from and after the Closing Date, both a Long-Term Issue Credit Rating and a Debt Rating from each of Moody’s and Standard & Poor’s.

 

7.1.18                  Intercreditor Issues.

 

In the event of a breach or default (i) under the Intercreditor Agreement by any party thereto (other than the Administrative Agent), or (ii) by any holder of any Indebtedness which is subordinated to the Obligations, of such subordination provisions, in each case, which circumstance is capable of being cured or mitigated by action or inaction by any of the Loan Parties, the Loan Parties shall take any practicable action or refrain from taking action available to it to cure or mitigate such breach or default.  By way of example only, and without limiting the generality of the foregoing, if, the collateral agent for the lenders of the Vought Term Loan receives a Lien on the assets which is not also provided to the Administrative Agent, the Loan Parties shall grant a Lien to the Administrative Agent thereon.

 

7.2                                 Negative Covenants.

 

The Borrowers covenant and agree that until payment in full of the Loans and interest thereon, expiration or termination of all Letters of Credit, satisfaction of all of the Borrowers’ other Obligations hereunder and termination of the Revolving Credit Commitments, the Borrowers shall comply, and shall cause each of their Subsidiaries to comply, with the following negative covenants:

 

7.2.1                        Indebtedness.

 

Other than (a) the Indebtedness under the Loan Documents and, prior to the Closing Date, the 2009 Credit Agreement, and (b) Indebtedness of the SP Sub (but only the SP Sub) incurred in connection with the Receivables Facility up to a maximum principal amount of $175,000,000.00 (or such greater amount that may be approved in writing by the Required Banks), TGI shall not, and shall not permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist

 

(i) any secured Indebtedness, except:

 

(a) the Vought Financing;

 

(b) the Existing Vought LCs, the Vought Excluded LCs and the Triumph Excluded LCs; provided that, in each case, the amount thereof is not hereafter increased and no additional assets become subject to any Liens thereon;

 

(c) the B&R Promissory Note;

 

(d) the Incremental Term Loans;

 

99



 

(e) the IDBs existing on the date hereof so long as the principal amount thereof is not hereafter increased and no additional assets become subject to Liens associated therewith;

 

(f) Capital Lease Obligations and other Indebtedness set forth on Schedule 7.2.1 as of the date hereof; provided that the amount thereof is not hereafter increased and no additional assets become subject to any Liens thereon;

 

(g) Indebtedness secured by Purchase Money Security Interests and Capital Lease Obligations incurred after the date hereof in an aggregate amount outstanding at any time (including additional IDBs) not to exceed $100,000,000; provided however that if the Vought Term Loans exceed $300,000,000 in principal amount on the Closing Date, the principal amount of such Indebtedness outstanding at any time (including additional IDBs) will not exceed $50,000,000;

 

(h) any Bank-Provided Hedge or Term Lender Provided Hedge;

 

(i)  Indebtedness under any Other Bank Provided Financial Services Product or Other Term Lender Provided Financial Service Product;

 

(j) Permitted Refinancing Debt refinancing any Refinanced Debt (and any Guaranties thereof by Persons who were guarantors of the Refinanced Debt related thereto) permitted pursuant to this Section 7.2.1(i) to the extent secured only by Permitted Refinancing Liens;

 

(k) Indebtedness in an aggregate principal amount outstanding at any time, when combined with the Indebtedness outstanding under clause (ii) (e) below, not exceeding $25,000,000; provided that such Indebtedness is secured solely by Liens permitted pursuant to clause (xvii) of the definition of Permitted Liens;

 

(l)            Guaranties by any Loan Party of secured Indebtedness of any other Loan Party otherwise permitted to be incurred under this Section 7.2.1(i) (other than Sections (e), (f), (g), (j), (k) and (m) of this Section 7.2.1(i));

 

(m)          any Indebtedness of a non-Loan Party (and any Guarantee by a non-Loan Party of such Indebtedness) that, together with amounts incurred by non-Loan Parties pursuant to Section 7.2.1(ii)(c) below, does not exceed $25,000,000; provided, that such Indebtedness, if not secured, could have been incurred pursuant to Section 7.2.1(ii)(c) below at the time it is incurred; or

 

(ii) any unsecured Indebtedness, except for:

 

(a) Indebtedness of TGI in respect of (x) the 2009 Bonds in an aggregate principal amount not to exceed $175,000,000, (y) the Convertible Notes and (z) the Vought

 

100



 

Acquisition Debt, provided, that such Vought Acquisition Debt meets the Vought Financing Parameters,

 

(b) notes issued in favor of the seller as consideration for an acquisition permitted under Section 7.2.6(ii) hereof; provided that: (A) the Indebtedness evidenced by such notes is included in the consideration for such acquisition and (B) such notes are subordinated to the Obligations in a manner reasonably satisfactory to the Administrative Agent; provided, further, that such notes may be repaid in accordance with their terms at or before the Expiration Date so long as no Event of Default or Potential Default then exists or will result from such payment, and

 

(c) other unsecured Indebtedness; provided that (A) the Obligations under this Agreement, the Notes and each of the other Loan Documents rank at least pari passu in priority of payment with such unsecured Indebtedness, (B) no Event of Default or Potential Default then exists nor will result from incurring such unsecured Indebtedness, (C) such indebtedness shall mature no earlier than ninety (90) days after the Expiration Date and (D) not more than $25,000,000 principal amount of Indebtedness may be incurred pursuant to this clause and clause 7.2.1(i)(m), in the aggregate, by Subsidiaries that are not Loan Parties, and (E) after giving effect thereto, the Loan Parties shall be in compliance with the Total Leverage Ratio and the Senior Leverage Ratio, assuming that the maximum permitted Total Leverage Ratio is 0.50 to 1.00 less than the maximum permitted ratio set forth in Section 7.2.16 and the maximum permitted Senior Leverage Ratio is 0.25 to 1.00 less than the maximum permitted ratio set forth in Section 7.2.17;

 

(d) Indebtedness of a Loan Party to another Loan Party which is subordinated pursuant to the Intercompany Subordination Agreement;

 

(e) Indebtedness in an aggregate principal amount outstanding at any time, when combined with Indebtedness outstanding under clause (i) (k) above, does not exceed $25,000,000;

 

(f) Guaranties by any Loan Party of unsecured Indebtedness of any other Loan Party otherwise permitted to be incurred pursuant to this Section 7.2.1(ii), and Guaranties of any Subsidiary of TGI that is not a Loan Party of Indebtedness of any other Subsidiary that is not a Loan Party otherwise permitted to be incurred pursuant to this Section 7.2.1; provided that, in each case, such Guaranties must meet all restrictions to which the Indebtedness that is being Guarantied is subject, including, without limitation, with respect to whom the obligors are on such Indebtedness or on any applicable subordination provisions or conditions to incurrence;

 

(g) Permitted Refinancing Debt;

 

(h) Indebtedness of a non-Loan Party Subsidiary to TGI or any Subsidiary of TGI to the extent permitted pursuant to Sections 7.2.4(v), (viii), (x) and (xii); and

 

(i) Indebtedness set forth on Schedule 7.2.1.

 

101



 

7.2.2                        Liens.

 

The Borrowers shall not, and shall not permit any of their Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien on any of its property or assets, tangible or intangible, now owned or hereafter acquired, or agree or become liable to do so, except Permitted Liens.

 

7.2.3                        Guaranties.

 

The Borrowers shall not, and shall not permit any of their Subsidiaries to, at any time, directly or indirectly, become or be liable in respect of any Guaranty, except:

 

(i)            Guaranties expressly permitted under Section 7.2.1 [Indebtedness];

 

(ii)           endorsements of negotiable or other instruments for deposit or collection in the ordinary course of business;

 

(iii)          any Guaranty of an obligation of any Borrower or any of their Subsidiaries to indemnify or hold harmless any seller or buyer, as applicable, incurred in connection with an acquisition or divestiture of Capital Stock or assets permitted under this Agreement; and

 

(iv)          any Guaranty by a Loan Party or its Subsidiaries (including through the issuance of a Letter of Credit on behalf of such Person) of the obligations of any of TGI or its direct or indirect Subsidiaries not constituting Indebtedness and which is incurred in the ordinary course of business such as trade credit and obligations under real estate leases (it being understood that any such Guaranty by a Loan Party of obligations of a non-Loan Party shall not be subject to the limitations in Section 7.2.4 unless and until payments are made under any such Guaranty); and

 

(v)           any Guaranty pursuant to the Guarantee and Collateral Agreement executed in connection herewith and the guarantee and collateral agreement executed with respect to the Vought Term Loan Obligations, to the extent such Vought Term Loan Obligations are permitted hereby; and

 

(vi)          the Receivables Performance Guaranty and other Standard Securitization Undertakings in connection with the Receivables Facility; and

 

(vii)         Guaranties permitted under Section 7.2.4 (other than Section 7.2.4(xi));

 

provided, with respect to each of clauses (i) through (vii) above, no Guaranties will be made for the benefit of any Loan Party or Subsidiary thereof which is intended to be dissolved, liquidated or wound up.

 

102



 

7.2.4                        Loans and Investments.

 

The Borrowers shall not, and shall not permit any of their Subsidiaries to, at any time make or suffer to remain outstanding any loan or advance to, or purchase, acquire or own any stock, bonds, notes or securities of, or any partnership interest (whether general or limited) in, or any other investment or interest in, or make any capital contribution to, any other Person, or agree, become or remain liable to do any of the foregoing, except:

 

(i)            (a) trade credit extended on usual and customary terms in the ordinary course of business and (b) extensions of credit extended beyond usual and customary terms and investments received in satisfaction or partial satisfaction of accounts receivable owing by financially troubled account debtors to the extent reasonably necessary in order to prevent or limit a loss; provided that the aggregate amount thereof outstanding under this clause (b) at any time does not exceed $10,000,000;

 

(ii)           advances to employees to meet expenses incurred by such employees in the ordinary course of business;

 

(iii)          Permitted Investments;

 

(iv)          subject to Section 7.2.1, loans, advances, investments and capital contributions in and to other Loan Parties (except for Loan Parties that are intended to be dissolved, liquidated or wound up);

 

(v)           Investments in (a) the SP Sub, and (b) Joint Ventures and Subsidiaries which are not Loan Parties, (other than SP Sub), provided  that the aggregate amount of Investments in Joint Ventures and Subsidiaries that are not Loan Parties made after the date hereof pursuant to this clause (b) shall not exceed $50,000,000.00; except additional Investments that would make the aggregate amount of all such Investments exceed $50,000,000 may be made if the Borrowers demonstrate that after giving effect to such Investments, the Senior Secured First Lien Leverage Ratio would not exceed 1.50 to 1.0, provided further that such Investments are calculated without duplication and are determined net of cash payments of principal, dividends or redemptions to the extent such cash is received by a Loan Party (but without netting out any write-downs or write-offs); and

 

(vi)          the consideration paid in connection with acquisitions permitted under Section 7.2.6(ii);

 

(vii)         investments existing on the date hereof and set forth on Schedule 7.2.4;

 

(viii)        other investments not identified above so long as the aggregate amount of such investments made after the date hereof shall not at any time exceed $15,000,000.

 

(ix)           investments in Triumph Group Charitable Foundation not to exceed $5,000,000;

 

103


 

(x)            any other investment to the extent that the aggregate amount of such investment would not exceed the then available Cumulative Credit at the time such investment is made; and

 

(xi)           investments constituting Guaranties permitted under Section 7.2.3 (other than Section 7.2.3(vii)); and

 

(xii)          investments of non-Loan Party Subsidiaries in other non-Loan Party Subsidiaries.

 

7.2.5                        Dividends and Related Distributions.

 

The Borrowers shall not, and shall not permit any of their Subsidiaries to, make or pay, or agree to become or remain liable to make or pay, any dividend or other distribution of any nature (whether in cash, property, securities or otherwise) on account of or in respect of its shares of capital stock or partnership interest or on account of the purchase, redemption, retirement or acquisition of its shares of capital stock (or warrants, options or rights therefor) or partnership interests, except

 

(i)            dividends or other distributions payable (a) to the Borrowers or any other Loan Party by its Subsidiaries, or (b) to a non-Loan Party Subsidiary by another non-Loan Party Subsidiary;

 

(ii)           repurchases by TGI of its common stock and dividends payable by TGI to the holders of its common stock, provided that the amount of any such repurchase made or dividends paid does not exceed the then available Cumulative Credit and provided further that no Event of Default or Potential Default exists at the time of any such payment or will result from such payment.

 

(iii)          regularly scheduled quarterly dividends on the common stock of TGI, consistent with past practice, not to exceed $0.04 per share per quarter, subject to adjustments for stock splits, reverse stock splits, stock dividends and similar transactions;

 

(iv)          redemptions of any employee’s Capital Stock in TGI upon termination of employment provided that no Event of Default then exists or will result from such redemption;

 

(v)           repurchases or redemptions of Capital Stock deemed to occur upon the cashless exercise of stock options or warrants or upon the vesting of restricted stock units if such Capital Stock represents the exercise price of such options or warrants or represents withholding taxes due upon such exercise or vesting; and

 

(vi)          dividends or other distributions payable in stock, including stock splits; and

 

(vii)         distributions from, or payments by, a Subsidiary to the extent necessary to pay any liability for taxes imposed on any shareholder or equity holder of such Subsidiary or any

 

104



 

consolidated, combined, or similar group of which such Subsidiary is a member as a result of income earned by such Subsidiary being taxable to such shareholder or equity holder or such group notwithstanding the absence of any distribution or payment by the Subsidiary.

 

7.2.6                        Liquidations, Mergers, Consolidations, Acquisitions.

 

The Borrowers shall not, and shall not permit any of their Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party to any merger or consolidation, or acquire by purchase, lease or otherwise all or substantially all of the assets or capital stock of any other Person other than the Acquisition occurring on the Closing Date in accordance with the terms of Section 6.1.14 [Vought Acquisition], except that

 

(i)            any Subsidiary may consolidate or merge or liquidate into TGI or another Subsidiary, provided that no Domestic Subsidiary shall merge, consolidate or liquidate into a Foreign Subsidiary and no Subsidiary that is a Loan Party shall merge, consolidate or liquidate into any Subsidiary that is not a Loan Party;

 

(ii)           TGI or any of its Subsidiaries may acquire assets or Capital Stock of other Persons engaged in the business permitted under Section 7.2.10 or may merge with or into any such Person in connection with an acquisition thereof (each such transaction, a “Permitted Acquisition”), provided that:

 

(a)           no Event of Default exists or will result from such acquisition;

 

(b)           with respect to any Permitted Acquisition for which the aggregate Consideration to be paid therefor equals or exceeds $30,000,000, TGI notifies the Administrative Agent in writing of the acquisition at least 15 days before it is scheduled to close, and includes with such notice, to the satisfaction of the Administrative Agent, the following:

 

(1)           a certification by the Chief Executive Officer, President or Chief Financial Officer of TGI confirming the matters addressed in clauses (a) and (b) of this Section 7.2.6(ii) and including a pro forma computation of clauses (c) and (d) below, and

 

(2)           if the Borrowers wish to include any of the pre-acquisition EBITDA of the acquired business in the Borrowers’ Consolidated Adjusted EBITDA, copies of the financial statements, due diligence reports, and computations described in, and to the extent required under, clause (1) of the definition of Consolidated Adjusted EBITDA.

 

(c)           on a pro forma basis using historical Consolidated EBITDA of the assets and business being acquired in such acquisition, the Borrowers are in compliance with all financial covenants set forth in Sections 7.2.15, 7.2.16, and 7.2.17 for the immediately preceding fiscal quarter for the twelve months then

 

105



 

ended and the full immediately preceding fiscal year, as though such acquisition had occurred on the first day of each of such respective periods, and

 

(d)           on a pro forma basis after giving effect to such acquisition, the Loan Parties shall be in compliance with the Total Leverage Ratio and the Senior Leverage Ratio assuming that the maximum permitted ratios in each case shall be 0.25 to 1.00 below the otherwise applicable ratio under Sections 7.2.16 and 7.2.17, respectively, and

 

(e)           if any merger is effected in connection with any such acquisition and any Loan Party is a party to such merger, then the surviving entity of such merger will be a Loan Party, and

 

(iii)          the Borrowers shall be permitted to dissolve, liquidate or wind up (A) Triumph Interiors, Ltd, organized under the laws of the Republic of Ireland, (B) Saygrove Acquisition & Motion Control Limited, organized under the laws of the United Kingdom, (C) Airframe Spares & Logistics GmbH, organized under the laws of Germany, and (D) any other non-Loan Party Subsidiary to the extent not a Material Subsidiary.

 

7.2.7                        Dispositions of Assets or Subsidiaries.

 

The Borrowers shall not, and shall not permit any of their Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any of its properties or assets, tangible or intangible (including sale, assignment, discount or other disposition of accounts, contract rights, chattel paper, equipment or general intangibles with or without recourse or of capital stock, shares of beneficial interest or partnership interests of a Subsidiary of any Borrower), except:

 

(i)            transactions involving the sale of inventory in the ordinary course of business;

 

(ii)           any sale, transfer or lease of assets in the ordinary course of business which are no longer necessary or required in the conduct of any Borrower’s or such Subsidiary’s business;

 

(iii)          any sale, transfer or lease of assets by (a) any Subsidiary of a Borrower to such Borrower or another Loan Party or (b) any non-Loan Party Subsidiary to another non-Loan Party Subsidiary;

 

(iv)          any sale, transfer or lease of assets in the ordinary course of business which are replaced by substitute assets acquired or leased; provided such substitute assets are subject to the Banks’ Prior Security Interest to the extent such substitute assets are required to become Collateral hereunder or under any of the Loan Documents;

 

106



 

(v)           any sale, transfer, or lease of assets the after-tax proceeds of which, when added to the after-tax proceeds of other sales, transfers and leases of assets in the same fiscal year, do not exceed, in the aggregate for TGI and its Subsidiaries, 5% of TGI’s consolidated total assets at the start of such fiscal year;

 

(vi)          the Payment Discount Arrangements;

 

(vii)         any sale, transfer or lease of assets, other than those specifically excepted pursuant to clauses (i) through (vi) above, which is approved by the Required Banks;

 

(viii)        to the extent done as part of the Receivables Facility, the sale, contribution, transfer, conveyance or assignment of Receivables and Related Rights by TGI and its Subsidiaries to the SP Sub and the sale by the SP Sub of individual variable percentage interests in the Purchased Interests to the Purchaser; and

 

(ix)           to the extent pursuant to a dissolution, liquidation or winding-up permitted by 7.2.6(iii) above.

 

7.2.8                        Affiliate Transactions.

 

Except for TGI and its Subsidiaries entering into, and performing their obligations under, the Receivables Purchase Agreement and the other Transaction Documents, the Borrowers shall not, and shall not permit any of their Subsidiaries to, enter into or carry out any transaction with any Affiliate (including purchasing property or services from or selling property or services to any Affiliate of TGI or other Person, but excluding transactions exclusively among Loan Parties) unless such transaction is not otherwise prohibited by the Agreement, is upon fair and reasonable arm’s-length terms and conditions and is in accordance with all applicable Law; provided, neither (a) the payment of customary directors’ fees, nor (b) ordinary course transactions with non-Loan Party Subsidiaries, including the provision of cash management and other general and administrative services, shall  be considered a prohibited Affiliate transaction.

 

7.2.9                        Subsidiaries, Partnerships and Joint Ventures.

 

Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, own or create directly or indirectly any Subsidiaries unless it shall comply with the requirements of Section 10.20 [Joinder of Guarantors], to the extent applicable.

 

7.2.10                  Continuation of Present Business.

 

The Borrowers shall not, and shall not permit any of their Subsidiaries to, engage in any business other than those businesses engaged in as of the Closing Date by a Loan Party or a Subsidiary of a Loan Party (provided that only the SP Sub shall be permitted to engage in the business in which the SP Sub is engaged in as of the Closing Date), and any business reasonably related, ancillary or complementary thereto and any reasonable extension thereof.

 

107



 

7.2.11                  Plans and Benefit Arrangements.

 

Except as would not result in a Material Adverse Change, the Borrowers shall not, and shall not permit any of their Subsidiaries to:

 

(i)            fail to satisfy the minimum funding requirements of ERISA and the Internal Revenue Code with respect to any Plan;

 

(ii)           request a minimum funding waiver from the Internal Revenue Service with respect to any Plan;

 

(iii)          engage in a Prohibited Transaction with any Plan, Benefit Arrangement or Multiemployer Plan which, alone or in conjunction with any other circumstances or set of circumstances resulting in liability under ERISA;

 

(iv)          permit the Adjusted Funding Target Attainment Percentage of any Plan to be less than sixty percent (60%), unless the Adjusted Funding Target Attainment Percentage is deemed to be less than sixty percent (60%) under Section 436(h)(2) of the Internal Revenue Code at no fault of any Borrower, Subsidiary or any other member of one of their ERISA Groups;

 

(v)           fail to make when due any contribution to any Multiemployer Plan that any Borrower or any member of its ERISA Group may be required to make under any agreement relating to such Multiemployer Plan, or any Law pertaining thereto where such failure is likely to result in a liability of any Borrower or any member of the ERISA Group;

 

(vi)          withdraw (completely or partially) from any Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to withdraw) from any Multiple Employer Plan, where any such withdrawal is likely to result in a Withdrawal Liability or other liability of the Borrowers or any member of the ERISA Group;

 

(vii)         terminate, or institute proceedings to terminate, any Plan, where such termination is likely to result in a liability to the Borrowers or any member of the ERISA Group; or

 

(viii)        fail to give any and all notices and make all disclosures and governmental filings required under ERISA or the Internal Revenue Code.

 

7.2.12                  Fiscal Year.

 

TGI shall not, and shall not permit any Subsidiary of TGI to, change its fiscal year from the twelve-month period beginning April 1 and ending March 31, other than upon thirty (30) days’ prior written notice to the Administrative Agent and provided that such new fiscal year shall end on a the last day of a calendar quarter.

 

108



 

7.2.13                  Issuance of Stock.

 

No Loan Party, other than TGI, shall, and no Loan Party (including TGI) shall permit any of its Subsidiaries to, issue any additional shares of its Capital Stock or any options, warrants or other rights in respect thereof, other than the issuance of Capital Stock by (i) any Loan Party or other Subsidiary to a Loan Party; provided the same is subject to the Administrative Agent’s Prior Security Interest and the receiving Loan Party takes such actions to perfect the Administrative Agent’s Lien thereon as is reasonably satisfactory to the Administrative Agent, all to the extent such Capital Stock is required to be pledged to the Administrative Agent for the benefit of the Bank under the Loan Documents, (ii) any non-Loan Party Subsidiary to another non-Loan Party Subsidiary and (iii) in connection with the formation of Joint Ventures not otherwise prohibited under this Agreement.

 

7.2.14                  Changes in Organizational Documents.

 

The Borrowers shall not, and shall not permit any Loan Party to, amend any provisions of its certificate of incorporation relating to capital stock, form of organization, jurisdiction of organization or name without, in each case, providing at least ten (10) Business Days’ prior written notice to the Administrative Agent and the Banks, taking all steps required by the Administrative Agent to continue its Prior Security Interest in the Collateral and, in the event such change would be adverse to the Banks as determined by the Administrative Agent in its reasonable discretion, obtaining the prior written consent of the Required Banks.

 

7.2.15                  Minimum Interest Coverage Ratio.

 

The Borrowers shall not permit the Interest Coverage Ratio, calculated as of the end of each fiscal quarter for the four fiscal quarters then ended, to be less than 3.50 to 1.00.

 

7.2.16                  Total Leverage Ratio.

 

The Borrowers shall not at any time permit the Total Leverage Ratio, calculated as of the end of each fiscal quarter, to exceed 4.50 to 1.00.

 

7.2.17                  Senior Leverage Ratio.

 

The Borrowers shall not at any time permit the Senior Leverage Ratio, calculated as of the end of each fiscal quarter, to exceed 3.00 to 1.00.

 

7.2.18                  Negative Pledges;  Restrictions on Dividend Payments.

 

The Borrowers shall not and shall not permit any of their Subsidiaries to, agree with any Person (i) to limit its ability to provide collateral security to the Banks to secure the Obligations  and (ii) to limit the ability of any Borrower’s Subsidiaries to pay dividends or make other distributions to such Borrower, except any such limitations set forth in (a) in the case of clause (ii) above, this Agreement, the other Loan Documents and the documents governing the Vought Financing, the Convertible Notes, the 2009 Notes or any Permitted Refinancing Debt in

 

109



 

respect of any of the foregoing so long as the limitations in such Permitted Refinancing Debt are no more restrictive than those contained in the applicable Refinanced Debt, (b) in the case of clause (i) above, agreements relating to secured Indebtedness permitted by this Agreement if such prohibition or limitation applies only to the property and assets securing such Indebtedness and such property or assets do not constitute Collateral, (c) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the disposition of assets of such Subsidiary otherwise permitted hereby so long as such restrictions apply only to such assets and do not conflict with any obligation to provide Collateral pursuant to the Loan Documents, or (d) customary restrictions or conditions on any non-Loan Party imposed by any agreement or document governing or evidencing indebtedness of any such non-Loan Party that is otherwise permitted hereunder or (e) customary anti-assignment provisions with respect to contractual obligations, permits or licenses.

 

7.2.19                  Minimum Availability.

 

The Borrowers shall not permit Availability to be less than 125% of the amount of outstanding Indebtedness under the Convertible Notes at any time during the period commencing 180 days prior to each Repurchase Date (as defined in the Convertible Note Indenture).

 

7.2.20                  Repayment of Convertible Notes; Repayment of other Subordinated Indebtedness.

 

Notwithstanding anything to the contrary in the Convertible Debt Documents, but subject to the subordination provisions contained in the Convertible Note Indenture, no Loan Party shall make, or permit any of their Subsidiaries to make, any principal payment of the Convertible Notes prior to October 1, 2011, or, as permitted in the Convertible Note Indenture based on a “fundamental change” of TGI (as such term is defined in the Convertible Note Indenture), without prior written consent of the Required Banks; provided however, TGI may, so long as no Event of Default or Potential Default exists immediately prior to or would exist after giving effect to such payment (a) pay the settlement amount with respect to each $1,000 aggregate principal amount of Convertible Notes converted into shares of TGI’s common stock (i) in cash, which shall not exceed the lesser of (x) $1,000 and (y) the conversion value of such Convertible Notes pursuant to the terms and conditions of the Convertible Note Indenture and (ii) if the conversion value of such Convertible Notes exceeds $1,000, in the number of shares of TGI’s common stock as calculated pursuant to the terms and conditions of the Convertible Note Indenture, (b) with respect to the conversion of the Convertible Notes into shares of TGI’s common stock, TGI may pay the cash value of fractional shares of TGI’s common stock pursuant to the terms and conditions of the Convertible Note Indenture and additional amounts to the extent TGI is required to pay such amounts under the Convertible Note Indenture, and (c) pay for purchases or voluntary repurchases of Convertible Notes by TGI (including by way of a tender offer for all of the outstanding Convertible Notes by TGI) prior to October 1, 2011; provided that after giving effect to each such purchase or repurchase by TGI, Availability equals or exceeds $50,000,000

 

110



 

No Loan Party shall or shall permit any Subsidiary to repay the 2009 Bonds, the 2010 Bonds, the Vought Bridge Loans (or any Permitted Refinancing Debt with respect to any of the foregoing) or any subordinated indebtedness (other than the Convertible Notes as addressed in the immediately preceding paragraph and except to the extent permitted by Section 7.2.1(ii)(b)), without the written consent of the Required Banks except, in each case, (w) with Permitted Refinancing Debt thereof, (x) upon scheduled maturity or as otherwise required by the terms thereof, (y) any such payment, if after giving pro forma effect to such payment, the Senior Secured First Lien Leverage Ratio would be no greater than 1.00 to 1.00 or (z) any such payments to the extent that, at the time such payments are made, such payments would not exceed the then available Cumulative Credit.

 

7.2.21                  Modification of Other Debt Documents

 

The Borrowers and the other Loan Parties shall not, without the prior written consent of the Required Banks, agree to, or make, or permit to be made any amendment, modification, or supplement to the Convertible Note Indenture or the other Convertible Debt Documents, the 2009 Bonds, the 2010 Bonds or the Vought Bridge Loans, as the case may be, each as in effect on the Closing Date, the effect of which is to (i) increase the rate of interest or fees payable in respect of the Convertible Notes or 2009 Bonds, as applicable, (ii) require any principal payments of the Convertible Notes or the 2009 Bonds prior to the dates of required principal payments under the Convertible Note Indenture or 2009 Bonds, as applicable or change the definition of “fundamental change” under the Convertible Note Indenture, (iii) shorten the final maturity date of the Convertible Notes, the 2009 Bonds or the documents evidencing the Vought Acquisition Debt or permit the holders of the Convertible Notes, the 2009 Bonds to put such Convertible Notes or 2009 Bonds to any Borrower prior to the times provided therefore under the Convertible Note Indenture or the 2009 Bonds, as applicable, (iv) secure or obtain any agreement to secure the Convertible Notes or the 2009 Bonds with the grant of any security interests, mortgage liens or other collateral assignments on the property of any of the Loan Parties, (v) modify the subordination provisions contained in the Convertible Note Indenture or the 2009 Bonds or, if applicable, the documents evidencing the Vought Acquisition Debt, (vi) make the covenants and events of default contained in the Convertible Note Indenture, the 2009 Bonds or the Documents evidencing the Vought Acquisition Debt more restrictive, (vii) modify or amend the terms under which the Convertible Notes are convertible into shares of TGI’s common stock or cash if the effect of such amendment or modification is to make the terms of such conversion less favorable either to the Borrowers or to the Banks than the terms of such conversion as in effect as of the Closing Date or (viii) with respect to the Convertible Debt Documents, the 2009 Bonds, the 2010 Bonds or the Vought Bridge Loans, materially adversely affect any Borrower’s or the Banks’ rights and interests.

 

The Borrowers and the other Loan Parties shall not agree to, or make, or permit to be made any amendment, modification, or supplement to any such documents evidencing the Vought Financing, the effect of which results in the Vought Financing not being in compliance with the Vought Financing Parameters or the Incremental Term Loans not being in compliance with the Incremental Term Loan Parameters, including without limitation in each case, such

 

111



 

documents shall not be guaranteed by or be in favor a borrower or other obligor thereunder unless such Person is also a Borrower or a Guarantor of the Obligations.

 

7.3                                 Reporting Requirements.

 

The Borrowers covenant and agree that until payment in full of the Loans and interest thereon, expiration or termination of all Letters of Credit, satisfaction of all of the Borrowers’ other Obligations hereunder and under the other Loan Documents and termination of the Revolving Credit Commitments, the Borrowers will furnish or cause to be furnished to the Administrative Agent and each of the Banks:

 

7.3.1                        Quarterly Financial Statements.

 

As soon as available and in any event within forty-five (45) calendar days after the end of each of the first three fiscal quarters in each fiscal year, TGI’s financial statements, consisting of consolidated balance sheets as of the end of such fiscal quarter and related consolidated statements of income, stockholders’ equity and cash flows for the fiscal quarter then ended and the fiscal year through that date, all in reasonable detail and certified (subject to normal year-end audit adjustments and the absence of footnotes) by the Chief Executive Officer, President or Chief Financial Officer of the Borrowers as having been prepared in accordance with GAAP, consistently applied, and setting forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year. The Borrowers will be deemed to have complied with the delivery requirements of this Section 7.3.1 if within forty -five (45) days after the end of its fiscal quarter, TGI delivers to the Administrative Agent and files with the Securities and Exchange Commission a copy of its Form 10-Q as filed with the Securities and Exchange Commission (together with a notice stating that such document is being delivered pursuant to this Section 7.3.1) and the financial statements contained therein meet the requirements of this Section.

 

7.3.2                        Annual Financial Statement.

 

As soon as available and in any event within ninety (90) days after the end of each fiscal year, consolidated financial statements of TGI and its Subsidiaries consisting of consolidated balance sheets as of the end of such fiscal year, and related consolidated statements of income, stockholders’ equity and cash flows for the fiscal year then ended, all in reasonable detail and setting forth in comparative form the financial statements as of the end of and for the preceding fiscal year, with the consolidated statements being certified by independent certified public accountants of nationally recognized standing reasonably satisfactory to the Administrative Agent. The certificate or report of accountants shall be free of qualifications (other than any consistency qualification that may result from a change in the method used to prepare the financial statements as to which such accountants concur) and shall not indicate the occurrence or existence of any event, condition or contingency which would materially impair the prospect of payment or performance of any covenant, agreement or duty of the Borrowers under any of the Loan Documents, together with a letter of such accountants (to the extent allowable under the policies of such accountants) substantially to the effect that, based upon their

 

112



 

ordinary and customary examination of the affairs of TGI and its Subsidiaries, performed in connection with the preparation of such consolidated financial statements, and in accordance with generally accepted auditing standards, they are not aware of the existence of any condition or event which constitutes an Event of Default or Potential Default or, if they are aware of such condition or event, stating the nature thereof and confirming the Borrowers’ calculations with respect to the certificate to be delivered pursuant to Section 7.3.3 with respect to such financial statements. The Borrowers will be deemed to have complied with the delivery requirements of this Section 7.3.2 if within ninety (90) days after the end of its fiscal year, TGI delivers to the Administrative Agent and files with the Securities and Exchange Commission a copy of TGI’s annual report and Form 10-K as filed with the Securities and Exchange Commission (together with a notice stating that such document is being delivered pursuant to this Section 7.3.2) and the financial statements and certification of public accountants contained therein meets the requirements described in this Section.

 

7.3.3                        Compliance Certificate.

 

Concurrently with the financial statements of TGI and its Subsidiaries furnished to the Administrative Agent and to the Banks pursuant to Sections 7.3.1 and 7.3.2, a certificate of the Borrowers signed by the Chief Executive Officer, President or Chief Financial Officer of TGI, as agent for the Borrowers, in the form of Exhibit 7.3.3, to the effect that, except as described pursuant to Section 7.3.4, (i) the representations and warranties of the Borrowers contained in Article 5 are true on and as of the date of such certificate with the same effect as though such representations and warranties had been made on and as of such date (except representations and warranties which expressly relate solely to an earlier date or time) and the Borrowers have performed and complied with all covenants and conditions hereof, (ii) no Event of Default or Potential Default exists and is continuing on the date of such certificate, (iii) containing calculations in sufficient detail to demonstrate compliance as of the date of the financial statements with all financial covenants contained in Section 7.2, and (iv) certifying that (a) the Subsidiaries of TGI then comprising the Loan Parties and being fully liable for the Obligations hereunder, directly contributed in the aggregate not less than eighty (80%) of the Consolidated EBITDA of TGI and its Subsidiaries and (b) the Domestic Subsidiaries then comprising the Loan Parties directly contributed in the aggregate not less than ninety five (95%) of the Consolidated EBITDA of TGI and its Domestic Subsidiaries, in each case, for the last four consecutive fiscal quarters then ended.  If an acquisition permitted under Section 7.2.6(ii) occurred during the reporting period covered by the compliance certificate and if the Borrowers have complied with the requirements set forth in the definition of Consolidated Adjusted EBITDA for purpose of making adjustments to Consolidated EBITDA reflecting the historical financial performance of the acquired assets or Person, Borrowers may also calculate the Section 7.2 financial covenants on a pro forma basis to include the financial performance and condition of the acquired business during the period; and the pro forma calculation of the Total Leverage Ratio may be relied upon as a basis for a change in the pricing level under the Pricing Grid.

 

113


 

7.3.4                        Notice of Default.

 

Promptly after any officer of any Borrower has learned of the occurrence of an Event of Default or Potential Default, a certificate signed by the Chief Executive Officer, President or Chief Financial Officer of such Borrower setting forth the details of such Event of Default or Potential Default and, if applicable, the action which the Borrowers propose to take with respect thereto.

 

7.3.5                        Notice of Litigation.

 

Promptly after the commencement thereof, notice of all actions, suits, proceedings or investigations before or by any Official Body or any other Person against any Borrower or Subsidiary of any Borrower which relate to the Collateral or in the good faith estimation of counsel for the Borrowers could reasonably be expected to constitute a Material Adverse Change.

 

7.3.6                        Certain Events; Events Under the Convertible Notes or Vought Financing.

 

Written notice together with a detailed description to the Administrative Agent of any of the following events:

 

(i)            Transfer of Assets.  At least ten (10) Business Days prior thereto, with respect to any proposed sale or transfer of assets pursuant to Section 7.2.7(v); provided that such notice shall be provided at least fifteen (15) Business Days prior to any individual sale or transfer of assets pursuant to such provision the after-tax proceeds of which exceed 2% of TGI’s consolidated total assets at the start of the fiscal year in which such sale or transfer occurs.

 

(ii)           Charter Amendments.  Within the time limits set forth in Section 7.2.14, the amendment to the charter affecting the capital structure of TGI or any of its Subsidiaries;

 

(iii)          Event of Default; Waiver or Amendment.  And to each of the Banks (A) promptly after any officer of any Borrower has learned of the occurrence of (i) an event of default under or (B) at least ten (10) Business Days prior to a waiver, amendment or consent under, in each case of clause (A) and (B), the Convertible Debt Documents, the 2009 Bonds, the Vought Term Loans or the 2010 Bonds, or the Acquisition Agreement; together with a copy of such proposed waiver, amendment or consent and a description of such event of default, as the case may be.

 

(iv)          Schedules.  Notice of and a detailed description, promptly after any change or addition to the information contained or required to be contained on Schedules: 1.1(M) [Real Property Collateral], 5.1.2 [Capitalization], 5.1.3 [Subsidiaries], assuming in each case that each such Schedule is being delivered as of the date of notice of such change or addition thereto (rather than as of the Closing Date or prior thereto).

 

114



 

7.3.7                        Budgets, Forecasts, Other Reports and Information.

 

At the request of the Administrative Agent, any of the following items, promptly upon their becoming available to any Borrower:

 

(i)            the annual budget of TGI and its Subsidiaries, to be certified by a responsible officer of such Borrower and supplied at the request of the Administrative Agent prior to commencement of the fiscal year to which any of the foregoing may be applicable,

 

(ii)           any reports including management letters submitted to TGI by independent accountants in connection with any annual, interim or special audit,

 

(iii)          any reports, notices or proxy statements generally distributed by TGI to its stockholders on a date no later than the date supplied to the stockholders,

 

(iv)          regular or periodic reports (other than the Forms 10-K, 10-Q which are addressed in Sections 7.3.1 and 7.3.2 above), including 8-K, registration statements and prospectuses, filed by TGI with the Securities and Exchange Commission within 5 days after such filing,

 

(v)           a copy of any order, issued by any Official Body in any proceeding to which TGI or any of its Subsidiaries is a party, and in which the amount in controversy exceeds $2,500,000 or where injunctive or similar relief is sought,

 

(vi)          such other reports and information as the Banks may from time to time reasonably request.  The Borrowers shall also notify the Banks promptly of the enactment or adoption of any Law which may result in a Material Adverse Change, and

 

(vii)         within 60 days of closing on any acquisition permitted under Section 7.2.6 in which the total consideration paid by TGI or its Subsidiary exceeded $5,000,000, such financial information as the Administrative Agent may reasonably request concerning the acquisition and its effect on the financial condition and performance of any Loan Party.

 

7.3.8                        Notices Regarding Plans and Benefit Arrangements.

 

7.3.8.1     Certain Events.

 

Promptly upon becoming aware of the occurrence thereof, notice (including the nature of the event and, when known, any action taken or threatened by the Internal Revenue Service or the PBGC with respect thereto) of:

 

(i)            any Reportable Event with respect to any Borrower or any member of any of its ERISA Group for which reporting to the PBGC has not been waived involving an event which could subject any Borrower or any member of its ERISA Group to any material liability,

 

115



 

(ii)           any Prohibited Transaction which could subject any Borrower or any member of any of its ERISA Group to any material tax or liability in connection with any Plan, Benefit Arrangement or any trust created thereunder,

 

(iii)          any assertion of material Withdrawal Liability with respect to any Multiemployer Plan,

 

(iv)          any partial or complete withdrawal from a Multiemployer Plan by any Borrower or any member of any of its ERISA Group, where such withdrawal is likely to result in material Withdrawal Liability,

 

(v)           withdrawal by any Borrower or any member of any of its ERISA Group from a Multiple Employer Plan, which is likely to result in a material liability, or

 

(vi)          any change in the actuarial assumptions or funding methods used for any Plan (other than interest rate changes required by Financial Standards Board Opinion No. 87 or ERISA or the Code), where the effect of such change is to materially increase or materially reduce the unfunded benefit liability or obligation to make periodic contributions to such Plan.

 

7.3.8.2     Notices of Involuntary Termination and Annual Reports.

 

Promptly after receipt thereof, copies of (a) all notices received by any Borrower or any member of any of its ERISA Group of the PBGC’s intent to terminate any Plan administered or maintained by such Borrower or member of its ERISA Group, or to have a trustee appointed to administer any such Plan; and (b) at the request of the Administrative Agent or any Bank each annual report (IRS Form 5500 series) and all accompanying schedules, the most recent actuarial reports, the most recent financial information concerning the financial status of each Plan administered or maintained by any Borrower or any member of any of their ERISA Groups, and schedules showing the amounts contributed to each such Plan by or on behalf of such Borrower or any member of the ERISA Group in which any of their personnel participate or from which such personnel may derive a benefit, and each Schedule SB (Actuarial Information) to the annual report filed by any Borrower or any member of any of its ERISA Group with the Internal Revenue Service with respect to each such Plan.

 

7.3.8.3     Notice of Voluntary Termination.

 

Promptly upon the filing thereof, copies of any Form 5310 or Form 500, or any successor or equivalent form to such forms, filed with the Internal Revenue Service or PBGC in connection with the termination of any Plan which causes any Borrower or any member of its ERISA Group to have a material liability.

 

7.3.8.4     Notice of Change in Debt Rating.

 

Within three (3) Business Days after Standard & Poor’s or Moody’s announces a change in TGI’s Debt Rating or Long Term Issuer Credit Rating, notice of such change.  TGI, on

 

116



 

behalf of the Loan Parties, will deliver, together with such notice, a copy of any written notification which TGI received from the applicable rating agency regarding such change of Debt Rating or Long Term Issuer Credit Rating, as the case may be.

 

8.             DEFAULT

 

8.1                                 Events of Default.

 

An Event of Default shall mean the occurrence or existence of any one or more of the following events or conditions (whatever the reason therefor and whether voluntary, involuntary or effected by operation of Law):

 

8.1.1                        Payments Under Loan Documents.

 

The Borrowers shall fail to pay when due any principal of any Loan (including scheduled installments, mandatory prepayments or the payment due at maturity) or shall fail to pay, for more than two Business Days after the due date thereof, any interest on any Loan or any fees or any other amount owing hereunder or under the other Loan Documents;

 

8.1.2                        Breach of Warranty.

 

Any representation or warranty made at any time by any Borrower or any other Loan Party herein or in any other Loan Document, or in any certificate, other instrument or statement furnished pursuant to the provisions hereof or thereof, shall prove to have been false or misleading in any material respect as of the time it was made or furnished;

 

8.1.3                        Refusal to Permit Inspections; Breach of Negative Covenants.

 

Any Borrower shall default in the observance or performance of any covenant contained in Section 7.1.1 (with respect to any Borrower), Section 7.1.6, Section 7.1.15, Section 7.2 hereof or Sections 5.5 or 5.7(b) of the Guarantee and Collateral Agreement;

 

8.1.4                        Breach of Other Covenants.

 

Any Borrower or any other Loan Party shall default in the observance or performance of any other covenant, condition or provision hereof or of any other Loan Document and such default shall continue unremedied for a period of ten (10) Business Days after any officer of any Borrower becomes aware of the occurrence thereof;

 

8.1.5                        Defaults in Other Agreements or Indebtedness.

 

(a) A default or event of default shall occur at any time under the terms of any other agreement involving borrowed money or the extension of credit or any other Indebtedness under which any Borrower or Subsidiary of any Borrower may be obligated as a borrower or guarantor in excess of $25,000,000.00 in the aggregate, and such breach, default or event of

 

117



 

default consists of the failure to pay (beyond any period of grace permitted with respect thereto, whether waived or not) any Indebtedness when due (whether at stated maturity, by acceleration or otherwise) or if such breach or default permits or causes the acceleration of any Indebtedness (and such right shall not have been waived) or the termination of any commitment to lend thereunder, or (b) without limiting the foregoing, there occurs and is continuing any event of default giving rise to a right of acceleration or termination under (i) the Convertible Debt Documents (ii) the Vought Term Loans, (iii) the 2009 Bonds, (iv) the Vought Bridge Loans or the (v) the 2010 Bonds, or (c) without limiting the foregoing, the Receivables Facility is terminated prior to maturity as a result of a breach, default, event of default, or Termination Event (as defined in the Receivables Purchase Agreement);

 

8.1.6                        Final Judgments or Orders.

 

Any final judgments or orders for the payment of money in excess of $25,000,000.00 (to the extent not covered by insurance) in the aggregate shall be entered against any Borrower or any Subsidiary of any Borrower by a court having jurisdiction in the premises, which judgment is not discharged, vacated, bonded or stayed pending appeal within a period of forty-five (45) days from the date of entry;

 

8.1.7                        Loan Document Unenforceable.

 

Any of the Loan Documents shall cease to be legal, valid and binding agreements enforceable against the party executing the same or such party’s successors and assigns (as permitted under the Loan Documents) in accordance with the respective terms thereof or shall in any way be terminated (except in accordance with its terms) or become or be declared ineffective or inoperative or shall in any way be challenged or contested by a Loan Party or cease to give or provide the respective Liens, security interests, rights, titles, interests, remedies, powers or privileges intended to be created thereby with the priority purported to be created thereby.  In addition to and without limiting the generality of the foregoing, (i) any Collateral Document ceases to be valid or effective, other than in accordance with the terms hereof or of such Collateral Document, (ii) any Loan Party asserts that any Collateral Document is not a legal, valid and binding obligation of such Person enforceable in accordance with its terms, (iii) the security interest or Lien purporting to be created by any of the Collateral Documents ceases to be or is asserted by any Loan Party not to be a valid, perfected Lien subject to no Liens (other than Permitted Liens), other than in accordance with the terms hereof or of such Collateral Document, or is declared by a court or other Official Body of competent jurisdiction to be void, voidable or unenforceable against such Person; or (iv) any Collateral Document is amended, subordinated, terminated or discharged, or any Person is released from any of its covenants or obligations except to the extent expressly provided herein or therein;

 

8.1.8                        Uninsured Losses; Proceedings Against Assets.

 

(i) There shall occur any material uninsured damage to or loss, theft or destruction of the assets of any Loan Party in excess of $50,000,000.00 in fair market value, and the same is reasonably expected to result in a Material Adverse Change, or (ii) the assets of any Loan Party

 

118



 

are attached, seized, levied upon or subjected to a writ or distress warrant and the fair market value of such assets exceeds $50,000,000.00 and the same is not cured within sixty (60) days thereafter; or such assets come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within sixty (60) days thereafter;

 

8.1.9                        Notice of Lien or Assessment.

 

A notice of Lien or assessment in excess of $25,000,000.00 which is not a Permitted Lien is filed of record with respect to all or any part of the assets of any Borrower or any of their Subsidiaries by the United States, or any department, agency or instrumentality thereof, or by any state, county, municipal or other governmental agency, including the Pension Benefit Guaranty Corporation, or if any taxes or debts owing at any time or times hereafter to any one of these becomes payable and the same is not paid within thirty (30) days after the same becomes payable (unless such Borrower or such Subsidiary is contesting the obligation as provided in Section 7.1.2);

 

8.1.10                  Insolvency.

 

Any Loan Party or any Material Subsidiary of any Borrower ceases to be solvent or admits in writing its inability to pay its debts as they mature;

 

8.1.11                  Events Relating to Plans and Benefit Arrangements.

 

Any of the following occurs: (i) any Reportable Event, which the Administrative Agent determines in good-faith constitutes grounds for the termination of any Plan by the PBGC or the appointment of a trustee to administer or liquidate any Plan, shall have occurred and be continuing; (ii) proceedings shall have been instituted or other formal action taken to terminate any Plan, or a termination notice shall have been filed with respect to any Plan; (iii) a trustee shall be appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice of its intent to institute proceedings to terminate any Plan or Plans or to appoint a trustee to administer or liquidate any Plan; (v) any Borrower or any member of the ERISA Group shall withdraw completely or partially from a Multiemployer Plan; (vi) any Borrower or any member of its ERISA Group shall withdraw (or shall be deemed under Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan; and, with respect to any of the events specified in (i) through (vi) above,  such occurrence is reasonably likely to result in a Material Adverse Change;

 

8.1.12                  Cessation of Business.

 

Except as otherwise permitted herein, any Borrower or any Subsidiary of any Borrower ceases to conduct its business as contemplated or any Borrower is enjoined, restrained or in any way prevented by court order from conducting all or any material part of its business and such injunction, restraint or other preventive order is not dismissed within thirty (30) days after the entry thereof, except as contemplated by the Acquisition Agreement prior to the consummation of the Acquisition;

 

119



 

8.1.13                  Change of Control.

 

There occurs an event or series of events by which (i) any “person” or “group” (as such terms are defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder), is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under such Exchange Act, except that a Person shall be deemed to have “beneficial ownership” of all shares that any such Person has the right to acquire without condition, other than passage of time, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the then outstanding voting stock of TGI, or (ii) (A) TGI consolidates with or merges into another corporation or conveys, transfers or leases all or substantially all of its properties and assets (determined on a consolidated basis for TGI and its Subsidiaries taken as a whole) to any Person, or (B) any corporation consolidates with or merges into any Borrower or a Subsidiary of any Borrower in a transaction in which the outstanding voting stock of TGI is changed into or exchanged for cash, securities or other property, other than a transaction solely between TGI and a Subsidiary of TGI;

 

8.1.14                  Involuntary Proceedings.

 

A proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of any Loan Party or any Material Subsidiary of any Loan Party in an involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any Borrower or any of its Subsidiaries for any substantial part of its property, or for the winding-up or liquidation of its affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of sixty (60) consecutive days or such court shall enter a decree or order granting any of the relief sought in such proceeding; or

 

8.1.15                  Voluntary Proceedings.

 

Any Loan Party or any Material Subsidiary of any Loan Party shall commence a voluntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or other similar official) of itself or for any substantial part of its property or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any action in furtherance of any of the foregoing.

 

120



 

8.2                                 Consequences of Event of Default.

 

8.2.1                        Events of Default Other Than Bankruptcy, Insolvency or Reorganization Proceedings.

 

If an Event of Default specified under subsections 8.1.1 through 8.1.13 of Section 8.1 shall occur and be continuing, the Banks and the Issuing Bank shall be under no further obligation to make Loans or issue Letters of Credit, as the case may be, and the Administrative Agent may, and upon the request of the Required Banks, shall (i) by written notice to TGI, as agent for the Borrowers, declare the unpaid principal amount of the Notes then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrowers to the Banks hereunder and thereunder to be forthwith due and payable, and the same shall thereupon become and be immediately due and payable to the Administrative Agent for the benefit of each Bank without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, and (ii) require the Borrowers to, and the Borrowers shall thereupon, deposit in a non-interest bearing account with the Administrative Agent, as cash collateral for its Obligations under the Loan Documents, an amount equal to the maximum amount currently or at any time thereafter available to be drawn on all outstanding Letters of Credit, and the Borrowers, individually and collectively, hereby pledge to the Administrative Agent and the Banks, and grant to the Administrative Agent and the Banks a security interest in, all such cash as security for such Obligations.  Upon the curing of all existing Events of Default to the satisfaction of the Required Banks, the Administrative Agent shall return such cash collateral to the Borrowers; and

 

8.2.2                        Bankruptcy, Insolvency or Reorganization Proceedings.

 

If an Event of Default specified under subsections 8.1.14 or 8.1.15 of Section 8.1 shall occur, the Banks shall be under no further obligations to make Loans hereunder and the Issuing Bank shall be under no obligation to issue Letters of Credit and the unpaid principal amount of the Notes then outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrowers to the Banks hereunder and thereunder shall be immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; and

 

8.2.3                        Set-off.

 

If an Event of Default shall occur and be continuing, any Bank or Issuing Bank to whom any Obligation is owed by any Borrower hereunder or under any other Loan Document or any participant of such Bank which has agreed in writing to be bound by the provisions of Section 4.2 and 9.13 and any branch, Subsidiary or Affiliate of such Bank or participant anywhere in the world shall have the right, in addition to all other rights and remedies available to it, without notice to the Borrowers, to set-off against and apply to the then unpaid balance of all the Loans and all other Obligations of any such Borrower hereunder or under any other Loan Document any debt owing to, and any other funds held in any manner for the account of, any such Borrower by such Bank, Issuing Bank or participant or by such branch, Subsidiary or

 

121



 

Affiliate, including all funds in all deposit accounts (whether time or demand, general or special, provisionally credited or finally credited, or otherwise) now or hereafter maintained by any Borrower for its own account (but not including funds held in custodian or trust accounts) with such Bank, Issuing Bank or participant or such branch, Subsidiary or Affiliate.  Such right shall exist whether or not any Bank, Issuing Bank or the Administrative Agent shall have made any demand under this Agreement or any other Loan Document, whether or not such debt owing to or funds held for the account of such Borrower is or are matured or unmatured and regardless of the existence or adequacy of any Guaranty or any other security, right or remedy available to any Bank, Issuing Bank or the Administrative Agent; and

 

8.2.4                        Suits, Actions, Proceedings.

 

If an Event of Default shall occur and be continuing, and whether or not the Administrative Agent shall have accelerated the maturity of Loans to the Borrowers pursuant to any of the foregoing provisions of this Section 8.2, the Administrative Agent or any Bank, if owed any amount with respect to the Notes, may proceed to protect and enforce its rights by suit in equity, action at law and/or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Agreement or the Notes, including as permitted by applicable Law the obtaining of the ex parte appointment of a receiver, and, if such amount shall have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of the Administrative Agent or such Bank; and

 

8.2.5                        Application of Proceeds; Collateral Sharing.

 

8.2.5.1     Application of Proceeds.

 

From and after the date on which the Administrative Agent has taken any action pursuant to this Section 8.2 and until all Obligations of the Borrowers have been paid in full, any and all proceeds received by the Administrative Agent from any sale or other disposition of the Collateral, or any part thereof, or on account of the exercise of other remedies by the Administrative Agent, shall, subject to the Intercreditor Agreement, be applied as follows:

 

(i)            first, to reimburse the Administrative Agent and the Banks for out-of-pocket costs, expenses and disbursements, including reasonable attorneys’ and paralegals’ fees and legal expenses, incurred by the Administrative Agent or the Banks in connection with realizing on the Collateral or collection of any Obligations of any Borrower or any Guarantor under any of the Loan Documents, including advances made by the Banks or any one of them or the Administrative Agent for the reasonable maintenance, preservation, protection or enforcement of, or realization upon, the Collateral, including reasonable expenses incurred to sell or otherwise realize on, or prepare for sale or other realization on, any of the Collateral;

 

(ii)           second, to the repayment of all Obligations and Indebtedness then due and unpaid of any Borrower or any Guarantor to the Banks incurred under this Agreement or any of the Loan Documents or a Bank-Provided Hedge or an Other Bank Provided Financial Service

 

122



 

Product, whether of principal, interest, fees, expenses or otherwise, in such manner as the Administrative Agent may determine in its discretion; and

 

(iii)          the balance, if any, to TGI, as agent for the Borrowers or as required by Law.

 

8.2.5.2     Collateral Sharing.

 

All Liens granted under the Collateral Documents and any other Loan Document shall secure ratably and on a pari passu basis (i) the Obligations in favor of the Administrative Agent and the Banks hereunder and (ii) the Obligations incurred by any of the Loan Parties in favor of any Bank which provides a Bank-Provided Hedge (the “IRH Provider”).  The Administrative Agent under the Collateral Documents shall be deemed to serve as the collateral agent (the “Collateral Agent”) for the IRH Provider and the Banks hereunder, provided that the Collateral Agent shall comply with the instructions and directions of the Administrative Agent (or the Banks under this Agreement to the extent that this Agreement or any other Loan Document empowers the Banks to direct the Administrative Agent), as to all matters relating to the Collateral, including the maintenance and disposition thereof.  No IRH Provider (except in its capacity as a Bank hereunder) shall be entitled or have the power to direct or instruct the Collateral Agent on any such matters or to control or direct in any manner the maintenance or disposition of the Collateral.

 

8.2.5.3     Notice of Sale.

 

Any notice required to be given by the Administrative Agent of a sale, lease, or other disposition of the Collateral or any other intended action by the Administrative Agent, if given ten (10) days prior to such proposed action, shall constitute commercially reasonable and fair notice thereof to the applicable Loan Parties.

 

9.             THE AGENT

 

9.1                                 Appointment.

 

Each Bank and Issuing Bank hereby irrevocably designates, appoints and authorizes PNC Bank to act as Administrative Agent for such Bank under this Agreement to execute and deliver or accept on behalf of each of the Banks the other Loan Documents and each Bank hereby agrees to be bound by the terms thereof.  Each Bank and Issuing Bank hereby irrevocably authorizes, and each holder of any Note by the acceptance of a Note shall be deemed irrevocably to authorize, the Administrative Agent to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and any other instruments and agreements referred to herein, and to exercise such powers and to perform such duties hereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto.  PNC Bank agrees to act as the Administrative Agent on behalf of the Banks to the extent provided in this Agreement.  Furthermore, Sovereign Bank shall be named Documentation Agent, Citizens Bank of Pennsylvania and U.S. Bank National

 

123



 

Association shall be named Syndication Agents and JPMorgan Chase Bank, N.A., Royal Bank of Canada, Branch Banking & Trust Company and Manufacturers and Traders Trust Company shall be named Managing Agents, though none shall have any duties in connection with this Agreement or have by reason of this Agreement a fiduciary or trust relationship in respect of any Bank.

 

9.2                                 Delegation of Duties.

 

The Administrative Agent may perform any of its duties hereunder by or through agents or employees (provided such delegation does not constitute a relinquishment of its duties as Administrative Agent) and, subject to Sections 9.5 and 9.6, shall be entitled to engage and pay for the advice or services of any attorneys, accountants or other experts concerning all matters pertaining to its duties hereunder and to rely upon any advice so obtained.

 

9.3                                 Nature of Duties; Independent Credit Investigation.

 

The Administrative Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants, functions, responsibilities, duties, obligations, or liabilities shall be read into this Agreement or otherwise exist.  The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement a fiduciary or trust relationship in respect of any Bank; and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement except as expressly set forth herein.  Each Bank expressly acknowledges (i) that the Administrative Agent has not made any representations or warranties to it and that no act by the Administrative Agent hereafter taken, including any review of the affairs of any Borrower, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Bank; (ii) that it has made and will continue to make, without reliance upon the Administrative Agent, its own independent investigation of the financial condition and affairs and its own appraisal of the creditworthiness of the Borrowers in connection with this Agreement and the making and continuance of the Loans hereunder; and (iii) except as expressly provided herein, that the Administrative Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Bank with any credit or other information with respect thereto, whether coming into its possession before the making of any Loan or at any time or times thereafter.

 

9.4                                 Actions in Discretion of Administrative Agent; Instructions from the Banks.

 

The Administrative Agent agrees, upon the written request of the Required Banks, to take or refrain from taking any action of the type specified as being within the Administrative Agent’s rights, powers or discretion herein (other than the Administrative Agent’s right to approve an extension of the Expiration Date under Section 10.1.1), provided that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement or any other Loan Document or applicable Law.  In the absence of a request by the Required Banks, the Administrative Agent shall have authority, in its sole discretion, to take or not to take any such action, unless this Agreement specifically

 

124



 

requires the consent of the Required Banks or all of the Banks.  Any action taken or failure to act pursuant to such instructions or discretion shall be binding on the Banks, subject to Section 9.6.  Subject to the provisions of Section 9.6, no Bank shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder in accordance with the instructions of the Required Banks, or in the absence of such instructions, in the absolute discretion of the Administrative Agent.

 

9.5                                 Reimbursement and Indemnification of Administrative Agent by the Borrowers.

 

The Borrowers, jointly and severally, unconditionally agree to pay or reimburse the Administrative Agent and save the Administrative Agent harmless against (a) liability for the payment of all reasonable and actual out-of-pocket costs, expenses and disbursements, including fees and expenses of counsel, appraisers and environmental consultants, incurred by the Administrative Agent (i) in connection with the development, negotiation, preparation, printing, execution, administration, syndication, interpretation and performance of this Agreement and the other Loan Documents, (ii) relating to any requested amendments, waivers or consents pursuant to the provisions hereof, (iii) in connection with the enforcement of this Agreement or any other Loan Document or collection of amounts due hereunder or thereunder or the proof and allowability of any claim arising under this Agreement or any other Loan Document, whether in bankruptcy or receivership proceedings or otherwise, and (iv) in any workout, restructuring or in connection with the protection, preservation, exercise or enforcement of any of the terms hereof or of any rights hereunder or under any other Loan Document or in connection with any foreclosure, collection or bankruptcy proceedings, and (b) all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent, in its capacity as such, in any way relating to or arising out of this Agreement or any other Loan Documents or any action taken or omitted by the Administrative Agent hereunder or thereunder, provided that the Borrowers shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements if the same results from the Administrative Agent’s gross negligence or willful misconduct, or if TGI, as agent for the Borrowers, was not given notice of the subject claim and the opportunity to participate in the defense thereof, at its expense (except that the Borrowers shall remain liable to the extent such failure to give notice does not result in a loss to the Borrowers), or if the same results from a compromise or settlement agreement entered into without the consent of TGI, as agent for the Borrowers, which shall not be unreasonably withheld.  In addition, the Borrowers, jointly and severally, agree to reimburse and pay all reasonable out-of-pocket expenses of the Administrative Agent’s regular employees and agents engaged periodically to perform audits of any Borrower’s books, records and business properties, provided that, so long as no Event of Default exists, the Borrowers shall not be obligated to pay for more than one such audit per year. The indemnifications set forth herein shall be in addition to the indemnifications elsewhere set forth in this Agreement. The provisions of this Section shall survive and continue after repayment of the Obligations and termination of this Agreement.

 

125


 

 

9.6                                 Exculpatory Provisions.

 

Neither the Administrative Agent nor any of its directors, officers, employees, agents, attorneys or Affiliates shall (a) be liable to any Bank or Issuing Bank for any action taken or omitted to be taken by it or them hereunder, or in connection herewith including pursuant to any Loan Document, unless caused by its or their own gross negligence or willful misconduct, (b) be responsible in any manner to any of the Banks or Issuing Banks for the effectiveness, enforceability, genuineness, validity or the due execution of this Agreement or any other Loan Documents or for any recital, representation, warranty, document, certificate, report or statement herein or made or furnished under or in connection with this Agreement or any other Loan Documents, or (c) be under any obligation to any of the Banks or Issuing Banks to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions hereof or thereof on the part of any Borrower, or the financial condition of any Borrower, or the existence or possible existence of any Event of Default or Potential Default.  Neither the Administrative Agent nor any Bank, nor any Issuing Bank, nor any of their respective directors, officers, employees, agents, or Affiliates shall be liable to any Borrower for consequential damages resulting from any breach of contract in connection with the negotiation, documentation, administration or collection of the Loans or any of the Loan Documents.

 

9.7                                 Reimbursement and Indemnification of Administrative Agent by Banks.

 

Each Bank agrees to reimburse and indemnify the Administrative Agent (to the extent not reimbursed by the Borrowers and without limiting the Obligation of the Borrowers to do so) in proportion to its Ratable Share from and against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent, in its capacity as such, in any way relating to or arising out of this Agreement or any other Loan Documents or any action taken or omitted by the Administrative Agent hereunder or thereunder, provided that no Bank shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (a) if the same results from the Administrative Agent’s gross negligence or willful misconduct, or (b) if such Bank was not given notice of the subject claim and the opportunity to participate in the defense thereof, at its expense (except that such Bank shall remain liable to the extent such failure to give notice does not result in a loss to the Bank), or (c) if the same results from a compromise and settlement agreement entered into without the consent of such Bank, which shall not be unreasonably withheld.  In addition, each Bank agrees promptly upon demand to reimburse the Administrative Agent (to the extent not reimbursed by the Borrowers and without limiting the Obligation of the Borrowers to do so) in proportion to its Ratable Share for all amounts due and payable by the Borrowers to the Administrative Agent in connection with the Administrative Agent’s periodic audit of any Borrower’s books, records and business properties.

 

9.8                                 Reliance by Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon any writing, telegram, telex or teletype message, resolution, notice, consent, certificate, letter, cablegram, statement, order or

 

126



 

other document or conversation by telephone or otherwise believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon the advice and opinions of counsel and other professional advisers selected by the Administrative Agent.  The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder unless it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.

 

9.9                                 Notice of Default.

 

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Potential Default or Event of Default unless the Administrative Agent has received written notice from a Bank or TGI referring to this Agreement, describing such Potential Default or Event of Default and stating that such notice is a “notice of default.”

 

9.10                           Notices.

 

The Administrative Agent shall promptly send to each Bank a copy of all notices received from TGI, as agent for the Borrowers, pursuant to the provisions of this Agreement or the other Loan Documents promptly upon receipt thereof.  The Administrative Agent shall promptly notify TGI, as agent for the Borrowers, and the other Banks of each change in the Base Rate and the effective date thereof.

 

9.11                           Banks in Their Individual Capacities.

 

With respect to its Revolving Credit Commitments, the Revolving Credit Loans made by it, the Administrative Agent shall have the same rights and powers hereunder as any other Bank and may exercise the same as though it were not the Administrative Agent, and the term “Banks” shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity.  PNC Bank and its Affiliates and each of the Banks and their respective Affiliates may, without liability to account, except as prohibited herein, make loans to, accept deposits from, discount drafts for, act as trustee under indentures of, and generally engage in any kind of banking or trust business with, any Borrower and their Affiliates, in the case of the Administrative Agent, as though it were not acting as Administrative Agent hereunder and in the case of each Bank, as though such Bank were not a Bank hereunder.

 

9.12                           Holders of Notes.

 

The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices a register for the recordation of the names and addresses of the Banks, and Commitment of, and principal amount of the Loans and Letters of Credit Outstanding owing to, each Bank pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank and the Banks may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of this Agreement, notwithstanding notice

 

127



 

to the contrary.  The Register shall be available for inspection by the Borrowers, any Issuing Bank and any Bank at any reasonable time from time to time upon reasonable prior notice.

 

9.13                           Equalization of Banks.

 

The Banks that lend to a Domestic Borrower and the holders of any participations in any Notes issued by a Domestic Borrower agree among themselves on one hand, and the Banks that lend to a Foreign Borrower and the holders of any participations in any Notes issued by a Foreign Borrower agree among themselves, on the other hand, that with respect to all amounts received by any Bank or any such holder for application on any Obligation hereunder or under any Note or under any such participation, whether received by voluntary payment, by realization upon security, by the exercise of the right of set-off or banker’s lien, by counterclaim or by any other non-pro rata source, equitable adjustment will be made in the manner stated in the following sentence so that, in effect, all such excess amounts will be shared ratably among the Banks and such holders in proportion to their interests in payments under the Notes, except as otherwise provided in Sections 3.4.2, 4.4.2, or 4.5.1.  The Banks or any such holder receiving any such amount shall purchase for cash from each of the other Banks an interest in such Bank’s Loans in such amount as shall result in a ratable participation by the Banks and each such holder in the aggregate unpaid amount under the Notes, provided that if all or any portion of such excess amount is thereafter recovered from the Bank or the holder making such purchase, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, together with interest or other amounts, if any, required by law (including court order) to be paid by the Bank or the holder making such purchase.  For the avoidance of doubt, no Bank that lends to a Foreign Borrower or any holder of Notes issued by a Foreign Borrower shall in its capacity as such make payments to a Bank that lends to a Domestic Borrower or that holds Notes issued by a Domestic Borrower.