SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended July 4, 2010
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
Commission file number 1-15295
TELEDYNE TECHNOLOGIES INCORPORATED
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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25-1843385
(I.R.S. Employer
Identification Number)
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1049 Camino Dos Rios
Thousand Oaks, California
(Address of principal executive offices)
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91360-2362
(Zip Code)
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(805) 373-4545
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes
þ
No
o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate website, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes
þ
No
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
Yes
o
No
þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date.
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Class
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Outstanding at July 30, 2010
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Common Stock, $.01 par value per share
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36,257,566 shares
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TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
TABLE OF CONTENTS
1
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 4, 2010 AND JUNE 28, 2009
(Unaudited Amounts in millions, except per-share amounts)
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Three Months
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Six Months
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2010
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2009
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2010
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2009
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Net Sales
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$
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442.5
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$
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441.1
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$
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881.7
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$
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881.4
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Costs and expenses
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Cost of sales
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309.9
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313.8
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622.1
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627.6
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Selling, general and administrative expenses
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86.9
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83.6
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174.0
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174.8
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Total costs and expenses
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396.8
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397.4
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796.1
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802.4
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Income before other income and expense and income taxes
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45.7
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43.7
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85.6
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79.0
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Other income (expense), net
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0.5
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(0.6
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)
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1.2
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(0.2
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)
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Interest and debt expense, net
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(0.7
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(1.5
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(1.7
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)
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(2.6
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Income before income taxes
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45.5
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41.6
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85.1
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76.2
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Provision for income taxes
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16.9
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16.2
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31.5
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29.8
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Net income before noncontrolling interest
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28.6
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25.4
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53.6
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46.4
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Less: Net income attributable to noncontrolling interest
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(0.2
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(0.4
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Net income attributable to Teledyne Technologies
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$
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28.6
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$
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25.2
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$
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53.6
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$
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46.0
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Basic earnings per common share
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$
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0.79
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$
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0.70
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$
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1.48
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$
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1.28
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Weighted average common shares outstanding
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36.2
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36.0
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36.2
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36.0
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Diluted earnings per common share
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$
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0.78
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$
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0.69
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$
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1.46
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$
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1.26
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Weighted average diluted common shares outstanding
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36.9
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36.6
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36.8
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36.5
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The accompanying notes are an integral part of these financial statements.
2
TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Current period unaudited -Amounts in millions, except share amounts)
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July 4,
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January 3,
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2010
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2010
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Assets
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Current Assets
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Cash and cash equivalents
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$
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36.5
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$
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26.1
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Accounts receivable, net
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270.0
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245.8
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Inventories, net
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191.3
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189.6
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Deferred income taxes, net
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38.0
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37.4
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Prepaid expenses and other current assets
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26.2
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32.8
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Total current assets
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562.0
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531.7
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Property, plant and equipment, at cost, net of accumulated
depreciation and amortization of $289.9
at July 4, 2010 and $275.9 at January 3, 2010
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199.9
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206.6
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Deferred income taxes, net
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33.8
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29.9
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Goodwill, net
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502.6
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502.4
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Acquired intangibles, net
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103.4
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109.6
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Other assets, net
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54.3
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41.3
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Total Assets
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$
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1,456.0
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$
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1,421.5
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Liabilities and Stockholders Equity
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Current Liabilities
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Accounts payable
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$
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103.6
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$
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103.8
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Accrued liabilities
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171.8
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176.8
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Current portion of long-term debt and capital leases
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0.6
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0.5
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Total current liabilities
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276.0
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281.1
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Long-term debt and capital leases
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236.5
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251.6
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Accrued pension obligation
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81.8
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79.8
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Accrued postretirement benefits
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14.7
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15.7
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Other long-term liabilities
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126.7
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125.9
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Total Liabilities
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735.7
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754.1
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Stockholders Equity
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Preferred stock, $0.01 par value; outstanding shares-none
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Common stock, $0.01 par value; outstanding shares 36,254,122
at July 4, 2010 and 36,078,269 at January 3, 2010
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0.4
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0.4
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Additional paid-in capital
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261.7
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254.7
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Retained earnings
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636.8
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583.2
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Accumulated other comprehensive loss
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(179.6
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)
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(171.8
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)
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Total Teledyne Technologies Stockholders Equity
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719.3
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666.5
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Noncontrolling interest
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1.0
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0.9
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Total Stockholders Equity
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720.3
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667.4
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Total Liabilities and Stockholders Equity
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$
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1,456.0
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$
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1,421.5
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The accompanying notes are an integral part of these financial statements.
3
TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 4, 2010 AND JUNE 28, 2009
(Unaudited Amounts in millions)
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Six Months
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2010
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2009
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Operating Activities
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Net income before noncontrolling interest
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$
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53.6
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$
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46.4
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Adjustments to reconcile net income to net cash provided by
operating activities:
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Depreciation and amortization
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22.4
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23.0
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Deferred income taxes
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(5.0
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)
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17.8
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Stock option expense
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2.5
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2.8
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Noncontrolling interest
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0.4
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Excess income tax benefits from stock options exercised
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(0.7
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)
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(0.1
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)
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Loss on sale of fixed assets
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0.2
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Changes in operating assets and liabilities, excluding the effect
of business acquired:
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Decrease (increase) in accounts receivable
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(24.7
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)
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9.7
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Decrease (increase) in inventories
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(2.0
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)
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8.7
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Decrease in prepaid expenses and other assets
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4.3
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2.6
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Increase (decrease) in accounts payable
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(3.7
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)
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Decrease in accrued liabilities
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(2.8
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(33.7
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)
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Increase in income taxes payable, net
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2.8
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19.4
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Increase in long-term assets
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(1.8
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)
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(3.1
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)
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Increase in other long-term liabilities
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1.2
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7.2
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Increase (decrease) in accrued pension obligation
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2.0
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(69.4
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Decrease in accrued postretirement benefits
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(1.1
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)
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(1.0
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)
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Other operating, net
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(0.6
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)
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1.0
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Net cash provided by operating activities
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50.1
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28.2
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Investing Activities
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Purchases of property, plant and equipment
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(10.5
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)
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(17.5
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)
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Purchase of businesses and other investments
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(16.8
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)
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(7.3
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)
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Proceeds from disposal of fixed assets
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0.1
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|
|
|
|
|
|
|
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Net cash used by investing activities
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(27.2
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)
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(24.8
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)
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|
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Financing Activities
|
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|
|
|
|
|
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Net proceeds from (repayments of) debt
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(14.2
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)
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0.8
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Purchase of treasury stock
|
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|
|
|
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(0.8
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)
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Proceeds from exercise of stock options
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1.6
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0.2
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Issuance of cash flow hedges
|
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|
(0.6
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)
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Excess income tax benefits from stock options exercised
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|
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0.7
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|
|
|
0.1
|
|
|
|
|
|
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Net cash provided (used) by financing activities
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(12.5
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)
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0.3
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|
|
|
|
|
|
|
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Increase in cash and cash equivalents
|
|
|
10.4
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|
|
|
3.7
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|
Cash and cash equivalentsbeginning of period
|
|
|
26.1
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|
|
|
20.4
|
|
|
|
|
|
|
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Cash and cash equivalentsend of period
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$
|
36.5
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$
|
24.1
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|
|
|
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|
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|
The accompanying notes are an integral part of these financial statements.
4
TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 4, 2010
Note 1. General
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared by
Teledyne Technologies Incorporated (Teledyne Technologies or the Company) pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain information and disclosures
normally included in notes to consolidated financial statements have been condensed or omitted
pursuant to such rules and regulations, but resultant disclosures are in accordance with
accounting principles generally accepted in the United States as they apply to interim
reporting. The condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and the notes thereto in Teledyne Technologies Annual
Report on Form 10-K for the fiscal year ended January 3, 2010 (2009 Form 10-K).
In the opinion of Teledyne Technologies management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of normal recurring
adjustments) necessary to present fairly, in all material respects, Teledyne Technologies
consolidated financial position as of July 4, 2010 and the consolidated results of operations
and cash flows for the three months and six months then ended. The results of operations and
cash flows for the period ended July 4, 2010 are not necessarily indicative of the results of
operations or cash flows to be expected for any subsequent quarter or the full fiscal year.
Accounting Adjustment
In the second quarter of 2010, the Company recorded a non-cash pre-tax charge totaling $8.2
million to correct cost of sales that had been recorded incorrectly by the Company during the
periods covering 2003 through the first quarter of 2010 primarily as a result of incorrect
inventory valuations at a business unit. The Company evaluated the impact of the incorrect
inventory valuations in accordance with Securities and Exchange Commission Staff Accounting
Bulletins (SAB) No. 99, Materiality (SAB No. 99) and SAB No. 108, Considering the Effects
of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements, (SAB No. 108), and determined the impact of the incorrect inventory entries to be
immaterial to any period presented. The Company considered several qualitative and
quantitative factors, including income before taxes it reported in each of the prior years and
for the current year, the trend in earnings for each period, the impact on earnings per diluted
share, the impact on operating segment results, the impact on Teledynes stockholders equity
and the non-cash nature of the incorrect inventory entries in each of the prior years. The
Company recorded a cumulative accounting adjustment in the second quarter of 2010, the effect
of which resulted in an $8.2 million pre-tax increase in costs of sales, a $7.7 million
decrease in inventories and a $0.5 million decrease in prepaid expenses and other current
assets. These adjustments decreased operating profit by $8.2 million and decreased net income
by $5.1 million for the three months and six months ended July 4, 2010. This adjustment was not
material to any individual prior period or to the results expected for the current year and,
accordingly, the prior period results have not been adjusted. The correction did not affect
compliance with the financial covenants under Teledynes credit facility in any period.
Note
2. Business Combinations and Investments, Goodwill and Acquired Intangible Assets
In March 2010, Teledyne Scientific & Imaging, LLC (Teledyne Scientific) acquired a 17%
minority interest in Optical Alchemy, Inc., a designer and manufacturer of ultra-light electro
optical gimbal systems located in Nashua, New Hampshire, for $4.6 million, which includes $0.1
million in acquisition expenses, accounted for under the cost basis method. In June 2010,
Teledyne Scientific acquired Optimum Optical Systems, Inc. (Optimum Optical) located in
Camarillo, California for $5.7 million, net of cash acquired. Optimum Optical is a designer
and manufacturer of custom optics and optomechanical assemblies. The results
of Optimum Optical have been included from the date of acquisition. The purchase of Optimum
Optical resulted in $4.3 million of goodwill and $1.9 million of other acquired intangible
assets. Optimum Optical is part of the Electronics and Components segment. The goodwill
acquired will not be deductible for
5
income
tax purposes. Also in June 2010, Teledyne acquired a 16% minority interest in Intelek plc (Intelek)
for $6.9 million, accounted for under the cost basis method. Intelek plc has locations in the
United Kingdom and State College, Pennsylvania. Intelek designs and manufactures satellite
modems, transceivers, block up-converters, solid state power amplifiers, low noise amplifiers
and associated equipment for the terrestrial segment of the satellite communications market.
In the third quarter of 2010, Teledyne completed the acquisition of
Intelek plc for an additional $38.5
million, which includes $2.0 million in acquisition expenses. In 2010, Teledyne also made a
scheduled payment of $0.3 million for a prior acquisition and received $0.7 million for a
purchase price adjustment for a prior acquisition. In 2009, Teledyne paid $5.9 million for the
purchase of Ocean Design, Inc. (ODI) shares, $1.4 million to acquire assets of a marine
sensor product line, $0.3 million for scheduled payment for a prior acquisition and received
$0.3 million for a purchase price adjustment for a prior acquisition.
Teledyne funded the purchases primarily from borrowings under its credit facility and cash on
hand. The primary reasons for the above acquisitions was to strengthen and expand our core
businesses through adding complementary product and service offerings, allowing greater
integrated products and services, enhancing our technical capabilities or increasing our
addressable markets. The significant factors that resulted in recognition of goodwill were: (a)
the purchase price was based on cash flow and return on capital projections assuming
integration with our businesses and (b) the calculation of the fair value of tangible and
intangible assets acquired that qualified for recognition.
Teledynes goodwill was $502.6 million at July 4, 2010 and $502.4 million at January 3, 2010.
The increase in the balance of goodwill in 2010 primarily resulted from goodwill from the
purchase of Optimum Optical, partially offset by foreign currency changes. Teledynes net
acquired intangible assets were $103.4 million at July 4, 2010 and $109.6 million at January 3,
2010. The change in the balance of acquired intangible assets in 2010 resulted from
amortization, as well as foreign currency changes.
Note 3. Comprehensive Income
Teledynes comprehensive income is comprised of net income attributable to common stockholders,
minimum pension liability adjustments, unamortized cash flow hedge losses and foreign currency
translation adjustments. Teledynes total comprehensive income for the second quarter and six
months of 2010 and 2009 consists of the following (in millions):
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Net income before noncontrolling interest
|
|
$
|
28.6
|
|
|
$
|
25.4
|
|
|
$
|
53.6
|
|
|
$
|
46.4
|
|
Other comprehensive gain (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gains (losses)
|
|
|
(0.2
|
)
|
|
|
14.8
|
|
|
|
(7.5
|
)
|
|
|
5.5
|
|
Cash flow hedge position
|
|
|
(1.0
|
)
|
|
|
|
|
|
|
(0.6
|
)
|
|
|
|
|
Minimum pension liability adjustment
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive gain (loss)
|
|
|
(1.2
|
)
|
|
|
14.8
|
|
|
|
(7.8
|
)
|
|
|
5.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
27.4
|
|
|
|
40.2
|
|
|
|
45.8
|
|
|
|
51.9
|
|
Less: Amounts attributable to noncontrolling
interests:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
|
(0.4
|
)
|
Foreign currency translation gains
|
|
|
|
|
|
|
0.2
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to common
stockholders
|
|
$
|
27.4
|
|
|
$
|
40.2
|
|
|
$
|
45.8
|
|
|
$
|
51.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 4. Earnings Per Share
Basic and diluted earnings per share were computed based on net earnings. The weighted average
number of common shares outstanding during the period was used in the calculation of basic
earnings per share. This number of shares was increased by contingent shares that could be
issued under various compensation plans as well as by the dilutive effect of stock options
based on the treasury stock method in the calculation of diluted earnings per share.
6
The following table sets forth the computations of basic and diluted earnings per share
(amounts in millions, except per share data):
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|
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|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders
|
|
$
|
28.6
|
|
|
$
|
25.2
|
|
|
$
|
53.6
|
|
|
$
|
46.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
36.2
|
|
|
|
36.0
|
|
|
|
36.2
|
|
|
|
36.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.79
|
|
|
$
|
0.70
|
|
|
$
|
1.48
|
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders
|
|
$
|
28.6
|
|
|
$
|
25.2
|
|
|
$
|
53.6
|
|
|
$
|
46.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
36.2
|
|
|
|
36.0
|
|
|
|
36.2
|
|
|
|
36.0
|
|
Dilutive effect of exercise of options outstanding
|
|
|
0.7
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares outstanding
|
|
|
36.9
|
|
|
|
36.6
|
|
|
|
36.8
|
|
|
|
36.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share
|
|
$
|
0.78
|
|
|
$
|
0.69
|
|
|
$
|
1.46
|
|
|
$
|
1.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 5. Stock-Based Compensation Plans
Teledyne has long-term incentive plans pursuant to which it has granted non-qualified stock
options, restricted stock and performance shares to certain employees. The Company also has
non-employee director stock compensation plans, pursuant to which non-qualified stock options
and common stock have been issued to its directors.
The following disclosures are based on stock options granted to Teledynes employees and
directors. The Company recorded a total of $1.2 million and $2.5 million in stock option
compensation expense for the second quarter and first six months of 2010, respectively. For
the second quarter and six months of 2009, the Company recorded a total of $1.2 million and
$2.8 million, respectively in stock option expense. Employee stock option grants are expensed
evenly over the three year vesting period. In 2010, the Company currently expects
approximately $5.0 million in stock option compensation expense based on stock options already
granted and current assumptions regarding the estimated fair value of stock option grants
expected to be issued during the remainder of the year. However, our assessment of the
estimated compensation expense will be affected by our stock price and actual stock option
grants during the remainder of the year as well as assumptions regarding a number of complex
and subjective variables and the related tax impact. These variables include, but are not
limited to, the volatility of our stock price and employee stock option exercise behaviors.
The Company issues shares of common stock upon the exercise of stock options.
The Company used a combination of its historical stock price volatility and the volatility of
exchange traded options on the Company stock to compute the expected volatility for purposes of
valuing stock options issued. The period used for the historical stock price corresponded to
the expected term of the options and was six years. The period used for the exchange traded
options included the longest-dated options publicly available, generally three months. The
expected dividend yield is based on Teledynes practice of not paying dividends. The risk-free
rate of return is based on the yield of U. S. Treasury Strips with terms equal to the expected
life of the options as of the grant date. The expected life in years is based on historical
actual stock option exercise experience. The following assumptions were used in the valuation
of stock options granted in 2010 and 2009:
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
Expected dividend yield
|
|
|
|
|
|
|
|
|
Expected volatility
|
|
|
35.3
|
%
|
|
|
38.8
|
%
|
Risk-free interest rate
|
|
|
2.4
|
%
|
|
|
2.1
|
%
|
Expected life in years
|
|
|
6.0
|
|
|
|
5.6
|
|
|
|
|
|
|
|
|
|
|
7
Based on the assumptions in the table above, the grant date fair value of stock options granted
in 2010 and 2009 was $16.44 and $10.02, respectively.
Stock option transactions for Teledynes employee stock option plans for the second quarter and
six months ended July 4, 2010 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
Second Quarter
|
|
|
Six Months
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
|
Exercise
|
|
|
|
Shares
|
|
|
Price
|
|
|
Shares
|
|
|
Price
|
|
Beginning balance
|
|
|
2,622,270
|
|
|
$
|
32.60
|
|
|
|
2,249,050
|
|
|
$
|
30.40
|
|
Granted
|
|
|
|
|
|
$
|
|
|
|
|
433,094
|
|
|
$
|
42.09
|
|
Exercised
|
|
|
(23,700
|
)
|
|
$
|
18.98
|
|
|
|
(74,998
|
)
|
|
$
|
18.42
|
|
Cancelled or expired
|
|
|
(4,041
|
)
|
|
$
|
45.33
|
|
|
|
(12,617
|
)
|
|
$
|
30.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
|
2,594,529
|
|
|
$
|
32.70
|
|
|
|
2,594,529
|
|
|
$
|
32.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable
at end of period
|
|
|
2,055,625
|
|
|
$
|
29.79
|
|
|
|
2,055,625
|
|
|
$
|
29.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock option transactions for Teledynes non-employee director stock option plan for the second
quarter and six months ended July 4, 2010 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
Second Quarter
|
|
|
Six Months
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
Exercise
|
|
|
|
|
|
|
Exercise
|
|
|
|
Shares
|
|
|
Price
|
|
|
Shares
|
|
|
Price
|
|
Beginning balance
|
|
|
414,845
|
|
|
$
|
26.91
|
|
|
|
418,817
|
|
|
$
|
26.66
|
|
Granted
|
|
|
32,735
|
|
|
|
42.99
|
|
|
|
36,763
|
|
|
|
41.18
|
|
Exercised
|
|
|
(6,936
|
)
|
|
|
13.45
|
|
|
|
(14,936
|
)
|
|
|
13.50
|
|
Canceled
|
|
|
(2,000
|
)
|
|
$
|
14.95
|
|
|
|
(2,000
|
)
|
|
$
|
14.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance
|
|
|
438,644
|
|
|
$
|
28.38
|
|
|
|
438,644
|
|
|
$
|
28.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable
at end of period
|
|
|
399,879
|
|
|
$
|
27.22
|
|
|
|
399,879
|
|
|
$
|
27.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In February 2010, Teledyne issued 44,751 shares of common stock in connection with the second
installment of the 2006 to 2008 Performance Share Plan. Also in February 2010, the
restriction was removed for 31,305 shares of Teledyne common stock related to the 2007 to 2009
restricted stock performance period.
Note 6. Cash Equivalents
Cash equivalents consist of highly liquid money-market mutual funds and bank deposits with
maturities of three months or less when purchased. Cash equivalents totaled $10.4 million at
July 4, 2010 and $11.2 million at January 3, 2010.
Note 7. Inventories
Inventories are stated at the lower of cost or market, less progress payments. Inventories are
valued under the LIFO method, FIFO method and average cost method. Interim LIFO calculations
are based on the Companys estimates of expected year-end inventory levels and costs since an
actual valuation of inventory under the LIFO method can be made only at the end of each year
based on the inventory levels and costs at that time. Because these are subject to many
factors beyond the Companys control, interim results are subject to the final year-end LIFO
inventory valuation. Inventories consist of the following (in millions):
8
|
|
|
|
|
|
|
|
|
Balance at
|
|
July 4, 2010
|
|
|
January 3, 2010
|
|
Raw materials and supplies
|
|
$
|
101.9
|
|
|
$
|
107.5
|
|
Work in process
|
|
|
100.0
|
|
|
|
100.4
|
|
Finished goods
|
|
|
17.0
|
|
|
|
15.9
|
|
|
|
|
|
|
|
|
|
|
|
218.9
|
|
|
|
223.8
|
|
Progress payments
|
|
|
(2.5
|
)
|
|
|
(8.9
|
)
|
LIFO reserve
|
|
|
(25.1
|
)
|
|
|
(25.3
|
)
|
|
|
|
|
|
|
|
Total inventories, net
|
|
$
|
191.3
|
|
|
$
|
189.6
|
|
|
|
|
|
|
|
|
Inventories at cost determined on the LIFO method were $110.3 million at July 4, 2010 and
$117.3 million at January 3, 2010. The remainder of the inventories using average cost or the
FIFO methods, were $108.6 million at July 4, 2010 and $106.5 million at January 3, 2010.
Note 8. Supplemental Balance Sheet Information
Other long-term assets included amounts related to a deferred compensation plan of $26.8
million and $26.7 million at July 4, 2010 and January 3, 2010, respectively. Accrued
liabilities included salaries and wages and other related compensation liabilities of $74.1
million and $76.0 million at July 4, 2010 and January 3, 2010, respectively. Accrued
liabilities also included customer related deposits and credits of $32.5 million and $30.8
million at July 4, 2010 and January 3, 2010, respectively. Other long-term liabilities
included aircraft product liability reserves of $45.0 million and $42.4 million at July 4, 2010
and January 3, 2010, respectively. Other long-term liabilities also included amounts related
to a deferred compensation plan of $27.0 million and $26.7 million at July 4, 2010 and January
3, 2010, respectively, as well as reserves for workers
compensation, environmental liabilities and the long-term portion of compensation liabilities.
Some of the Companys products are subject to specified warranties and the Company provides for
the estimated cost of product warranties. The adequacy of the pre-existing warranty
liabilities is assessed regularly and the reserve is adjusted as necessary based on a review of
historic warranty experience with respect to the applicable business or products, as well as
the length and actual terms of the warranties, which are typically one year. The product
warranty reserve is included in current and long term accrued liabilities on the balance sheet.
Changes in the Companys product warranty reserve during the first six months of 2010 and 2009
are as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
First Six Months
|
|
|
|
2010
|
|
|
2009
|
|
Balance at beginning of year
|
|
$
|
15.9
|
|
|
$
|
14.0
|
|
Accruals for product warranties
charged to expense
|
|
|
3.7
|
|
|
|
4.3
|
|
Cost of product warranty claims
|
|
|
(3.8
|
)
|
|
|
(3.4
|
)
|
|
|
|
|
|
|
|
Balance at end of period
|
|
$
|
15.8
|
|
|
$
|
14.9
|
|
|
|
|
|
|
|
|
The Company establishes reserves for product returns and replacements on a product-specific
basis when circumstances giving rise to the return become known. Facts and circumstances
related to a return, including where the product affected by the return is located (e.g., the
end user, customers inventory, or in Teledynes inventory) and cost estimates to return,
repair and/or replace the product are considered when establishing a product return reserve.
The reserve is reevaluated each period and is adjusted when the reserve is either not
sufficient to cover or exceeds the estimated product return expenses.
Note 9. Income Taxes
The Companys effective income tax rate for the second quarter and first six months of 2010 was
37.0% for both periods. The Companys effective income tax rate for the second quarter and
first six months of 2009 was 39.0% and 39.1%. The first six months of 2010 included the
recognition of previously unrecognized tax benefits of
$0.6 million due to the expiration of applicable statutes of limitations, of which $0.2
million was recorded in the second quarter of 2010. Excluding this amount, the effective
income tax rate for the first six months of 2010 would have been 37.7% and the
9
effective income tax rate for the second quarter of 2010 would have been 37.4%. The effective tax rate
for the first six months of 2009 reflected additional income tax expense of $0.3 million
primarily related to the impact of California income tax law changes, which was recorded in the
first quarter of 2009. Excluding this item, the Companys effective tax rate for the first six
months of 2009 would have been 38.7%.
Except for claims for refunds related to credits for research and development activities, the
Company has concluded all U.S. federal and California income tax matters for all years through
2005. Substantially all other material state, local and foreign income tax matters have been
concluded for years through 2004. The Company believes appropriate provisions for all
outstanding issues have been made for all jurisdictions and all open years.
During the next twelve months, it is reasonably possible that tax audit resolutions and
expirations of the statute of limitations could reduce unrecognized tax benefits by $2.7
million, either because our tax positions are sustained on audit, because the Company agrees to
their disallowance, or the expiration of the statute of limitations.
Note 10. Long-Term Debt and Capital Leases
At July 4, 2010, Teledyne had $226.0 million of outstanding indebtedness under its $590.0
million credit facility. Excluding interest and fees, no payments are due under the credit
facility until it matures in July 2011. Available
borrowing capacity under the $590.0 million credit facility, which is reduced by borrowings and
outstanding letters of credit, was $309.2 million at July 4, 2010. The credit agreement
requires the Company to comply with various financial and operating covenants, including
maintaining certain consolidated leverage and interest coverage ratios, as well as minimum net
worth levels and limits on acquired debt. At July 4, 2010, the Company was in compliance with
these covenants. The Company also has a $5.0 million uncommitted credit line available. This
credit line is utilized, as needed, for periodic cash needs. Total debt at July 4, 2010,
includes $226.0 million outstanding under the $590.0 million credit facility at a weighted
average interest rate of 1.1%. The Company also has $11.1 million in capital leases, of which
$0.6 million is current. At July 4, 2010, Teledyne had $54.8 million in outstanding letters of
credit, which included a $43.0 million required letter of credit backing our offer for Intelek
plc. On July 30, 2010 this letter of credit was terminated given Teledynes completion of the
Intelek plc acquisition.
On May 12, 2010, the Company entered into a
note purchase agreement providing for a private placement of $250.0 million in aggregate
principal amount of senior notes to be issued on September 15, 2010. The Notes will consist of
$75.0 million of 4.04% senior notes due September 15, 2015, $100.0 million of 4.74% senior
notes due September 15, 2017 and $75.0 million of 5.30% Senior Notes due September 15, 2020.
The interest rates for the notes were determined on April 14, 2010. The Company intends to use
the proceeds of the private placement to pay down amounts outstanding under the companys
existing credit facility and for general corporate purposes including acquisitions. The
closing and issuance of the notes are subject to customary closing conditions.
In the first and second quarters of 2010, Teledyne entered into cash flow hedges of forecasted
interest payments associated with the anticipated issuance of fixed rate debt. The objective
of these cash flow hedges was to protect against the risk of changes in the interest payments
attributable to changes in the designated benchmark, which is the LIBOR interest rate leading
up to the fixed rate on the anticipated issuance of fixed rate debt being locked. The notional
amount of the debt hedged was $150.0 million. In the second quarter, concurrent with the
interest rates being determined on the fixed rate debt, Teledyne terminated the cash flow
hedges for a total payment of $0.6 million. Since the cash flow hedges were considered
effective, changes in the fair value of the hedge contracts as of the termination date were
deferred in accumulated other comprehensive loss. Amounts deferred in accumulated other
comprehensive loss of $0.6 million will be reclassified to interest expense over the same period of time that
interest expense is recognized on the future borrowings beginning
September 15, 2010, the expected closing date.
10
Note 11. Lawsuits, Claims, Commitments, Contingencies and Related Matters
The Company is subject to federal, state and local environmental laws and regulations which
require that it investigate and remediate the effects of the release or disposal of materials
at sites associated with past and present operations, including sites at which the Company has
been identified as a potentially responsible party under the federal Superfund laws and
comparable state laws.
In accordance with the Companys accounting policy disclosed in Note 2 to the consolidated
financial statements in the 2009 Form 10-K, environmental liabilities are recorded when the
Companys liability is probable and the costs are reasonably estimable. In many cases,
however, investigations are not yet at a stage where the Company has been able to determine
whether it is liable or, if liability is probable, to reasonably estimate the loss or range of
loss, or certain components thereof. Estimates of the Companys liability are subject to
uncertainties as described in Note 15 to the consolidated financial statements in the 2009 Form 10-K. As investigation and remediation of these sites proceeds, it is likely that adjustments
in the Companys accruals will be necessary to reflect new information. The amounts of any
such adjustments could have a material adverse effect on the Companys results of operations in
a given period, but the amounts, and the possible range of loss in excess of the amounts
accrued, are not reasonably estimable. Based on currently available information, management
does not believe that future environmental costs in excess of those accrued, with respect to
sites with which the Company has been identified, are likely to have a material adverse effect
on the Companys financial condition or results of operations. The Company cannot provide
assurance that additional future developments, administrative actions or liabilities relating
to environmental matters will not have a material adverse effect on the Companys financial
condition or results of operations.
At July 4, 2010, the Companys reserves for environmental remediation obligations totaled $2.9
million, of which $0.3 million is included in current accrued liabilities. The Company
periodically evaluates whether it may be able to recover a portion of future costs for
environmental liabilities from its insurance carriers and from third parties. The timing of
expenditures depends on a number of factors that vary by site, including the nature and extent
of contamination, the number of potentially responsible parties, the timing of regulatory
approvals, the complexity of the investigation and remediation, and the standards for
remediation. The Company expects that it will expend present accruals over many years, and
will complete remediation of all sites with which it has been identified in up to 30 years.
Various claims (whether based on U.S. Government or Company audits and investigations or
otherwise) may be asserted against the Company related to its U.S. Government contract work,
including claims based on business practices and cost classifications and actions under the
False Claims Act. Although such claims are generally resolved by detailed fact-finding and
negotiation, on those occasions when they are not so resolved, civil or criminal legal or
administrative proceedings may ensue. Depending on the circumstances and the outcome, such
proceedings could result in fines, penalties, compensatory and treble damages or the
cancellation or suspension of payments under one or more U.S. Government contracts. Under
government regulations, a company, or one or more of its operating divisions or units, can also
be suspended or debarred from government contracts based on the results of investigations.
Although the outcome of these matters cannot be predicted with certainty, management does not
believe there is any audit, review or investigation currently pending against the Company, of
which management is aware, that is likely to result in suspension or debarment of the Company,
or that is otherwise likely to have a material adverse effect on the Companys financial
condition. The resolution in any reporting period of one or more of these matters could,
however, have a material adverse effect on the Companys results of operations for that period.
A number of other lawsuits, claims and proceedings have been or may be asserted against the
Company, including those pertaining to product liability, patent infringement, commercial
contracts, employment and employee benefits. While the outcome of litigation cannot be
predicted with certainty, and some of these lawsuits, claims or proceedings may be determined
adversely to the Company, management does not believe that the disposition of any such pending
matters is likely to have a material adverse effect on the Companys financial condition. The
resolution in any reporting period of one or more of these matters could have a material
adverse effect on the Companys results of operations for that period. Teledyne has aircraft
and product liability insurance with an annual self-insured retention for general aviation
aircraft liabilities incurred in connection with products manufactured by Teledyne Continental
Motors of $5.0 million for its current aircraft product liability insurance policies which
expire on May 31, 2011. At July 4, 2010, the
11
Companys reserves for aircraft product liabilities totaled $45.0 million all of which is included in
other long-term liabilities. The reserve is developed based on several factors, including the
number and nature of claims, the level of annual self-insurance retentions, historic payments
and consultations with our insurers and outside counsel, all of which are used as a basis for
estimating future losses.
Note 12. Pension Plans and Postretirement Benefits
Teledyne has a defined benefit pension plan covering substantially all employees hired before
January 1, 2004. The Companys assumed discount rate on plan liabilities is 6.25% for both
2010 and 2009. The Companys assumed long-term rate of return on plan assets is 8.25% for both
2010 and 2009.
Teledynes net periodic pension expense was $1.3 million and $2.6 million for second quarter
and first six months of 2010, respectively, compared with net periodic pension expense of $5.6
million and $11.2 million for the second quarter and first six months of 2009, respectively.
Pension expense allocated to contracts pursuant to U.S. Government Cost Accounting Standards
(CAS) was $2.4 million and $4.8 million for the second quarter and first six months of 2010,
respectively, compared with $3.1 million and $6.2 million for the second quarter and first six
months of 2009, respectively. Pension expense determined under CAS can generally be recovered
through the pricing of products and services sold to the U.S. Government. The decrease in 2010
pension expense reflects higher investment returns in 2009 and the impact of pension
contributions made in 2009 and 2008. No pension contributions were made to the pension plan in
the first six months of 2010, compared with an $80.0 million voluntary contribution to its
pension plan in the first quarter of 2009. Teledyne expects to make a voluntary pretax
contribution to its qualified pension plan of approximately $37.0 million in the third quarter
of 2010.
The Company sponsors several postretirement defined benefit plans that provide health care and
life insurance benefits for certain eligible retirees.
The following tables set forth the components of net periodic pension benefit expense for
Teledynes defined benefit pension plans and postretirement benefit plans for the second
quarter and first six months of 2010 and 2009 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
Pension Benefits
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
Service cost benefits earned during the period
|
|
$
|
3.4
|
|
|
$
|
3.7
|
|
|
$
|
6.8
|
|
|
$
|
7.4
|
|
Interest cost on benefit obligation
|
|
|
10.1
|
|
|
|
10.0
|
|
|
|
20.3
|
|
|
|
20.0
|
|
Expected return on plan assets
|
|
|
(14.3
|
)
|
|
|
(12.2
|
)
|
|
|
(28.6
|
)
|
|
|
(24.3
|
)
|
Amortization of prior service cost
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Recognized actuarial loss
|
|
|
2.0
|
|
|
|
4.0
|
|
|
|
3.9
|
|
|
|
7.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit expense
|
|
$
|
1.3
|
|
|
$
|
5.6
|
|
|
$
|
2.6
|
|
|
$
|
11.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Six Months
|
|
Postretirement Benefits
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
Service cost benefits earned during the period
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Interest cost on benefit obligation
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
0.5
|
|
|
|
0.7
|
|
Amortization of prior service cost
|
|
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
|
(0.2
|
)
|
|
|
(0.2
|
)
|
Recognized actuarial gain
|
|
|
(0.2
|
)
|
|
|
(0.1
|
)
|
|
|
(0.5
|
)
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit (income) expense
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
Note 13. Industry Segments
Teledyne is a leading provider of sophisticated electronic components and subsystems,
instrumentation and communications products, engineered systems and information technology
services, general aviation engines and components, and energy generation, energy storage and
small propulsion products. Its customers include government agencies, aerospace prime
contractors, energy exploration and production companies, major industrial companies, and
airlines and general aviation companies.
Teledyne operates in four business segments: Electronics and Communications, Engineered
Systems, Aerospace Engines and Components and Energy and Power Systems. The factors for
determining the reportable segments were based on the distinct nature of their operations.
They are managed as separate business units because each requires and is responsible for
executing a unique business strategy.
Segment operating profit includes other income and expense directly related to the segment, but
excludes minority interest, interest income and expense, gains and losses on the disposition of
assets, sublease rental income and non-revenue licensing and royalty income, domestic and
foreign income taxes and corporate office expenses.
The following table presents Teledynes interim industry segment disclosures for net sales and
operating profit including other segment income. The table also provides a reconciliation of
segment operating profit and other segment income to total net income attributable to common
stockholders (amounts in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
Three
|
|
|
|
|
|
|
Six
|
|
|
Six
|
|
|
|
|
|
|
Months
|
|
|
Months
|
|
|
%
|
|
|
Months
|
|
|
Months
|
|
|
%
|
|
|
|
2010
|
|
|
2009
|
|
|
Change
|
|
|
2010
|
|
|
2009
|
|
|
Change
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics and Communications
|
|
$
|
323.8
|
|
|
$
|
305.1
|
|
|
|
6.1
|
%
|
|
$
|
634.2
|
|
|
$
|
615.1
|
|
|
|
3.1
|
%
|
Engineered Systems
|
|
|
67.3
|
|
|
|
89.7
|
|
|
|
(25.0
|
)%
|
|
|
145.7
|
|
|
|
178.5
|
|
|
|
(18.4)
|
%
|
Aerospace Engines and Components
|
|
|
34.5
|
|
|
|
29.7
|
|
|
|
16.2
|
%
|
|
|
68.8
|
|
|
|
55.7
|
|
|
|
23.5
|
%
|
Energy and Power Systems
|
|
|
16.9
|
|
|
|
16.6
|
|
|
|
1.8
|
%
|
|
|
33.0
|
|
|
|
32.1
|
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net sales
|
|
$
|
442.5
|
|
|
$
|
441.1
|
|
|
|
0.3
|
%
|
|
$
|
881.7
|
|
|
$
|
881.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) and other segment
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics and Communications
|
|
$
|
41.6
|
|
|
$
|
39.9
|
|
|
|
4.3
|
%
|
|
$
|
81.7
|
|
|
$
|
78.2
|
|
|
|
4.5
|
%
|
Engineered Systems
|
|
|
7.4
|
|
|
|
8.7
|
|
|
|
(14.9
|
)%
|
|
|
14.7
|
|
|
|
16.8
|
|
|
|
(12.5)
|
%
|
Aerospace Engines and Components
|
|
|
2.0
|
|
|
|
0.7
|
|
|
|
*
|
|
|
|
1.6
|
|
|
|
(3.6
|
)
|
|
|
*
|
|
Energy and Power Systems
|
|
|
1.1
|
|
|
|
0.3
|
|
|
|
*
|
|
|
|
1.4
|
|
|
|
0.3
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating profit and other segment income
|
|
$
|
52.1
|
|
|
$
|
49.6
|
|
|
|
5.0
|
%
|
|
$
|
99.4
|
|
|
$
|
91.7
|
|
|
|
8.4
|
%
|
Corporate expense
|
|
|
(6.4
|
)
|
|
|
(5.9
|
)
|
|
|
8.5
|
%
|
|
|
(13.8
|
)
|
|
|
(12.7
|
)
|
|
|
8.7
|
%
|
Other income (expense), net
|
|
|
0.5
|
|
|
|
(0.6
|
)
|
|
|
*
|
|
|
|
1.2
|
|
|
|
(0.2
|
)
|
|
|
*
|
|
Interest expense, net
|
|
|
(0.7
|
)
|
|
|
(1.5
|
)
|
|
|
(53.3
|
)%
|
|
|
(1.7
|
)
|
|
|
(2.6
|
)
|
|
|
(34.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
45.5
|
|
|
|
41.6
|
|
|
|
9.4
|
%
|
|
|
85.1
|
|
|
|
76.2
|
|
|
|
11.7
|
%
|
Provision for income taxes (a)
|
|
|
16.9
|
|
|
|
16.2
|
|
|
|
4.3
|
%
|
|
|
31.5
|
|
|
|
29.8
|
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income before noncontrolling interest
|
|
|
28.6
|
|
|
|
25.4
|
|
|
|
12.6
|
%
|
|
|
53.6
|
|
|
|
46.4
|
|
|
|
15.5
|
%
|
Less: net income attributable to
noncrontrolling interest
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
*
|
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Teledyne
Technologies
|
|
$
|
28.6
|
|
|
$
|
25.2
|
|
|
|
13.5
|
%
|
|
$
|
53.6
|
|
|
$
|
46.0
|
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The first six months of 2010 includes the recognition of previously unrecognized tax benefits of
$0.6 million due to the
expiration of applicable statutes of limitations, of which $0.2 million was recorded in
the second quarter. The first six months of 2009 includes additional income tax
expense of $0.3 million primarily related to the impact of California income tax law
changes, which was recorded in the first quarter.
|
|
*
|
|
percentage change not meaningful
|
13
Through the first six months of 2010, the Electronics and Communications segment
represented 71.9% of total company sales. This business segment includes three business areas:
Defense Electronics; Electronic Instrumentation; and Other Commercial Electronics. The Defense
Electronics businesses provide a range of highly specialized electronic subsystems to our
government and other defense contractors. The Electronic Instrumentation businesses provide
products that power subsea oil production systems, help locate new energy reserves, report
subtle changes to the environment, and detect trace contaminant in air and water. Our Other
Commercial Electronics businesses provide aircraft information management solutions that are
designed to increase flight safety and efficiency of aircraft transportation, and also provide
precision electronics for other commercial markets. The table below provides a summary of the
segments sales by business area and the percentage that each contributed to the Electronics
and Communications segment total sales for the first six months of 2010 (in millions).
|
|
|
|
|
|
|
|
|
|
|
Six
|
|
|
|
|
|
|
Months
|
|
|
% to
|
|
|
|
2010
|
|
|
Total
|
|
Defense Electronics
|
|
$
|
269.7
|
|
|
|
42
|
%
|
Electronic Instrumentation
|
|
|
295.9
|
|
|
|
47
|
%
|
Other Commercial Electronics
|
|
|
68.6
|
|
|
|
11
|
%
|
|
|
|
|
|
|
|
Total Electronics and Communications segment
|
|
$
|
634.2
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Note 14. Subsequent Event
In the third quarter of 2010, Teledyne completed the acquisition of Intelek for $38.5 million,
which includes $2.0 million in acquisition expenses. Intelek has locations in the United
Kingdom and State College, Pennsylvania.
Through its Paradise Datacom division, Intelek designs and manufactures satellite modems,
transceivers, block up-converters, solid state power amplifiers, low noise amplifiers and
associated equipment for the terrestrial segment of the satellite communications market.
Inteleks Labtech division is a manufacturer of microwave circuits and components primarily for
the defense electronics, global telecommunications, space and satellite communications markets.
Inteleks CML Group division manufactures precision machined and composite aerostructures for
military and commercial aircraft. Following the acquisition, the three divisions will change
their names to Teledyne Paradise Datacom, Teledyne Labtech and Teledyne CML Group. For the
fiscal year ended March 31, 2010, Intelek had sales of approximately £38 million.
The Paradise Datacom and Labtech divisions will become part of the Electronics and
Communications segment and the CML Group will become part of the Engineered Systems segment.
Teledyne funded the acquisition primarily from borrowings under its credit facility and cash on
hand.
14
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Strategy
Our strategy continues to emphasize growth in our core markets of instrumentation, defense
electronics and government engineered systems. Our core markets are characterized by high barriers
to entry and include specialized products and services not likely to be commoditized. We intend to
strengthen and expand our core businesses with targeted acquisitions. We intend to aggressively
pursue operational excellence to continually improve our margins and earnings. At Teledyne,
operational excellence includes the rapid integration of the businesses we acquire. Over time, our
goal is to create a set of businesses that are truly superior in their niches. We continue to
evaluate our product lines to ensure that they are aligned with our strategy.
Our Recent Acquisitions
In March 2010, Teledyne Scientific & Imaging, LLC (Teledyne Scientific) acquired a 17% minority
interest in Optical Alchemy, Inc., a designer and manufacturer of ultra-light electro optical
gimbal systems located in Nashua, New Hampshire, for $4.6 million, which includes $0.1 million in
acquisition expenses, accounted for under the cost basis method. In June 2010, Teledyne Scientific
acquired Optimum Optical Systems, Inc. (Optimum Optical), located in Camarillo, California for
$5.7 million, net of cash acquired. Optimum Optical is a designer and manufacturer of custom
optics and optomechanical assemblies. Also in
June 2010, Teledyne acquired a 16% minority
interest in Intelek plc (Intelek) for $6.9 million, accounted for under the cost basis method.
Intelek has locations in the United Kingdom and State College,
Pennsylvania. Intelek primarily designs and
manufactures electronic systems for satellite and microwave
communication. In the third quarter of 2010, Teledyne completed the acquisition of Intelek
for an additional $38.5 million, which includes $2.0 million in acquisition expenses.
Results of Operations
Second quarter of 2010 compared with the second quarter of 2009
Our second quarter 2010 sales were $442.5 million, compared with sales of $441.1 million for the
same period of 2009, an increase of 0.3%. Net income attributable to common stockholders for the
second quarter of 2010 was $28.6 million ($0.78 per diluted share) compared with net income
attributable to common stockholders of $25.2 million ($0.69 per diluted share) for the second
quarter of 2009, an increase of 13.5%.
The second quarter of 2010, compared with the same period in 2009, reflected higher sales in each
business segment except in the Engineered Systems segment. The increase in the Electronics and
Communication segment reflected higher sales of marine and environmental instrumentation products.
The decrease in the Engineered Systems segment reflected lower sales of missile defense programs,
primarily the Ground-based Midcourse Defense contract engineering services as well as gas
centrifuge service modules. We continue to anticipate reduced sales of gas centrifuge service
modules and missile defense engineering services in 2010 due to program funding. In addition,
we anticipate reduced sales to NASA in the third and fourth quarters of 2010 due to government
funding reductions in certain programs.
The increase in earnings for the second quarter of 2010, compared with the same period of
2009, reflected the impact of higher sales, lower pension and cost containment efforts, partially
offset by charges of $8.2 million, primarily to correct inventory valuations incorrectly recorded
in previous periods at a business unit. The second quarter of 2010 also included $0.7 million in
professional fees related to acquisition activity.
The second quarter of 2010 included pension expense of $1.3 million, compared with pension expense
of $5.6 million in the second quarter of 2009. Pension expense allocated to contracts pursuant to
U.S. Government Cost Accounting Standards (CAS) was $2.4 million in the second quarter of 2010,
compared with pension expense of $3.1 million in the second quarter of 2009. The decrease in 2010
pension expense reflects higher investment returns in 2009 and the impact of pension contributions
made in 2009 and 2008.
Stock option compensation expense was $1.2 million for both the second quarter of 2010 and 2009.
Cost of sales in total dollars was slightly lower in the second quarter of 2010, compared with the
second quarter of 2009. Cost of sales as a percentage of sales for the second quarter of 2010
decreased to 70.0% from 71.1% for the
15
second quarter of 2009 and reflected the impact of cost
containment efforts, product mix and lower pension expense, partially offset by offset by the
impact of the inventory write-down.
Selling, general and administrative expenses, including research and development and bid and
proposal expense, in total dollars were higher in the second quarter of 2010, compared with the
second quarter of 2009, and primarily reflected higher general and administrative expenses. The
increase in general and administrative expenses reflected higher professional fees expense,
including acquisition related expenses. Selling, general and administrative expenses for the
second quarter of 2010, as a percentage of sales, increased to 19.6%, compared with 19.0% in the
second quarter of 2009, and reflected the impact of higher general and administrative expenses.
Interest expense, net of interest income, was $0.7 million in the second quarter of 2010, compared
with $1.5 million for the second quarter of 2009. The decrease in net interest expense primarily
reflected the impact of lower outstanding debt levels. Other income in 2010 includes an insurance
benefit of $0.7 million.
The Companys effective income tax rate for the second quarter of 2010 was 37.0% compared with
39.0% for the second quarter of 2009. The second quarter of 2010 included the recognition of previously unrecognized tax benefits of
$0.2 million due to the
expiration of applicable statutes of limitations. Excluding this amount, the effective income tax
rate for the second quarter of 2010 would have been 37.4%.
Noncontrolling interest in subsidiaries earnings in 2009 reflected the minority ownership interest
in Ocean Design, Inc. (ODI) and Teledyne Energy Systems, Inc.
First six months of 2010 compared with the first six months of 2009
Teledynes sales for the first six months of 2010 were $881.7 million, compared with sales of
$881.4 million for the same period of 2009. Net income attributable to common stockholders for the
first six months of 2010 was $53.6 million ($1.46 per diluted share) compared with net income
attributable to common stockholders of $46.0 million ($1.26 per diluted share) for the first six
months of 2009, an increase of 16.5%.
The first six months of 2010, compared with the same period in 2009, reflected higher sales in each
business segment except in the Engineered Systems segment. The increase in the Electronics and
Communication segment reflected higher sales of manufacturing services, microwave subsystems and
marine and environmental instrumentation products. The decrease in the Engineered Systems segment
reflected lower sales of missile defense programs, primarily the Ground-based Midcourse Defense
contract engineering services as well as gas centrifuge service modules. The increase in the
Aerospace Engines and Components segment reflected higher sales of engines for new OEM aircraft, as
well as increased sales of aftermarket engines and spare parts.
The increase in earnings for the first six months of 2010, compared with the same period of 2009,
reflected higher operating profit in each operating segment except the Engineered Systems segment.
Operating profit reflected lower pension and cost containment efforts, partially offset by charges
of $8.2 million, primarily to correct inventory valuations incorrectly recorded in previous periods
at a business unit. The first six months of 2010 also included $0.7 million in professional fees
related to acquisition activity. Incremental operating profit in the first six months of 2010 from
businesses acquired in 2009, including synergies, was $0.1 million.
The first six months of 2010 included pension expense of $2.6 million, compared with pension
expense of $11.2 million in the first six months of 2009. The decrease in 2010 pension expense
reflects higher investment returns in 2009 and the impact of pension contributions made in 2009 and
2008. Pension expense allocated to contracts pursuant to CAS was $4.8 million in the first six
months of 2010, compared with pension expense of $6.2 million in the first six months of 2009.
For the
first six months of 2010 and 2009, we recorded a total of $2.5 million and $2.8 million,
respectively in stock option compensation expense.
Cost of sales in total dollars was lower in the first six months of 2010, compared with the first
six months of 2009, and reflected the impact of lower pension expense, partially offset by offset
by the impact of the inventory write-down. Cost of sales as a percentage of sales for the first
six months of 2010 decreased to 70.6% from 71.2% for the first six months of 2009 and reflected the
impact of cost containment efforts, product mix and lower pension expense, partially offset by
offset by the impact of the inventory write-down.
16
Selling, general and administrative expenses, including research and development and bid and
proposal expense, in total dollars were slightly lower in the first six months of 2010, compared
with the first six months of 2009. Corporate expense was $13.8 million for the first six months of
2010, compared with $12.7 million for the same
period in 2009 and reflected higher professional fees expense and higher compensation expense.
Selling, general and administrative expenses for the first six months of 2010, as a percentage of
sales, remained flat at 19.8%.
Interest expense, net of interest income, was $1.7 million in the first six months of 2010,
compared with $2.6 million for the first six months of 2009. The decrease in net interest expense
primarily reflected the impact of lower outstanding debt levels. Other income in 2010 includes an
insurance benefit of $0.7 million. The Companys effective tax rate for the first six months of
2010 was 37.0% compared with 39.1% for the first six months of 2009. The effective tax rate for
the first six months of 2010 reflected the recognition of previously unrecognized tax benefits of
$0.6 million due to the expiration of applicable statutes
of limitations. Excluding this item, the Companys effective tax rate for the first six months of
2010 would have been 37.7%. The effective tax rate for the first six months of 2009 reflected
additional income tax expense of $0.3 million, primarily related to the impact of California income
tax law changes, which was recorded in the first quarter of 2009. Excluding this item, the
Companys effective tax rate for the first six months of 2009 would have been 38.7%.
Noncontrolling interest in subsidiaries earnings in 2009 reflects the minority ownership interest
in ODI and Teledyne Energy Systems, Inc.
Review of Operations:
The following table sets forth the sales and operating profit (loss) for each segment (amounts in
millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
Three
|
|
|
|
|
|
|
Six
|
|
|
Six
|
|
|
|
|
|
|
Months
|
|
|
Months
|
|
|
%
|
|
|
Months
|
|
|
Months
|
|
|
%
|
|
|
|
2010
|
|
|
2009
|
|
|
Change
|
|
|
2010
|
|
|
2009
|
|
|
Change
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics and Communications
|
|
$
|
323.8
|
|
|
$
|
305.1
|
|
|
|
6.1
|
%
|
|
$
|
634.2
|
|
|
$
|
615.1
|
|
|
|
3.1
|
%
|
Engineered Systems
|
|
|
67.3
|
|
|
|
89.7
|
|
|
|
(25.0
|
)%
|
|
|
145.7
|
|
|
|
178.5
|
|
|
|
(18.4
|
)%
|
Aerospace Engines and Components
|
|
|
34.5
|
|
|
|
29.7
|
|
|
|
16.2
|
%
|
|
|
68.8
|
|
|
|
55.7
|
|
|
|
23.5
|
%
|
Energy and Power Systems
|
|
|
16.9
|
|
|
|
16.6
|
|
|
|
1.8
|
%
|
|
|
33.0
|
|
|
|
32.1
|
|
|
|
2.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net sales
|
|
$
|
442.5
|
|
|
$
|
441.1
|
|
|
|
0.3
|
%
|
|
$
|
881.7
|
|
|
$
|
881.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss) and other segment
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics and Communications
|
|
$
|
41.6
|
|
|
$
|
39.9
|
|
|
|
4.3
|
%
|
|
$
|
81.7
|
|
|
$
|
78.2
|
|
|
|
4.5
|
%
|
Engineered Systems
|
|
|
7.4
|
|
|
|
8.7
|
|
|
|
(14.9
|
)%
|
|
|
14.7
|
|
|
|
16.8
|
|
|
|
(12.5
|
)%
|
Aerospace Engines and Components
|
|
|
2.0
|
|
|
|
0.7
|
|
|
|
*
|
|
|
|
1.6
|
|
|
|
(3.6
|
)
|
|
|
*
|
|
Energy and Power Systems
|
|
|
1.1
|
|
|
|
0.3
|
|
|
|
*
|
|
|
|
1.4
|
|
|
|
0.3
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating profit and other
segment income
|
|
$
|
52.1
|
|
|
$
|
49.6
|
|
|
|
5.0
|
%
|
|
$
|
99.4
|
|
|
$
|
91.7
|
|
|
|
8.4
|
%
|
Corporate expense
|
|
|
(6.4
|
)
|
|
|
(5.9
|
)
|
|
|
8.5
|
%
|
|
|
(13.8
|
)
|
|
|
(12.7
|
)
|
|
|
8.7
|
%
|
Other income (expense), net
|
|
|
0.5
|
|
|
|
(0.6
|
)
|
|
|
*
|
|
|
|
1.2
|
|
|
|
(0.2
|
)
|
|
|
*
|
|
Interest expense, net
|
|
|
(0.7
|
)
|
|
|
(1.5
|
)
|
|
|
(53.3
|
)%
|
|
|
(1.7
|
)
|
|
|
(2.6
|
)
|
|
|
(34.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
45.5
|
|
|
|
41.6
|
|
|
|
9.4
|
%
|
|
|
85.1
|
|
|
|
76.2
|
|
|
|
11.7
|
%
|
Provision for income taxes (a)
|
|
|
16.9
|
|
|
|
16.2
|
|
|
|
4.3
|
%
|
|
|
31.5
|
|
|
|
29.8
|
|
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income before noncontrolling interest
|
|
|
28.6
|
|
|
|
25.4
|
|
|
|
12.6
|
%
|
|
|
53.6
|
|
|
|
46.4
|
|
|
|
15.5
|
%
|
Less: net income attributable to
noncontrolling interest
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
*
|
|
|
|
|
|
|
|
(0.4
|
)
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Teledyne
Technologies
|
|
$
|
28.6
|
|
|
$
|
25.2
|
|
|
|
13.5
|
%
|
|
$
|
53.6
|
|
|
$
|
46.0
|
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
The first six months of 2010 includes the recognition of previously unrecognized tax benefits of
$0.6 million due to the expiration
of applicable statutes of limitations, of which $0.2 million was recorded in the second
quarter. The first six months of 2009 includes additional income tax expense of $0.3
million primarily related to the impact of California income tax law changes, which was
recorded in the first quarter.
|
|
*
|
|
percentage change not meaningful
|
17
Electronics and Communications
Second quarter of 2010 compared with the second quarter of 2009
Our Electronics and Communications segments second quarter 2010 sales were $323.8 million,
compared with $305.1 million for the second quarter of 2009, an increase of 6.1%. Second quarter
2010 operating profit was $41.6 million, compared with operating profit of $39.9 million for the
second quarter of 2009, an increase of 4.3%.
The second quarter 2010 sales change resulted primarily from higher sales of electronic
instrumentation, partially offset by lower sales of other commercial electronics. Revenue growth
of $18.7 million in electronic instrumentation primarily reflected higher sales of marine and
environmental instrumentation products. Lower sales of $1.1 million of other commercial
electronics primarily reflected reduced sales from product lines which the company is exiting, such
as commercial electronic manufacturing services and telecommunication subsystems partially offset
by higher sales of electronic relays. Sales of defense electronics increased by $1.1 million and
included $0.4 million in sales from the acquisition of Optimum Optical in June 2010. The increase
in operating profit reflected the impact of higher sales, cost containment efforts and product mix,
partially offset by charges of $8.2 million, primarily to correct inventory valuations incorrectly
recorded in previous periods at a business unit. The second quarter of 2010 also included $0.7
million in professional fees related to acquisition activity. Operating profit included pension
expense of $0.8 million in the second quarter of 2010, compared with $2.4 million for the second
quarter of 2009. Pension expense allocated to contracts pursuant to CAS was $0.7 million in the
second quarter of 2010, compared with $0.6 million for the second quarter of 2009.
First six months of 2010 compared with the first six months of 2009
Our Electronics and Communications segments first six months 2010 sales were $634.2 million,
compared with first six months 2009 sales of $615.1 million, an increase of 3.1%. First six months
2010 operating profit was $81.7 million, compared with operating profit of $78.2 million in the
first six months of 2009, an increase of 4.5%.
The first six months 2010 sales improvement resulted from revenue growth in defense electronics and
electronic instruments, partially offset by lower sales of other commercial electronics. Revenue
growth of $14.7 million in electronic instrumentation primarily reflected higher sales of marine
and environmental instrumentation products. Revenue growth of $11.7 million in defense electronics
primarily reflected higher sales of manufacturing services, microwave subsystems and also included
$0.4 million in sales from the acquisition of Optimum Optical. Lower sales of $7.3 million of
other commercial electronics primarily reflected reduced sales from product lines which the company
is exiting, such as commercial electronic manufacturing services and telecommunication subsystems
partially offset by higher sales of electronic relays. The increase in operating profit reflected
the impact of higher sales, cost containment efforts and product mix, partially offset by charges
of $8.2 million, primarily to correct inventory valuations incorrectly recorded in previous periods
at a business unit. The first six months of 2010 also included $0.7 million in professional fees
related to acquisition activity. Operating profit included
pension expense of $1.5 million in the first six months of 2010, compared with $4.8 million for the
first six months of 2009. Pension expense allocated to contracts pursuant to CAS was $1.3 million
in the first six months of 2010, compared with $1.2 million for the first six months of 2009.
Engineered Systems
Second quarter of 2010 compared with the second quarter of 2009
Our Engineered Systems segments second quarter 2010 sales were $67.3 million, compared with $89.7
million for the second quarter of 2009, a decrease of 25.0%. The second quarter 2010 operating
profit was $7.4 million, compared with operating profit of $8.7 million for the second quarter of
2009, a decrease of 14.9%.
The second quarter 2010 sales decrease primarily reflected lower sales of missile defense programs,
primarily the Ground-based Midcourse Defense contract engineering services as well as gas
centrifuge service modules. Operating profit in the second quarter of 2010 reflected the impact of
lower sales, partially offset by lower pension expense. Operating profit included pension expense
of $0.4 million in the second quarter of 2010, compared with $2.8 million in the second quarter of
2009. Pension expense allocated to contracts pursuant to CAS was $1.7 million in the second
quarter of 2010, compared with $2.5 million in the second quarter of 2009.
18
Our Engineered Systems segment manufactures gas centrifuge service modules for Fluor Enterprises,
Inc., acting as agent for USEC Inc., used in the American Centrifuge Plant. We continue to
anticipate reduced sales of gas centrifuge service modules in 2010 due to a suspension of work
notice received on August 13, 2009, caused by the U.S. Department of Energys delayed decision
regarding USECs application for a loan guarantee to complete construction of the American
Centrifuge Plant. In March 2010, the Department of Energy finalized $45 million in funding to USEC
Inc. to continue centrifuge development. In April 2010 the Department of Energy announced
additional loan guarantees for nuclear front-end processing that increase the likelihood that the
Department of Energy may support USECs American Centrifuge Plan, which could result in additional
revenue to us in 2011. In addition, given reduced program funding, as well as changes to
contracting policy by the U.S. Government relating to organizational conflicts of interest, we
expect reduced sales of missile defense engineering services in 2010. Finally, we anticipate
reduced sales to NASA in the third and fourth quarters of 2010 due to government funding reductions
in certain programs.
First six months of 2010 compared with the first six months of 2009
Our Engineered Systems segments first six months 2010 sales were $145.7 million, compared with
first six months 2009 sales of $178.5 million, a decrease of 18.4%. First six months 2010
operating profit was $14.7 million, compared with operating profit of $16.8 million for the first
six months of 2009, a decrease of 12.5%.
The first six months 2010 sales reflected lower sales of missile defense programs, primarily the
Ground-based Midcourse Defense contract engineering services as well as gas centrifuge service
modules. Operating profit in the first six months of 2010 primarily reflected the impact of lower
sales, partially offset by lower pension expense. Operating profit included pension expense of
$0.8 million in the first six months of 2010, compared with $5.5 million in the first six months of
2009. Pension expense allocated to contracts pursuant to CAS was $3.4 million in the first six
months of 2010 and $4.9 million for the first six months of 2009.
Aerospace Engines and Components
Second quarter of 2010 compared with the second quarter of 2009
Our Aerospace Engines and Components segments second quarter 2010 sales were $34.5 million,
compared with $29.7 million for the second quarter of 2009, an increase of 16.2%. The second
quarter 2010 operating profit was $2.0 million, compared with operating profit of $0.7 million for
the second quarter of 2009.
Second quarter 2010 sales reflected higher sales of engines for new OEM aircraft, as well as
increased sales of aftermarket engines and spare parts due to improved demand in the general
aviation market relative to 2009. Operating profit in 2010 included the reversal of $1.2 million
of product recall and replacement reserves that were no longer needed
as the program nears completion. Operating profit in 2009
included a $0.3 million charge related to past due accounts receivable, partially offset by a
favorable workers compensation settlement of $0.9 million.
First six months of 2010 compared with the first six months of 2009
Our Aerospace Engines and Components segments first six months 2010 sales were $68.8 million,
compared with first six months 2009 sales of $55.7 million, an increase of 23.5%. The first six
months 2010 operating profit was $1.6 million, compared with an operating loss of $3.6 million in
the first six months of 2009.
The increase in revenue reflected higher sales of engines for new OEM aircraft, as well as
increased sales of aftermarket engines and spare parts due to improved demand in the general
aviation market relative to 2009. Operating profit included the reversal of $1.2 million of
product recall and replacement reserves that were no longer needed as the program nears completion. Operating profit in 2009
included a $0.3 million charge related to past due accounts receivable, partially offset by a
favorable workers compensation settlement of $0.9 million.
Energy and Power Systems
Second quarter of 2010 compared with the second quarter of 2009
Our Energy and Power Systems segments second quarter 2010 sales were $16.9 million, compared with
$16.6 million for the second quarter of 2009, an increase of 1.8%. Operating profit was $1.1
million for the second quarter 2010, compared with operating profit of $0.3 million for the second
quarter of 2009.
19
Second quarter 2010 sales primarily reflected higher sales of commercial hydrogen generators and
power systems for government applications as well as higher battery product sales, partially offset
by reduced revenue related to the Joint Air-to-Surface Standoff Missile (JASSM) turbine engine
program. Operating profit in 2009 reflected a $1.2 million product replacement reserve for
commercial energy systems.
First six months of 2010 compared with the first six months of 2009
Our Energy and Power Systems segments first six months 2010 sales were $33.0 million, compared
with $32.1 million for the first six months of 2009, an increase of 2.8%. Operating profit was
$1.4 million for the first six months of 2010, compared with $0.3 million for the first six months
of 2009.
Second quarter 2010 sales primarily reflected higher sales of commercial hydrogen generators and
power systems for government applications as well as higher battery product sales, partially offset
by reduced revenue related to the JASSM turbine engine program. Operating profit in 2009 reflected
a $1.2 million product replacement reserve for commercial energy systems
Financial Condition, Liquidity and Capital Resources
Our net cash provided by operating activities was $50.1 million for the first six months of 2010,
compared with $28.2 million for the same period of 2009. No pension contributions were made in the
first six months of 2010, compared with an $80.0 million voluntary pretax pension contribution made
in the first six months of 2009. The 2010 amount also reflected tax payments of $34.1 million
compared with net tax refunds of $7.6 million in 2009. The higher cash provided by operating
activities in the first six months of 2010, compared with the first six months of 2009, reflected
the impact of these items, partially offset by higher working capital requirements, which primarily
reflected the early collection of accounts receivable in the fourth quarter of 2009.
Our net cash used by investing activities was $27.2 million for the first six months of 2010,
compared with net cash used by investing activities of $24.8 million for the first six months of
2009. The 2010 amount includes the purchase of a 17% minority interest in Optical Alchemy, Inc.
for $4.6 million which includes $0.1 million in acquisition expenses, accounted for under the cost
basis method. The 2010 amount also includes the purchase of Optimum Optical for $5.7 million, net
of cash acquired and the purchase of a 16% minority interest in Intelek plc for $6.9 million. In
the third quarter of 2010, Teledyne acquired the remaining ownership in Intelek plc for $38.5
million, which includes $2.0 million in acquisition expenses. The 2010 amount also includes a
scheduled payment of $0.3 million for a prior acquisition and a $0.7 million receipt for a purchase
price adjustment for a prior acquisition. The 2009 amount included $5.9 million paid for the
purchase of ODI shares, $1.4 million to acquire assets of a marine sensor product line, a scheduled
payment of $0.3 million for a prior acquisition and a $0.3 million receipt for a purchase price
adjustment for a prior acquisition.
We funded the purchases primarily from borrowings under our credit facility and cash on hand.
Capital expenditures for the first six months of 2010 and 2009 were $10.5 million and $17.5
million, respectively.
Our goodwill was $502.6 million at July 4, 2010 and $502.4 million at January 3, 2010. The
increase in the balance of goodwill in 2010 primarily resulted from goodwill from the purchase of
Optimum Optical, partially offset by foreign currency changes. Our net acquired intangible assets
were $103.4 million at July 4, 2010 and $109.6 million at January 3, 2010. The change in the
balance of acquired intangible assets in 2010 resulted from amortization, as well as foreign
currency changes.
Financing activities used cash of $12.5 million for the first six months of 2010, compared with
cash provided by financing activities of $0.3 million for the first six months of 2009. Cash
used by financing activities for the first six months of 2010 included net repayment of
borrowings of $14.2 million. Cash provided by financing activities for the first six months of
2009 included net borrowings of $0.8 million. Proceeds from the exercise of stock options were
$1.6 million and $0.2 million for the first six months of 2010 and 2009, respectively. The first
six months of 2010 and 2009 included $0.7 million and $0.1 million in excess tax benefits related
to stock-based compensation, respectively. In the first quarter of 2009, Teledyne paid $0.8
million to repurchase 36,239 shares of Teledyne common stock under a now expired stock repurchase
program.
Working capital was $286.0 million at July 4, 2010, compared with $250.6 million at January 3,
2010. The higher amount at July 4, 2010 primarily reflects the impact of higher trade receivables.
20
No pension contributions have been made in 2010, however we expect to make a voluntary pretax
contribution to our qualified pension plan of approximately $37.0 million in the third quarter of
2010. Teledyne made a voluntary pretax contribution of $80.0 million to its pension plan in the
first quarter of 2009.
Our principal cash and capital requirements are to fund working capital needs, capital
expenditures, pension contributions and debt service requirements, as well as acquisitions. It is
anticipated that operating cash flow, together with available borrowings under the credit facility
described below, will be sufficient to meet these requirements over the next twelve months. To
support acquisitions, we may need to raise additional capital. As of July 4, 2010, we do not
believe our ability to undertake additional debt financing, if needed, is reasonably likely to be
materially impacted by debt restrictions under our credit agreements subject to our complying with
required financial covenants listed in the table below. We currently expect capital expenditures
to be approximately $35.0 million in 2010, of which $10.5 million has been spent in the first six
months of 2010.
Our credit facility has lender commitments totaling $590.0 million and expires on July 14, 2011.
Excluding interest and fees, no payments are due under the credit facility until it matures. On
May 12, 2010 the Company entered into a note purchase agreement providing for a private placement
of $250.0 million in aggregate principal amount of senior notes to be issued on September 15, 2010.
The Notes will consist of $75 million of 4.04% senior notes due September 15, 2015, $100 million
of 4.74% senior notes due September 15, 2017 and $75 million of 5.30% Senior Notes due September
15, 2020. The interest rates for the notes were determined on April 14, 2010. The Company intends
to use the proceeds of the private placement to pay down amounts outstanding under the companys
existing credit facility and for general corporate purposes including acquisitions. The closing and
issuance of the notes are subject to customary closing conditions. The credit agreements requires
the Company to comply with various financial and operating covenants, including maintaining certain
consolidated leverage and interest coverage ratios, as well as minimum net worth levels and limits
on acquired debt. At July 4, 2010, the Company was in compliance with these covenants. As of July
4, 2010 the Company had a significant amount of margin between required financial covenant ratios
and our actual ratios. At July 4, 2010 the required financial covenant ratios and the actual
ratios were as follows:
$590M Credit Facility expires July 2011
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|
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|
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Actual
|
|
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Required Financial
|
|
Covenant
|
Covenant
|
|
Covenant Ratio
|
|
Ratio
|
Consolidated Net Worth
|
|
No less than $459.5M
|
|
$720.3M
|
Consolidated Leverage Ratio (Debt/EBITDA)
|
|
No more than 3.0 to 1
|
|
1.30 to 1
|
Consolidated Interest Coverage Ratio
|
|
No less than 3.0 to 1
|
|
50.4 to 1
|
$250M Private Placement Notes due 2015, 2017 and 2020 (anticipated issuance date September 15, 2010)
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Actual
|
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Required Financial
|
|
Covenant
|
Covenant
|
|
Covenant Ratio
|
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Ratio
|
Consolidated Leverage Ratio (Net Debt/EBITDA)
|
|
No more than 3.25 to 1
|
|
1.30 to 1
|
Consolidated Interest Coverage Ratio
|
|
No less than 3.0 to 1
|
|
63.5 to 1
|
Available borrowing capacity under the $590.0 million credit facility, which is reduced by
borrowings and outstanding letters of credit, was $309.2 million at July 4, 2010. The Company is
planning to refinance the $590.0 million credit facility prior to its scheduled maturity.
In the first and second quarters of 2010, Teledyne entered into cash flow hedges of forecasted
interest payments associated with the anticipated issuance of fixed rate debt. The objective of
these cash flow hedges was to protect against the risk of changes in the interest payments
attributable to changes in the designated benchmark, which is the LIBOR interest rate leading up to
the fixed rate on the anticipated issuance of fixed rate debt being locked. The notional amount of
the debt hedged was$150.0 million. In the second quarter, concurrent with the interest rates being
determined on the fixed rate debt, Teledyne terminated the cash flow hedges for a total payment of
$0.6
21
million. Since the cash flow hedges were considered effective, changes in the fair value of the
hedge contract as of the termination date were deferred in accumulated other comprehensive loss.
Amounts deferred in accumulated other comprehensive loss will be reclassified to interest expense
over the same period of time that interest expense is recognized on the future borrowings beginning
September 15, 2010. As of July 4, 2010, unamortized loss of $0.6 million was included in
accumulated other comprehensive loss in the stockholders equity section of the balance sheet.
Our liquidity is not dependent upon the use of off-balance sheet financial arrangements. We have
no off-balance sheet financing arrangements that incorporate the use of special purpose entities or
unconsolidated entities.
Critical Accounting Policies
Our critical accounting policies are those that are reflective of significant judgments and
uncertainties, and may potentially result in materially different results under different
assumptions and conditions. Our critical accounting policies are the following: revenue
recognition; aircraft product liability reserve; accounting for pension plans; accounting for
business combinations, goodwill and other long-lived assets; and accounting for income taxes. For
additional discussion of the application of these and other accounting policies, see Managements
Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting
Policies and Note 2 of the Notes to Consolidated Financial Statements included in Teledyne
Technologies Annual Report on Form 10-K for the fiscal year ended January 3, 2010 (2009 Form
10-K).
Safe Harbor Cautionary Statement Regarding Forward-Looking Information
From time to time we make, and this report contains, forward looking statements, as defined in the
Private Securities Litigation Reform Act of 1995, relating to earnings, growth opportunities,
product sales, pension matters, stock option compensation expense, debt issuance and strategic
plans. All statements made in this Managements Discussion and Analysis of Financial Condition and
Results of Operations that are not historical in nature should be considered forward-looking.
Actual results could differ materially from these forward-looking statements. Many factors could
change the anticipated results: including continuing disruptions in the global economy; insurance
and credit markets; changes in demand for products sold to the defense electronics, instrumentation
and energy exploration and production, commercial aviation, semiconductor and communications
markets; funding, continuation and award of government programs; continued liquidity of our
suppliers and customers (including commercial aviation customers); availability of credit to our
suppliers and customers, and a potential decrease in offshore oil production and exploration
activity due to the April 2010 oil spill in the Gulf of Mexico. Increasing fuel costs could
negatively affect the markets of our commercial aviation businesses. Lower oil and natural gas
prices could negatively affect our business units that supply the oil and gas industry. In
addition, financial market fluctuations affect the value of our pension assets.
Global responses to terrorism and other perceived threats increase uncertainties associated with
forward-looking statements about our businesses. Various responses to terrorism and perceived
threats could realign government programs, and affect the composition, funding or timing of our
programs. Changes in U.S. Government policy could result, over time, in reductions and realignment
in defense or other government spending and further changes in programs in which the Company
participates including anticipated reductions in the Companys missile defense engineering services
and gas centrifuge service module manufacturing programs, as well as certain NASA programs.
We continue to take action to assure compliance with the internal controls, disclosure controls and
other requirements of the Sarbanes-Oxley Act of 2002. While we believe our control systems are
effective, there are inherent limitations in all control systems, and misstatements due to error or
fraud may occur and not be detected.
While our growth strategy includes possible acquisitions, we cannot provide any assurance as to
when, if or on what terms any acquisitions will be made. Acquisitions involve various inherent
risks, such as, among others, our ability to integrate acquired businesses and retain customers and
to achieve identified financial and operating synergies. There are additional risks associated
with acquiring, owning and operating businesses outside of the United States, including those
arising from U.S. and foreign government policy changes or actions and exchange rate fluctuations.
Additional information concerning factors that could cause actual results to differ materially from
those projected in the forward-looking statements is contained in Teledyne Technologies periodic
filings with the Securities and
Exchange Commission, including its 2009 Form 10-K and this Form
10-Q. We assume no duty to update forward-looking statements.
22
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There were no material changes to the information provided under Item 7A, Quantitative and
Qualitative Disclosure About Market Risk included in our 2009 Annual Report on Form 10-K.
Interest Rate Exposure
We are exposed to market risk through the interest rate on our borrowings under our amended and
restated credit facility. Borrowings under our credit facility are at variable rates which are at
our option tied to a eurodollar base rate equal to LIBOR (London Interbank Offered Rate) plus an
applicable rate or a base rate as defined in our credit agreement. LIBOR based loans under the
facility typically have terms of one, two, three or six months and the interest rate for each such
loan is subject to change if the loan is continued or converted following the applicable maturity
date. Base rate loans have interest rates that primarily fluctuate with changes in the prime rate.
Interest rates are also subject to change based on our debt to earnings before interest, taxes,
depreciation and amortization (EBITDA) ratio. As of July 4, 2010, we had $226.0 million in
outstanding indebtedness under our amended and restated credit facility. A 100 basis point
increase in interest rates would result in an increase in annual interest expense of approximately
$2.3 million, assuming the $226.0 million in debt was outstanding for the full year.
Item 4. Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information required to be
disclosed in reports that we file or submit under the Securities Exchange Act of 1934, are
recorded, processed, summarized and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission and to provide reasonable assurance that
information required to be disclosed by us in such reports is accumulated and communicated to the
Companys management, including its principal executive officer and principal financial officer, as
appropriate to allow timely decisions regarding required disclosure. Our Chairman, President and
Chief Executive Officer and our Senior Vice President and Chief Financial Officer, with the
participation and assistance of other members of management, have reviewed the effectiveness of our
disclosure controls and procedures and have concluded that the disclosure controls and procedures,
as of July 4, 2010, are effective at the reasonable assurance level.
In connection with our evaluation during the quarterly period ended July 4, 2010, we have made no
change in our internal controls over financial reporting that have materially affected or are
reasonably likely to materially affect our internal controls over financial reporting.
23
PART II OTHER INFORMATION
Item 1A. Risk Factors
There are no material changes to the risk factors previously disclosed in our 2009 Annual Report on
Form 10-K in response to Item 1A to Part 1 of Form 10-K, except as disclosed in Item 3 Quantitative
and Qualitative Disclosures About Market Risk under Interest Rate Exposure.
Item 6. Exhibits
(a) Exhibits
|
|
|
Exhibit 10.1
|
|
Amended and Restated Credit Agreement, dated as of July 14, 2006, among
Teledyne Technologies Incorporated, Bank of America, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer, certain lenders thereunder and certain
subsidiaries of Teledyne Technologies Incorporated as guarantors, together with
Schedules and Exhibits thereto.
|
|
|
|
Exhibit 10.2
|
|
Note Purchase Agreement, dated May 12, 2010, by and among Teledyne
Technologies Incorporated and the Purchasers identified therein, together with
Schedules and Exhibits thereto.
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|
|
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Exhibit 31.1
|
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302 Certification Robert Mehrabian
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Exhibit 31.2
|
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302 Certification Dale A. Schnittjer
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Exhibit 32.1
|
|
906 Certification Robert Mehrabian
|
|
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Exhibit 32.2
|
|
906 Certification Dale A. Schnittjer
|
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
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|
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TELEDYNE TECHNOLOGIES INCORPORATED
|
|
DATE: August 9, 2010
|
By:
|
/s/ Dale A. Schnittjer
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Dale A. Schnittjer, Senior Vice President and
Chief Financial Officer
(Principal Financial Officer and Authorized Officer)
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25
Teledyne Technologies Incorporated
Index to Exhibits
|
|
|
Exhibit Number
|
|
Description
|
Exhibit 10.1
|
|
Amended and Restated Credit Agreement, dated as of July 14, 2006, among Teledyne
Technologies Incorporated, Bank of America, N.A., as Administrative Agent, Swing Line
Lender and L/C Issuer, certain lenders thereunder and certain subsidiaries of Teledyne
Technologies Incorporated as guarantors, together with Schedules and Exhibits thereto.
|
Exhibit 10.2
|
|
Note Purchase Agreement, dated May 12, 2010, by and among Teledyne Technologies
Incorporated and the Purchasers identified therein, together with Schedules and Exhibits
thereto.
|
Exhibit 31.1
|
|
302 Certification Robert Mehrabian
|
Exhibit 31.2
|
|
302 Certification Dale A. Schnittjer
|
Exhibit 32.1
|
|
906 Certification Robert Mehrabian
|
Exhibit 32.2
|
|
906 Certification Dale A. Schnittjer
|
26
Exhibit
10.1
[Published CUSIP Number:
]
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of July 14, 2006
among
TELEDYNE TECHNOLOGIES INCORPORATED,
as the Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER IDENTIFIED HEREIN,
as the Guarantors,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender and L/C Issuer,
THE BANK OF NEW YORK,
as Syndication Agent,
THE BANK OF TOKYO-MITSUBISHI UFJ TRUST COMPANY,
JPMORGAN CHASE BANK, N.A. AND SUNTRUST BANK,
as Co-Documentation Agents
and
THE OTHER LENDERS PARTY HERETO
BANC OF AMERICA SECURITIES LLC,
as Sole Book Manager and Sole Lead Arranger
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
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1
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1.01
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Defined Terms.
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1
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1.02
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Other Interpretive Provisions.
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20
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1.03
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Accounting Terms.
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21
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1.04
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Rounding.
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21
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1.05
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References to Agreements and Laws.
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21
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1.06
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Times of Day.
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22
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1.07
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Letter of Credit Amounts.
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22
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ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS
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22
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2.01
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Revolving Loans.
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22
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2.02
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Borrowings, Conversions and Continuations of Loans.
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22
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2.03
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Letters of Credit.
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24
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2.04
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Swing Line Loans.
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31
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2.05
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Prepayments.
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34
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2.06
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Termination or Reduction of Aggregate Revolving Commitments.
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35
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2.07
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Repayment of Loans.
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35
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2.08
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Interest.
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35
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2.09
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Fees.
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36
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2.10
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Computation of Interest and Fees.
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36
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2.11
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Evidence of Debt.
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36
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2.12
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Payments Generally; Administrative Agents Clawback.
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37
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2.13
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Sharing of Payments by Lenders.
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38
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ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY
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39
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3.01
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Taxes.
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39
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3.02
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Illegality.
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41
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3.03
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Inability to Determine Rates.
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41
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3.04
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Increased Costs.
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42
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3.05
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Funding Losses.
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43
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3.06
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Mitigation Obligations; Replacement of Lenders.
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43
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3.07
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Survival.
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44
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ARTICLE IV GUARANTY
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44
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4.01
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The Guaranty.
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44
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4.02
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Obligations Unconditional.
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44
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4.03
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Reinstatement.
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45
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4.04
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Certain Additional Waivers.
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46
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4.05
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Remedies.
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46
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4.06
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Rights of Contribution.
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46
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4.07
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Guarantee of Payment; Continuing Guarantee.
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46
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ARTICLE V CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
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46
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5.01
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Conditions of Initial Credit Extension.
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46
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5.02
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Conditions to all Credit Extensions.
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48
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ARTICLE VI REPRESENTATIONS AND WARRANTIES
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48
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6.01
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Existence, Qualification and Power.
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48
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6.02
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Authorization; No Contravention.
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49
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6.03
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Governmental Authorization; Other Consents.
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49
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6.04
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Binding Effect.
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49
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6.05
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Financial Statements; No Material Adverse Effect.
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49
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i
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6.06
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Litigation.
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50
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6.07
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No Default.
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50
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6.08
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Ownership of Property; Liens.
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50
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6.09
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Environmental Compliance.
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50
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6.10
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Insurance.
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51
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6.11
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Taxes.
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51
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6.12
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ERISA Compliance.
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51
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6.13
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Subsidiaries.
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51
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6.14
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Margin Regulations; Investment Company Act; Public Utility Holding Company Act.
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52
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6.15
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Disclosure.
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52
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6.16
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Compliance with Laws.
|
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52
|
|
|
|
|
6.17
|
|
|
Intellectual Property; Licenses, Etc.
|
|
|
52
|
|
|
|
|
6.18
|
|
|
Solvency.
|
|
|
53
|
|
|
|
|
6.19
|
|
|
Legal Name.
|
|
|
53
|
|
|
|
|
6.20
|
|
|
Brokers Fees.
|
|
|
53
|
|
|
|
|
6.21
|
|
|
Labor Matters.
|
|
|
53
|
|
ARTICLE VII AFFIRMATIVE COVENANTS
|
|
|
53
|
|
|
|
|
7.01
|
|
|
Financial Statements.
|
|
|
53
|
|
|
|
|
7.02
|
|
|
Certificates; Other Information.
|
|
|
54
|
|
|
|
|
7.03
|
|
|
Notices. Promptly notify the Administrative Agent and each Lender:
|
|
|
55
|
|
|
|
|
7.04
|
|
|
Payment of Obligations.
|
|
|
56
|
|
|
|
|
7.05
|
|
|
Preservation of Existence, Etc.
|
|
|
56
|
|
|
|
|
7.06
|
|
|
Maintenance of Properties.
|
|
|
56
|
|
|
|
|
7.07
|
|
|
Maintenance of Insurance.
|
|
|
56
|
|
|
|
|
7.08
|
|
|
Compliance with Laws.
|
|
|
56
|
|
|
|
|
7.09
|
|
|
Books and Records.
|
|
|
57
|
|
|
|
|
7.10
|
|
|
Inspection Rights.
|
|
|
57
|
|
|
|
|
7.11
|
|
|
Use of Proceeds.
|
|
|
57
|
|
|
|
|
7.12
|
|
|
Additional Guarantors.
|
|
|
57
|
|
|
|
|
7.13
|
|
|
ERISA Compliance.
|
|
|
57
|
|
ARTICLE VIII NEGATIVE COVENANTS
|
|
|
58
|
|
|
|
|
8.01
|
|
|
Liens.
|
|
|
58
|
|
|
|
|
8.02
|
|
|
Investments.
|
|
|
60
|
|
|
|
|
8.03
|
|
|
Indebtedness.
|
|
|
60
|
|
|
|
|
8.04
|
|
|
Fundamental Changes.
|
|
|
61
|
|
|
|
|
8.05
|
|
|
Dispositions.
|
|
|
61
|
|
|
|
|
8.06
|
|
|
Change in Nature of Business.
|
|
|
62
|
|
|
|
|
8.07
|
|
|
Transactions with Affiliates and Insiders.
|
|
|
62
|
|
|
|
|
8.08
|
|
|
Burdensome Agreements.
|
|
|
62
|
|
|
|
|
8.09
|
|
|
Use of Proceeds.
|
|
|
63
|
|
|
|
|
8.10
|
|
|
Financial Covenants.
|
|
|
63
|
|
|
|
|
8.11
|
|
|
Organization Documents; Fiscal Year.
|
|
|
63
|
|
|
|
|
8.12
|
|
|
Sale Leasebacks.
|
|
|
63
|
|
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES
|
|
|
63
|
|
|
|
|
9.01
|
|
|
Events of Default.
|
|
|
63
|
|
|
|
|
9.02
|
|
|
Remedies Upon Event of Default.
|
|
|
65
|
|
|
|
|
9.03
|
|
|
Application of Funds.
|
|
|
66
|
|
ARTICLE X ADMINISTRATIVE AGENT
|
|
|
67
|
|
|
|
|
10.01
|
|
|
Appointment and Authority.
|
|
|
67
|
|
|
|
|
10.02
|
|
|
Rights as a Lender.
|
|
|
67
|
|
|
|
|
10.03
|
|
|
Exculpatory Provisions.
|
|
|
67
|
|
ii
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.04
|
|
|
Reliance by Administrative Agent.
|
|
|
68
|
|
|
|
|
10.05
|
|
|
Delegation of Duties.
|
|
|
68
|
|
|
|
|
10.06
|
|
|
Resignation of Administrative Agent.
|
|
|
68
|
|
|
|
|
10.07
|
|
|
Non-Reliance on Administrative Agent and Other Lenders.
|
|
|
69
|
|
|
|
|
10.08
|
|
|
No Other Duties, Etc.
|
|
|
69
|
|
|
|
|
10.09
|
|
|
Administrative Agent May File Proofs of Claim.
|
|
|
70
|
|
|
|
|
10.10
|
|
|
Releases.
|
|
|
70
|
|
ARTICLE XI MISCELLANEOUS
|
|
|
71
|
|
|
|
|
11.01
|
|
|
Amendments, Etc.
|
|
|
71
|
|
|
|
|
11.02
|
|
|
Notices; Effectiveness; Electronic Communication.
|
|
|
72
|
|
|
|
|
11.03
|
|
|
No Waiver; Cumulative Remedies.
|
|
|
73
|
|
|
|
|
11.04
|
|
|
Expenses; Indemnity; Damage Waiver.
|
|
|
73
|
|
|
|
|
11.05
|
|
|
Payments Set Aside.
|
|
|
75
|
|
|
|
|
11.06
|
|
|
Successors and Assigns.
|
|
|
75
|
|
|
|
|
11.07
|
|
|
Confidentiality.
|
|
|
77
|
|
|
|
|
11.08
|
|
|
Set-off.
|
|
|
78
|
|
|
|
|
11.09
|
|
|
Interest Rate Limitation.
|
|
|
79
|
|
|
|
|
11.10
|
|
|
Counterparts.
|
|
|
79
|
|
|
|
|
11.11
|
|
|
Integration.
|
|
|
79
|
|
|
|
|
11.12
|
|
|
Survival of Representations and Warranties.
|
|
|
79
|
|
|
|
|
11.13
|
|
|
Severability.
|
|
|
79
|
|
|
|
|
11.14
|
|
|
Replacement of Lenders.
|
|
|
80
|
|
|
|
|
11.15
|
|
|
Governing Law; Jurisdiction, Etc.
|
|
|
80
|
|
|
|
|
11.16
|
|
|
Waiver of Right to Trial by Jury.
|
|
|
80
|
|
|
|
|
11.17
|
|
|
No Advisory or Fiduciary Responsibility.
|
|
|
81
|
|
|
|
|
11.18
|
|
|
USA PATRIOT Act Notice.
|
|
|
81
|
|
|
|
|
11.19
|
|
|
Waiver of Notice of Termination.
|
|
|
81
|
|
iii
|
|
|
|
|
|
|
|
|
|
|
SCHEDULES
|
|
|
|
|
|
|
|
1.01
|
|
|
Existing Letters of Credit
|
|
|
|
|
|
|
|
2.01
|
|
|
Commitments and Pro Rata Shares
|
|
|
|
|
|
|
|
6.13
|
|
|
Subsidiaries
|
|
|
|
|
|
|
|
6.21
|
|
|
Collective Bargaining Agreements
|
|
|
|
|
|
|
|
8.01
|
|
|
Liens Existing on the Closing Date
|
|
|
|
|
|
|
|
8.02
|
|
|
Investments Existing on the Closing Date
|
|
|
|
|
|
|
|
8.03
|
|
|
Indebtedness Existing on the Closing Date
|
|
|
|
|
|
|
|
11.02
|
|
|
Certain Addresses for Notices
|
|
|
|
|
|
|
|
11.06
|
|
|
Processing and Recordation Fees
|
|
|
|
|
EXHIBITS
|
|
|
|
|
|
|
|
A
|
|
|
Form of Loan Notice
|
|
|
|
|
|
|
|
B
|
|
|
Form of Swing Line Loan Notice
|
|
|
|
|
|
|
|
C-1
|
|
|
Form of Revolving Note
|
|
|
|
|
|
|
|
C-2
|
|
|
Form of Swing Line Note
|
|
|
|
|
|
|
|
D
|
|
|
Form of Compliance Certificate
|
|
|
|
|
|
|
|
E
|
|
|
Form of Assignment and Assumption
|
|
|
|
|
|
|
|
F
|
|
|
Form of Joinder Agreement
|
|
|
|
|
iv
AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of July 14, 2006 among TELEDYNE
TECHNOLOGIES INCORPORATED, a Delaware corporation (the
Borrower
), the Guarantors (defined
herein), the Lenders (defined herein) and BANK OF AMERICA, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer and amends and restates that certain Credit Agreement, dated as of June
15, 2004 (as amended by the First Amendment to Credit Agreement dated as of March 15, 2006, the
Existing Credit Agreement
) among the Borrower, each guarantor from time to time party
thereto, each lender from time to time party thereto and Bank of America, N.A., as administrative
agent.
The Borrower has requested that the Lenders provide $400,000,000 in credit facilities for the
purposes set forth herein, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01
Defined Terms
.
As used in this Agreement, the following terms shall have the meanings set forth below:
Acquired Purchase Money Indebtedness
means the Indebtedness of any Person that
becomes a Subsidiary of the Borrower or Indebtedness directly attributable to assets acquired by
the Borrower or any of its Subsidiaries, in each case, after the Closing Date pursuant to a
Permitted Acquisition, if such Indebtedness was outstanding prior to the time such Person became a
Subsidiary of the Borrower or such assets were so acquired and was not created in contemplation of
or in connection with such Person becoming a Subsidiary of the Borrower or the acquisition of such
assets and constitutes either (i) obligations under Capital Leases or (ii) purchase money or other
Indebtedness incurred to finance the acquisition of fixed or capital assets and otherwise
satisfying the requirements of
Section 8.01(i)
.
Acquisition
, by any Person, means the acquisition by such Person, in a single
transaction or in a series of related transactions, of all or substantially all of the Property of
another Person or all or substantially all of the Voting Stock of another Person, in each case
whether or not involving a merger or consolidation with such other Person and whether for cash,
property, services, assumption of Indebtedness, securities or otherwise.
Administrative Agent
means Bank of America in its capacity as administrative agent
under any of the Loan Documents, or any successor administrative agent.
Administrative Agent Fee Letter
means the letter agreement, dated June 9, 2006 among
the Borrower, the Administrative Agent and BAS.
Administrative Agents Office
means the Administrative Agents address and, as
appropriate, account as set forth on
Schedule 11.02
or such other address or account as the
Administrative Agent may from time to time notify the Borrower and the Lenders.
Administrative Questionnaire
means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
Affiliate
means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.
Control
means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
Controlling
and
Controlled
have meanings correlative thereto. Without limiting the generality of the
foregoing, a Person shall be deemed to be Controlled by another Person if such other Person
possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary
voting power for the election of directors, managing general partners or the equivalent.
Aggregate Revolving Commitments
means the Revolving Commitments of all the Lenders.
The initial amount of the Aggregate Revolving Commitments in effect on the Closing Date is FOUR
HUNDRED MILLION DOLLARS ($400,000,000).
Agreement
means this Credit Agreement, as amended, modified, supplemented and
extended in writing from time to time.
Applicable Rate
means in the case of the Revolving Loans, the Letters of Credit and
the Swing Line Loans, the following percentages per annum, based upon the Consolidated Leverage
Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent
pursuant to
Section 7.02(a)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pricing Level
|
|
Consolidated Leverage Ratio
|
|
Facility Fee
|
|
Letters of Credit
|
|
Eurodollar Loans
|
|
Base Rate Loans
|
|
1
|
|
|
Greater than or
equal to 2.5 to 1.0
|
|
|
0.25
|
%
|
|
|
1.00
|
%
|
|
|
1.00
|
%
|
|
|
0.00
|
%
|
|
2
|
|
|
Less than 2.5 to
1.0 but greater
than or equal to
2.0 to 1.0
|
|
|
0.20
|
%
|
|
|
0.80
|
%
|
|
|
0.80
|
%
|
|
|
0.00
|
%
|
|
3
|
|
|
Less than 2.0 to
1.0 but greater
than or equal to
1.5 to 1.0
|
|
|
0.15
|
%
|
|
|
0.60
|
%
|
|
|
0.60
|
%
|
|
|
0.00
|
%
|
|
4
|
|
|
Less than 1.5 to
1.0 but greater
than or equal to
1.0 to 1.0
|
|
|
0.125
|
%
|
|
|
0.50
|
%
|
|
|
0.50
|
%
|
|
|
0.00
|
%
|
|
5
|
|
|
Less than 1.0 to 1.0
|
|
|
0.10
|
%
|
|
|
0.40
|
%
|
|
|
0.40
|
%
|
|
|
0.00
|
%
|
Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated
Leverage Ratio shall become effective as of the first Business Day immediately following the date a
Compliance
2
Certificate is required to be delivered pursuant to
Section 7.02(a)
;
provided
,
however
, that if a Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level 1 shall apply as of the first Business Day after the date on which such
Compliance Certificate was required to have been delivered and shall continue to apply until the
first Business Day immediately following the date a Compliance Certificate is delivered in
accordance with
Section 7.02(a)
, whereupon the Applicable Rate shall be adjusted based upon
the calculation of the Consolidated Leverage Ratio contained in such Compliance Certificate. The
Applicable Rate in effect from the Closing Date through the first Business Day immediately
following the date a Compliance Certificate is required to be delivered pursuant to
Section
7.02(a)
for the fiscal quarter ending July 2, 2006 shall be determined based upon Pricing Level
5.
Approved Fund
means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.
Assignment and Assumption
means an Assignment and Assumption substantially in the
form of
Exhibit E
.
Attorney Costs
means and includes all reasonable fees, expenses and disbursements of
any law firm or other external counsel.
Attributable Indebtedness
means, on any date, (a) in respect of any Capital Lease of
any Person, the capitalized amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease, the
capitalized amount of the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a Capital Lease and (c) in respect of any Securitization Transaction of any
Person, the outstanding principal amount of such financing, after taking into account reserve
accounts and making appropriate adjustments, determined by the Administrative Agent in its
reasonable judgment.
Audited Financial Statements
means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended January 1, 2006, and the related
consolidated statements of income or operations, shareholders equity and cash flows for such
fiscal year of the Borrower and its Subsidiaries, including the notes thereto.
Availability Period
means the period from and including the Closing Date to the
earliest of (i) the Maturity Date, (ii) the date of termination of the Aggregate Revolving
Commitments pursuant to
Section 2.06
, and (iii) the date of termination of the commitment
of each Lender to make Revolving Loans and of the obligation of the L/C Issuer to make L/C Credit
Extensions pursuant to
Section 9.02
.
Bank of America
means Bank of America, N.A. and its successors.
BAS
means Banc of America Securities LLC, in its capacity as joint lead arranger and
sole book manager.
Base Rate
means for any day a fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as
publicly announced from time to time by Bank of America as its prime rate. The prime rate is a
rate set by Bank of America based upon various factors including Bank of Americas costs and
desired return, general economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate. Any change in the
prime rate announced by Bank of America shall take effect at the opening of business on the day
specified in the public announcement of such change.
3
Base Rate Loan
means a Loan that bears interest based on the Base Rate.
Borrower
has the meaning specified in the introductory paragraph hereto.
Borrower Materials
has the meaning specified in
Section 7.02
.
Borrowing
means a borrowing consisting of simultaneous Loans of the same Type and,
in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders
pursuant to
Section 2.01
.
Business Day
means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact closed in, the state
where the Administrative Agents Office is located or the State of California and, if such day
relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.
Capital Lease
means, as applied to any Person, any lease of any Property by that
Person as lessee which, in accordance with GAAP, is required to be accounted for as a capital lease
on the balance sheet of that Person.
Capital Stock
means (i) in the case of a corporation, capital stock, (ii) in the
case of an association or business entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of capital stock, (iii) in the case of a partnership,
partnership interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
Cash Collateralize
has the meaning specified in
Section 2.03(g)
.
Cash Equivalents
means, as at any date, (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality thereof (provided that
the full faith and credit of the United States is pledged in support thereof) having maturities of
not more than twelve months from the date of acquisition, (b) Dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of recognized standing
having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or from Moodys is at least P-1 or
the equivalent thereof (any such bank being an Approved Bank), in each case with maturities of
not more than 270 days from the date of acquisition, (c) commercial paper and variable or fixed
rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate
notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof)
or better by S&P or P-1 (or the equivalent thereof) or better by Moodys and maturing within six
months of the date of acquisition, (d) repurchase agreements entered into by any Person with a bank
or trust company (including any of the Lenders) or recognized securities dealer having capital and
surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the
United States in which such Person shall have a perfected first priority security interest (subject
to no other Liens) and having, on the date of purchase thereof, a fair market value of at least
100% of the amount of the repurchase obligations and (e) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered under the Investment Company
Act of 1940, as amended, which are administered by reputable financial institutions having capital
of at least $500,000,000 and the portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (d).
4
Change in Law
means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority.
Change of Control
means an event or series of events by which:
(a) any person or group (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have beneficial ownership of all Capital Stock that such person
or group has the right to acquire (such right, an
option right
), whether such
right is exercisable immediately or only after the passage of time), directly or indirectly,
of twenty-five percent (25%) of the Capital Stock of the Borrower entitled to vote for
members of the board of directors or equivalent governing body of the Borrower on a fully
diluted basis (and taking into account all such securities that such person or group has the
right to acquire pursuant to any option right); or
(b) during any period of 24 consecutive months, a majority of the members of the board
of directors or other equivalent governing body of the Borrower cease to be composed of
individuals (i) who were members of that board or equivalent governing body on the first day
of such period, (ii) whose election or nomination to that board or equivalent governing body
was approved by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing body or
(iii) whose election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any individual whose
initial nomination for, or assumption of office as, a member of that board or equivalent
governing body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or group other
than a solicitation for the election of one or more directors by or on behalf of the board
of directors).
Closing Date
means the date hereof.
Commitment
means, as to each Lender, the Revolving Commitment of such Lender.
Compliance Certificate
means a certificate substantially in the form of
Exhibit
D
.
Consolidated EBIT
means, for any period, for the Borrower and its Subsidiaries on a
consolidated basis, an amount equal to Consolidated Net Income for such period
plus
the
following to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated
Interest Charges for such period and (b) the provision for federal, state, local and foreign income
taxes payable by the Borrower and its Subsidiaries for such period.
Consolidated EBITDA
means, for any period, for the Borrower and its Subsidiaries on
a consolidated basis, an amount equal to Consolidated Net Income for such period
plus
the
following to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated
Interest Charges for such
5
period, (b) the provision for federal, state, local and foreign income taxes payable by the
Borrower and its Subsidiaries for such period and (c) the amount of depreciation and amortization
expense for such period.
Consolidated Funded Indebtedness
means Funded Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis.
Consolidated Interest Charges
means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (i) all interest, premium
payments, debt discount, fees, charges and related expenses of the Borrower and its Subsidiaries in
connection with Indebtedness (including capitalized interest and other fees and charges incurred
under any asset securitization program) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
plus
(ii)
the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under
Capital Leases or Synthetic Leases that is treated as interest in accordance with GAAP.
Consolidated Interest Coverage Ratio
means, as of any date of determination, the
ratio of (a) Consolidated EBIT for the period of the four fiscal quarters most recently ended for
which the Borrower has delivered financial statements pursuant to
Section 7.01(a)
or
(b)
to (b) Consolidated Interest Charges for the period of the four fiscal quarters most
recently ended for which the Borrower has delivered financial statements pursuant to
Section
7.01(a)
or
(b)
.
Consolidated Leverage Ratio
means, as of any date of determination, the ratio of (a)
Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the
four fiscal quarters most recently ended for which the Borrower has delivered financial statements
pursuant to
Section 7.01(a)
or
(b)
.
Consolidated Net Income
means, for any period, for the Borrower and its Subsidiaries
on a consolidated basis, the net income of the Borrower and its Subsidiaries (excluding
extraordinary non-cash gains and extraordinary non-cash losses) for that period, as determined in
accordance with GAAP.
Consolidated Net Worth
means, as of any date of determination, consolidated
shareholders equity of the Borrower and its Subsidiaries as of that date determined in accordance
with GAAP.
Consolidated Total Assets
means, as of any date of determination, for the Borrower
and its Subsidiaries on a consolidated basis, the value of all properties and all right, title and
interest in such properties which would be classified as assets of the Borrower and its
Subsidiaries, as determined in accordance with GAAP.
Contractual Obligation
means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound.
Control
has the meaning specified in the definition of Affiliate.
Credit Extension
means each of the following: (a) a Borrowing and (b) an L/C Credit
Extension.
Debt Issuance
means the issuance by the Borrower or any Subsidiary of any
Indebtedness other than Indebtedness permitted under
Section 8.03(b)
.
6
Debtor Relief Laws
means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.
Default
means any event or condition that constitutes an Event of Default or that,
with the giving of any notice, the passage of time, or both, would be an Event of Default.
Default Rate
means (a) with respect to Obligations other than Letter of Credit
Fees, an interest rate equal to (i) the Base Rate
plus
(ii) the Applicable Rate, if any,
applicable to Base Rate Loans
plus
(iii) 2% per annum;
provided
,
however
,
that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to
the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per
annum, and (b) with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2%
per annum, in all cases to the fullest extent permitted by applicable Laws.
Defaulting Lender
means any Lender that (a) has failed to fund any portion of the
Loans, participations in L/C Obligations or participations in Swing Line Loans required to be
funded by it hereunder within one Business Day of the date required to be funded by it hereunder,
(b) has otherwise failed to pay over to the Administrative Agent or any other Lender 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 (c) has been deemed insolvent or become the subject of a
bankruptcy or insolvency proceeding.
Disposition
or
Dispose
means the sale, transfer, license, lease or other
disposition (including any Sale and Leaseback Transaction) of any Property by the Borrower or any
Subsidiary (including the Capital Stock of any Subsidiary), including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith, but excluding (i) the sale, lease, license, transfer or
other disposition of inventory in the ordinary course of business of the Borrower and its
Subsidiaries, (ii) the sale, lease, license, transfer or other disposition of machinery and
equipment no longer used or useful in the conduct of business of the Borrower and its Subsidiaries,
(iii) any sale, lease, license, transfer or other disposition of Property by the Borrower or any
Subsidiary to any Loan Party, (iv) any Involuntary Disposition by the Borrower or any Subsidiary,
(v) any Disposition by the Borrower or any Subsidiary to the extent constituting a Permitted
Investment, and (vi) any sale, lease, license, transfer or other disposition of Property by any
Foreign Subsidiary to another Foreign Subsidiary.
Dollar
and
$
mean lawful money of the United States.
Domestic Subsidiary
means any Subsidiary that is organized under the laws of any
political subdivision of the United States.
Earn Out Obligations
means, with respect to an Acquisition, all obligations of the
Borrower or any Subsidiary to make earn out or other contingency payments pursuant to the
documentation relating to such Acquisition. The amount of any Earn Out Obligation shall be deemed
to be the aggregate liability in respect thereof as recorded on the balance sheet of the Borrower
and its Subsidiaries in accordance with GAAP.
Eligible Assignee
means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative
Agent (and in the case of an assignment of a Revolving Commitment, the L/C Issuer and the Swing
Line Lender), and (ii) with respect to Revolving Loans, unless an Event of Default has occurred and
is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed);
provided
that notwithstanding the
7
foregoing, Eligible Assignee shall not include the Borrower or any of the Borrowers
Affiliates or Subsidiaries.
Environmental Laws
means any and all federal, state, local, foreign and other
applicable statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental restrictions in each case
relating to pollution and the protection of the environment or the release of any materials into
the environment, including those related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.
Environmental Liability
means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure
to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into
the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
Equity Issuance
means any issuance by the Borrower or any Subsidiary to any Person
of shares of its Capital Stock, other than (a) any issuance of shares of its Capital Stock pursuant
to the exercise of options or warrants, (b) any issuance of shares of its Capital Stock pursuant to
the conversion of any debt securities to equity or the conversion of any class equity securities to
any other class of equity securities, (c) any issuance of options or warrants relating to its
Capital Stock, and (d) any issuance by the Borrower of shares of its Capital Stock as consideration
for a Permitted Acquisition. The term Equity Issuance shall not be deemed to include any
Disposition.
ERISA
means the Employee Retirement Income Security Act of 1974, as amended, and any
regulations issued pursuant thereto.
ERISA Affiliate
means any trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of Section 414(b) or (c) of the Internal
Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions
relating to Section 412 of the Internal Revenue Code).
ERISA Event
means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e)
of ERISA or the termination of a Pension Plan subject to Section 4064 of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification
that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an
event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
Eurodollar Base Rate
has the meaning specified in the definition of Eurodollar Rate.
8
Eurodollar Rate
means for any Interest Period with respect to a Eurodollar Rate
Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:
|
|
|
|
|
|
|
|
|
|
|
Eurodollar Rate
|
|
=
|
|
Eurodollar Base Rate
1.00 - Eurodollar Reserve Percentage
|
|
|
Where,
Eurodollar Base Rate
means, for such Interest Period, the rate per annum
equal to the British Bankers Association LIBOR Rate (
BBA LIBOR
), as published by
Reuters (or other commercially available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period. If such rate is not available at such time for any reason, then the
Eurodollar Base Rate for such Interest Period shall be the rate per annum determined by
the Administrative Agent to be the rate at which deposits in Dollars for delivery on the
first day of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of Americas London Branch to
major banks in the London interbank eurodollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such Interest
Period.
Eurodollar Rate Loan
means a Loan that bears interest at a rate based on the
Eurodollar Rate.
Eurodollar Reserve Percentage
means, for any day during any Interest Period, the
reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such
day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB
for determining the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurodollar funding (currently referred to as
Eurocurrecy liabilities). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be
adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
Event of Default
has the meaning specified in
Section 9.01
.
Excluded Taxes
means, with respect to the Administrative Agent, any Lender, the L/C
Issuer or any other recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar
tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower under
Section
11.14
), any withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is
attributable to such Foreign Lenders failure or inability (other than as a result of a Change in
Law) to comply with
Section 3.01(e)
, except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment),
to receive additional amounts from the Borrower with respect to such withholding tax pursuant to
Section 3.01(a)
.
Existing Credit Agreement
has the meaning specified in the introductory paragraph
hereto.
9
Existing Letters of Credit
means the standby letters of credit described by date of
issuance, letter of credit number, undrawn amount, name of beneficiary and date of expiry on
Schedule 1.01
.
Federal Funds Rate
means, for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day;
provided
that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such
rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by the Administrative
Agent.
Foreign Lender
means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
Foreign Subsidiary
means any Subsidiary that is not a Domestic Subsidiary.
FRB
means the Board of Governors of the Federal Reserve System of the United States.
Fund
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.
Funded Indebtedness
means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or liabilities in
accordance with GAAP:
(a) all obligations for borrowed money, whether current or long-term (including the
Obligations) and all obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all purchase money Indebtedness;
(c) all obligations arising under letters of credit (including standby), bankers
acceptances, bank guaranties, surety bonds and similar instruments;
(d) all obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business), including without
limitation, any Earn Out Obligations;
(e) the Attributable Indebtedness of Capital Leases and Synthetic Leases;
(f) the Attributable Indebtedness of Securitization Transactions;
(g) all preferred stock or other equity interests providing for mandatory redemptions,
sinking fund or like payments prior to the Maturity Date; and
(h) all Guarantees with respect to Indebtedness of the types specified in clauses (a)
through (g) above of another Person; and
10
(i) all Indebtedness of the types referred to in clauses (a) through (h) above of any
partnership or joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or joint venturer,
except to the extent such Indebtedness is expressly made non-recourse to such Person.
For purposes hereof, (x) the amount of any obligation arising under letters of credit
(including standby and commercial), bankers acceptances, bank guaranties, surety bonds and
similar instruments shall be the maximum amount available to be drawn thereunder and (y) the
amount of any Guarantee shall be the amount of the Indebtedness subject to such Guarantee.
GAAP
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board, consistently applied.
Governmental Authority
means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative
tribunal, central bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.
Guarantee
means, as to any Person, (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the primary obligor) in any manner, and
including any obligation of such Person, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of such Indebtedness or
other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to
maintain working capital, equity capital or any other financial statement condition or liquidity or
level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness or other obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof (in whole or in
part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is assumed by such
Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by the guaranteeing Person in good faith. The term Guarantee as
a verb has a corresponding meaning.
Guaranty
means the Guaranty made by the Guarantors in favor of the Administrative
Agent and the Lenders pursuant to
Article IV
hereof.
Guarantors
means each Domestic Subsidiary of the Borrower that is a Material
Subsidiary and each other Person that joins as a Guarantor pursuant to
Section 7.12
,
together with their successors and permitted assigns.
Hazardous Materials
means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.
11
Honor Date
has the meaning set forth in
Section 2.03(c)
.
Indebtedness
means, as to any Person at any time, without duplication, all items
which would, in conformity with GAAP, be classified as indebtedness on a balance sheet of such
Person at such time, as well as the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all Funded Indebtedness;
(b) net obligations under any Swap Contract;
(c) all Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) and (b) above of any other Person; and
(d) all Indebtedness of the types referred to in clauses (a) through (c) above of any
partnership or joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which the Borrower or a Subsidiary is a general partner or
joint venturer, unless such Indebtedness is expressly made non-recourse to the Borrower or
such Subsidiary.
For purposes hereof (y) the amount of any net obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date and (z) the amount
of any Guarantee shall be the amount of the Indebtedness subject to such Guarantee.
Indemnified Taxes
means Taxes other than Excluded Taxes.
Indemnitees
has the meaning specified in
Section 11.04
.
Interest Payment Date
means (a) as to any Loan other than a Base Rate Loan, the last
day of each Interest Period applicable to such Loan and the Maturity Date;
provided
,
however
, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such Interest Period shall
also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the
last Business Day of each March, June, September and December and the Maturity Date.
Interest Period
means, as to each Eurodollar Rate Loan, the period commencing on the
date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan
and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its
Loan Notice;
provided
that:
(i) any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last Business
Day of the calendar month at the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
Interim Financial Statements
has the meaning set forth in
Section 5.01(c)
.
12
Internal Revenue Code
means the Internal Revenue Code of 1986.
Investment
means, as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of Capital Stock of
another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other Person, or (c) an
Acquisition. For purposes of covenant compliance, the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases in the value of such
Investment.
Involuntary Disposition
means any loss of, damage to or destruction of, or any
condemnation or other taking for public use of, any Property of the Borrower or any of its
Subsidiaries.
IP Rights
has the meaning set forth in
Section 6.17
.
IRS
means the United States Internal Revenue Service.
ISP
means, with respect to any Letter of Credit, the International Standby
Practices 1998 published by the Institute of International Banking Law & Practice (or such later
version thereof as may be in effect at the time of issuance).
Issuer Documents
means with respect to any Letter of Credit, the Letter Credit
Application, and any other document, agreement and instrument entered into by the L/C Issuer and
the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to any such Letter of
Credit.
Joinder Agreement
means a joinder agreement substantially in the form of
Exhibit
F
executed and delivered by a Domestic Subsidiary that is a Material Subsidiary in accordance
with the provisions of
Section 7.12
.
Laws
means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case whether or not having the
force of law.
L/C Advance
means, with respect to each Lender, such Lenders funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.
L/C Borrowing
means an extension of credit resulting from a drawing under any Letter
of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing of
Revolving Loans.
L/C Credit Extension
means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount thereof.
L/C Issuer
means Bank of America in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder.
13
L/C Obligations
means, as at any date of determination, the aggregate undrawn amount
of all outstanding Letters of Credit
plus
the aggregate of all Unreimbursed Amounts,
including all L/C Borrowings. For all purposes of this Agreement, if on any date of determination
a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason
of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be outstanding
in the amount so remaining available to be drawn.
Lenders
means each of the Persons identified as a Lender on the signature pages
hereto and their successors and assigns and, as the context requires, includes the L/C Issuer and
the Swing Line Lender.
Lending Office
means, as to any Lender, the office or offices of such Lender
described as such in such Lenders Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Borrower and the Administrative Agent.
Letter of Credit
means (a) any standby letter of credit issued hereunder and (b) any
Existing Letter of Credit. Each Letter of Credit shall be a standby letter of credit.
Letter of Credit Application
means an application and agreement for the issuance or
amendment of a letter of credit in the form from time to time in use by the L/C Issuer.
Letter of Credit Expiration Date
means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business
Day).
Letter of Credit Fee
has the meaning specified in
Section 2.03(i)
.
Letter of Credit Sublimit
means an amount equal to the lesser of (a) the Aggregate
Revolving Commitments and (b) $25,000,000. The Letter of Credit Sublimit is part of, and not in
addition to, the Aggregate Revolving Commitments.
Lien
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, and any financing lease having
substantially the same economic effect as any of the foregoing).
Loan
means an extension of credit by a Lender to the Borrower under
Article
II
in the form of a Revolving Loan or Swing Line Loan.
Loan Documents
means this Agreement, each Note, each Letter of Credit, each Letter
of Credit Application, each Joinder Agreement, each Issuer Document, each Request for Credit
Extension, each Compliance Certificate, the Administrative Agent Fee Letter and each other
document, instrument or agreement from time to time executed by the Borrower or any of its
Subsidiaries or any Responsible Officer thereof and delivered in connection with this Agreement.
Loan Notice
means a notice of (a) a Borrowing of Revolving Loans, (b) a conversion
of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to
Section 2.02(a)
, which, if in writing, shall be substantially in the form of
Exhibit
A
.
Loan Parties
means, collectively, the Borrower and each Guarantor.
14
Material Adverse Effect
means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, Properties, liabilities (actual or contingent) or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of the Loan Parties taken as a whole to perform their
obligations under the Loan Documents; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Loan Party of any Loan Document to which it is a
party.
Material Subsidiary
means, as of any date of determination, any Subsidiary of the
Borrower that (i) has on such date Total Assets constituting ten percent (10%) or more of
Consolidated Total Assets or (ii) for the most recently ended four fiscal quarter period has
revenues constituting ten percent or more of the consolidated revenues of the Borrower and its
Subsidiaries for such period, as determined in accordance with GAAP.
Maturity Date
means July 14, 2011.
Moodys
means Moodys Investors Service, Inc. and any successor thereto.
Multiemployer Plan
means any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding five plan years, has made or been obligated to make
contributions.
Note
or
Notes
means the Revolving Notes and/or the Swing Line Note,
individually or collectively, as appropriate.
Obligations
means all advances to, and debts, liabilities, obligations, covenants
and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan
or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute
or contingent, due or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of
any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such proceeding. The foregoing
shall also include any Swap Contract between any Loan Party and any Lender or Affiliate of a
Lender.
Organization Documents
means, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.
Other Taxes
means all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.
Outstanding Amount
means (i) with respect to any Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and prepayments or
15
repayments of any Loans occurring on such date; and (ii) with respect to any L/C Obligations on any
date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount available for drawing
under Letters of Credit taking effect on such date.
Participant
has the meaning specified in
Section 11.06(d)
.
PBGC
means the Pension Benefit Guaranty Corporation.
Pension Plan
means any employee pension benefit plan (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and
is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time
during the immediately preceding five plan years.
Permitted Acquisition
means Investments consisting of an Acquisition by the Borrower
or any Subsidiary of the Borrower,
provided
that (i) the Property acquired (or the Property
of the Person acquired) in such Acquisition is used or useful in the same, similar or complementary
lines of business as the Borrower and its Subsidiaries were engaged in on the Closing Date (or any
reasonable adjacencies, extensions or expansions thereof), (ii) in the case of an Acquisition of
the Capital Stock of another Person, the board of directors (or other comparable governing body) of
such other Person shall have duly approved such Acquisition, (iii) after giving effect to any such
Acquisition on a Pro Forma Basis, the Loan Parties are in compliance with the financial covenants
set forth in
Section 8.10
as of the most recent fiscal quarter for which the Borrower has
delivered financial statements pursuant to
Section 7.01(a)
or
(b)
, (iv) the
representations and warranties made by the Loan Parties in any Loan Document shall be true and
correct in all material respects at and as if made as of the date of such Acquisition (after giving
effect thereto) except to the extent such representations and warranties expressly relate to an
earlier date, (v) no Default or Event of Default has occurred and is continuing or would result
therefrom and (vi) if such transaction involves the purchase of an interest in a partnership
between the Borrower (or a Subsidiary of the Borrower) as a general partner and entities
unaffiliated with the Borrower or such Subsidiary as the other partners, such transaction shall be
effected by having such equity interest acquired by a corporate holding company directly or
indirectly wholly-owned by the Borrower newly formed for the sole purpose of effecting such
transaction.
Permitted Investments
means, at any time, Investments by the Borrower or any of its
Subsidiaries permitted to exist at such time pursuant to the terms of
Section 8.02
.
Permitted Liens
means, at any time, Liens in respect of Property of the Borrower or
any of its Subsidiaries permitted to exist at such time pursuant to the terms of
Section
8.01
.
Person
means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.
Plan
means any employee benefit plan (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412
of the Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate.
Platform
has the meaning specified in
Section 7.02
.
16
Pro Forma Basis
means, for purposes of calculating the financial covenants set forth
in Section 8.10 (including for purposes of determining the Applicable Rate), that any Disposition,
Involuntary Disposition or Acquisition shall be deemed to have occurred as of the first day of the
most recent four fiscal quarter period preceding the date of such transaction for which the
Borrower has delivered financial statements pursuant to
Section 7.01(a)
or
(b)
. In
connection with the foregoing, (a) with respect to any Disposition or Involuntary Disposition, (i)
income statement and cash flow statement items (whether positive or negative) attributable to the
Property disposed of shall be excluded to the extent relating to any period occurring prior to the
date of such transaction and (ii) Indebtedness which is retired shall be excluded and deemed to
have been retired as of the first day of the applicable period and (b) with respect to any
Acquisition (i) income statement items (whether positive or negative) attributable to the Person or
Property acquired shall be included to the extent relating to any period applicable in such
calculations to the extent (A) such items are not otherwise included in such income statement items
for the Borrower and its Subsidiaries in accordance with GAAP or in accordance with any defined
terms set forth in
Section 1.01
and (B) such items are supported by audited financial
statements or other information reasonably satisfactory to the Administrative Agent and (ii) any
Indebtedness incurred or assumed by the Borrower or any Subsidiary (including the Person or
Property acquired) in connection with such transaction and any Indebtedness of the Person or
Property acquired which is not retired in connection with such transaction (A) shall be deemed to
have been incurred as of the first day of the applicable period and (B) if such Indebtedness has a
floating or formula rate, shall have an implied rate of interest for the applicable period for
purposes of this definition determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination.
Pro Rata Share
means, as to each Lender at any time, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is the amount of the
Revolving Commitment of such Lender at such time and the denominator of which is the amount of the
Aggregate Revolving Commitments at such time;
provided
that if the commitment of each
Lender to make Revolving Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to
Section 9.02
, then the Pro Rata Share of each Lender shall
be determined based on the Pro Rata Share of such Lender immediately prior to such termination and
after giving effect to any subsequent assignments made pursuant to the terms hereof. The initial
Pro Rata Share of each Lender is set forth opposite the name of such Lender on
Schedule
2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable.
Property
means any interest of any kind in any property or asset, whether real,
personal or mixed, or tangible or intangible.
Register
has the meaning specified in
Section 11.06(c)
.
Related Parties
means, with respect to any Person, such Persons Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Persons
Affiliates.
Reportable Event
means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the thirty-day notice period has been waived.
Request for Credit Extension
means (a) with respect to a Borrowing, conversion or
continuation of Loans, a Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of
Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.
Required Lenders
means, at any time, Lenders holding in the aggregate more than
fifty percent (50%) of (a) the Revolving Commitments or (b) if the Revolving Commitments have been
terminated, the outstanding Loans, L/C Obligations, Swing Line Loans and participations therein.
The Revolving
17
Commitments of, and the outstanding Loans held or deemed held by, any Defaulting Lender shall
be excluded for purposes of making a determination of Required Lenders.
Responsible Officer
means the chief executive officer, president, chief financial
officer or treasurer of a Loan Party. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
Revolving Commitment
means, as to each Lender, its obligation to (a) make Revolving
Loans to the Borrower pursuant to
Section 2.01
, (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount
at any one time outstanding not to exceed the amount set forth opposite such Lenders name on
Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time in accordance with
this Agreement.
Revolving Loan
has the meaning specified in
Section 2.01
.
Revolving Note
has the meaning specified in
Section 2.11(a)
.
S&P
means Standard & Poors Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.
Sale and Leaseback Transaction
means, with respect to the Borrower or any
Subsidiary, any arrangement, directly or indirectly, with any person whereby the Borrower or such
Subsidiary shall sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes as the property
being sold or transferred.
SEC
means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.
Securitization Transaction
means any financing transaction or series of financing
transactions (including factoring arrangements) pursuant to which the Borrower or any Subsidiary
may sell, convey or otherwise transfer, or grant a security interest in, accounts, payments,
receivables, rights to future lease payments or residuals or similar rights to payment to a special
purpose subsidiary or affiliate of the Borrower.
Solvent
or
Solvency
means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the ordinary course of business, (b) such
Person does not intend to, and does not believe that it will, incur debts or liabilities beyond
such Persons ability to pay as such debts and liabilities mature in their ordinary course, (c)
such Person is not engaged in a business or a transaction, and is not about to engage in a business
or a transaction, for which such Persons Property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in which such Person is
engaged or is to engage, (d) the fair value of the Property of such Person is greater than the
total amount of liabilities, including, without limitation, contingent liabilities, of such Person
and (e) the present fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts as they become
absolute and matured. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of all the facts
18
and circumstances existing at such time, represents the amount that can reasonably be expected
to become an actual or matured liability.
Subsidiary
of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of Capital Stock
having ordinary voting power for the election of directors or other governing body (other than
Capital Stock having such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a Subsidiary or to Subsidiaries shall refer to a Subsidiary or
Subsidiaries of the Borrower.
Swap Contract
means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a
Master Agreement
), including any such
obligations or liabilities under any Master Agreement.
Swap Termination Value
means, in respect of any one or more Swap Contracts, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).
Swing Line Lender
means Bank of America in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.
Swing Line Loan
has the meaning specified in
Section 2.04(a)
.
Swing Line Loan Notice
means a notice of a Borrowing of Swing Line Loans pursuant to
Section 2.04(b)
, which, if in writing, shall be substantially in the form of
Exhibit
B
.
Swing Line Note
has the meaning specified in
Section 2.11(a)
.
Swing Line Sublimit
means an amount equal to the lesser of (a) $10,000,000 and (b)
the Aggregate Revolving Commitments. The Swing Line Sublimit is part of, and not in addition to,
the Aggregate Revolving Commitments.
Synthetic Lease
means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing arrangement whereby the arrangement
is considered borrowed
19
money indebtedness for tax purposes but is classified as an operating lease or does not
otherwise appear on the balance sheet under GAAP.
Taxes
means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental Authority, including
any interest, additions to tax or penalties applicable thereto.
Threshold Amount
means $20,000,000.
Total Revolving Outstandings
means the aggregate Outstanding Amount of all Revolving
Loans, all Swing Line Loans and all L/C Obligations.
Type
means, with respect to any Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.
Unfunded Pension Liability
means the excess of a Pension Plans benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension Plans assets,
determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section
412 of the Internal Revenue Code for the applicable plan year.
United States
and
U.S.
mean the United States of America.
Unreimbursed Amount
has the meaning specified in
Section 2.03(c)(i)
.
Voting Stock
means, with respect to any Person, Capital Stock issued by such Person,
the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person, even though the
right so to vote has been suspended by the happening of such a contingency.
Wholly Owned Subsidiary
means any Person 100% of whose Capital Stock is at the time
owned by the Borrower directly or indirectly through other Persons 100% of whose Capital Stock is
at the time owned, directly or indirectly, by the Borrower.
1.02
Other Interpretive Provisions
.
With reference to this Agreement and each other Loan Document, unless otherwise specified
herein or in such other Loan Document:
(a) The meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms.
(b) (i) The words
herein
,
hereto
,
hereof
and
hereunder
and words of similar import when used in any Loan Document shall
refer to such Loan Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the Loan Document
in which such reference appears.
(iii) The term
including
is by way of example and not limitation.
20
(iv) The term
documents
includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other writings,
however evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified date to a later specified
date, the word
from
means
from and including
; the words
to
and
until
each mean
to but excluding
; and the word
through
means
to and including
.
(d) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this Agreement or
any other Loan Document.
1.03
Accounting Terms
.
(a) Except as otherwise specifically prescribed herein, all accounting terms not specifically
or completely defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be submitted pursuant to
this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in
effect from time to time, applied in a manner consistent with that used in preparing the Audited
Financial Statements; provided, however, that calculations of Attributable Indebtedness under any
Synthetic Lease or the implied interest component of any Synthetic Lease shall be made by the
Borrower in accordance with accepted financial practice and consistent with the terms of such
Synthetic Lease.
(b) If at any time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall
so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders);
provided
that
, until so
amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
(c) Notwithstanding the above, the parties hereto acknowledge and agree that all calculations
of the financial covenants in Section 8.10 (including for purposes of determining the Applicable
Rate) shall be made on a Pro Forma Basis.
1.04
Rounding
.
Any financial ratios required to be maintained by the Borrower pursuant to this Agreement
shall be calculated by dividing the appropriate component by the other component, carrying the
result to one place more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if there is no nearest
number).
1.05
References to Agreements and Laws
.
Unless otherwise expressly provided herein, (a) references to Organization Documents,
agreements (including the Loan Documents) and other contractual instruments shall be deemed to
include all subsequent amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions, supplements and
other modifications
21
are not prohibited by any Loan Document; and (b) references to any Law shall include all
statutory and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06
Times of Day
.
Unless otherwise specified, all references herein to times of day shall be references to
Pacific time (daylight or standard, as applicable).
1.07
Letter of Credit Amounts
.
Unless otherwise specified, all references herein to the amount of a Letter of Credit at any
time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect
to all increases thereof contemplated by such Letter of Credit or the Issuer Document related
thereto, whether or not such maximum face amount is in effect at such time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01
Revolving Loans
.
Subject to the terms and conditions set forth herein, each Lender severally agrees to make
loans (each such loan, a
Revolving Loan
) to the Borrower in Dollars from time to time on
any Business Day during the Availability Period in an aggregate amount not to exceed at any time
outstanding the amount of such Lenders Revolving Commitment;
provided
,
however
,
that after giving effect to any Borrowing of Revolving Loans, (i) the Total Revolving Outstandings
shall not exceed the Aggregate Revolving Commitments, and (ii) the aggregate Outstanding Amount of
the Revolving Loans of any Lender,
plus
such Lenders Pro Rata Share of the Outstanding
Amount of all L/C Obligations,
plus
such Lenders Pro Rata Share of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lenders Revolving Commitment.
Within the limits of each Lenders Revolving Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this
Section 2.01
, prepay under
Section 2.05
, and reborrow under this
Section 2.01
. Revolving Loans may be Base
Rate Loans or Eurodollar Rate Loans, as further provided herein; provided, however, all Borrowings
made on the Closing Date shall be made as Base Rate Loans.
2.02
Borrowings, Conversions and Continuations of Loans
.
(a) Each Borrowing, each conversion of Loans from one Type to the other, and each continuation
of Eurodollar Rate Loans shall be made upon the Borrowers irrevocable notice to the Administrative
Agent, which may be given by telephone. Each such notice must be received by the Administrative
Agent not later than 10:00 a.m. (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of, Eurodollar Rate Loans or of any conversion of
Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base
Rate Loans. Each telephonic notice by the Borrower pursuant to this
Section 2.02(a)
must
be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of,
conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $3,000,000
or a whole multiple of $500,000 in excess thereof. Except as provided in
Sections 2.03(c)
and
2.04(c)
, each Borrowing of or conversion to Base Rate Loans shall be in a principal
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Each Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a
conversion of Loans from one Type to the other, or a continuation of
22
Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation,
as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans
are to be converted, and (v) if applicable, the duration of the Interest Period with respect
thereto. If the Borrower fails to specify a Type of a Loan in a Loan Notice or if the Borrower
fails to give a timely notice requesting a conversion or continuation, then the applicable Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in effect with respect to
the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or
continuation of Eurodollar Rate Loans in any Loan Notice, but fails to specify an Interest Period,
it will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each
Lender of the amount of its Pro Rata Share of the applicable Loans, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each
Lender of the details of any automatic conversion to Base Rate Loans as described in the preceding
subsection. In the case of a Borrowing, each Lender shall make the amount of its Loan available to
the Administrative Agent in immediately available funds at the Administrative Agents Office not
later than 11:00 a.m. on the Business Day specified in the applicable Loan Notice. Upon
satisfaction of the applicable conditions set forth in
Section 5.02
(and, if such Borrowing
is the initial Credit Extension,
Section 5.01
), the Administrative Agent shall make all
funds so received available to the Borrower in like funds as received by the Administrative Agent
either by (i) crediting the account of the Borrower on the books of Bank of America with the amount
of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by the Borrower;
provided
,
however
, that if, on the date of a Borrowing of Revolving Loans, there
are L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied,
first
, to the payment in full of any such L/C Borrowings, and
second
, to the
Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted
only on the last day of the Interest Period for such Eurodollar Rate Loan. During the existence of
a Default or Event of Default, no Loans may be requested as, converted to or continued as
Eurodollar Rate Loans without the consent of the Required Lenders, and the Required Lenders may
demand that any or all of the then outstanding Eurodollar Rate Loans be converted immediately to
Base Rate Loans.
(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of
such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of Americas
prime rate used in determining the Base Rate promptly following the public announcement of such
change.
(e) After giving effect to all Borrowings, all conversions of Loans from one Type to the
other, and all continuations of Loans as the same Type, there shall not be more than 10 Interest
Periods in effect with respect to the Revolving Loans.
(f) The Borrower may at any time and from time to time, upon prior written notice by the
Borrower to the Administrative Agent, increase the Aggregate Revolving Commitments by up to EIGHTY
MILLION DOLLARS ($80,000,000) with additional Revolving Commitments from any existing Lender or new
Revolving Commitments from any other Person selected by the Borrower and approved by the
Administrative Agent (not to be unreasonably withheld);
provided
that:
23
(i) any such increase shall be in a minimum principal amount of $10 million and
in integral multiples of $5 million in excess thereof;
(ii) no Default or Event of Default shall be continuing at the time of any such
increase;
(iii) no existing Lender shall be under any obligation to increase its Revolving
Commitment and any such decision whether to increase its Revolving Commitment shall be in
such Lenders sole and absolute discretion;
(iv) (A) any new Lender shall join this Agreement by executing such joinder documents
as customarily and reasonably required by the Administrative Agent and/or (B) any existing
Lender electing to increase its Revolving Commitment shall have executed a commitment
agreement reasonably satisfactory to the Administrative Agent; and
(v) as a condition precedent to such increase, the Borrower shall deliver to the
Administrative Agent a certificate of each Loan Party dated as of the date of such increase
(in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party
(A) certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase and (B) in the case of the Borrower, certifying that, before and
after giving effect to such increase, (1) the representations and warranties contained in
Article VI
and the other Loan Documents are true and correct on and as of the date
of such increase, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this
Section 2.02(f)
, the representations and
warranties contained in subsections (a) and (b) of
Section 6.05
shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively,
of
Section 7.01
, and (2) no Default or Event of Default exists.
The Borrower shall prepay any Loans outstanding on the date of any such increase (and pay any
additional amounts required pursuant to
Section 3.05
) to the extent necessary to keep the
outstanding Loans ratable with any revised Revolving Commitments arising from any nonratable
increase in the Commitments under this
Section 2.02(f)
. In connection with any such
increase in the Aggregate Revolving Commitments, the Letter of Credit Sublimit shall be increased
by the same amount and
Schedule 2.01
shall be revised by the Administrative Agent to
reflect the new Revolving Commitments and distributed to the Lenders.
2.03
Letters of Credit
.
(a)
The Letter of Credit Commitment
.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in
reliance upon the agreements of the other Lenders set forth in this
Section 2.03
,
(1) from time to time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of
the Borrower or any of its Subsidiaries, and to amend or extend Letters of Credit previously
issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the
Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit
issued for the account of the Borrower or its Subsidiaries and any drawings thereunder;
provided
that after giving effect to any L/C Credit Extension with respect to any
Letter of Credit, (x) the Total Revolving Outstandings shall not exceed the Aggregate
Revolving Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any
Lender,
plus
such Lenders Pro Rata Share of the Outstanding Amount
24
of all L/C Obligations,
plus
such Lenders Pro Rata Share of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lenders Revolving Commitment or (z)
the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit. Each request by the Borrower for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by the Borrower that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso to the preceding sentence.
Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers
ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower
may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. Furthermore, each Lender
acknowledges and confirms that it has a participation interest in the liability of the L/C
Issuer under each Existing Letter of Credit in a percentage equal to its Pro Rata Share of
Revolving Loans. The Borrowers reimbursement obligations in respect of each Existing
Letter of Credit, and each Lenders obligations in connection therewith, shall be governed
by the terms of this Agreement.
(ii) The L/C Issuer shall not issue any Letter of Credit if the expiry date of such
requested Letter of Credit would occur after the Letter of Credit Expiration Date,
unless all the Lenders have approved such expiry date.
(iii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such
Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental Authority
with jurisdiction over the L/C Issuer shall prohibit or request that the L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the L/C Issuer is
not otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good faith deems material
to it;
(B) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer,
such Letter of Credit is in an initial amount less than $500,000, or is to be
denominated in a currency other than Dollars; or
(D) a default of any Lenders obligations to fund under
Section 2.03(c)
exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C
Issuer has entered into satisfactory arrangements with the Borrower or such Lender
to eliminate the L/C Issuers risk with respect to such Lender
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under the terms
hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A)
the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its
amended
25
form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not
accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall be under no obligation to issue or amend any Letter of Credit
if the L/C Issuer has received written notice from any Lender, the Administrative Agent or
any Loan Party, on or prior to the Business Day prior to the requested date of issuance or
amendment of such Letter of Credit, that one or more applicable conditions contained in
Article V
shall not then be satisfied.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer shall have
all of the benefits and immunities (A) provided to the Administrative Agent in
Article
X
with respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents
pertaining to such Letters of Credit as fully as if the term Administrative Agent as used
in
Article X
included the L/C Issuer with respect to such acts or omissions, and (B)
as additionally provided herein with respect to the L/C Issuer.
(b)
Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of
Credit
.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed and signed by
a Responsible Officer of the Borrower. Such Letter of Credit Application must be received
by the L/C Issuer and the Administrative Agent not later than 10:00 a.m. at least two (2)
Business Days (or such later date and time as the Administrative Agent and the L/C Issuer
may agree in a particular instance in its sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be. In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry
date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing thereunder; and (G)
such other matters as the L/C Issuer may reasonably require. In the case of a request for
an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail reasonably satisfactory to the L/C Issuer (A) the Letter of
Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business
Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer
may reasonably require. Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to such requested
Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or
the Administrative Agent may reasonably require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will
confirm with the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit Application from the Borrower and, if
not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the
L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan
Party, at least one Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions in Article V shall not
then be satisfied, then,
26
subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or
enter into the applicable amendment, as the case may be, in each case in accordance with the
L/C Issuers usual and customary business practices. Immediately upon the issuance of each
Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an
amount equal to the product of such Lenders Pro Rata Share
times
the amount of such
Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit Application, the
L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that
has automatic extension provisions (each, an
Auto-Extension Letter of Credit
);
provided
that any such Auto-Extension Letter of Credit must permit the L/C Issuer to
prevent any such extension by giving prior notice to the beneficiary thereof not later than
a day (the
Non-Extension Notice Date
) to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be
required to make a specific request to the L/C Issuer for any such extension. Once an
Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have
authorized (but may not require) the L/C Issuer to permit the extension of such Letter of
Credit at any time to an expiry date not later than the Letter of Credit Expiration Date;
provided
,
however
, that the L/C Issuer shall not permit any such extension
if (A) the L/C Issuer has determined that it would not be permitted, or would have no
obligation at such time to issue such Letter of Credit in its revised (as extended) form
under the terms hereof (by reason of the provisions clause (ii) or (iii) of
Section
2.03(a)
or otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five Business Days before the Non-Extension Notice
Date (1) from the Administrative Agent that the Required Lenders have elected not to permit
such extension or (2) from the Administrative Agent, any Lender or any Loan Party that one
or more of the applicable conditions specified in
Section 5.02
is not then
satisfied, and in each such case directing the L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter
of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C
Issuer will also deliver to the Borrower and the Administrative Agent a true and complete
copy of such Letter of Credit or amendment.
(c)
Drawings and Reimbursements; Funding of Participations
.
(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of drawing
under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative
Agent thereof. Not later than 12:00 p.m. on the date of any payment by the L/C Issuer under
a Letter of Credit if the L/C Issuer delivers notice of such payment by 10:00 a.m. on such
day (or, if notice of such payment by the L/C Issuer is made after 10:00 a.m., not later
than 10:00 a.m. the next succeeding Business Day) (each such date, an
Honor Date
),
the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount
equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer
by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date,
the amount of the unreimbursed drawing (the
Unreimbursed Amount
), and the amount
of such Lenders Pro Rata Share thereof. In such event, the Borrower shall be deemed to
have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Aggregate Revolving Commitments and the conditions set
forth in
Section 5.02
(other than the delivery of a Loan Notice). Any notice given
by the L/C Issuer or the Administrative Agent pursuant to this
27
Section 2.03(c)(i)
may be given by telephone 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.
(ii) Each Lender shall upon any notice pursuant to
Section 2.03(c)(i)
make
funds available to the Administrative Agent for the account of the L/C Issuer at the
Administrative Agents Office in an amount equal to its Pro Rata Share of the Unreimbursed
Amount not later than 12:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of
Section 2.03(c)(iii)
,
each Lender that so makes funds available shall be deemed to have made a Base Rate Loan to
the Borrower in such amount. The Administrative Agent shall remit the funds so received to
the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans because the conditions set forth in
Section 5.02
cannot
be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate. In such event, each Lenders payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section
2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this
Section 2.03
.
(iv) Until each Lender funds its Revolving Loan or L/C Advance pursuant to this
Section 2.03(c)
to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lenders Pro Rata Share of such amount shall be solely
for the account of the L/C Issuer.
(v) Each Lenders obligation to make Revolving Loans or L/C Advances to reimburse the
L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this
Section
2.03(c)
, shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the L/C Issuer, the Borrower or any other Person for any
reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided
,
however
, that each Lenders obligation to make Revolving Loans
pursuant to this
Section 2.03(c)
is subject to the conditions set forth in
Section 5.02
(other than delivery by the Borrower of a Loan Notice). No such making
of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent for the account
of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing
provisions of this
Section 2.03(c)
by the time specified in
Section
2.03(c)(ii)
, the L/C Issuer shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment is
immediately available to the L/C Issuer at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking
industry rules on interbank compensation. A certificate of the L/C Issuer submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing under this
clause (vi) shall be conclusive absent manifest error.
28
(d)
Repayment of Participations
.
(i) At any time after the L/C Issuer has made a payment under any Letter of Credit and
has received from any Lender such Lenders L/C Advance in respect of such payment in
accordance with
Section 2.03(c)
, if the Administrative Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or
interest thereon (whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lenders L/C Advance was
outstanding) in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to
Section 2.03(c)(i)
is required to be returned under any of the
circumstances described in
Section 11.06
(including pursuant to any settlement
entered into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand
of the Administrative Agent, plus interest thereon from the date of such demand to the date
such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.
(e)
Obligations Absolute
. The obligation of the Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this Agreement or
any other Loan Document;
(ii) the existence of any claim, counterclaim, set-off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of such Letter of
Credit (or any Person for whom any such beneficiary or any such transferee may be acting),
the L/C Issuer or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer in good faith under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the terms of such
Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law; or
29
(v) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or any Subsidiary.
The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto
that is delivered to it and, in the event of any claim of noncompliance with the Borrowers
instructions or other irregularity, the Borrower will promptly notify the L/C Issuer. The Borrower
shall be conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f)
Role of L/C Issuer
. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of any such document (other
than to determine that such document appears on its face to be in compliance with the terms of such
Letter of Credit) or the authority of the Person executing or delivering any such document. None
of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor
correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the approval of the Lenders
or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or Issuer Document.
The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Letter of Credit;
provided
,
however
, that this
assumption is not intended to, and shall not, preclude the Borrowers pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under any other agreement.
None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties, nor any
correspondent, participant or assignee of the L/C Issuer, shall be liable or responsible for any of
the matters described in clauses (i) through (v) of
Section 2.03(e)
;
provided
,
however
, that anything in such clauses to the contrary notwithstanding, the Borrower may
have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C Issuers willful
misconduct or gross negligence or the L/C Issuers willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly
complying with the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any notice or information to
the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a 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.
(g)
Cash Collateral
. Upon the request of the Administrative Agent, (i) if the L/C
Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any L/C
Obligations for any reason remains outstanding, the Borrower shall, in each case, immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations.
Section 2.05
and
9.02(c)
set forth certain additional requirements to deliver Cash Collateral hereunder.
For purposes of this
Section 2.03
,
Section 2.05
and
Section 9.02(c)
,
Cash Collateralize
means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations,
cash or deposit account balances pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby consented
to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby
grants to the
30
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security interest
in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.
Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of
America.
(h)
Applicability of ISP98
. Unless otherwise expressly agreed by the L/C Issuer and
the Borrower when a Letter of Credit is issued (including any such agreement applicable to an
Existing Letter of Credit), the rules of the ISP shall apply to each Letter of Credit.
(i)
Letter of Credit Fees
. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share a Letter of Credit fee (the
Letter of Credit Fee
) for each Letter of Credit equal to the Applicable Rate
times
the daily maximum amount available to be drawn under such Letter of Credit (whether
or not such maximum amount is then in effect under such Letter of Credit). Letter of Credit Fees
shall be (i) computed on a quarterly basis in arrears and (ii) due and payable on the first
Business Day after the end of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter,
the daily maximum amount of each Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such Applicable Rate was in
effect. Notwithstanding anything to the contrary contained herein, upon the request of the
Required Lenders, while an Event of Default exists, all Letter of Credit Fees shall accrue at the
Default Rate.
(j)
Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer
. The
Borrower shall pay directly to the L/C Issuer for its own account a fronting fee with respect to
each Letter of Credit, at the rate per annum specified in the Administrative Agent Fee Letter,
computed on the actual daily maximum amount available to be drawn under such Letter of Credit
(whether or not such maximum amount is then in effect under such Letter of Credit), due and payable
quarterly in arrears on the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the issuance of such Letter of Credit
and on the Letter of Credit Expiration Date. In addition, the Borrower shall pay directly to the
L/C Issuer for its own account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from
time to time in effect. Such customary fees and standard costs and charges are due and payable on
demand and are nonrefundable.
(k)
Conflict with Issuer Documents
. In the event of any conflict between the terms
hereof and the terms of any Issuer Document, the terms hereof shall control.
(l)
Letters of Credit Issued for Subsidiaries
. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or is for the account
of, a Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and
all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of
Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that
the Borrowers business derives substantial benefits from the businesses of such Subsidiaries.
2.04
Swing Line Loans
.
(a)
Swing Line Facility
. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.04
, to make loans (each such loan, a
Swing Line Loan
) to the Borrower
in Dollars from time to time on any Business Day during the Availability Period in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding
the fact that such Swing Line Loans, when aggregated with the Pro Rata Share of the Outstanding
Amount of Revolving Loans and L/C Obligations
31
of the Swing Line Lender in its capacity as a Lender of Revolving Loans, may exceed the amount
of such Lenders Revolving Commitment;
provided
,
however
, that after giving effect
to any Swing Line Loan, (i) the Total Revolving Outstandings shall not exceed the Aggregate
Revolving Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any
Lender,
plus
such Lenders Pro Rata Share of the Outstanding Amount of all L/C Obligations,
plus
such Lenders Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lenders Revolving Commitment, and
provided
,
further
, that the
Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line
Loan. Within the foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this
Section 2.04
, prepay under
Section 2.05
, and
reborrow under this
Section 2.04
. Each Swing Line Loan shall be a Base Rate Loan.
Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation
in such Swing Line Loan in an amount equal to the product of such Lenders Pro Rata Share
times
the amount of such Swing Line Loan.
(b)
Borrowing Procedures
. Each Borrowing of Swing Line Loans shall be made upon the
Borrowers irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall specify
(i) the amount to be borrowed, which shall be a minimum principal amount of $500,000 and integral
multiples of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a
Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line
Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed
and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Swing Line
Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent has also received
such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 2:00 p.m. on the date of the proposed Borrowing of Swing Line Loans (A) directing
the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in
the proviso to the first sentence of
Section 2.04(a)
, or (B) that one or more of the
applicable conditions specified in
Article V
is not then satisfied, then, subject to the
terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to
the Borrower.
(c)
Refinancing of Swing Line Loans
.
(i) The Swing Line Lender at any time in its sole and absolute discretion may request,
on behalf of the Borrower (which hereby irrevocably requests and authorizes the Swing Line
Lender to so request on its behalf), that each Lender make a Base Rate Loan in an amount
equal to such Lenders Pro Rata Share of the amount of Swing Line Loans then outstanding.
Such request shall be made in writing (which written request shall be deemed to be a Loan
Notice for purposes hereof) and in accordance with the requirements of
Section 2.02
,
without regard to the minimum and multiples specified therein for the principal amount of
Base Rate Loans, but subject to the unutilized portion of the Aggregate Revolving
Commitments and the conditions set forth in
Section 5.02
. The Swing Line Lender
shall furnish the Borrower with a copy of the applicable Loan Notice promptly after
delivering such notice to the Administrative Agent. Each Lender shall make an amount equal
to its Pro Rata Share of the amount specified in such Loan Notice available to the
Administrative Agent in immediately available funds for the account of the Swing Line Lender
at the Administrative Agents Office not later than 10:00 a.m. on the day specified in such
Loan Notice, whereupon, subject to
Section 2.04(c)(ii)
, each Lender that so
32
makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such
amount. The Administrative Agent shall remit the funds so received to the Swing Line
Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Borrowing of
Revolving Loans in accordance with
Section 2.04(c)(i)
, the request for Base Rate
Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request
by the Swing Line Lender that each of the Lenders fund its risk participation in the
relevant Swing Line Loan and each Lenders payment to the Administrative Agent for the
account of the Swing Line Lender pursuant to
Section 2.04(c)(i)
shall be deemed
payment in respect of such participation.
(iii) If any Lender fails to make available to the Administrative Agent for the account
of the Swing Line Lender any amount required to be paid by such Lender pursuant to the
foregoing provisions of this
Section 2.04(c)
by the time specified in
Section
2.04(c)(i)
, the Swing Line Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment is
immediately available to the Swing Line Lender at a rate per annum equal to the greater of
the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance in
accordance with banking industry rules on interbank compensation. A certificate of the
Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to
any amounts owing under this clause (iii) shall be conclusive absent manifest error.
(iv) Each Lenders obligation to make Revolving Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this
Section 2.04(c)
shall be
absolute and unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right that such Lender may have against
the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the
occurrence or continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing;
provided
,
however
, that each
Lenders obligation to make Revolving Loans pursuant to this
Section 2.04(c)
is
subject to the conditions set forth in
Section 5.02
. No such purchase or funding of
risk participations shall relieve or otherwise impair the obligation of the Borrower to
repay Swing Line Loans, together with interest as provided herein.
(d)
Repayment of Participations
.
(i) At any time after any Lender has purchased and funded a risk participation in a
Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line
Loan, the Swing Line Lender will distribute to such Lender its Pro Rata Share of such
payment (appropriately adjusted, in the case of interest payments, to reflect the period of
time during which such Lenders risk participation was funded) in the same funds as those
received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line Lender under
any of the circumstances described in
Section 11.06
(including pursuant to any
settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay
to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is returned, at a
rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender. The obligations of the Lenders under this
clause shall survive the payment in full of the Obligations and the termination of this
Agreement.
33
(e)
Interest for Account of Swing Line Lender
. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Lender
funds its Revolving Loans that are Base Rate Loans or risk participation pursuant to this
Section 2.04
to refinance such Lenders Pro Rata Share of any Swing Line Loan, interest in
respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender.
(f)
Payments Directly to Swing Line Lender
. The Borrower shall make all payments of
principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.
2.05
Prepayments
.
(a)
Voluntary Prepayments of Loans
.
(i)
Revolving Loans
. The Borrower may, upon notice from the Borrower to the
Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans in
whole or in part without premium or penalty;
provided
that (A) such notice must be
received by the Administrative Agent not later than 10:00 a.m. (1) three (3) Business Days
prior to any date of prepayment of Eurodollar Rate Loans and (2) on the date of prepayment
of Base Rate Loans; (B) any such prepayment of Eurodollar Rate Loans shall be in a principal
amount of $1,000,000 or a whole multiple of $100,000 in excess thereof (or, if less, the
entire principal amount thereof then outstanding) and (C) any prepayment of Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
(or, if less, the entire principal amount thereof then outstanding). Each such notice shall
specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each such notice,
and of the amount of such Lenders Pro Rata Share of such prepayment. If such notice is
given by the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein. Any
prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the
amount prepaid, together with any additional amounts required pursuant to
Section
3.05
. Each such prepayment shall be applied to the Loans of the Lenders in accordance
with their respective Pro Rata Shares.
(ii)
Swing Line Loans
. The Borrower may, upon notice to the Swing Line Lender
(with a copy to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty;
provided
that (i) such notice must be received by the Swing Line Lender and the Administrative Agent
not later than 1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall
be in a minimum principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof (or, if less, the entire principal thereof then outstanding). Each such notice
shall specify the date and amount of such prepayment. If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.
(b)
Mandatory Prepayments of Loans
.
(i)
Revolving Commitments
. If for any reason the Total Revolving Outstandings
at any time exceed the Aggregate Revolving Commitments then in effect, the Borrower shall
immediately prepay Revolving Loans and/or the Swing Line Loans and/or Cash Collateralize the
L/C Obligations in an aggregate amount equal to such excess;
provided
,
however
, that the Borrower shall not be required to Cash Collateralize the L/C
Obligations pursuant to this
Section
34
2.05(b)(i)
unless after the prepayment in full of the Revolving Loans and Swing
Line Loans the Total Revolving Outstandings exceed the Aggregate Revolving Commitments then
in effect.
(ii)
Application of Mandatory Prepayments
. All amounts required to be paid
pursuant to
Section 2.05(b)(i)
shall be applied to Revolving Loans and Swing Line
Loans and (after all Revolving Loans and all Swing Line Loans have been repaid) to Cash
Collateralize L/C Obligations. Within the parameters of the applications set forth above,
prepayments shall be applied first to Base Rate Loans and then to Eurodollar Rate Loans in
direct order of Interest Period maturities. All prepayments under this
Section
2.05(b)
shall be subject to
Section 3.05
, but otherwise without premium or
penalty, and shall be accompanied by interest on the principal amount prepaid through the
date of prepayment.
2.06
|
|
Termination or Reduction of Aggregate Revolving Commitments
.
|
The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Revolving
Commitments, or from time to time permanently reduce the Aggregate Revolving Commitments to an
amount not less than the Outstanding Amount of Revolving Loans, Swing Line Loans and L/C
Obligations;
provided
that (i) any such notice shall be received by the Administrative
Agent not later than 9:00 a.m. five (5) Business Days prior to the date of termination or
reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof and (iii) if, after giving effect to any reduction
of the Aggregate Revolving Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Aggregate Revolving Commitments, such sublimit shall be automatically
reduced by the amount of such excess. The Administrative Agent will promptly notify the Lenders of
any such notice of termination or reduction of the Aggregate Revolving Commitments. Any reduction
of the Aggregate Revolving Commitments shall be applied to the Revolving Commitment of each Lender
according to its Pro Rata Share. All fees accrued with respect thereto until the effective date of
any termination of the Aggregate Revolving Commitments shall be paid on the effective date of such
termination.
2.07
Repayment of Loans
.
(a)
Revolving Loans
. The Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of all Revolving Loans outstanding on such date.
(b)
Swing Line Loans
. The Borrower shall repay each Swing Line Loan on the earlier to
occur of (i) demand by the Swing Line Lender and (ii) the Maturity Date.
2.08
Interest
.
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall
bear interest on the outstanding principal amount thereof for each Interest Period at a rate per
annum equal to the sum of (A) the Eurodollar Rate for such Interest Period
plus
(B) the
Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base Rate
plus
the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate
plus
the Applicable Rate.
(b) Upon the occurrence and during the continuation of an Event of Default, the Borrower shall
pay interest on the principal amount of all outstanding Obligations at a fluctuating interest rate
per annum at all times equal to the Default Rate to the fullest extent permitted by applicable
Laws.
35
(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment
Date applicable thereto and at such other times as may be specified herein. Interest hereunder
shall be due and payable in accordance with the terms hereof before and after judgment, and before
and after the commencement of any proceeding under any Debtor Relief Law.
2.09
Fees
.
In addition to certain fees described in subsections (i) and (j) of
Section 2.03
:
(a)
Facility Fee
. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share, a facility fee equal to the
Applicable Rate
times
the actual daily amount of the Aggregate Revolving Commitments
(or, if the Aggregate Revolving Commitments have terminated, on the Outstanding Amount of
all Revolving Loans, Swing Line Loans and L/C Obligations), regardless of usage. The
facility fee shall accrue at all times during the Availability Period (and thereafter so
long as any Revolving Loans, Swing Line Loans or L/C Obligations remain outstanding),
including at any time during which one or more of the conditions in
Article V
is not
met, and shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing with the first such date to occur after the
Closing Date, and on the Maturity Date (and, if applicable, thereafter on demand). The
facility fee shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied
by the Applicable Rate separately for each period during such quarter that such Applicable
Rate was in effect.
(b)
Administrative Agent Fee Letter
. The Borrower shall pay to BAS and the
Administrative Agent for their own respective accounts fees in the amounts and at the times
specified in the Administrative Agent Fee Letter. Such fees shall be fully earned when paid
and shall be non-refundable for any reason whatsoever;
provided
,
however
,
that the Borrower shall be entitled to receive from the Administrative Agent the prorated
amount of the administrative agent fee for any applicable year if the Administrative Agent
should voluntarily resign in such year.
2.10
Computation of Interest and Fees
.
All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of
Americas prime rate shall be made on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed. All other computations of fees and interest shall be made on the basis of
a 360-day year and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan
for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for
the day on which the Loan or such portion is paid,
provided
that any Loan that is repaid on
the same day on which it is made shall, subject to
Section 2.12(a)
, bear interest for one
day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.
2.11
Evidence of Debt
.
(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by the Administrative Agent in the ordinary course of
business. The accounts or records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the
36
Obligations. In the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of manifest error.
Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute
and deliver to such Lender (through the Administrative Agent) a promissory note, which shall
evidence such Lenders Loans in addition to such accounts or records. Each such promissory note
shall (i) in the case of Revolving Loans, be in the form of
Exhibit C-1
(a
Revolving
Note
) and (ii) in the case of Swing Line Loans, be in the form of
Exhibit C-2
(a
Swing Line Note
). Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection (a), each Lender and the
Administrative Agent shall maintain in accordance with its usual practice accounts or records
evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing
Line Loans. In the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of manifest error.
2.12
Payments Generally; Administrative Agents Clawback
.
(a)
General
. All payments to be made by the Borrower shall be made without condition
or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly
provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the Administrative
Agents Office in Dollars and in immediately available funds not later than 11:00 a.m. on the date
specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata
Share (or other applicable share as provided herein) of such payment in like funds as received by
wire transfer to such Lenders Lending Office. All payments received by the Administrative Agent
after 11:00 a.m. shall be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due
on a day other than a Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the case may be.
(b)
Insufficient Funds
. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings,
interest and fees then due hereunder, such funds shall be applied (i)
first
, toward costs
and expenses (including Attorney Costs and amounts payable under
Article III
) incurred by
the Administrative Agent and each Lender, (ii)
second
, toward repayment of interest and
fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts
of interest and fees then due to such parties, and (iii)
third
, toward repayment of
principal and L/C Borrowings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and L/C Borrowings then due to such parties.
(c) (i)
Funding by Lenders; Presumption by Administrative Agent
. Unless the
Administrative Agent shall have received notice from a Lender prior to the proposed date of any
Revolving Loan that such Lender will not make available to the Administrative Agent such Lenders
share of such Revolving Loan, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with
Section 2.02
and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Revolving Loan available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount in immediately available funds with interest thereon,
for each day from and
37
including the date such amount is made available to the Borrower to but excluding the date of
payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the
greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation and (B) in the case of a payment to be made
by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the
Borrower for such period. If such Lender pays its share of the applicable Revolving Loan to the
Administrative Agent, then the amount so paid shall constitute such Lenders Revolving Loan
included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim
the Borrower may have against a Lender that shall have failed to make such payment to the
Administrative Agent.
(ii)
Payments by Borrower; Presumptions by Administrative Agent
. Unless the
Administrative Agent shall have received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer
hereunder that the Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due.
In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the
L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or the L/C Issuer, in immediately available funds
with interest thereon, for each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount
owing under this subsection (c) shall be conclusive, absent manifest error.
(d)
Failure to Satisfy Conditions Precedent
. If any Lender makes available to the
Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this
Article II
, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension set forth in
Article V
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from such Lender) to such
Lender, without interest.
(e)
Obligations of Lenders Several
. The obligations of the Lenders hereunder to make
Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments
pursuant to
Section 11.04(c)
are several and not joint. The failure of any Lender to make
any Loan, to fund any such participation or to make any payment under
Section 11.04(c)
on
any date required hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, no Lender shall be responsible for the failure of any other Lender to so make
its Loan, to purchase its participation or to make its payment under
Section 11.04(c)
.
(f)
Funding Source
. Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any particular place or
manner.
2.13
Sharing of Payments by Lenders
.
If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of the Revolving Loans made by it, or the
38
participations in L/C Obligations or in Swing Line Loans held by it resulting in such Lenders
receiving payment of a proportion of the aggregate amount of such Loans or participations and
accrued interest thereon greater than its
pro
rata
share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent
of such fact, and (b) purchase (for cash at face value) participations in the Revolving Loans and
subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them,
provided
that:
(a) if any such participations or subparticipations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations or subparticipations shall be
rescinded and the purchase price restored to the extent of such recovery, without interest; and
(b) the provisions of this Section shall not be construed to apply to (x) any payment made by
the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or sale of a participation in
any of its Revolving Loans or subparticipations in L/C Obligations or Swing Line Loans to any
assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the
provisions of this Section shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements
may exercise against such Loan Partys rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of
such participation.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01
Taxes
.
(a)
Payments Free of Taxes
. Any and all payments by or on account of any obligation
of the Borrower hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes,
provided
that if
the Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any
Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b)
Payment of Other Taxes by the Borrower
. Without limiting the provisions of
subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.
(c)
Indemnification by the Borrower
. The Borrower shall indemnify the
Administrative Agent, each Lender and the L/C Issuer, within 10 days after demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or
39
the L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to the Borrower by a Lender or the L/C Issuer
(with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.
(d)
Evidence of Payments
. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e)
Status of Lenders
. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by
the Borrower or the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to backup withholding or
information reporting requirements.
Without limiting the generality of the foregoing, in the event that the Borrower is resident for
tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the request of the Borrower or the Administrative Agent, but only if such
Foreign Lender is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for
benefits of an income tax treaty to which the United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio
interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign
Lender is not (A) a bank within the meaning of section 881(c)(3)(A) of the Code, (B) a 10
percent shareholder of the Borrower within the meaning of section 881(c)(3)(B) of the Code,
or (C) a controlled foreign corporation described in section 881(c)(3)(C) of the Code and
(y) duly completed copies of Internal Revenue Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable law to permit the Borrower to
determine the withholding or deduction required to be made.
(f)
Treatment of Certain Refunds
. If the Administrative Agent, any Lender or the L/C
Issuer determines, in its reasonable discretion, that it has received a refund of any Taxes or
Other Taxes as to
40
which it has been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section, it shall promptly pay to the Borrower an amount equal
to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by
the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the L/C
Issuer, as the case may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund),
provided
that the Borrower, upon the
request of the Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount paid
over to the Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent, such Lender or the L/C Issuer in the event the
Administrative Agent, such Lender or the L/C Issuer is required to repay such refund to such
Governmental Authority. This subsection shall not be construed to require the Administrative
Agent, any Lender or the L/C Issuer to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other Person.
Notwithstanding anything to the contrary contained herein, the Borrower shall not be required
to make any payments to any Lender pursuant to this Section 3.01 relating to any Taxes or Other
Taxes paid by a Lender more than 180 days prior to such Lenders request for any additional payment
or compensation pursuant to this
Section 3.01
.
3.02
Illegality
.
If any Lender determines that any Law has made it unlawful, or that any Governmental Authority
has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain
or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar
Rate, or any Governmental Authority has imposed material restrictions on the authority of such
Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then,
on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation
of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to
Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender
to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such
Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment
or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.
3.03
Inability to Determine Rates
.
If the Administrative Agent determines that for any reason in connection with any request for
a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not
being offered to banks in the London interbank eurodollar market for the applicable amount and
Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for
determining the Eurodollar Base Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or (c) the Eurodollar Base Rate for any requested Interest Period with
respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to the
Lenders of funding such Loan, the Administrative Agent will promptly notify the Borrower and all
Lenders. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall
be suspended until the Administrative Agent revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing, conversion or continuation of Eurodollar
Rate Loans or, failing that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.
41
3.04
Increased Costs
.
(a)
Increased Costs Generally
. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or credit extended or participated in by, any Lender (except any reserve requirement
reflected in the Eurodollar Rate) or the L/C Issuer;
(ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit, any participation in a Letter of Credit or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender or
the L/C Issuer in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 3.01
and the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender or the L/C Issuer); or
(iii) impose on any Lender or the L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Loans made by such Lender
or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan), or to
increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any
Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer
hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or
the L/C Issuer, the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.
(b)
Capital Requirements
. If any Lender or the L/C Issuer determines that any Change
in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such
Lenders or the L/C Issuers holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lenders or the L/C Issuers capital or on
the capital of such Lenders or the L/C Issuers holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below
that which such Lender or the L/C Issuer or such Lenders or the L/C Issuers holding company could
have achieved but for such Change in Law (taking into consideration such Lenders or the L/C
Issuers policies and the policies of such Lenders or the L/C Issuers holding company with
respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the
L/C Issuer, as the case may be, such additional amount or amounts as
will compensate such
Lender or the L/C Issuer or such Lenders or the L/C Issuers holding company for any such
reduction suffered.
(c)
Certificates for Reimbursement
. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its
holding company, as the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such
Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.
42
(d)
Delay in Requests
. Failure or delay on the part of any Lender or the L/C Issuer
to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Lenders or the L/C Issuers right to demand such compensation,
provided
that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the
foregoing provisions of this Section for any increased costs incurred or reductions suffered more
than six months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies
the Borrower of the Change in Law giving rise to such increased costs or reductions and of such
Lenders or the L/C Issuers intention to claim compensation therefor (except that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then the six-month period
referred to above shall be extended to include the period of retroactive effect thereof).
3.05
Funding Losses.
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the
Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss,
cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on
the date or in the amount notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to
Section
11.14
.
including any loss of anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Borrower shall also pay any customary
administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this
Section 3.05
, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by
it at the Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching
deposit or other borrowing in the London interbank eurodollar market for a comparable amount and
for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.
Notwithstanding anything to the contrary contained herein, the Borrower shall not be required
to make any payments to any Lender pursuant to this
Section 3.05
relating to any loss, cost
or expense incurred by a Lender more than 180 days prior to such Lenders request for any
additional payment or compensation pursuant to this
Section 3.05
.
3.06
Mitigation Obligations; Replacement of Lenders.
(a)
Designation of a Different Lending Office
. If any Lender requests compensation
under
Section 3.04
, or the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to
Section 3.01
, or if
any Lender gives a notice pursuant to
Section 3.02
, then such Lender shall use reasonable
efforts to designate a different Lending Office for funding or booking its Loans hereunder or to
assign its rights and obligations
43
hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to
Section 3.01
or
3.04
, as the case may be, in the future, or eliminate the need for
the notice pursuant to
Section 3.02
, as applicable, and (ii) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment.
(b)
Replacement of Lenders
. If any Lender requests compensation under
Section
3.04
, or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to
Section 3.01
, the Borrower
may replace such Lender in accordance with
Section 11.14
.
3.07
Survival
.
All of the Borrowers obligations under this
Article III
shall survive termination of
the Aggregate Revolving Commitments and repayment of all other Obligations hereunder, subject to
the limitations contained in this
Article III
.
ARTICLE IV
GUARANTY
4.01
The Guaranty
.
Each of the Guarantors hereby jointly and severally guarantees to each Lender, each Affiliate
of a Lender that enters into a Swap Contract, and the Administrative Agent as hereinafter provided,
as primary obligor and not as surety, the prompt payment of the Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors
hereby further agree that if any of the Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization
or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of
any of the Obligations, the same will be promptly paid in full when due (whether at extended
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any other of the Loan
Documents or Swap Contracts, the obligations of each Guarantor under this Agreement and the other
Loan Documents shall be limited to an aggregate amount equal to the largest amount that would not
render such obligations subject to avoidance under the Debtor Relief Laws or any comparable
provisions of any applicable state law.
4.02
Obligations Unconditional
.
The obligations of the Guarantors under
Section 4.01
are joint and several, absolute
and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Loan Documents or Swap Contracts, or any other agreement or instrument referred to
therein, or any substitution, release, impairment or exchange of any other guarantee of or security
for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of
any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge
or defense of a surety or guarantor, it being the intent of
44
this
Section 4.02
that the obligations of the Guarantors hereunder shall be absolute
and unconditional under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any
other Guarantor for amounts paid under this
Article IV
until such time as the Obligations
have been paid in full and the Commitment have expired or terminated. Without limiting the
generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the liability of any
Guarantor hereunder, which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to any Guarantor, the time for any
performance of or compliance with any of the Obligations shall be extended, or such
performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the Loan Documents,
any Swap Contract between any Loan Party and any Lender, or any Affiliate of a Lender, or
any other agreement or instrument referred to in the Loan Documents or such Swap Contracts
shall be done or omitted;
(c) the maturity of any of the Obligations shall be accelerated, or any of the
Obligations shall be modified, supplemented or amended in any respect, or any right under
any of the Loan Documents, any Swap Contract between any Loan Party and any Lender, or any
Affiliate of a Lender, or any other agreement or instrument referred to in the Loan
Documents or such Swap Contracts shall be waived or any other guarantee of any of the
Obligations or any security therefor shall be released, impaired or exchanged in whole or in
part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative Agent or any Lender or
Lenders as security for any of the Obligations shall fail to attach or be perfected; or
(e) any of the Obligations shall be determined to be void or voidable (including,
without limitation, for the benefit of any creditor of any Guarantor) or shall be
subordinated to the claims of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or proceed against any Person
under any of the Loan Documents, any Swap Contract between any Loan Party and any Lender, or any
Affiliate of a Lender, or any other agreement or instrument referred to in the Loan Documents or
such Swap Contracts, or against any other Person under any other guarantee of, or security for, any
of the Obligations.
4.03
Reinstatement
.
The obligations of the Guarantors under this
Article IV
shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf of any Person in
respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the
Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise,
and each Guarantor agrees that it will indemnify the Administrative Agent and each Lender on demand
for all reasonable costs and expenses (including, without limitation, fees and expenses of counsel)
incurred by the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
45
4.04
Certain Additional Waivers
.
Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the
Obligations, except through the exercise of rights of subrogation pursuant to
Section 4.02
and through the exercise of rights of contribution pursuant to
Section 4.06
.
4.05
Remedies
.
The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors,
on the one hand, and the Administrative Agent and the Lenders, on the other hand, the Obligations
may be declared to be forthwith due and payable as provided in
Section 9.02
(and shall be
deemed to have become automatically due and payable in the circumstances provided in said
Section 9.02
) for purposes of
Section 4.01
notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Obligations from becoming
automatically due and payable) as against any other Person and that, in the event of such
declaration (or the Obligations being deemed to have become automatically due and payable), the
Obligations (whether or not due and payable by any other Person) shall forthwith become due and
payable by the Guarantors for purposes of
Section 4.01
. The Guarantors acknowledge and
agree that their obligations hereunder are secured in accordance with the terms of the Collateral
Documents and that the Lenders may exercise their remedies thereunder in accordance with the terms
thereof.
4.06
Rights of Contribution
.
The Guarantors agree among themselves that, in connection with payments made hereunder, each
Guarantor shall have contribution rights against the other Guarantors as permitted under applicable
law. Such contribution rights shall be subordinate and subject in right of payment to the
obligations of such Guarantors under the Loan Documents and no Guarantor shall exercise such rights
of contribution until all Obligations have been paid in full and the Commitments have terminated.
4.07
Guarantee of Payment; Continuing Guarantee
.
The guarantee in this
Article IV
is a guaranty of payment and not of collection, is a
continuing guarantee, and shall apply to all Obligations whenever arising.
ARTICLE V
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
5.01
Conditions of Initial Credit Extension
.
The obligation of the L/C Issuer and each Lender to make its initial Credit Extension
hereunder is subject to satisfaction of the following conditions precedent:
(a)
Loan Documents
. Receipt by the Administrative Agent of executed
counterparts of this Agreement and the other Loan Documents, each properly executed by a
Responsible Officer of the signing Loan Party and, in the case of this Agreement, by each
Lender.
(b)
Opinions of Counsel
. Receipt by the Administrative Agent of a
favorable opinion of in-house legal counsel of the Borrower, addressed to the Administrative
Agent and each Lender, dated as of the Closing Date, and in form and substance satisfactory
to the Administrative Agent.
46
(c)
Financial Statements
. The Administrative Agent shall have received:
(i) consolidated financial statements of the Borrower and its Subsidiaries for
the fiscal year ended January 1, 2006, including balance sheet and income and cash
flow statements, in each case, audited by independent public accountants of
recognized national standing and prepared in conformity with GAAP; and
(ii) unaudited consolidated financial statements of the Borrower and its
Subsidiaries for the three month period ending April 2, 2006, including balance
sheet and statements of income or operations, shareholders equity and cash flows
(the
Interim Financial Statements
).
(d)
No Material Adverse Change
. There shall not have occurred a material
adverse change since January 1, 2006 in the business, assets, Properties, liabilities
(actual or contingent), operations or condition (financial or otherwise) of the Borrower and
its Subsidiaries taken as a whole.
(e)
Litigation
. There shall not exist any action, suit, investigation or
proceeding against the Borrower or any Subsidiary pending or, to the knowledge of the
Borrower, threatened in any court or before an arbitrator or Governmental Authority that
could reasonably be expected to have a Material Adverse Effect.
(f)
Organization Documents, Resolutions, Etc.
Receipt by the Administrative
Agent of the following, each of which shall be originals or facsimiles (followed promptly by
originals), in form and substance reasonably satisfactory to the Administrative Agent and
its legal counsel:
(i) copies of the Organization Documents of each Loan Party certified by a
secretary or assistant secretary of such Loan Party to be true and correct as of the
Closing Date;
(ii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity of
each Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which such Loan Party
is a party; and
(iii) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed, and
is validly existing, in good standing and qualified to engage in business in its
state of organization or formation.
(g)
Closing Certificate
. Receipt by the Administrative Agent of a certificate
signed by a Responsible Officer of the Borrower certifying that the conditions specified in
Sections 5.01(d)
and
(e)
and
Sections 5.02(a)
and
(b)
have
been satisfied.
(h)
Fees
. Receipt by the Administrative Agent and the Lenders of any fees
required to be paid on or before the Closing Date.
(i)
Attorney Costs
. The Borrower shall have paid all Attorney Costs of the
Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such
additional
47
amounts of Attorney Costs as shall constitute its reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing proceedings.
Without limiting the generality of the provisions of
Section 10.04
, for
purposes of determining compliance with the conditions specified in this
Section
5.01
, each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a Lender
unless the Administrative Agent shall have received notice from such Lender prior to the
proposed Closing Date specifying its objection thereto.
5.02
Conditions to all Credit Extensions
.
The obligation of each Lender to honor any Request for Credit Extension (other than a Loan
Notice requesting only a conversion of Revolving Loans to the other Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:
(a) The representations and warranties of the Borrower and each other Loan Party
contained in
Article VI
or any other Loan Document shall be true and correct in all
material respects on and as of the date of such Credit Extension, except to the extent that
such representations and warranties specifically refer to an earlier date, in which case
they shall be true and correct in all material respects as of such earlier date, and except
that for purposes of this
Section 5.02
, the representations and warranties contained
in subsections (a) and (b) of
Section 6.05
shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section
7.01
.
(b) No Default shall exist, or would result from such proposed Credit Extension or from
the application thereof.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with the
requirements hereof.
Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of
Revolving Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the
Borrower shall be deemed to be a representation and warranty that the conditions specified in
Sections 5.02(a)
,
(b)
and
(c)
have been satisfied on and as of the date of
the applicable Credit Extension.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and the Lenders that:
6.01
Existence, Qualification and Power
.
Each Loan Party (a) is a corporation, partnership or limited liability company duly organized
or formed, validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all requisite
governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on
its business and (ii) execute, deliver and perform its obligations under the Loan Documents to
which it is a party, and (c) is duly
48
qualified and is licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent
that failure to do so could not reasonably be expected to have a Material Adverse Effect. As of
the Closing Date, Teledyne Brown Engineering, Inc., Teledyne Continental Motors, Inc., Teledyne
Investment, Inc., Teledyne Isco, Inc. and Teledyne Wireless, Inc. are the only Material
Subsidiaries of the Borrower.
6.02
Authorization; No Contravention
.
The execution, delivery and performance by each Loan Party of each Loan Document to which such
Loan Party is party, have been duly authorized by all necessary corporate or other organizational
action, and do not (a) contravene the terms of any of such Loan Partys Organization Documents; (b)
conflict with or result in any breach or contravention of, or the creation of any Lien under, or
require any payment to be made under (i) any Contractual Obligation to which such Loan Party is a
party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Loan Party or its Property is subject; or (c) violate any Law (including,
without limitation, Regulation U or Regulation X issued by the FRB); except in each case referred
to in clause (b) to the extent it would not reasonably be expected to have a Material Adverse
Effect.
6.03
Governmental Authorization; Other Consents
.
No approval, consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person with respect to any Contractual Obligation is
necessary or required in connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document other than those that have
already been obtained and are in full force and effect or the failure of which to have been
obtained would not reasonably be expected to have a Material Adverse Effect.
6.04
Binding Effect
.
This Agreement and each other Loan Document has been duly executed and delivered by each Loan
Party that is party thereto. This Agreement and each other Loan Document constitutes a legal,
valid and binding obligation of each Loan Party that is party thereto, enforceable against each
such Loan Party in accordance with its terms.
6.05
Financial Statements; No Material Adverse Effect
.
(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii)
fairly present in all material respects the financial condition of the Borrower and its
Subsidiaries as of the date thereof and their results of operations for the period covered thereby
in accordance with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Indebtedness in accordance with GAAP consistently
applied.
(b) The Interim Financial Statements (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii)
fairly present in all material respects the financial condition of the Borrower and its
Subsidiaries as of the date thereof and their results of operations for the period covered thereby,
subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end
audit adjustments; and (iii) show
49
all material indebtedness and other liabilities, direct or contingent, of the Borrower and its
Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and
Indebtedness in accordance with GAAP consistently applied.
(c) From the date of the Audited Financial Statements to and including the Closing Date, there
has been no Disposition by the Borrower or any Subsidiary, or any Involuntary Disposition, of any
material part of the business or Property of the Borrower and its Subsidiaries, taken as a whole,
and no purchase or other acquisition by any of them of any business or Property (including any
Capital Stock of any other Person) material in relation to the consolidated financial condition of
the Borrower and its Subsidiaries, taken as a whole, in each case, which is not reflected in the
foregoing financial statements or in the notes thereto or has not otherwise been disclosed publicly
by the Borrower or in writing to the Lenders on or prior to the Closing Date.
(d) The financial statements delivered pursuant to
Section 7.01(a)
and
(b)
have been prepared in accordance with GAAP consistently applied (except as may otherwise be
permitted under
Section 7.01(a)
and
(b)
) and present fairly in all material
respects (on the basis disclosed in the footnotes to such financial statements) the consolidated
and consolidating financial condition, results of operations and cash flows of the Borrower and its
Subsidiaries as of such date and for such periods.
(e) Since the date of the Audited Financial Statements, there has been no event or
circumstance that has had or could reasonably be expected to have a Material Adverse Effect.
6.06
Litigation
.
There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Borrower after reasonable investigation, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or any of its
Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain
to this Agreement or any other Loan Document, or any of the transactions contemplated hereby or (b)
could reasonably be expected to have a Material Adverse Effect.
6.07
No Default
.
Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual
Obligation that could reasonably be expected to have a Material Adverse Effect. No Default has
occurred and is continuing or would result from the consummation of the transactions contemplated
by this Agreement or any other Loan Document.
6.08
Ownership of Property; Liens
.
Each of the Borrower and its Subsidiaries has good record and marketable title in fee simple
to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of
its business, except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of the Borrower and its
Subsidiaries is subject to no Liens, other than Permitted Liens.
6.09
Environmental Compliance
.
The Borrower and its Subsidiaries conduct in the ordinary course of business a review of the
effect of existing Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations and properties, and
as a result
50
thereof the Borrower has reasonably concluded that such Environmental Laws and claims could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.10
Insurance
.
The properties of the Borrower and its Subsidiaries are insured with financially sound and
reputable insurance companies not Affiliates of the Borrower, in such amounts and covering such
risks as are customarily carried by companies engaged in similar businesses.
6.11
Taxes
.
The Borrower and its Subsidiaries have filed all federal, state and other material tax returns
and reports required to be filed, and have paid all federal, material state and other material
taxes, assessments, fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which adequate reserves have
been provided in accordance with GAAP. There is no proposed tax assessment against the Borrower or
any Subsidiary that would, if made, have a Material Adverse Effect.
6.12
ERISA Compliance
.
(a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Internal Revenue Code and other federal or state Laws. Each Plan that is intended to
qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination
letter from the IRS or an application for such a letter is currently being processed by the IRS
with respect thereto and, to the best knowledge of the Loan Parties, nothing has occurred which
would prevent, or cause the loss of, such qualification. Each Loan Party and each ERISA Affiliate
have made all required contributions to each Plan subject to Section 412 of the Internal Revenue
Code, and no application for a funding waiver or an extension of any amortization period pursuant
to Section 412 of the Internal Revenue Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions
or lawsuits, or action by any Governmental Authority, with respect to any Plan that could be
reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability that would reasonably be expected to have a Material Adverse
Effect; (iii) no Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) no Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) no Loan Party nor any ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.
6.13
Subsidiaries
.
Set forth on
Schedule 6.13
is a complete and accurate list as of the Closing Date of
each Subsidiary, together with (i) jurisdiction of formation, (ii) number of shares of each class
of Capital Stock outstanding,
51
(iii) number and percentage of outstanding shares of each class owned (directly or indirectly)
by the Borrower or any Subsidiary and (iv) number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and all other similar rights with respect
thereto. The outstanding Capital Stock of each Subsidiary is validly issued, fully paid and
non-assessable.
6.14
Margin Regulations; Investment Company Act; Public Utility Holding Company Act
.
(a) The Borrower is not engaged and will not engage, principally or as one of its important
activities, in the business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock. Following the application of the proceeds of each Borrowing or drawing under each
Letter of Credit, not more than 25% of the value of the assets (either of the Borrower only or of
the Borrower and its Subsidiaries on a consolidated basis) subject to the provisions of
Section
8.01
or
Section 8.05
or subject to any restriction contained in any agreement or
instrument between the Borrower and any Lender or any Affiliate of any Lender relating to
Indebtedness and within the scope of
Section 9.01(e)
will be margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is
required to be registered as an investment company under the Investment Company Act of 1940.
6.15
Disclosure
.
Each Loan Party has disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject,
and all other matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No report, financial statement, certificate or
other information furnished by or on behalf of any Loan Party to the Administrative Agent or any
Lender in connection with the this Agreement or under any other Loan Document (in each case, as
modified or supplemented by other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided
that, with respect
to projected financial information, the Loan Parties represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the time.
6.16
Compliance with Laws
.
Each of the Borrower and each Subsidiary is in compliance with the requirements of all Laws
and all orders, writs, injunctions and decrees applicable to it or to its properties, except in
such instances in which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b) the failure to
comply therewith could not reasonably be expected to have a Material Adverse Effect.
6.17
Intellectual Property; Licenses, Etc
.
The Borrower and its Subsidiaries own, or possess the legal right to use, all of the material
trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses
and other intellectual property rights (collectively,
IP Rights
) that are reasonably
necessary for the operation of their respective businesses. Except for such claims and
infringements that could not reasonably be expected to have a Material Adverse Effect, no claim has
been asserted and is pending by any Person challenging or questioning the use of any IP Rights or
the validity or effectiveness of any IP Rights, nor does any Loan Party know of any such claim,
and, to the knowledge of the Responsible Officers of the Loan Parties, the use of any
52
IP Rights by the Borrower or any Subsidiary or the granting of a right or a license in respect
of any IP Rights from the Borrower or any Subsidiary does not infringe on the rights of any Person.
6.18
Solvency
.
The Loan Parties are Solvent on a consolidated basis.
6.19
Legal Name
.
The exact legal name and state of organization of each Loan Party is as set forth on the
signature pages hereto.
6.20
Brokers Fees
.
Except for the Administrative Agent Fee Letter, neither the Borrower nor any Subsidiary has
any obligation to any Person in respect of any finders, brokers, investment banking or other
similar fee in connection with any of the transactions contemplated under the Loan Documents.
6.21
Labor Matters
.
There are no collective bargaining agreements (except as set forth on
Schedule 6.21
)
or Multiemployer Plans covering the employees of the Borrower or any Subsidiary as of the Closing
Date and neither the Borrower nor any Subsidiary has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the
Loan Parties shall and shall cause each of its Subsidiaries to:
7.01
Financial Statements
.
Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the
Administrative Agent and the Required Lenders, with sufficient copies for each Lender:
(a) as soon as available, but in any event within 100 days after the end of each fiscal
year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal year, and the related consolidated statements of income or
operations, shareholders equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in reasonable detail
and prepared in accordance with GAAP, audited and accompanied by a report of an independent
certified public accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any going concern or like
qualification or exception or any qualification or exception as to the scope of such audit;
53
(b) as soon as available, but in any event within 50 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower, a consolidated balance
sheet including shareholders equity of the Borrower and its Subsidiaries as at the end of
such fiscal quarter and latest fiscal year end in comparative form, the related consolidated
statements of income or operations for such fiscal quarter and for the portion of the
Borrowers fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, and the related statement of cash flows
for the portion of the Borrowers fiscal year then ended, setting forth in comparative form
the figures for the corresponding portion of the previous fiscal year all in reasonable
detail and certified by a Responsible Officer of the Borrower as fairly presenting the
financial condition, results of operations, shareholders equity and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and
As to any information contained in materials furnished pursuant to
Section 7.02(b)
,
the Borrower shall not be separately required to furnish such information under clause (a)
or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower
to furnish the information and materials described in subsections (a) and (b) above at the
times specified therein.
7.02
Certificates; Other Information
.
Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the
Administrative Agent and the Required Lenders, with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial statements referred to in
Sections 7.01(a)
and
(b)
, a duly completed Compliance Certificate signed by
a Responsible Officer of the Borrower;
(b) promptly after the same are available, copies of each annual report, proxy or
financial statement or other report or communication sent to the stockholders of the
Borrower, and copies of all annual, regular, periodic and special reports and registration
statements which the Borrower may file or be required to file with the SEC under Section 13
or 15(d) of the Securities Exchange Act of 1934 or to a holder of any Indebtedness owed by
the Borrower or any Subsidiary in its capacity as such a holder and not otherwise required
to be delivered to the Administrative Agent pursuant hereto;
(c) promptly, and in any event within ten days after receipt thereof by any Loan Party
or any Subsidiary thereof, copies of each notice or other correspondence received from the
SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry by such agency regarding financial
or other operational results of the Borrower or any Subsidiary thereof; and
(d) promptly, such additional information regarding the business, financial or
corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably
request.
Documents required to be delivered pursuant to
Section 7.01(a)
or
(b)
or
Section 7.02(b)
(to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on
the Borrowers website on the Internet at
54
the website address listed on
Schedule 11.02
; or (ii) on which such documents are
posted on the Borrowers behalf on IntraLinks/IntraAgency or another relevant website, if any, to
which each Lender and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent);
provided
that: (i) the Borrower
shall deliver paper copies of such documents to the Administrative Agent or any Lender upon the
request of the Administrative Agent or such Lender to deliver such paper copies and (ii) the
Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail)
of the posting of any such documents and provide to the Administrative Agent by electronic mail
electronic versions (
i.e.
, soft copies) of such documents. Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by
Section 7.02(a)
to the Administrative Agent and each of
the Lenders. Except for such Compliance Certificates, the Administrative Agent shall have no
obligation to request the delivery or to maintain copies of the documents referred to above, and in
any event shall have no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.
The Borrower hereby acknowledges that (a) the Administrative Agent and/or BAS will make
available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf
of the Borrower hereunder (collectively, the
Borrower Materials
) by posting the Borrower
Materials on IntraLinks or another similar electronic system (the
Platform
) and (b)
certain of the Lenders may be public-side Lenders (
i.e.,
Lenders that do not wish to receive
material non-public information with respect to the Borrower or its securities) (each, a
Public Lender
). The Borrower hereby agrees that (w) all Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked PUBLIC which, at a
minimum, shall mean that the word PUBLIC shall appear prominently on the first page thereof; (x)
by marking Borrower Materials PUBLIC, the Borrower shall be deemed to have authorized the
Administrative Agent, BAS and the Lenders to treat such Borrower Materials as not containing any
material non-public information with respect to the Borrower or its securities for purposes of
United States federal and state securities laws (
provided
,
however
, that to the
extent such Borrower Materials constitute Information, they shall be treated as set forth in
Section 11.07
); (y) all Borrower Materials marked PUBLIC are permitted to be made
available through a portion of the Platform designated as Public Investor; and (z) the
Administrative Agent and BAS shall be entitled to treat any Borrower Materials that are not marked
PUBLIC as being suitable only for posting on a portion of the Platform not designated Public
Investor.
7.03
Notices
. Promptly notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default.
(b) of any matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect, including (in each case to the extent such matter has resulted or could reasonably
be expected to have a Material Adverse Effect) (i) breach or non-performance of, or any default
under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any litigation or
proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws.
(c) of the occurrence of any ERISA Event.
(d) of any material change in accounting policies or financial reporting practices by the
Borrower or any Subsidiary.
55
Each notice pursuant to this Section shall be accompanied by a statement of a Responsible
Officer of the Borrower setting forth details of the occurrence referred to therein and stating
what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant
to
Section 7.03(a)
shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
7.04
Payment of Obligations
.
Pay and discharge as the same shall become due and payable, all its obligations and
liabilities, including (a) all material tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are
being maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would
by law become a Lien upon its property, and (c) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement evidencing such
Indebtedness, except in the case of clauses (b) and (c), to the extent any failure to pay or
discharge such claim or Indebtedness could not reasonably be expected to have a Material Adverse
Effect.
7.05
Preservation of Existence, Etc.
(a) Preserve, renew and maintain in full force and effect its legal existence and good
standing under the Laws of the jurisdiction of its organization except in a transaction permitted
by
Section 8.04
or
8.05
and (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect and (c) preserve or renew all of its material registered patents,
trademarks, trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
7.06
Maintenance of Properties
.
(a) Maintain, preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order and condition, ordinary wear and tear excepted;
(b) make all necessary repairs thereto and renewals and replacements thereof, except where the
failure to do so could not reasonably be expected to have a Material Adverse Effect and (c) use the
standard of care typical in the industry in the operation and maintenance of its facilities, except
where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
7.07
Maintenance of Insurance
.
Maintain in full force and effect insurance (including workers compensation insurance,
liability insurance, casualty insurance and business interruption insurance) with financially sound
and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such
deductibles and covering such risks as are customarily carried by similarly situated companies.
7.08
Compliance with Laws
.
Comply with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.
56
7.09
Books and Records
.
(a) With respect to the Borrower, maintain proper books of record and account, in which
requisite, true and correct entries in conformity in all material respects with GAAP consistently
applied shall be made of all financial transactions and matters involving the assets and business
of the Borrower and its Subsidiaries; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.
7.10
Inspection Rights
.
Permit representatives and independent contractors of the Administrative Agent and each Lender
to visit and inspect any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its Responsible Officers, and at such reasonable times during normal business hours
and as often as may be reasonably desired, upon reasonable advance notice to the Borrower;
provided
,
however
, that when an Event of Default exists and/or after the occurrence
of an event or events that have a Material Adverse Effect, the Administrative Agent or any Lender
(or any of their respective representatives or independent contractors) may do any of the foregoing
as well as discuss the affairs, finances and accounts of such Loan Party with its directors and
independent public accountants, all at the reasonable expense of the Borrower at any time during
normal business hours after having provided reasonable notice. Notwithstanding the foregoing, no
Loan Party or any of its Subsidiaries shall be required to disclose (a) any materials subject to a
confidentiality obligation binding upon such Person (but provided further that such Person shall,
at the request of the Lender, use commercially reasonable efforts to obtain permission for such
disclosure and, in the event permission cannot be obtained, furnish some information regarding the
matters to which such materials relate as can reasonably be furnished without violation of such
confidentiality obligations) or (b) any communications protected by attorney-client privilege, the
disclosure or inspection of which would waive such privilege.
7.11
Use of Proceeds
.
Use the proceeds of the Credit Extensions to finance working capital, make Permitted
Acquisitions and for other lawful corporate purposes,
provided
that in no event shall the
proceeds of the Credit Extensions be used in contravention of any Law or of any Loan Document.
7.12
Additional Guarantors.
Promptly, and in any event, not later than thirty (30) days, after the acquisition or
formation of any Material Subsidiary, notify the Administrative Agent thereof in writing, and cause
such Person to (a) become a Guarantor by executing and delivering to the Administrative Agent a
Joinder Agreement or such other documents as the Administrative Agent shall deem appropriate for
such purpose, and (b) deliver to the Administrative Agent documents of the types referred to in
Section 5.01(f)
and favorable opinions of counsel to such Person (which shall cover, among
other things, the legality, validity, binding effect and enforceability of the documentation
referred to in clause (a)), all in form, content and scope reasonably satisfactory to the
Administrative Agent.
7.13
ERISA Compliance
.
Do, and cause each of its ERISA Affiliates to do, each of the following: (a) maintain each
Plan in compliance in all material respects with the applicable provisions of ERISA, the Internal
Revenue Code
57
and other federal or state law except where termination of such Plan is permitted by the terms
of such Plan and any applicable collective bargaining agreement and in accordance with the
applicable provisions of ERISA, the Internal Revenue Code and other applicable Laws; (b) cause each
Plan that is qualified under Section 401(a) of the Internal Revenue Code to maintain such
qualification; and (c) make all required contributions to any Plan subject to Section 412 of the
Internal Revenue Code.
ARTICLE VIII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, no
Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly:
8.01
Liens
.
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on
Schedule 8.01
and any
renewals or extensions thereof,
provided
that (i) the property covered thereby is
not changed, (ii) the amount secured or benefited thereby is not increased, (iii) the direct
or contingent obligor with respect thereto is not changed and (iv) any renewal or extension
of the obligations secured or benefited thereby is permitted by
Section 8.03(b)
;
(c) Liens (other than Liens imposed under ERISA) for taxes, assessments or governmental
charges or levies not yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP;
(d) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and suppliers and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary course of business,
provided
that such Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the same or are being
contested in good faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established;
(e) pledges or deposits in the ordinary course of business in connection with workers
compensation, unemployment insurance and other social security legislation, other than any
Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or
litigation), performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances affecting
real property which, in the aggregate, are not substantial in amount, and which do not in
any case
58
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting an Event of
Default under
Section 9.01(h)
or securing appeal or other surety bonds related to
such judgments;
(i) Liens securing Indebtedness permitted under
Section 8.03(e)
;
provided
that (i) such Liens do not at any time encumber any Property other than the
Property financed by such Indebtedness, (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the Property being acquired on
the date of acquisition and (iii) such Liens attach to such Property concurrently with or
within ninety days after the acquisition thereof;
(j) leases or subleases granted to others not interfering in any material respect with
the business of the Borrower or any of its Subsidiaries;
(k) any interest of title of a lessor under, and Liens arising from UCC financing
statements (or equivalent filings, registrations or agreements in foreign jurisdictions)
relating to, leases permitted by this Agreement;
(l) normal and customary rights of setoff upon deposits of cash in favor of banks or
other depository institutions;
(m) Liens of a collection bank arising under Section 4-210 of the Uniform Commercial
Code on items in the course of collection;
(n) Liens of sellers of goods to the Borrower and any of its Subsidiaries arising under
Article 2 of the Uniform Commercial Code or similar provisions of applicable law in the
ordinary course of business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;
(o) other Liens which secure Indebtedness of the Borrower and its Subsidiaries;
provided
that the aggregate principal amount of Indebtedness secured thereby shall
not at any time exceed $10,000,000;
(p) Liens granted in favor of any Governmental Authority created pursuant to cost-type
contracts, progress-billing contracts or advance-pay contracts with such Governmental
Authority to which the Borrower or any of its Subsidiaries is a party in the materials and
products of the Borrower and its Subsidiaries subject to such contracts or, in the case of
advance-pay contracts only, any advance payments made thereunder to the Borrower and its
Subsidiaries by such Governmental Authority; and
(q) Liens on any Property of the Borrower or any of its Subsidiaries acquired after the
Closing Date pursuant to a Permitted Acquisition or any Liens on any Property of any Person
that becomes a Subsidiary after the Closing Date pursuant to a Permitted Acquisition
provided that, in each case (i) such Liens secure only Acquired Purchase Money Indebtedness
permitted under
Section 8.03(g)
, (ii) such Liens were not created in contemplation
of or in connection with any such Permitted Acquisition and (iii) such Liens do not at any
time encumber any Property other than the Property financed by such Acquired Purchase Money
Indebtedness.
59
8.02
Investments
.
Make any Investments, except:
(a) Investments held by the Borrower or such Subsidiary in the form of cash or Cash
Equivalents;
(b) Investments existing as of the Closing Date and set forth in
Schedule 8.02
;
(c) Investments in any Person that is a Loan Party prior to giving effect to such
Investment;
(d) Investments consisting of extensions of credit in the nature of accounts receivable
or notes receivable arising from the grant of trade credit in the ordinary course of
business, and Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;
(e) Guarantees permitted by
Section 8.03
;
(f) Investments permitted by
Section 8.04
,
Section 8.06
or
Section
8.07
;
(g) Permitted Acquisitions;
(h) Investments by any Loan Party in joint ventures not to exceed at any time an amount
equal to twenty percent (20%) of Consolidated Total Assets as of the last day of the most
recently ended fiscal quarter for which the Borrower shall have delivered financial
statements pursuant to
Section 7.01(a)
or
(b)
, as the case may be; and
(i) the Borrower may purchase, redeem, acquire or retire shares of its Capital Stock.
8.03
Indebtedness
.
Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set forth in
Schedule
8.03
and any renewals, refinancings and extensions thereof on terms and conditions not
materially less favorable to the applicable debtor(s); provided that the amount of such
Indebtedness is not increased at the time of such refinancing, refunding, renewal or
extension except by an amount equal to a reasonable premium or other amount paid, and fees
and expenses reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments utilized thereunder;
(c) intercompany Indebtedness permitted under
Section 8.02
;
(d) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or
arising under any Swap Contract,
provided
that (i) such obligations are (or were)
entered into by such Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets, or property
held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not
60
for purposes of speculation or taking a market view; and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;
(e) purchase money Indebtedness (including obligations in respect of Capital Leases or
Synthetic Leases) hereafter incurred by the Borrower or any of its Subsidiaries to finance
the purchase of fixed assets and renewals, refinancings and extensions thereof,
provided
that (i) the total of all such Indebtedness for all such Persons taken
together shall not exceed an aggregate principal amount of $25,000,000 at any one time
outstanding; (ii) such Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced for a principal amount
in excess of the principal balance outstanding thereon at the time of such refinancing;
(f) unsecured Indebtedness (except to the extent of any Liens permitted pursuant to
Section 8.01(o
)) of the Borrower and the Guarantors; provided that, (i) such
Indebtedness, when added to the then outstanding Indebtedness of the Borrower and its
Subsidiaries would not cause the Loan Parties to be in violation of
Section 8.10
on
a pro forma basis; and provided, further that (ii) such Indebtedness permitted pursuant to
this clause (f) which is Indebtedness of the Guarantors shall not exceed in the aggregate at
any one time outstanding, $25,000,000 and (iii) such Indebtedness permitted pursuant to this
clause (f) may not (other than unsecured Indebtedness (except to the extent of any Liens
permitted pursuant to
Section 8.01(q
)) assumed in connection with a Permitted
Acquisition in an aggregate amount not to exceed at any one time outstanding $20,000,000)
contain covenants more restrictive than the covenants contained herein; and
(g) Acquired Purchase Money Indebtedness of the Borrower and its Subsidiaries in an
aggregate principal amount not to exceed $45,000,000 at any one time outstanding.
8.04
Fundamental Changes
.
Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person; provided that, subject to
Section
7.12
and provided that, after giving effect to any such transaction, no Default or Event of
Default shall exist, (a) the Borrower may merge or consolidate with any of its Subsidiaries
provided
that the Borrower shall be the continuing or surviving corporation, (b) any
Subsidiary of the Borrower may merge or consolidate with any other Subsidiary of the Borrower
provided that if a Loan Party is a party thereto, a Loan Party shall be the continuing or surviving
corporation, (c) any Loan Party other than the Borrower may merge or consolidate with any other
Loan Party other than the Borrower, (d) any Foreign Subsidiary may be merged or consolidated with
or into any Loan Party provided that such Loan Party shall be the continuing or surviving
corporation, (e) any Foreign Subsidiary may be merged or consolidated with or into any other
Foreign Subsidiary and (f) any Subsidiary may wind up, liquidate or dissolve itself so long as it
transfers all or substantially all of its assets to a Loan Party prior to such wind up, liquidation
or dissolution.
8.05
Dispositions
.
Make any Disposition unless (a) the consideration paid in connection therewith shall be cash
or Cash Equivalents paid contemporaneously with consummation of the transaction and shall be in an
amount not less than the fair market value of the Property disposed of, (b) such transaction does
not involve a sale or other disposition of receivables other than receivables owned by or
attributable to other Property concurrently
being disposed of in a transaction otherwise permitted under this
Section 8.05
, and
(c) the total book value of
61
all of the assets sold or otherwise disposed of by the Borrower and its
Subsidiaries in all such transactions in any fiscal year of the Borrower represent less than ten
percent (10%) of Consolidated Total Assets determined as of the last day of the immediately
preceding fiscal year; provided that, in determining compliance with this
Section 8.05
a
Disposition shall be excluded to the extent the net proceeds of such Disposition are used within a
period of 365 days following such Disposition to acquire assets or property useful in the ordinary
course of business of the Borrower or its Subsidiaries. Notwithstanding the foregoing, the parties
hereto agree that the Borrower may sell the assets or Capital Stock of Teledyne Continental Motors,
Inc. (
TCM
) for cash consideration; provided that, the net proceeds of such Disposition
are used by the Borrower within a period of 365 days following such Disposition to acquire assets
or property useful in the ordinary course of business of the Borrower or its Subsidiaries.
Provided that no Default or Event of Default exists or arises therefrom, upon the sale, exchange,
transfer or other disposition of all of the assets or Capital Stock of a Loan Party not prohibited
by this
Section 8.05
, such Loan Party shall be deemed automatically and unconditionally
released and discharged from all obligations hereunder without any further action required on the
part of the Administrative Agent or any Lender. The Administrative Agent shall, upon the Loan
Parties request and at the Loan Parties expense, deliver such documentation as is reasonably
necessary to evidence such release and discharge. For purposes of clarification, the release of
TCM in accordance with the terms hereof shall not constitute a Material Adverse Effect.
8.06
Change in Nature of Business
.
Enter into any business, either directly or indirectly through a Subsidiary, except for (a)
any business in which the Borrower or the applicable Subsidiary is engaged in on the Closing Date,
(b) any business that is reasonably related thereto, (c) any business that is substantially the
same industry as any business conducted by the Borrower or such Subsidiary on the Closing Date or
(d) any other business on a non-material basis to the extent acquired by the Borrower in a
Permitted Acquisition so long as the other business or businesses acquired by the Borrower pursuant
to such Permitted Acquisition otherwise satisfy the requirements of clauses (a), (b) or (c) of this
Section 8.06
.
8.07
Transactions with Affiliates and Insiders
.
Enter into or permit to exist any transaction or series of transactions with any officer,
director or Affiliate of such Person other than (a) advances of working capital to any Loan Party,
(b) transfers of cash and assets to any Loan Party, (c) intercompany transactions expressly
permitted by
Section 8.02
,
Section 8.03
,
Section 8.04
or
Section
8.05
, (d) compensation and reimbursement of expenses of officers and directors in accordance
with the Borrowers policies which comply in all material respects with applicable Laws and (e)
except as otherwise specifically limited in this Agreement, other transactions which are entered
into in the ordinary course of such Persons business on terms and conditions substantially as
favorable to such Person as would be obtainable by it in a comparable arms-length transaction with
a Person other than an officer, director or Affiliate.
8.08
Burdensome Agreements
.
Enter into, or permit to exist, any Contractual Obligation that, by its terms, encumbers or
restricts on the ability of any such Person to (i) pay dividends or make any other distributions to
any Loan Party on its Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (ii) pay any Indebtedness or other obligation owed to any Loan Party,
(iii) make loans or advances to any Loan Party, (iv) sell, lease or transfer any of its Property to
any Loan Party, or (v) perform its obligations as a Loan Party pursuant to the Loan Documents or
any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any
of the matters referred to in clauses (i)-(iv) above) for (1) this
Agreement and the other Loan Documents, (2) any document or instrument governing Indebtedness
62
incurred pursuant to
Section 8.03(e)
,
provided
that any such restriction contained
therein relates only to the asset or assets constructed or acquired in connection therewith, (3)
any document or instrument governing Indebtedness incurred pursuant to
Section 8.03(f)
, (4)
any Permitted Lien or any document or instrument governing any Permitted Lien,
provided
that any such restriction contained therein relates only to the asset or assets subject to such
Permitted Lien, (5) customary restrictions and conditions contained in any agreement relating to
the sale of any Property permitted under
Section 8.05
pending the consummation of such sale
or (6) restrictions and limitations imposed by applicable law.
8.09
Use of Proceeds
.
Use the proceeds of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying
margin stock or to refund indebtedness originally incurred for such purpose.
8.10
Financial Covenants
.
(a)
Consolidated Net Worth
. Permit Consolidated Net Worth at any time to be less than
the sum of $240,000,000
plus
50% of Consolidated Net Income (to the extent positive) for
each fiscal quarter ending after April 2, 2006
plus
75% of the amount of all Equity
Issuances after the Closing Date.
(b)
Consolidated Leverage Ratio
. Permit the Consolidated Leverage Ratio as of the end
of any fiscal quarter of the Borrower to be greater than 3.0:1.0.
(c)
Consolidated Interest Coverage Ratio
. Permit the Consolidated Interest Coverage
Ratio as of the end of any fiscal quarter of the Borrower to be less than 3.0 to 1.0.
8.11
Organization Documents; Fiscal Year
.
(a) Amend, modify or change its Organization Documents in a manner adverse to the Lenders; or
(b) change its fiscal year without providing prior written notice to the Administrative Agent.
8.12
Sale Leasebacks
.
Enter into any Sale and Leaseback Transaction in an amount in excess of $15 million in the
aggregate during the term of this Agreement.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
9.01
Events of Default
.
Any of the following shall constitute an Event of Default:
(a)
Non-Payment
. The Borrower or any other Loan Party fails to pay (i) when
and as required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) within three Business Days after the same becomes due, any interest on
any Loan or on any L/C Obligation, or any commitment fee or other fee due hereunder, or
(iii) within five Business Days
63
after the same becomes due, any other amount payable hereunder or under any other Loan
Document; or
(b)
Specific Covenants
. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of
Section 7.01
,
7.02
,
7.03
,
7.05(a)
,
7.10
,
7.11
, or
7.12
or
Article VIII
or
(c)
Other Defaults
. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan
Document on its part to be performed or observed and such failure continues for thirty days;
or
(d)
Representations and Warranties
. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the Borrower or
any other Loan Party herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading in any material respect
when made or deemed made; or
(e)
Cross-Default
. (i) The Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder
and Indebtedness under Swap Contracts) having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all creditors under
any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B)
fails to observe or perform any other agreement or condition relating to any such
Indebtedness or Guarantee having an aggregate principal amount (including undrawn committed
or available amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to
repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect thereof to be
demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined
in such Swap Contract) resulting from (A) any event of default under such Swap Contract as
to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which
the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event,
the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is
greater than the Threshold Amount; or
(f)
Insolvency Proceedings, Etc.
Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor Relief Law, or
makes an assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed
without the application or consent of such Person and the appointment continues undischarged
or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for sixty calendar
days, or an order for relief is entered in any such proceeding; or
64
(g)
Inability to Pay Debts; Attachment
. (i) The Borrower or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its debts as
they become due, or (ii) any writ or warrant of attachment or execution or similar process
is issued or levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within thirty days after its issue or levy; or
(h)
Judgments
. There is entered against the Borrower or any Subsidiary (i) one
or more final judgments or orders for the payment of money in an aggregate amount exceeding
the Threshold Amount (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, there is a period of thirty (30)
consecutive days during which such judgment is not vacated, satisfied or discharged or a
stay of enforcement of such judgment, by reason of a pending appeal posting of bond or
otherwise, is not in effect; or
(i)
ERISA
. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result in liability
of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC
in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(j)
Invalidity of Loan Documents
. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted hereunder or
satisfaction in full of all the Obligations, ceases to be in full force and effect or fails
to give the Administrative Agent and/or the Lenders the rights, powers and privileges
purported to be created by the Loan Documents; or any Loan Party or any other Person on
behalf of a Loan Party contests in any manner the validity or enforceability of any Loan
Document; or any Loan Party denies that it has any or further liability or obligation under
any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or
(k)
Change of Control
. There occurs any Change of Control.
9.02
Remedies Upon Event of Default
.
If any Event of Default occurs and is continuing, the Administrative Agent shall, at the
request of, or may, with the consent of, the Required Lenders, take any or all of the following
actions:
(a) declare the commitment of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and
obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in an amount
equal to the then Outstanding Amount thereof); and
65
(d) exercise on behalf of itself and the Lenders all rights and remedies available to
it and the Lenders under the Loan Documents or applicable law;
provided
,
however
, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the
obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and
all interest and other amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of the Administrative Agent or any
Lender.
9.03
Application of Funds
.
After the exercise of remedies provided for in
Section 9.02
(or after the Loans have
automatically become immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to
Section 9.02
), any
amounts received on account of the Obligations shall be applied by the Administrative Agent in the
following order:
First
, to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including Attorney Costs and amounts payable under
Article
III
) payable to the Administrative Agent in its capacity as such;
Second
, to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal and interest) payable to the Lenders (including
Attorney Costs and amounts payable under
Article III
), ratably among them in
proportion to the amounts described in this clause
Second
payable to them;
Third
, to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans and L/C Borrowings and fees, premiums and scheduled periodic payments,
and any interest accrued thereon, due under any Swap Contract between any Credit Party and
any Lender, or any Affiliate of a Lender, to the extent such Swap Contract is permitted by
Section 8.03(d)
, ratably among the Lenders (and, in the case of such Swap Contracts,
Affiliates of Lenders) in proportion to the respective amounts described in this clause
Third
held by them;
Fourth
, to payment of that portion of the Obligations constituting unpaid principal
of the Loans and L/C Borrowings and breakage, termination or other payments, and any
interest accrued thereon, due under any Swap Contract between any Credit Party and any
Lender, or any Affiliate of a Lender, to the extent such Swap Contract is permitted by
Section 8.03(d)
, and to Cash Collateralize that portion of L/C Obligations comprised
of the aggregate undrawn amount of Letters of Credit, ratably among the Lenders (and, in the
case of such Swap Contracts, Affiliates of Lenders) in proportion to the respective amounts
described in this clause
Fourth
held by them; and
Last
, the balance, if any, after all of the Obligations have been indefeasibly paid
in full, to the Borrower or as otherwise required by Law.
Subject to
Section 2.03(c)
, amounts used to Cash Collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause
Fourth
above shall be applied to satisfy
drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash
Collateral after all Letters of Credit
66
have either been fully drawn or expired, such remaining amount shall be applied to the other
Obligations, if any, in the order set forth above.
ARTICLE X
ADMINISTRATIVE AGENT
10.01
Appointment and Authority
.
Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on
its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower nor
any other Loan Party shall have rights as a third party beneficiary of any of such provisions.
10.02
Rights as a Lender
.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term Lender or Lenders shall, unless otherwise expressly indicated
or unless the context otherwise requires, include the Person serving as the Administrative Agent
hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if
such Person were not the Administrative Agent hereunder and without any duty to account therefor to
the Lenders.
10.03
Exculpatory Provisions
.
The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein and in the other Loan Documents. Without limiting the generality of the foregoing,
the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that the Administrative Agent is required to exercise as directed in writing
by the Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents),
provided
that the
Administrative Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose the Administrative Agent to liability or that is contrary
to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to the
Borrower or any of its Affiliates that is communicated to or obtained by the Person serving
as the Administrative Agent or any of its Affiliates in any capacity.
67
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in
Sections 11.01
and
9.02
) or (ii)
in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with this Agreement or
any other Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in
Article V
or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Administrative Agent.
10.04
Reliance by Administrative Agent
.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated
by the proper Person. The Administrative Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the
making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall
have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such
Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
10.05
Delegation of Duties
.
The Administrative Agent may perform any and all of its duties and exercise its rights and
powers hereunder or under any other Loan Document by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the
Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit facilities provided for
herein as well as activities as Administrative Agent.
10.06
Resignation of Administrative Agent
.
The Administrative Agent may at any time give notice of its resignation to the Lenders, the
L/C Issuer and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have
68
the right, in consultation with the Borrower, to appoint a successor, which shall be a
bank with an office in the United States, or an Affiliate of any such bank with an office in the
United States. If no such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C
Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above;
provided
that if the Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan Documents and (2) all
payments, communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until
such time as the Required Lenders appoint a successor Administrative Agent as provided for above in
this Section. Upon the acceptance of a successors appointment as Administrative Agent hereunder,
such successor shall succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent
shall be discharged from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this Section). The fees
payable by the Borrower to a successor Administrative Agent shall be the same as those payable to
its predecessor unless otherwise agreed between the Borrower and such successor. After the
retiring Administrative Agents resignation hereunder and under the other Loan Documents, the
provisions of this Article and
Section 11.04
shall continue in effect for the benefit of
such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also
constitute its resignation as L/C Issuer and Swing Line Lender. Upon the acceptance of a
successors appointment as Administrative Agent hereunder, (a) such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and
Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all
of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the
successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or make other arrangement satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect
to such Letters of Credit.
10.07
Non-Reliance on Administrative Agent and Other Lenders
.
Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related Parties and based on such
documents and information as it has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
10.08
No Other Duties, Etc
.
Anything herein to the contrary notwithstanding, the Sole Book Manager, the Sole Lead
Arranger, the co-documentation agents and the syndication agent listed on the cover page hereof
shall not have any powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C
Issuer hereunder.
69
10.09
Administrative Agent May File Proofs of Claim
.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any
Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C
Obligation shall then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall
be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in order to
have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of the Lenders,
the L/C Issuer and the Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders, the L/C Issuer and the Administrative Agent under
Sections 2.03(i)
and
(j)
,
2.09
and
11.04
) allowed in such
judicial proceeding; and
(b) to collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender, the L/C Issuer to make such
payments to the Administrative Agent and, in the event that the Administrative Agent shall consent
to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under
Sections 2.09
and
11.04
.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or
consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
10.10
Releases
.
The Lenders and the L/C Issuer irrevocably authorize the Administrative Agent, at its option
and in its discretion, to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agents authority to release any Guarantor from its obligations under
the Guaranty, pursuant to this
Section 10.10
.
70
ARTICLE XI
MISCELLANEOUS
11.01
Amendments, Etc
.
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no
consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective
unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given;
provided
,
however
, that no such amendment, waiver or consent shall:
(a) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to
Section 9.02
) without the written consent of such Lender (it
being understood and agreed that a waiver of any condition precedent set forth in
Section 5.02
or of any Default or Event of Default or a mandatory reduction in
Commitments is not considered an extension or increase in Commitments of any Lender);
(b) postpone any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document without the written consent of each Lender
directly affected thereby;
(c) reduce the principal of, or the rate of interest specified herein on, any Loan or
L/C Borrowing, or any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
provided
,
however
, that only the consent of the Required Lenders shall be
necessary to amend the definition of Default Rate or to waive any obligation of the
Borrower to pay interest at the Default Rate;
(d) change
Section 2.13
or
Section 9.03
in a manner that would alter
the pro rata sharing of payments or the order of application of payments required thereby
without the written consent of each Lender directly affected thereby;
(e) change any provision of this Section or the definition of Required Lenders or any
other provision hereof specifying the number or percentage of Lenders required to amend,
waive or otherwise modify any rights hereunder or make any determination or grant any
consent hereunder without the written consent of each Lender directly affected thereby;
(f) release the Borrower or, except in connection with a merger or consolidation
permitted under
Section 8.04
or a Disposition permitted under
Section 8.05
,
all or substantially all of the Guarantors, from its or their obligations under the Loan
Documents without the written consent of each Lender directly affected thereby;
and,
provided
further
, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the
rights or duties of the L/C Issuer under this Agreement or any Letter of Credit Application
relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required
above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed
by the Administrative Agent in addition to the Lenders required above, affect the rights or
duties of the
71
Administrative Agent under this Agreement or any other Loan Document; and (iv) the
Administrative Agent Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or extended without the
consent of such Lender.
Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances
as set forth above, (x) each Lender is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders shall determine whether or not to allow a Loan Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be
binding on all of the Lenders.
11.02
Notices; Effectiveness; Electronic Communication
.
(a)
General
. Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in subsection (b) below), all notices
and other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by telecopier as follows,
and all notices and other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line
Lender, to the address, facsimile number, electronic mail address or telephone number
specified for such Person on
Schedule 11.02
or to such other address, facsimile
number, electronic mail address or telephone number as shall be designated by such party in
a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile number, electronic mail address
or telephone number specified in its Administrative Questionnaire or to such other address,
facsimile number, electronic mail address or telephone number as shall be designated by such
party in a notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing
Line Lender.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day for the recipient).
Notices delivered through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).
(b)
Electronic Communications
. Notices and other communications to the Lenders and
the L/C Issuer hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative
Agent,
provided
that the foregoing shall not apply to notices to any Lender or the L/C
Issuer pursuant to
Article II
if such Lender or the L/C Issuer, as applicable, has notified
the Administrative Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it,
provided
that approval of such procedures may be limited to
particular notices or communications.
72
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to
an e-mail address shall be deemed received upon the senders receipt of an acknowledgement from the
intended recipient (such as by the return receipt requested function, as available, return e-mail
or other written acknowledgement),
provided
that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or communication shall be
deemed to have been sent at the opening of business on the next business day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website shall be deemed received
upon the deemed receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is available and identifying
the website address therefor.
(c)
Change of Address, Etc
. Each of the Borrower, the Administrative Agent, the L/C
Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices
and other communications hereunder by notice to the other parties hereto. Each other Lender may
change its address, telecopier or telephone number for notices and other communications hereunder
by notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender.
(d)
Reliance by Administrative Agent and Lenders
. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices and
Swing Line Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices
were not made in a manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, the
L/C Issuer, each Lender and the Related Parties from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by or on behalf of the
Borrower. All telephonic notices to and other communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby consents to such
recording.
11.03
No Waiver; Cumulative Remedies
.
No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
11.04
Expenses; Indemnity; Damage Waiver
.
(a)
Costs and Expenses
. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of external counsel for the Administrative Agent), in connection with the
syndication of the credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, any Lender or the L/C Issuer (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C
Issuer), in connection with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder,
including all
73
such reasonable out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b)
Indemnification by the Borrower
. The Borrower shall indemnify the Administrative
Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of
the foregoing Persons (each such Person being called an
Indemnitee
) against, and hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related
expenses (including the reasonable fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly comply with the
terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or
any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought by a third party or
by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party
thereto;
provided
that such indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee, (y) result from a claim brought by the
Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitees
obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has
obtained a final and nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction or (z) are based on any theory of liability for punitive damages.
(c)
Reimbursement by Lenders
. To the extent that the Borrower for any reason fails to
indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it
to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any
of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lenders Applicable
Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment
is sought) of such unpaid amount,
provided
that the unreimbursed expense or indemnified
loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such,
or against any Related Party of any of the foregoing acting for the Administrative Agent (or any
such sub-agent) or L/C Issuer in connection with such capacity. The obligations of the Lenders
under this subsection (c) are subject to the provisions of
Section 2.12(d)
.
(d)
Waiver of Consequential Damages, Etc.
To the fullest extent permitted
by applicable law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any
damages arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic, internet or other information
74
transmission systems in connection with the Loans, this Agreement or the other Loan Documents or
the transactions contemplated hereby or thereby.
11.05
Payments Set Aside
.
To the extent that any payment by or on behalf of any Loan Party is made to the Administrative
Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender
exercises its right of set-off, and such payment or the proceeds of such set-off or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or
required (including pursuant to any settlement entered into by the Administrative Agent or such
Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection
with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or such set-off had not
occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the date such payment
is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this Agreement.
11.06
Successors and Assigns.
(a)
Successors and Assigns Generally
. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that neither the Borrower nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of
this Section or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by
any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their respective successors
and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section
and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b)
Assignments by Lenders
. Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to it);
provided
that (i) except in the case of an assignment of the entire remaining amount of the
assigning Lenders Commitment and the Loans at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the
Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if Trade Date is
specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000
unless the Administrative Agent and, so long as no Event of Default has occurred and is continuing,
the Borrower, otherwise consents (each such consent not to be unreasonably withheld or delayed);
(ii) each partial assignment shall be made as an assignment of a proportionate part of all the
assigning Lenders Loans and Commitments, and rights and obligations with respect thereto,
assigned,
75
except that this clause (ii) shall not apply to rights in respect of Swing Line Loans;
(iii) any assignment of a Revolving Commitment must be approved by the Administrative Agent, the
L/C Issuer and the Swing Line Lender unless the Person that is the proposed assignee is itself a
Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee) (each
such approval not to be unreasonably withheld or delayed); and (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee in the amount, if any, required as set forth in
Schedule
11.06
;
provided
,
however
, that the Administrative Agent may, in its sole
discretion, elect to waive such processing and recordation fee in the case of any assignment, and
the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Subject to acceptance and recording thereof by the Administrative
Agent pursuant to subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement
and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 3.01
,
3.04
,
3.05
,
11.04
and
11.05
with respect to facts and circumstances
occurring prior to the effective date of such assignment). Upon request, the Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with this subsection
shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.
(c)
Register
. The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at the Administrative Agents Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to,
each Lender pursuant to the terms hereof from time to time (the
Register
). The entries
in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d)
Participations
. Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person (other than a natural
person or the Borrower or any of the Borrowers Affiliates or Subsidiaries) (each, a
Participant
) in all or a portion of such Lenders rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans (including such Lenders
participations in L/C Obligations and/or Swing Line Loans) owing to it);
provided
that (i)
such Lenders obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations and
(iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lenders rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement;
provided
that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in clauses (a) through
(g) of the first proviso to
Section 11.01
that directly affects such Participant. Subject
to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of
Sections 3.01
,
3.04
and
3.05
to
the same extent as if it were a Lender and had acquired its interest by assignment pursuant to
subsection
76
(b) of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of
Section 11.08
as though it were a Lender,
provided
such
Participant agrees to be subject to
Section 2.13
as though it were a Lender.
(e)
Limitation upon Participation Rights
. A Participant shall not be entitled to
receive any greater payment under
Section 3.01
or
3.04
than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Borrowers prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of
Section 3.01
unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower, to comply with
Section 3.01(e)
as though it were a Lender.
(f)
Certain Pledges
. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its Note, if any) to
secure obligations of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank;
provided
that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as
a party hereto.
(g)
Electronic Execution of Assignments
. The words execution, signed,
signature, and words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.
(g)
Resignation as L/C Issuer or Swing Line Lender after Assignment
. Notwithstanding
anything to the contrary contained herein, if at any time Bank of America assigns all of its
Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon thirty days
notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon thirty days notice
to the Borrower, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer
or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor
L/C Issuer or Swing Line Lender hereunder;
provided
,
however
, that no failure by
the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C
Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder with respect to all Letters
of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C
Obligations with respect thereto (including the right to require the Lenders to make Base Rate
Loans or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.03(c)
). If
Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line
Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders to make Base Rate
Loans or fund risk participations in outstanding Swing Line Loans pursuant to
Section
2.04(c)
.
11.07
Confidentiality
.
Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to its and its
Affiliates directors, officers, employees and agents, including accountants, legal counsel and
other advisors (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested by
any regulatory authority; (c) to the extent required by applicable laws or regulations or by
any subpoena
77
or similar legal process provided, however, that the Administrative Agent and/or such
Lender will give the Borrower as soon as reasonably practicable prior notice of any such
requirement or subpoena so that the Borrower may seek a protective order or other appropriate
remedy to prevent such disclosure unless such applicable law or regulation or subpoena expressly
provides that no such prior notice shall be given to the Borrower; (d) to any other party to this
Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an
agreement containing provisions substantially the same as those of this Section, to (i) any
Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterpartys or prospective
counterpartys professional advisor) to any credit derivative transaction relating to obligations
of the Loan Parties; (g) with the consent of the Borrower; (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section, (ii) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis from a source other
than the Borrower who was not known by the Administrative Agent or such Lender to be bound by a
confidentiality agreement or legal obligation of confidentiality with respect to such information
or (iii) is independently developed by the Administrative Agent or any Lender without the use of
confidential information; or (i) to the National Association of Insurance Commissioners or any
other similar organization or any nationally recognized rating agency that requires access to
information about a Lenders or its Affiliates investment portfolio in connection with ratings
issued with respect to such Lender or its Affiliates. In addition, the Administrative Agent and
the Lenders may disclose the existence of this Agreement and information about this Agreement to
market data collectors, similar service providers to the lending industry, and service providers to
the Administrative Agent and the Lenders in connection with the administration and management of
this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions. For the
purposes of this Section,
Information
means all information received from any Loan Party
relating to any Loan Party or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Loan
Party; provided that, in the case of information received from a Loan Party after the date hereof,
such information is clearly identified in writing at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same
reasonable degree of care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
11.08
Set-off
.
In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and
during the continuance of any Event of Default, each Lender, the L/C Issuer and each of their
respective Affiliates is authorized at any time and from time to time, without prior notice to the
Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf
and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or the account of the
respective Loan Parties against any and all Obligations owing to such Lender hereunder or under any
other Loan Document, now or hereafter existing, irrespective of whether or not the Administrative
Agent or such Lender shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a currency different
from that of the applicable deposit or indebtedness. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application made by such Lender;
provided
,
however
, that the failure to give such notice shall not affect the
validity of such set-off and application.
78
11.09
Interest Rate Limitation.
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the
Maximum Rate
). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to
the Borrower. In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted
by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.
11.10
Counterparts
.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.
11.11
Integration
.
This Agreement, together with the other Loan Documents, comprises the complete and integrated
agreement of the parties on the subject matter hereof and thereof and supersedes all prior
agreements, written or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement
shall control;
provided
that the inclusion of supplemental rights or remedies in favor of
the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict
with this Agreement. Each Loan Document was drafted with the joint participation of the respective
parties thereto and shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
11.12
Survival of Representations and Warranties
.
All representations and warranties made hereunder and in any other Loan Document or other
document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Administrative Agent and each Lender, regardless of any investigation
made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of
any Credit Extension, and shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.
11.13
Severability
.
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid
or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
79
11.14
Replacement of Lenders
.
Under any circumstances set forth herein providing that the Borrower shall have the right to
replace a Lender as a party to this Agreement, the Borrower may, upon notice to such Lender and the
Administrative Agent, replace such Lender by causing such Lender to assign its Commitment and
outstanding Loans (with the assignment fee to be paid by the Borrower in such instance) pursuant to
Section 11.06(b)
to one or more other Lenders or Eligible Assignees procured by the
Borrower;
provided
,
however
, that if the Borrower elects to exercise such right
with respect to any Lender pursuant to
Section 3.06(b)
, it shall be obligated to replace
all Lenders that have made similar requests for compensation pursuant to
Section 3.01
or
3.04
. The Borrower shall (x) pay in full all principal, interest, fees and other amounts
owing to such Lender through the date of replacement (including any amounts payable pursuant to
Section 3.05
), (y) provide appropriate assurances and indemnities (which may include
letters of credit) to the L/C Issuer and the Swing Line Lender as each may reasonably require with
respect to any continuing obligation to fund participation interests in any L/C Obligations or any
Swing Line Loans then outstanding, and (z) release such Lender from its obligations under the Loan
Documents. Any Lender being replaced shall execute and deliver an Assignment and Assumption with
respect to such Lenders Commitment and outstanding Loans and participations in L/C Obligations and
Swing Line Loans.
11.15
Governing Law; Jurisdiction, Etc
.
(a)
GOVERNING LAW
. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE;
PROVIDED
THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b)
SUBMISSION TO JURISDICTION
. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING
IN NEW YORK, NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH PARTY HERETO IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS
, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
11.16
Waiver of Right to Trial by Jury
.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS
80
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.17
No Advisory or Fiduciary Responsibility
.
In connection with all aspects of each transaction contemplated hereby, the Loan Parties each
acknowledge and agree that: (i) the credit facilities provided for hereunder and any related
arranging or other services in connection therewith (including in connection with any amendment,
waiver or other modification hereof or of any other Loan Document) are an arms-length commercial
transaction between the Loan Parties and their respective Affiliates, on the one hand, and the
Administrative Agent and BAS, on the other hand, and each of the Loan Parties is capable of
evaluating and understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver
or other modification hereof or thereof); (ii) in connection with the process leading to such
transaction, the Administrative Agent and BAS each is and has been acting solely as a principal and
is not the financial advisor, agent or fiduciary, for the Loan Parties or any of their respective
Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor BAS has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of any Loan Party with respect to any of the transactions contemplated
hereby or the process leading thereto, including with respect to any amendment, waiver or other
modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent
or BAS has advised or is currently advising any of the Loan Parties or any of their respective
Affiliates on other matters) and neither the Administrative Agent nor BAS has any obligation to any
of the Loan Parties or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in the other Loan
Documents; (iv) the Administrative Agent and BAS and their respective Affiliates may be engaged in
a broad range of transactions that involve interests that differ from those of the Loan Parties and
their respective Affiliates, and neither the Administrative Agent nor BAS has any obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v)
neither the Administrative Agent, nor BAS has provided nor will provide any legal, accounting,
regulatory or tax advice with respect to any of the transactions contemplated hereby (including any
amendment, waiver or other modification hereof or of any other Loan Document) and each Loan Party
has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed
appropriate. Each Loan Party hereby waives and releases, to the fullest extent permitted by law,
any claims that it may have against the Administrative Agent and/or BAS with respect to any breach
or alleged breach of agency or fiduciary duty;
provided
, however, that nothing in this
Section 11.17
releases the Administrative Agent or BAS from fraudulent conduct.
11.18
USA PATRIOT Act Notice
.
Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub.
L. 107-56 (signed into law October 26, 2001)) (the
Act
), it is required to obtain, verify
and record information that identifies the Borrower, which information includes the name and
address of the Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.
11.19
Waiver of Notice of Termination
.
Those Lenders party hereto which are also party to the Existing Credit Agreement hereby waive
any prior notice requirement under the Existing Credit Agreement with respect to the termination of
commitments thereunder and the making of any prepayments thereunder.
81
[SIGNATURE PAGES FOLLOW]
82
IN WITNESS WHEREOF
,
the parties hereto have caused this Agreement to be duly executed as of
the date first above written.
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BORROWER:
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TELEDYNE TECHNOLOGIES INCORPORATED,
a Delaware corporation
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By:
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/s/ Dale A. Schnittjer
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Name:
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Dale A. Schnittjer
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Title:
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Senior Vice President and Chief Financial Officer
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GUARANTORS:
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TELEDYNE BROWN ENGINEERING,
INC.,
a Delaware corporation
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By:
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/s/ Janice L. Hess
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Name:
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Janice L. Hess
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Title:
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Vice President and Chief Financial Officer
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TELEDYNE CONTINENTAL MOTORS, INC.,
a Delaware corporation
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By:
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/s/ Dale A. Schnittjer
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Name:
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Dale A. Schnittjer
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Title:
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Senior Vice President and Chief Financial Officer
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TELEDYNE INVESTMENT, INC.,
a Delaware corporation
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By:
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/s/ Dale A. Schnittjer
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Name:
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Dale A. Schnittjer
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Title:
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Senior Vice President and Chief Financial Officer
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TELEDYNE ISCO, INC.,
a Nebraska corporation
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By:
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/s/ Vicki L. Benne
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Name:
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Vicki L. Benne
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Title:
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Vice President and Chief Financial Officer
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TELEDYNE WIRELESS, INC.,
a Delaware corporation
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By:
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/s/ Dale A. Schnittjer
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Name:
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Dale A. Schnittjer
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Title:
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Senior Vice President and Chief Financial Officer
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ADMINISTRATIVE AGENT:
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BANK OF AMERICA, N.A.,
as Administrative Agent
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By:
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/s/ Brenda H. Little
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Name:
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Brenda H. Little
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Title:
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Assistant Vice President
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LENDERS:
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BANK OF AMERICA, N.A.,
as a Lender, L/C Issuer and Swing Line Lender
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By:
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/s/ Robert W. Troutman
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Name:
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Robert W. Troutman
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Title:
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Managing Director
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THE BANK OF NEW YORK,
as a Lender
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By:
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/s/ Elizabeth T. Ying
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Name:
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Elizabeth T. Ying
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Title:
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Vice President
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BANK OF TOKYO-MITSUBISHI
UFJ TRUST COMPANY,
as a Lender
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By:
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/s/ Chi-Chang Chen
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Name:
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Chi-Chang Chen
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Title:
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Vice President
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SUNTRUST BANK,
as a Lender
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By:
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/s/ Robert Bugbee
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Name:
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Robert Bugbee
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Title:
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Director
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JPMORGAN CHASE BANK, N.A.,
as a Lender
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By:
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/s/ Sanjna R. Daphtary
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Name:
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Sanjna R. Daphtary
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Title:
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Underwriter
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MELLON BANK, N.A.,
as a Lender
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By:
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/s/ David B. Wirl
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Name:
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David B. Wirl
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Title:
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Vice President
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COMERICA WEST INCORPORATED,
as a Lender
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By:
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/s/ Elise M. Walker
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Name:
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Elise M. Walker
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Title:
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Vice President
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COMMERZBANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES,
as a Lender
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By:
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/s/ Karla Wirth
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Name:
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Karla Wirth
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Title:
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AVP
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By:
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/s/ Yangling J. Si
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Name:
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Yangling J. Si
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Title:
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AVP
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WELLS FARGO BANK, N.A.,
as a Lender
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By:
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/s/ Ling Li
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Name:
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Ling Li
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Title:
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Vice President
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BANK OF THE WEST,
as a Lender
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By:
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/s/ Kathy Hills
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Name:
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Kathy Hills
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Title:
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Vice President
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|
|
Schedule 1.01
EXISTING LETTERS OF CREDIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficiary
|
|
L/C Number
|
|
|
Expiry Date
|
|
|
Issuer
|
|
|
Amount
|
|
|
BHARAT HEAVY ELEC. LTD
|
|
|
3074702
|
|
|
|
07/30/07
|
|
|
Bank of America
|
|
$
|
4,550.00
|
|
BHARAT HEAVY ELEC. LTD
|
|
|
3074703
|
|
|
|
07/30/07
|
|
|
Bank of America
|
|
$
|
74,379.10
|
|
BHARAT HEAVY ELEC. LTD
|
|
|
3074704
|
|
|
|
07/30/07
|
|
|
Bank of America
|
|
$
|
4,550.00
|
|
EMIRATES IND. GASES CO.
|
|
|
3075590
|
|
|
|
12/01/06
|
|
|
Bank of America
|
|
$
|
69,708.00
|
|
YUSUF BIN AHMED KANOO
|
|
|
3076046
|
|
|
|
11/24/06
|
|
|
Bank of America
|
|
$
|
44,760.30
|
|
MORITANI AMERICA, INC.
|
|
|
3076287
|
|
|
|
07/31/08
|
|
|
Bank of America
|
|
$
|
52,575.00
|
|
LYCOMING, A TEXTRON CO.
|
|
|
3077479
|
|
|
|
09/01/06
|
|
|
Bank of America
|
|
$
|
100,000.00
|
|
S.C. ROMINSERV S.A.
|
|
|
3078261
|
|
|
|
12/15/07
|
|
|
Bank of America
|
|
$
|
4,464.00
|
|
CONTINENTAL INSURANCE
|
|
|
3020340
|
|
|
|
11/05/06
|
|
|
Bank of America
|
|
$
|
1,987,000.00
|
|
ACE AMERICAN INSURANCE
|
|
|
3053840
|
|
|
|
11/01/06
|
|
|
Bank of America
|
|
$
|
3,291,870.00
|
|
ZURICH AMERICAN INSURANCE
|
|
|
3071693
|
|
|
|
11/01/06
|
|
|
Bank of America
|
|
$
|
3,225,000.00
|
|
MITSUBISHI HEAVY INDUSTRIES AMERICA
|
|
|
3072360
|
|
|
|
05/29/07
|
|
|
Bank of America
|
|
$
|
88,423.50
|
|
MORITANI AMERICA
|
|
|
3073585
|
|
|
|
03/26/07
|
|
|
Bank of America
|
|
$
|
12,500.00
|
|
ROYAL BK OF CANADA
|
|
|
3074309
|
|
|
|
04/05/07
|
|
|
Bank of America
|
|
$
|
312,270.00
|
|
BHARAT HEAVY ELEC. LTD
|
|
|
3074701
|
|
|
|
07/30/07
|
|
|
Bank of America
|
|
$
|
72,326.70
|
|
AGENCY FOR DEFENSE,KOREA
|
|
|
3079168
|
|
|
|
05/31/07
|
|
|
Bank of America
|
|
$
|
3,000.00
|
|
MINISTRY OF SCIENCE, CROATIA
|
|
|
3081526
|
|
|
|
09/10/07
|
|
|
Bank of America
|
|
$
|
15,142.60
|
|
MINISTRY OF SCIENCE, CROATIA
|
|
|
3082270
|
|
|
|
09/10/06
|
|
|
Bank of America
|
|
$
|
15,142.60
|
|
SIDI KERIR PETROCHMICALS
|
|
|
3082271
|
|
|
|
02/29/08
|
|
|
Bank of America
|
|
$
|
4,633.30
|
|
BHARAT HEAVY ELEC. LTD
|
|
|
3082310
|
|
|
|
10/15/07
|
|
|
Bank of America
|
|
$
|
59,080.00
|
|
FOODIN YAKOS AEBE
|
|
|
3082849
|
|
|
|
09/07/06
|
|
|
Bank of America
|
|
$
|
8,960.00
|
|
BHARAT HEAVY ELEC. LTD
|
|
|
3082710
|
|
|
|
01/26/07
|
|
|
Bank of America
|
|
$
|
82,583.00
|
|
GUJARAT NARMADA VALLEY FERTILIZERS CO., LTD.
|
|
|
3083144
|
|
|
|
10/14/07
|
|
|
Bank of America
|
|
$
|
11,274.90
|
|
Schedule 2.01
COMMITMENTS AND APPLICABLE PERCENTAGES
|
|
|
|
|
|
|
|
|
Lender
|
|
Revolving Commitment
|
|
|
Applicable Percentage
|
|
|
Bank of America, N.A.
|
|
$
|
55,000,000
|
|
|
|
13.750000000
|
%
|
The Bank of New York
|
|
$
|
45,000,000
|
|
|
|
11.250000000
|
%
|
The Bank of Tokyo-Mitsubishi
UFJ Trust Company
|
|
$
|
45,000,000
|
|
|
|
11.250000000
|
%
|
SunTrust Bank
|
|
$
|
45,000,000
|
|
|
|
11.250000000
|
%
|
JPMorgan Chase Bank, N.A.
|
|
$
|
45,000,000
|
|
|
|
11.250000000
|
%
|
Mellon Bank, N.A.
|
|
$
|
45,000,000
|
|
|
|
11.250000000
|
%
|
Comerica West Incorporated
|
|
$
|
35,000,000
|
|
|
|
8.750000000
|
%
|
Commerzbank AG,
New York and Grand Cayman Branches
|
|
$
|
35,000,000
|
|
|
|
8.750000000
|
%
|
Wells Fargo Bank, N.A.
|
|
$
|
25,000,000
|
|
|
|
6.250000000
|
%
|
Bank of the West
|
|
$
|
25,000,000
|
|
|
|
6.250000000
|
%
|
|
Total
|
|
$
|
400,000,000
|
|
|
|
100.000000000
|
%
|
|
Schedule 6.13
SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER
|
|
OUTSTANDING
|
|
|
|
|
SHARES OF EACH CLASS OF
|
|
AND PERCENTAGE OWNED BY
|
|
OPTIONS, WARRANTS,
|
|
|
JURISDICTION OF
|
|
CAPITAL STOCK
|
|
BORROWER OR
|
|
RIGHTS OF
|
COMPANY NAME
|
|
FORMATION
|
|
OUTSTANDING
|
|
SUBSIDIARY
|
|
CONVERSION, ETC.
|
Aerosance, Inc.
|
|
Delaware
|
|
5,000 Common Shares
1,622 Preferred Shares
|
|
Teledyne Investment, Inc. 4,005 Common
Shares 80.1%; Teledyne Investment, Inc.
1,622 Preferred Shares 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Ensambles de Precision S.A. de C.V.
|
|
Mexico
|
|
21 Shares
|
|
Teledyne Technologies Incorporated
20.75 Shares 99%; Teledyne Investment,
Inc. 0.25 Shares -1%
|
|
None
|
|
|
|
|
|
|
|
|
|
ISCO GmbH
|
|
Germany
|
|
3 Shares
|
|
Teledyne Isco, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Isco Holdings, Inc.*
|
|
Nebraska
|
|
10,000 Common Shares
|
|
Teledyne Isco, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
RD Technologies (Shanghai) Co. Ltd.
|
|
China
|
|
N/A
|
|
Teledyne RD Instruments, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Reynolds Industries Limited
|
|
United Kingdom
|
|
1,000 Shares
|
|
Teledyne Reynolds Limited 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Advanced Pollution
Instrumentation, Inc.
|
|
California
|
|
1,000 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Benthos, Inc.
|
|
Massachusetts
|
|
1,000 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Brown Engineering, Inc.
|
|
Delaware
|
|
1,000 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Brown Netherlands, Inc.
|
|
Delaware
|
|
100 Common Shares
|
|
Teledyne Brown Engineering, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Continental Motors, Inc.
|
|
Delaware
|
|
1,000 Common Shares
|
|
Teledyne Technologies Incorporated
100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Controls Simulation Limited
|
|
Ontario, Canada
|
|
62,354 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Controls Wichita, Inc.
|
|
Delaware
|
|
1,000 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Cougar, Inc.
|
|
California
|
|
1,000 Common Shares
|
|
Teledyne Investment, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Energy Systems, Inc.
|
|
Delaware
|
|
10,000,000 Common Shares
|
|
Teledyne Technologies Incorporated
8,600,000 Common Shares 86%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne France
|
|
France
|
|
100 Shares
|
|
Teledyne RD Instruments, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Germany GmbH
|
|
Germany
|
|
50 Shares
|
|
Teledyne Tekmar Company 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Instruments, Inc.
|
|
Delaware
|
|
1,000 Common shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER
|
|
OUTSTANDING
|
|
|
|
|
SHARES OF EACH CLASS OF
|
|
AND PERCENTAGE OWNED BY
|
|
OPTIONS, WARRANTS,
|
|
|
JURISDICTION OF
|
|
CAPITAL STOCK
|
|
BORROWER OR
|
|
RIGHTS OF
|
COMPANY NAME
|
|
FORMATION
|
|
OUTSTANDING
|
|
SUBSIDIARY
|
|
CONVERSION, ETC.
|
Teledyne Investment, Inc.
|
|
Delaware
|
|
1,000 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Isco, Inc.
|
|
Nebraska
|
|
1,000 Common Shares
|
|
Teledyne Technologies, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Lighting and Display Products,
Inc.
|
|
Nevada
|
|
1,087,067 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Limited
|
|
United Kingdom
|
|
3,532,100 Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Mattituck Services, Inc.
|
|
Delaware
|
|
100 Common Shares
|
|
Teledyne Investment, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Monitor Labs, Inc.
|
|
Delaware
|
|
1,000 Common Shares
|
|
Teledyne Instruments, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne RD Instruments, Inc.
|
|
Delaware
|
|
42,500 Common Shares
|
|
Teledyne Investment, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Reynolds, Inc.
|
|
California
|
|
1,270,960 Common Shares
|
|
Teledyne Investment, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Reynolds International, Inc.*
|
|
California
|
|
250 Common Shares
|
|
Teledyne Reynolds, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Reynolds Limited
|
|
United Kingdom
|
|
150,000 Shares
|
|
Teledyne Reynolds, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne RISI, Inc.
|
|
California
|
|
810,000 Common Shares
|
|
Teledyne Reynolds, Inc. 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Singapore Private Limited
|
|
Singapore
|
|
100 Ordinary Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Solutions, Inc.
|
|
Alabama
|
|
10,000 Common Shares
|
|
Teledyne Brown Engineering, Inc.100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Technologies International Corp.
|
|
Delaware
|
|
1,000 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Technologies (Bermuda) Limited
|
|
Bermuda
|
|
120,000 Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Tekmar Company
|
|
Ohio
|
|
970 Common Shares
|
|
Teledyne Instruments, Inc.
|
|
None
|
|
|
|
|
|
|
|
|
|
Teledyne Wireless, Inc.
|
|
Delaware
|
|
1,000 Common Shares
|
|
Teledyne Technologies Incorporated 100%
|
|
None
|
|
|
|
|
|
|
|
|
|
The Flight Data Company Limited*
|
|
United Kingdom
|
|
One Share
|
|
Teledyne Limited 100%
|
|
None
|
Schedule 6.21
COLLECTIVE BARGAINING AGREEMENT
|
|
|
|
|
1)
|
|
Company:
|
|
Teledyne Continental Motors Mobile, Alabama
|
|
|
Union:
|
|
International Union of United Automobile, Aerospace and
Agricultural Implement Workers of America
|
|
|
Expiration:
|
|
February 20, 2007
|
|
|
|
|
|
2)
|
|
Company:
|
|
Teledyne Continental Motors Turbine Engines Toledo, Ohio
|
|
|
Union:
|
|
International Union of United Automobile, Aerospace and
Agricultural Implement Workers of America
|
|
|
Expiration:
|
|
November 9, 2006
|
Schedule 8.01
LIENS EXISTING ON THE CLOSING DATE
None
Schedule 8.02
INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Teledyne
|
|
Type of
|
|
Maturity
|
|
|
|
Issuer
|
|
Company Name
|
|
Investment
|
|
Date
|
|
Amount
|
|
Dreyfus
|
|
Teledyne Energy Systems*
|
|
Money Market
|
|
N/A
|
|
$
|
1,250,000
|
**
|
Barclays Bank
|
|
Teledyne Reynolds Limited
|
|
Money Market
|
|
N/A
|
|
£
|
300,000
|
**
|
PhotoMedix, Inc.
|
|
Teledyne Reynolds, Inc.
|
|
Common Stock
|
|
N/A
|
|
40 shares
|
|
Teledyne & BAE
Systems JV, LLC
|
|
Teledyne Solutions, Inc.
|
|
LLC Interest
|
|
N/A
|
|
50% of J.V.
|
|
|
|
|
*
|
|
Teledyne Energy Systems is 86% owned by Teledyne Technologies Incorporated
|
|
**
|
|
Amounts are estimated as of the Closing Date
|
Schedule 8.03
INDEBTEDNESS
Overdraft Facility
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity
|
|
|
Obligor
|
|
Issuer
|
|
Terms
|
|
Date
|
|
Amount
|
|
|
|
|
|
|
|
|
|
Teledyne Limited U.K.
Overdraft Facility
Guaranteed by Teledyne
Technologies Incorporated
|
|
Bank of Scotland
|
|
Renews Annually
|
|
4/25/2007
|
|
£500,000
|
Promissory Note
$1,500,000 Promissory Note dated June 30, 2005 between Teledyne Investments, Inc. and Dan Cheadle,
Sr. related to the acquisition of Cougar Components.
|
|
|
Current Principal Amount:
|
|
$750,000.00
|
Principal Due Date:
|
|
6/29/2007
|
Interest Rate:
|
|
6.00% Compounded Annually
|
Surety Bond List
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Name (a)
|
|
Bond #
|
|
Obligee
|
|
Bond Type
|
|
Effective Date
|
|
Expiration Date
|
|
Bond Amount
|
|
Teledyne Brown
Engineering, Inc.
|
|
5812424
|
|
State of California
|
|
Contractors License
|
|
30-Oct-05
|
|
30-Oct-06
|
|
$
|
10,000
|
|
Teledyne Continental Motors,
Inc.
|
|
5851177
|
|
The Utilities Board
|
|
Utility
|
|
10-Nov-05
|
|
10-Nov-06
|
|
$
|
6,000
|
|
Teledyne Technologies
Incorporated & Teledyne
Mattituck Services, Inc.
|
|
5884102
|
|
US Customs
|
|
Importer
|
|
02-Mar-06
|
|
02-Mar-07
|
|
$
|
50,000
|
|
Teledyne Energy Systems, Inc.
|
|
6138678
|
|
US Customs
|
|
Importer
|
|
11-Feb-06
|
|
11-Feb-07
|
|
$
|
50,000
|
|
Teledyne Instruments, Inc.
|
|
6138683
|
|
US Customs
|
|
Importer
|
|
28-Feb-06
|
|
28-Feb-07
|
|
$
|
50,000
|
|
Teledyne Continental Motors,
Inc.
|
|
6138684
|
|
US Customs
|
|
Importer
|
|
23-Feb-06
|
|
23-Feb-07
|
|
$
|
50,000
|
|
Teledyne Brown Engineering,
Inc.
|
|
6180583
|
|
Alabama Department of Revenue
|
|
License
|
|
30-Sep-05
|
|
30-Sep-06
|
|
$
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Name (a)
|
|
Bond #
|
|
Obligee
|
|
Bond Type
|
|
Effective Date
|
|
Expiration Date
|
|
Bond Amount
|
|
Teledyne Wireless, Inc.
|
|
6224216
|
|
US Customs
|
|
Importer
|
|
01-Jan-06
|
|
01-Jan-07
|
|
$
|
50,000
|
|
Teledyne Isco, Inc.
|
|
6350284
|
|
Township of Bethlehem
|
|
Performance
|
|
10-Aug-05
|
|
10-Aug-06
|
|
$
|
5,000
|
|
Teledyne Monitor Labs, Inc.
|
|
6180581
|
|
US Customs
|
|
Importer
|
|
13-Mar-06
|
|
13-Mar-07
|
|
$
|
50,000
|
|
Teledyne Isco, Inc.
|
|
6350265
|
|
City of Wooster
|
|
Performance
|
|
01-Aug-05
|
|
01-Aug-06
|
|
$
|
17,634
|
|
Teledyne Monitor Labs, Inc.
|
|
6370185
|
|
Burns & McDonald Eng. Co., Inc.
|
|
Supply
|
|
12-Sep-05
|
|
12-Sep-06
|
|
$
|
236,666
|
|
Teledyne Isco, Inc.
|
|
6389304
|
|
State of California
|
|
License
|
|
16-Jun-06
|
|
16-Jun-07
|
|
$
|
10,000
|
|
Teledyne Isco, Inc.
|
|
6389305
|
|
State of California
|
|
Contractors License
|
|
16-Jun-06
|
|
16-Jun-07
|
|
$
|
7,500
|
|
Teledyne Monitor Labs, Inc.
|
|
K06612799
|
|
Abbg, Inc.
|
|
Performance / Warranty
|
|
12-Dec-02
|
|
Dec 2006
(b)
|
|
$
|
70,512
|
|
Teledyne Reynolds Limited
|
|
|
|
UK Customs
|
|
Importer
|
|
21-Feb-05
|
|
21-Feb-07
|
|
GBP 24,000
|
Isco GmbH
|
|
BGF0300113
|
|
Ludwig Pfeffer
|
|
Performance
|
|
17-Dec-03
|
|
31-Dec-08
|
|
EUR 11,009.10
|
Isco GmbH
|
|
BGF0300114
|
|
OTTO HEIL, Hoch-,Tief-
|
|
Performance
|
|
17-Dec-03
|
|
31-Dec-08
|
|
EUR 43,275.00
|
Isco GmbH
|
|
BGF0400016
|
|
Ludwig Pfeffer
|
|
Performance
|
|
27-Feb-04
|
|
26-Feb-09
|
|
EUR 14,200.44
|
|
|
|
(a)
|
|
For all surety bonds (except the last 5 bonds listed above) the surety is Safeco Insurance Company of America.
|
|
(b)
|
|
This performance bond will close upon expiration of applicable warranty period; Surety is Westchester Fire (ACE).
|
Capital Leases
|
|
|
|
|
Lessee
|
|
Amount
|
|
Description
|
Teledyne Reynolds Limited
Teledyne Isco, Inc.
|
|
£2,023,478
$150,121
|
|
Berkshire U.K. facility lease
Equipment leases
|
Schedule 11.02
CERTAIN ADDRESSES FOR NOTICES
1. Address for Loan Parties:
Borrower:
|
|
|
Teledyne Technologies Incorporated
|
12333 West Olympic Boulevard
|
Los Angeles, California 90064
|
Attn:
|
|
Shelley D. Green, Treasurer
|
Telephone:
|
|
310.893.1615
|
Facsimile:
|
|
310.893.1650
|
Email:
|
|
sdgreen@teledyne.com
|
2. Addresses for Administrative Agent, Swing Line Lender and L/C Issuer:
Agents Office
:
(for payments and requests)
|
|
|
Bank of America, N.A.
|
2001 Clayton Road, Building B, Floor 2
|
Concord, California 94520
|
Mail Code:
|
|
CA4-702-02-25
|
|
|
|
Attention:
|
|
Pamela Greer-Tillman
|
Telephone:
|
|
925-675-8453
|
Facsimile:
|
|
888-969-2786
|
E-mail:
|
|
pamela.s.greer-tillman@bankofamerica.com
|
|
|
|
Payment instructions:
|
|
Bank of America, N.A.
|
Dallas, Texas
|
ABA #:
|
|
020069593
|
Acct #:
|
|
3750836479
|
Ref:
|
|
Teledyne Technologies Incorporated
|
Other Notices to Administrative Agent
:
|
|
|
Bank of America, N.A., as Administrative Agent
|
800 Fifth Avenue, Floor 32
|
Seattle, Washington 98104
|
Mail Code:
|
|
WA1-501-32-37
|
|
|
|
Attn:
|
|
Tiffany Shin, Assistant Vice President
|
Telephone:
|
|
206-358-0078
|
Facsimile:
|
|
206-358-0971
|
E-mail:
|
|
tiffany.shin@bankofamerica.com
|
For Notices as L/C Issuer
:
|
|
|
Bank of America, N.A.
|
Trade Operations-Los Angeles #22621
|
1000 West Temple Street, Floor 7
|
Mail Code:
|
|
CA9-705-07-05
|
Los Angeles, California 90012-1514
|
Attention:
|
|
Tai Lu
|
Telephone:
|
|
213-481-7840
|
Facsimile:
|
|
213-580-8442
|
E-mail:
|
|
tai.lu@bankofamerica.com
|
Schedule 11.06
PROCESSING AND RECORDATION FEES
The Administrative Agent will charge to the assigning Lender a processing and recordation fee
(an
Assignment Fee
) in the amount of $2,500 for each assignment;
provided
,
however
, that in the event of two or more concurrent assignments to members of the same
Assignee Group (which may be effected by a suballocation of an assigned amount among members of
such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to
a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), the
Assignment Fee will be $2,500 plus the amount set forth below:
|
|
|
|
|
|
|
Transaction
|
|
Assignment Fee
|
|
|
First four concurrent assignments or suballocations to
|
|
-0-
|
|
|
members of an Assignee Group (or from members of an
|
|
|
|
|
Assignee Group, as applicable)
|
|
|
|
|
|
|
|
|
|
Each additional concurrent assignment or suballocation to a
|
|
$500
|
|
|
member of such Assignee Group (or from a member of such
|
|
|
|
|
Assignee Group, as applicable)
|
|
|
Exhibit A
FORM OF LOAN NOTICE
Date:
, 20___
To:
|
|
Bank of America, N.A., as Administrative Agent
|
|
Re:
|
|
Amended and Restated Credit Agreement (as amended, modified,
supplemented and extended from time to time, the
Credit
Agreement
) dated as
of July 14, 2006 among Teledyne Technologies Incorporated, a Delaware
corporation (the
Borrower
), the Guarantors identified therein, the Lenders
identified therein, and Bank of America, N.A., as Administrative Agent, L/C
Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined
herein have the meanings provided in the Credit Agreement.
|
Ladies and Gentlemen:
The undersigned hereby requests (select one):
o
A Borrowing of Revolving Loans
o
A conversion or continuation of Revolving Loans
1. On
, 20___(which is a Business Day).
2. In the amount of $
.
3. Comprised of
(Type of Loan requested).
4. For Eurodollar Rate Loans: with an Interest Period of
months.
With respect to any Borrowing requested herein, the Borrower hereby represents and warrants that
(i) such request complies with the requirements of the proviso to the first sentence of Section
2.01 of the Credit Agreement and (ii) in the case of a Borrowing, each of the conditions set forth
in Section 5.02 of the Credit Agreement has been satisfied on and as of the date of such Borrowing.
|
|
|
|
|
|
TELEDYNE TECHNOLOGIES INCORPORATED,
a Delaware corporation
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
Exhibit B
FORM OF SWING LINE LOAN NOTICE
Date:
, 20___
To:
|
|
Bank of America, N.A., as Swing Line Lender
|
|
Cc:
|
|
Bank of America, N.A., as Administrative Agent
|
|
Re:
|
|
Amended and Restated Credit Agreement (as amended,
modified, supplemented and extended from time to
time, the
Credit Agreement
) dated as of July 14,
2006 among Teledyne Technologies Incorporated, a
Delaware corporation (the
Borrower
), the
Guarantors identified therein, the Lenders
identified therein, and Bank of America, N.A., as
Administrative Agent, L/C Issuer and Swing Line
Lender. Capitalized terms used but not otherwise
defined herein have the meanings provided in the
Credit Agreement.
|
Ladies and Gentlemen:
The undersigned hereby requests a Swing Line Loan:
1. On
, 20___(a Business Day).
2. In the amount of $
.
With respect to such Borrowing of Swing Line Loans, the Borrower hereby represents and warrants
that (i) such request complies with the requirements of the proviso to the first sentence of
Section 2.04(a) of the Credit Agreement and (ii) each of the conditions set forth in Section 5.02
of the Credit Agreement has been satisfied on and as of the date of such Borrowing of Swing Line
Loans.
|
|
|
|
|
|
TELEDYNE TECHNOLOGIES INCORPORATED,
a Delaware corporation
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
Exhibit C-1
FORM OF REVOLVING NOTE
FOR VALUE RECEIVED, the undersigned (the
Borrower
), hereby promises to pay to the order
of
or registered assigns (the
Lender
), in accordance with the
provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Revolving
Loan from time to time made by the Lender to the Borrower under that certain Amended and Restated
Credit Agreement (as amended, modified, supplemented and extended from time to time, the
Credit Agreement
) dated as of July 14, 2006 among the Borrower, the Guarantors identified
therein, the Lenders identified therein and Bank of America, N.A., as Administrative Agent, L/C
Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein have the
meanings provided in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of each Revolving Loan from
the date of such Revolving Loan until such principal amount is paid in full, at such interest rates
and at such times as provided in the Credit Agreement. All payments of principal and interest
shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agents Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment) computed at the per
annum rate set forth in the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable all as provided in the Credit Agreement. Revolving
Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by
the Lender in the ordinary course of business. The Lender may also attach schedules to this Note
and endorse thereon the date, amount and maturity of its Revolving Loans and payments with respect
thereto.
The Borrower, for itself, its successors and assigns, hereby waives presentment, protest and demand
and notice of protest, demand, dishonor and nonpayment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
|
|
|
|
|
|
TELEDYNE TECHNOLOGIES INCORPORATED,
a Delaware corporation
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
Exhibit C-2
FORM OF SWING LINE NOTE
FOR VALUE RECEIVED, the undersigned (the
Borrower
), hereby promises to pay to the order
of
or registered assigns (the
Swing Line Lender
), in accordance
with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each
Swing Line Loan from time to time made by the Swing Line Lender to the Borrower under that certain
Amended and Restated Credit Agreement (as amended, modified, supplemented and extended from time to
time, the
Credit Agreement
) dated as of July 14, 2006 among the Borrower, the Guarantors
identified therein, the Lenders identified therein and Bank of America, N.A., as Administrative
Agent, L/C Issuer and Swing Line Lender. Capitalized terms used but not otherwise defined herein
have the meanings provided in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of each Swing Line Loan from
the date of such Swing Line Loan until such principal amount is paid in full, at such interest
rates and at such times as provided in the Credit Agreement. All payments of principal and
interest shall be made to the Administrative Agent for the account of the Swing Line Lender in
Dollars in immediately available funds at the Administrative Agents Office. If any amount is not
paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand,
from the due date thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable all as provided in the Credit Agreement. Swing Line
Loans made by the Swing Line Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Swing Line Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its Swing Line Loans
and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives presentment, protest and demand
and notice of protest, demand, dishonor and nonpayment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
|
|
|
|
|
|
TELEDYNE TECHNOLOGIES INCORPORATED,
a Delaware corporation
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
Exhibit D
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date:
, 20___
|
|
|
To:
|
|
Bank of America, N.A., as Administrative Agent
|
|
|
|
Re:
|
|
Amended and Restated Credit Agreement (as amended, modified,
supplemented and extended from time to time, the
Credit
Agreement
)
dated as of July 14, 2006 among Teledyne Technologies Incorporated, a
Delaware corporation (the
Borrower
), the Guarantors identified
therein, the Lenders identified therein, and Bank of America, N.A., as
Administrative Agent, L/C Issuer and Swing Line Lender. Capitalized
terms used but not otherwise defined herein have the meanings provided
in the Credit Agreement.
|
Ladies and Gentlemen:
The undersigned Responsible Officer hereby certifies as of the date hereof that [he/she] is the
of the Borrower, and that, in [his/her] capacity as such, [he/she] is authorized to
execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and
that:
[Use following paragraph 1 for fiscal year-end financial statements:]
[1. Attached hereto as
Schedule 1
are the year-end audited financial statements required by
Section 7.01(a) of the Credit Agreement for the fiscal year of the Borrower ended as of the above
date, together with the report and opinion of an independent certified public accountant required
by such section.]
[Use following paragraph 1 for fiscal quarter-end financial statements:]
[1. Attached hereto as
Schedule 1
are the unaudited financial statements required by
Section 7.01(b) of the Credit Agreement for the fiscal quarter of the Borrower ended as of the
above date. Such financial statements fairly present in all material respects the financial
condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance
with GAAP as at such date and for such period, subject only to normal year-end audit adjustments
and the absence of footnotes.]
2. The undersigned has reviewed and is familiar with the terms of the Credit Agreement and has
made, or has caused to be made, a detailed review of the transactions and condition (financial or
otherwise) of the Borrower during the accounting period covered by the attached financial
statements.
3. No Default or Event of Default exists under the Credit Agreement.
4. The representations and warranties of the Loan Parties contained in the Credit Agreement or any
other Loan Document, are true and correct in all material respects on and as of the date hereof,
except to the extent that such representations and warranties specifically refer to an earlier
date, in which case they are true and correct in all material respects as of such earlier date, and
except that for purposes of this Compliance Certificate, the representations and warranties
contained in subsections (a) and (b) of Section 6.05 of the Credit Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 7.01 of the Credit Agreement, including the statements in connection with which this
Compliance Certificate is delivered.
5. The financial covenant analyses and information set forth on
Schedule 2
hereto are true
and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
, 20___.
|
|
|
|
|
|
TELEDYNE TECHNOLOGIES INCORPORATED,
a Delaware corporation
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
Exhibit E
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this
Assignment and Assumption
) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
Assignor
) and [Insert name of Assignee] (the
Assignee
). Capitalized terms used
but not defined herein have the meanings provided in the Credit Agreement identified below, receipt
of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set
forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made
a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and
the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the attached Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignors
rights and obligations as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the Assignor under the
respective facilities identified below (including, without limitation, Letters of Credit,
Guarantees and Swing Line Loans included in such facilities) and (ii) to the extent permitted
to be assigned under applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under
or in connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to herein collectively as, the
Assigned
Interest
). Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or warranty by the
Assignor.
|
|
|
|
|
|
|
1.
|
|
Assignor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
|
Assignee:
|
|
|
|
[and is an
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate/Approved Fund of [identify Lender]]
|
|
|
|
|
|
|
|
3.
|
|
Borrower:
|
|
Teledyne Technologies Incorporated, a Delaware corporation
|
|
|
|
|
|
|
|
4.
|
|
Administrative Agent:
|
|
Bank of America, N.A., as the administrative agent under the
Credit Agreement
|
|
|
|
|
|
|
|
5.
|
|
Credit Agreement:
|
|
Amended and Restated Credit Agreement dated as of July 14, 2006 by and
among the Borrower, the Guarantors, the Lenders parties thereto, and Bank of America, N.A., as
Administrative Agent, L/C Issuer and Swing Line Lender
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Amount of
|
|
Amount of
|
|
|
|
|
|
|
Commitment/Loans
|
|
Commitment/Loans
|
|
Percentage Assigned of
|
Facility Assigned
|
|
|
for all Lenders
|
|
Assigned
1
|
|
Commitment/Loans
2
|
|
|
|
|
|
|
|
7.
|
|
Trade Date:
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
|
Effective Date:
|
|
|
|
4
|
|
|
|
|
|
|
|
The terms set forth in this Assignment and Assumption are hereby agreed to:
|
|
|
|
|
ASSIGNOR:
|
[NAME OF ASSIGNOR]
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
ASSIGNEE:
|
[NAME OF ASSIGNEE]
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
[Consented to and]
5
Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
|
|
|
|
|
[Consented to:]
6
TELEDYNE TECHNOLOGIES INCORPORATED
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
1
|
|
Amount to be adjusted by the counterparties to
take into account any payments or prepayments made between the Trade Date and
the Effective Date.
|
|
2
|
|
Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.
|
|
3
|
|
To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of
the Trade Date.
|
|
4
|
|
To be inserted by Administrative Agent and
shall be the effective date of recordation of transfer in the register
therefor.
|
|
5
|
|
To be added only if the consent of the
Administrative Agent is required by the terms of the Credit Agreement.
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6
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|
To be added only if the consent of the
Borrower is required by the terms of the Credit Agreement.
|
[Consented to:]
7
BANK OF AMERICA, N.A., as L/C Issuer and Swing Line Lender
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7
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To be added only if the consent of the Swing
Line Lender and L/C Issuer is required by the terms of the Credit Agreement.
|
Annex 1 to Assignment and Assumption
STANDARD TERMS AND CONDITIONS
1.
Representations and Warranties
.
1.1.
Assignor
. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.
1.2.
Assignee
. The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 7.01 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
2.
Payments
. From and after the Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective Date.
3.
General Provisions
. This Assignment and Assumption shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns. This Assignment
and Assumption may be executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in
accordance with, the law of the State of New York.
Exhibit F
FORM OF JOINDER AGREEMENT
THIS
JOINDER AGREEMENT (the
Agreement
) dated as of
, 20___ is by and
between
, a
(the
Material Subsidiary
), and Bank of America, N.A., in
its capacity as Administrative Agent under that certain Amended and Restated Credit Agreement (as
amended, modified, supplemented and extended from time to time, the
Credit Agreement
)
dated as of July 14, 2006 among Teledyne Technologies Incorporated, a Delaware corporation (the
Borrower
), the Guarantors identified therein, the Lenders identified therein and Bank of
America, N.A., as Administrative Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Loan Parties are required by Section 7.12 of the Credit Agreement to cause the Material
Subsidiary to become a Guarantor thereunder. Accordingly, the Material Subsidiary hereby agrees
as follows with the Administrative Agent, for the benefit of the Lenders:
1. The Material Subsidiary hereby acknowledges, agrees and confirms that, by its execution of
this Agreement, the Material Subsidiary will be deemed to be a party to the Credit Agreement and a
Guarantor for all purposes of the Credit Agreement, and shall have all of the obligations of a
Guarantor thereunder as if it had executed the Credit Agreement. The Material Subsidiary hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Guarantors contained in the Credit Agreement. Without limiting the
generality of the foregoing terms of this paragraph 1, the Material Subsidiary hereby jointly and
severally together with the other Guarantors, guarantees to each Lender and the Administrative
Agent, as provided in Article IV of the Credit Agreement, the prompt payment and performance of the
Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby represents and warrants to the Administrative Agent that the Material
Subsidiarys exact legal name and state of formation are as set forth on the signature pages
hereto.
3. The address of the Material Subsidiary for purposes of all notices and other communications
is the address designated for all Loan Parties on Schedule 11.02 to the Credit Agreement or such
other address as the Material Subsidiary may from time to time notify the Administrative Agent in
writing.
4. The Material Subsidiary hereby waives acceptance by the Administrative Agent and the
Lenders of the guaranty by the Material Subsidiary under Article IV of the Credit Agreement upon
the execution of this Agreement by the Material Subsidiary.
5. This Agreement may be executed in multiple counterparts, each of which shall constitute an
original but all of which when taken together shall constitute one contract.
6. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Material Subsidiary has caused this Joinder Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the benefit of the Lenders,
has caused the same to be accepted by its authorized officer, as of the day and year first above
written.
|
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[MATERIAL SUBSIDIARY]
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By:
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Name:
|
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Title:
|
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Acknowledged and accepted:
BANK OF AMERICA, N.A., as Administrative Agent
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By:
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Name:
|
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Title:
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Exhibit 10.2
execution version
Teledyne Technologies Incorporated
$75,000,000 4.04% Senior Notes, Series A,
due September 15, 2015
$100,000,000 4.74% Senior Notes, Series B,
due September 15, 2017
$75,000,000 5.30% Senior Notes, Series C,
due September 15, 2020
Note Purchase Agreement
Dated as of May 12, 2010
Table of Contents
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Section
Heading
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Page
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Section 1.
Authorization of Notes
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1
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Section 1.1. Description of Notes
|
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1
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|
Section 1.2. Interest Rate
|
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2
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Section 2.
Sale and Purchase of Notes
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2
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Section 2.1. Notes
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2
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|
Section 2.2. Subsidiary Guaranty
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2
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Section 3.
Closing
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3
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Section 4.
Conditions to Closing
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3
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Section 4.1. Representations and Warranties
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3
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Section 4.2. Performance; No Default
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4
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Section 4.3. Compliance Certificates
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4
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Section 4.4. Opinions of Counsel
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4
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Section 4.5. Purchase Permitted By Applicable Law, Etc
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5
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|
Section 4.6. Execution of Agreement; Sale of Other Notes
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5
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|
Section 4.7. Payment of Special Counsel Fees
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5
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|
Section 4.8. Private Placement Number
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5
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Section 4.9. Changes in Corporate Structure
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5
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Section 4.10. Subsidiary Guaranty
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6
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Section 4.11. Funding Instructions
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6
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Section 4.12. July 4, 2010 Financials
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6
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Section 4.13. Proceedings and Documents
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6
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Section 5.
Representations and Warranties of the Company
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6
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Section 5.1. Organization; Power and Authority
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6
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Section 5.2. Authorization, Etc
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6
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Section 5.3. Disclosure
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7
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Section 5.4. Organization and Ownership of Shares of Subsidiaries
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7
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Section 5.5. Financial Statements; Material Liabilities
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8
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Section 5.6. Compliance with Laws, Other Instruments, Etc
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8
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Section 5.7. Governmental Authorizations, Etc
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9
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Section 5.8. Litigation; Observance of Agreements, Statutes and Orders
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9
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Section 5.9. Taxes
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9
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Section 5.10. Title to Property; Leases
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9
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Section 5.11. Licenses, Permits, Etc
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10
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Section 5.12. Compliance with ERISA
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10
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Section 5.13. Private Offering by the Company
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11
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-i-
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Section
Heading
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Page
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Section 5.14. Use of Proceeds; Margin Regulations
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11
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Section 5.15. Existing Indebtedness; Future Liens
|
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11
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Section 5.16. Foreign Assets Control Regulations, Etc
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12
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Section 5.17. Status under Certain Statutes
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12
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Section 5.18. Environmental Matters
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13
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Section 5.19. Notes Rank Pari Passu
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13
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Section 6.
Representations of the Purchasers
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13
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Section 6.1. Purchase for Investment
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13
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Section 6.2. Accredited Investor
|
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13
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Section 6.3. Source of Funds
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14
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Section 7.
Information as to Company
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15
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Section 7.1. Financial and Business Information
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15
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Section 7.2. Officers Certificate
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18
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Section 7.3. Visitation
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19
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Section 8.
Payment of the Notes
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19
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Section 8.1. Maturity
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19
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Section 8.2. Optional Prepayments with Make-Whole Amount
|
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20
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Section 8.3. Allocation of Partial Prepayments
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20
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Section 8.4. Maturity; Surrender, Etc.
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21
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Section 8.5. Purchase of Notes
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21
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Section 8.6. Make-Whole Amount for the Notes
|
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21
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Section 8.7. Prepayment in Connection with a Change in Control
|
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23
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Section 8.8. Prepayment in Connection with Asset Sales
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24
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Section 9.
Affirmative Covenants
|
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|
24
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Section 9.1. Compliance with Law
|
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24
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|
Section 9.2. Insurance
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24
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Section 9.3. Maintenance of Properties
|
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25
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Section 9.4. Payment of Taxes and Claims
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25
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Section 9.5. Corporate Existence, Etc
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25
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Section 9.6. Notes to Rank Pari Passu
|
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25
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Section 9.7. Additional Subsidiary Guarantors
|
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25
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Section 9.8. Books and Records
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26
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Section 10.
Negative Covenants
|
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26
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Section 10.1. Consolidated Leverage Ratio
|
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26
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Section 10.2. Interest Coverage Ratio
|
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27
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Section 10.3. Priority Debt
|
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27
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Section 10.4. Limitation on Liens
|
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27
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Section 10.5. Sales of Assets
|
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30
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|
Section 10.6. Merger and Consolidation
|
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31
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|
-ii-
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Section
Heading
|
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Page
|
|
Section 10.7. Transactions with Affiliates
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32
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Section 10.8. Terrorism Sanctions Regulations
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32
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Section 11.
Events of Default
|
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32
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Section 12.
Remedies on Default, Etc
|
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35
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Section 12.1. Acceleration
|
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35
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|
Section 12.2. Other Remedies
|
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|
35
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Section 12.3. Rescission
|
|
|
36
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|
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc
|
|
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36
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Section 13.
Registration; Exchange; Substitution of Notes
|
|
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36
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Section 13.1. Registration of Notes
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36
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|
Section 13.2. Transfer and Exchange of Notes
|
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36
|
|
Section 13.3. Replacement of Notes
|
|
|
37
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|
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Section 14.
Payments on Notes
|
|
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38
|
|
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|
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|
|
Section 14.1. Place of Payment
|
|
|
38
|
|
Section 14.2. Home Office Payment
|
|
|
38
|
|
|
|
|
|
|
Section 15.
Expenses, Etc
|
|
|
38
|
|
|
|
|
|
|
Section 15.1. Transaction Expenses
|
|
|
38
|
|
Section 15.2. Survival
|
|
|
39
|
|
|
|
|
|
|
Section 16.
Survival of Representations and Warranties; Entire Agreement
|
|
|
39
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|
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|
|
Section 17.
Amendment and Waiver
|
|
|
39
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|
|
|
Section 17.1. Requirements
|
|
|
39
|
|
Section 17.2. Solicitation of Holders of Notes
|
|
|
40
|
|
Section 17.3. Binding Effect, Etc
|
|
|
40
|
|
Section 17.4. Notes Held by Company, Etc
|
|
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41
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Section 18.
Notices
|
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41
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Section 19.
Reproduction of Documents
|
|
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41
|
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|
|
Section 20.
Confidential Information
|
|
|
42
|
|
|
|
|
|
|
Section 21.
Substitution of Purchaser
|
|
|
43
|
|
-iii-
|
|
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|
Section
Heading
|
|
Page
|
|
Section 22.
Miscellaneous
|
|
|
43
|
|
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Section 22.1. Successors and Assigns
|
|
|
43
|
|
Section 22.2. Payments Due on Non-Business Days
|
|
|
43
|
|
Section 22.3. Accounting Terms
|
|
|
44
|
|
Section 22.4. Severability
|
|
|
44
|
|
Section 22.5. Construction
|
|
|
44
|
|
Section 22.6. Counterparts
|
|
|
44
|
|
Section 22.7. Governing Law
|
|
|
44
|
|
Section 22.8. Jurisdiction and Process; Waiver of Jury Trial
|
|
|
44
|
|
-iv-
|
|
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|
|
Schedule A
|
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|
Information Relating to Purchasers
|
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|
Schedule B
|
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|
Defined Terms
|
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|
Schedule 4.9
|
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|
|
Changes in Corporate Structure
|
|
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|
Schedule 5.3
|
|
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|
Disclosure Materials
|
|
|
|
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|
Schedule 5.4
|
|
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|
Subsidiaries of the Company, Ownership of Subsidiary Stock
|
|
|
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|
Schedule 5.15
|
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|
Existing Indebtedness
|
|
|
|
|
|
Schedule 10.4
|
|
|
|
Existing Liens
|
|
|
|
|
|
Exhibit 1(
a
)
|
|
|
|
Form of 4.04% Senior Notes, Series A, due September 15, 2015
|
|
|
|
|
|
Exhibit 1(
b
)
|
|
|
|
Form of 4.74% Senior Notes, Series B, due September 15, 2017
|
|
|
|
|
|
Exhibit 1(
c
)
|
|
|
|
Form of 5.30% Senior Notes, Series C, due September 15, 2020
|
|
|
|
|
|
Exhibit 2.2
|
|
|
|
Form of Subsidiary Guaranty
|
|
|
|
|
|
Exhibit 4.4(
a
)
|
|
|
|
Form of Opinion of Associate General Counsel to the Company
|
|
|
|
|
|
Exhibit 4.4(
b
)
|
|
|
|
Form of Opinion of Special Counsel to the Purchasers
|
-v-
Teledyne Technologies Incorporated
1049 Camino Dos Rios
Thousand Oaks, CA 91360
$75,000,000 4.04% Senior Notes, Series A,
due September 15, 2015
$100,000,000 4.74% Senior Notes, Series B,
due September 15, 2017
$75,000,000 5.30% Senior Notes, Series C,
due September 15, 2020
Dated as of
May 12, 2010
To the Purchasers listed in
the attached Schedule A:
Ladies and Gentlemen:
Teledyne Technologies Incorporated
, a Delaware corporation (the
Company
), agrees
with the Purchasers listed in the attached Schedule A (the
Purchasers
) to this Note Purchase
Agreement (this
Agreement
) as follows:
Section 1.
Authorization of Notes.
Section 1.1. Description of Notes
. The Company will authorize the issue and sale of the
following Senior Notes:
|
|
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|
|
|
|
|
|
|
|
|
|
Aggregate Principal
|
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|
|
|
Issue
|
|
Series
|
|
Amount
|
|
Interest Rate
|
|
Maturity Date
|
Senior Notes
|
|
Series A (the
Series A Notes
)
|
|
$75,000,000
|
|
4.04%
|
|
September 15, 2015
|
|
|
|
|
|
|
|
|
|
Senior Notes
|
|
Series B (the
Series B Notes
)
|
|
$100,000,000
|
|
4.74%
|
|
September 15, 2017
|
|
|
|
|
|
|
|
|
|
Senior Notes
|
|
Series C (the
Series C Notes
)
|
|
$75,000,000
|
|
5.30%
|
|
September 15, 2020
|
The Senior Notes described above are collectively referred to as the
Notes
(such term shall
also include any such notes issued in substitution therefor pursuant to Section 13 of this
Agreement). The Series A Notes, Series B Notes and Series C Notes shall be substantially in
the form set out in Exhibit 1(a), Exhibit 1(b) and Exhibit 1(c), respectively, with such changes
therefrom, if any, as may be approved by the Purchasers and the Company. Certain capitalized terms
used in this Agreement are defined in Schedule B; references to a Schedule or an Exhibit are,
unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
Section 1.2. Interest Rate.
The Notes shall bear interest (computed on the basis of a 360-day
year of twelve 30-day months) on the unpaid principal thereof from the date of issuance at their
respective stated rates of interest as may be adjusted pursuant to the terms of this Agreement,
payable semi-annually in arrears (a) with respect to the respective stated rates of interest,
payable on the 15th day of September and March in each year and at maturity and (b) with respect to
the Interest Rate Adjustment (if any), on the 15th day of September and March next succeeding the
Companys election to apply the Elevated Ratio and at maturity, in each case, commencing on March
15, 2011, until such principal sum shall have become due and payable (whether at maturity, upon
notice of prepayment or otherwise) and interest (so computed) on any overdue principal, interest or
Make-Whole Amount from the due date thereof (whether by acceleration or otherwise) and, during the
continuance of an Event of Default, on the unpaid balance thereof, at the applicable Default Rate
until paid.
Section 2.
Sale and Purchase of Notes; Subsidiary Guaranty.
Section 2.1. Notes.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing
provided for in Section 3, the Notes in the principal amount of the Series specified opposite such
Purchasers name in Schedule A at the purchase price of 100% of the principal amount thereof. The
obligations of each Purchaser hereunder are several and not joint obligations and each Purchaser
shall have no obligation and no liability to any Person for the performance or nonperformance by
any other Purchaser hereunder.
Section 2.2. Subsidiary Guaranty.
(a) The payment by the Company of all amounts due with
respect to the Notes and the performance by the Company of its obligations under this Agreement
will be absolutely and unconditionally guaranteed by the Subsidiary Guarantors pursuant to the
Guaranty Agreement dated as of the Closing Date, which shall be substantially in the form of
Exhibit 2.2 attached hereto, and otherwise in accordance with the provisions of Section 9.7 hereof
(the
Subsidiary Guaranty
).
(b) Subject to Section 9.7, at the election of the Company and by written notice by the
Company to each holder of Notes, any Subsidiary Guarantor may be discharged from all of its
obligations and liabilities under the Subsidiary Guaranty Agreement and shall be automatically
released from its obligations thereunder without the need for the execution or delivery of any
other document by the holders or any other Person,
provided
that (i) such Subsidiary Guarantor has
been released and discharged (or will be released and discharged concurrently with the release of
such Subsidiary Guarantor under the Subsidiary Guaranty) as an obligor and guarantor under and in
respect of the Bank Credit Agreement and the Company so certifies to the holders of the Notes in a
certificate of a Responsible Officer, (ii) upon giving effect to such release and
discharge, no Default or Event of Default exists and the Company has
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delivered a certificate
of a Responsible Officer to the holders of the Notes to that effect and (iii) if any fee or other
form of consideration is given to any holder of Indebtedness of the Company for the purpose of such
release, holders of the Notes shall receive equivalent consideration.
Section 3.
Closing.
The execution and delivery of this Agreement will be made at the offices of Chapman and Cutler
LLP, 595 Market Street, San Francisco, California 94105 on May 12, 2010 (the
Execution Date
).
The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Chapman and Cutler LLP, 595 Market Street, San Francisco, California 94105 at 10:00 a.m.
Central time, at a closing (the
Closing
) on September 15, 2010, or on such other Business Day
prior to September 15, 2010 as may be agreed upon by the Company and the Purchasers. On the
Closing Date, the Company will deliver to each Purchaser the Notes of the Series to be purchased by
such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at
least $250,000 as such Purchaser may request) dated the date of the Closing Date and registered in
such Purchasers name (or in the name of such Purchasers nominee), against delivery by such
Purchaser to the Company or its order of immediately available funds in the amount of the purchase
price therefor by wire transfer of immediately available funds for the account of the Company to
Account Number 058-6988, at The Bank of New York Mellon, Pittsburgh, Pennsylvania, ABA Number
043-000-261, in the Account Name of Teledyne Technologies Incorporated. If, on the Closing Date,
the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3,
or any of the conditions specified in Section 4 shall not have been fulfilled to any Purchasers
satisfaction, such Purchaser shall, at such Purchasers election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights such Purchaser may have by
reason of such failure or such nonfulfillment.
Section 4.
Conditions to Closing.
Each Purchasers obligation to execute and deliver this Agreement on the Execution Date and to
purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the
fulfillment to such Purchasers satisfaction, on the Execution Date and/or at the Closing, as the
case may be, of the following conditions:
Section 4.1. Representations and Warranties
.
(a)
Representations and Warranties of the Company.
The representations and warranties of the
Company in this Agreement shall be correct when made and on (1) the Execution Date and (2) at the
time of the Closing (except in each case for representations and warranties, if any, (y) made as of
a specific date, which representations and warranties will be true and correct as of the specific
date or (z) which are not qualified by the inclusion of a materiality standard, which
representations and warranties shall be true and correct in all material respects at the time of
Closing).
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(b)
Representations and Warranties of the Subsidiary Guarantors.
The representations and
warranties of the Subsidiary Guarantors in the Subsidiary Guaranty shall be correct when made and
at the time of the Closing.
Section 4.2. Performance; No Default
.
The Company and each Subsidiary Guarantor
shall have performed and complied with all agreements and conditions contained in this Agreement
and the Subsidiary Guaranty required to be performed or complied with by the Company and each such
Subsidiary Guaranty prior to or on the Execution Date and at the time of the Closing, and after
giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14), (i) no Default or Event of Default shall have occurred and be
continuing, (ii) with respect to the Closing, no Default under Sections 10.1 or 10.2 shall have
occurred had such covenants been effective as of July 4, 2010 and the Notes had been issued and the
proceeds of the Notes applied as of such date as contemplated by Section 5.14 and (iii) with
respect to the Closing, Priority Indebtedness outstanding as of the time of Closing is less than
20% of Consolidated Net Worth as of July 4, 2010. Neither the Company nor any Subsidiary shall
have entered into any transaction since the date of the Memorandum that would have been prohibited
by Sections 10.5 and 10.6 hereof had such Sections applied since such date.
Section 4.3. Compliance Certificates
.
(a)
Officers Certificate of the Company
. The Company shall have delivered to such Purchaser
an Officers Certificate, dated the Execution Date and the date of the Closing, as the case may be,
certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b)
Secretarys Certificate of the Company
. The Company shall have delivered to such
Purchaser a certificate of its Secretary or Assistant Secretary, dated the Execution Date and the
date of the Closing, as the case may be, certifying as to the resolutions attached thereto and
other corporate proceedings relating to the authorization, execution and delivery of the Notes and
the Agreement.
(c)
Officers Certificate of the Subsidiary Guarantors.
Each Subsidiary Guarantor shall have
delivered to such Purchaser a certificate of an authorized officer, dated the date of the Closing,
certifying that the conditions set forth in Section 4.1(b), 4.2 and 4.9 have been fulfilled.
(d)
Secretarys Certificate of the Subsidiary Guarantors
. Each Subsidiary Guarantor shall
have delivered to such Purchaser a certificate, dated the date of the Closing, certifying as to the
resolutions attached thereto and other partnership or corporate proceedings relating to the
authorization, execution and delivery of the Subsidiary Guaranty.
Section 4.4. Opinions of Counsel
.
Such Purchaser shall have received opinions in
form and substance satisfactory to such Purchaser, dated the Closing Date (a) from Melanie S.
Cibik, Vice President, Associate General Counsel and Assistant Secretary of the Company, covering
the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company
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hereby instructs its counsel to deliver such
opinion to the Purchasers) and (b) from Chapman and Cutler LLP, the Purchasers special counsel in
connection with such transactions, substantially in the form set forth in Exhibit 4.4(b) and
covering such other matters incident to such transactions as such Purchaser may reasonably request.
Section 4.5. Purchase Permitted By Applicable Law, Etc
.
On the date of the Closing
such Purchasers purchase of Notes shall (a) be permitted by the laws and regulations of each
jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section
1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not violate any
applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an
Officers Certificate certifying as to such matters of fact as such Purchaser may reasonably
specify to enable such Purchaser to determine whether such purchase is so permitted.
Section 4.6. Execution of Agreement; Sale of Other Notes
.
(a)
Execution of Agreement.
Each of the Purchasers shall have executed and delivered this
Agreement on the Execution Date.
(b)
Sale of Other Notes
. Contemporaneously with the Closing the Company shall sell to each
other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the
Closing as specified in Schedule A.
Section 4.7. Payment of Special Counsel Fees
. Without limiting the provisions of Section
15.1, the Company shall have paid on or before the Execution Date and the date of the Closing the
reasonable fees, reasonable charges and reasonable disbursements of the Purchasers special counsel
referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the
Company at least one Business Day prior to the Execution Date and Closing, as the case may be.
Section 4.8. Private Placement Number
.
On or before the date of the Closing, a
Private Placement Number issued by Standard & Poors CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance Commissioners) shall have been
obtained for each Series of the Notes.
Section 4.9. Changes in Corporate Structure
.
Neither the Company nor any Subsidiary
Guarantor shall have changed its jurisdiction of organization or, except as reflected in Schedule
4.9, been a party to any merger or consolidation, or shall have succeeded to all or any substantial
part of the liabilities of any other
entity, at any time following the date of the most recent financial statements referred to in
Section 5.5 except any such event occurring after the Execution Date and as permitted by Sections
10.5 and 10.6 hereof. No Change of Control has occurred since April 4, 2010.
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Section 4.10. Subsidiary Guaranty.
On or before the date of Closing, the Subsidiary Guaranty
shall have been duly authorized, executed and delivered by each Subsidiary Guarantor, shall
constitute the legal, valid and binding contract and agreement of each Subsidiary Guarantor and
such Purchaser shall have received a true, correct and complete copy thereof.
Section 4.11. Funding Instructions
.
At least three Business Days prior to the date
of the Closing, each Purchaser shall have received written instructions signed by a Responsible
Officer on letterhead of the Company confirming the information specified in Section 3 including
(i) the name and address of the transferee bank, (ii) such transferee banks ABA number and (iii)
the account name and number into which the purchase price for the Notes is to be deposited.
Section 4.12. July 4, 2010 Financials.
Not later than five Business Days prior to the
Closing, the Company shall have delivered to the Purchasers copies of the unaudited consolidated
balance sheet of the Company and its Subsidiaries for the fiscal quarter ended July 4, 2010 and the
related statements of income and cash flows of the Company and its Subsidiaries.
Section 4.13. Proceedings and Documents
.
All corporate and other similar proceedings
in connection with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory to such Purchaser and
its special counsel, and such Purchaser and its special counsel shall have received all such
counterpart originals or certified or other copies of such documents as such Purchaser or such
special counsel may reasonably request.
Section 5.
Representations and Warranties of the Company.
The Company represents and warrants to each Purchaser on (1) the Execution Date and (2) the
Closing Date (except in each case for representations and warranties, if any, (y) made as of a
specific date, which representations and warranties will be true and correct as of the specific
date or (z) which are not qualified by the inclusion of a materiality standard, which
representations and warranties shall be true and correct in all material respects on the Closing
Date) that:
Section 5.1. Organization; Power and Authority
. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. The Company has the corporate power and authority to own or
hold under lease the
properties it purports to own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement and the Notes and to perform the
provisions hereof and thereof.
Section 5.2. Authorization, Etc
.
This Agreement and the Notes to be issued pursuant
to the terms hereof have been duly authorized by all necessary corporate action on the part of the
Company, and this Agreement constitutes, and upon execution and delivery thereof each such
-6-
Note
will constitute, a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure
.
The Company, through its agents, Banc of America Securities
LLC and U.S. Bancorp Investments, Inc., has delivered to each Purchaser a copy of a Private
Placement Memorandum, dated March 31, 2010 (the
Memorandum
), relating to the transactions
contemplated hereby. The Memorandum fairly describes as of its date, in all material respects, the
general nature of the business and principal properties of the Company and its Subsidiaries. This
Agreement, the Memorandum and the documents, certificates or other writings delivered to the
Purchasers by or on behalf of the Company in connection with the transactions contemplated hereby
and identified in Schedule 5.3 and the financial statements listed in Section 5.5 (this Agreement,
the Memorandum and such documents, certificates or other writings and such financial statements in
each case, delivered to the Purchasers prior to April 14, 2010 being referred to, collectively, as
the
Disclosure Documents
), taken as a whole, do not, as of their respective dates, contain any
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they were made. Except
as disclosed in the Disclosure Documents, since January 3, 2010, there has been no change in the
financial condition, operations, business, properties or prospects of the Company or any
Subsidiary, except changes that individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect. There is no fact known to the Company that would reasonably be
expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure
Documents.
Section 5.4. Organization and Ownership of Shares of Subsidiaries
.
(a) Schedule 5.4
contains (except as noted therein) complete and correct lists (i) of the Companys Subsidiaries,
showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its Capital Stock or similar equity interests outstanding
owned by the Company and each other Subsidiary and (ii) of the Companys directors and senior
officers.
(b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by the Company, its Material Subsidiaries and the
Subsidiary Guarantors have been validly issued, are fully paid and nonassessable and are
owned by the Company, a Material Subsidiary or a Subsidiary Guarantor free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Material Subsidiary and Subsidiary Guarantor identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other
legal entity and is in good standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Material Subsidiary and Subsidiary Guarantor has the corporate or other
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power and authority to own or hold under lease the properties it purports to own or hold under
lease and to transact the business it transacts and proposes to transact, except for such power or
authority as to which the failure to have would not have a Material Adverse Effect.
(d) Neither any Material Subsidiary nor any Subsidiary Guarantor is a party to, or otherwise
subject to any legal, regulatory, contractual or other restriction (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar
statutes) restricting the ability of such Material Subsidiary or such Subsidiary Guarantor to pay
dividends out of profits or make any other similar distributions of profits to the Company or any
of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of
such Material Subsidiary or such Subsidiary Guarantor.
Section 5.5. Financial Statements; Material Liabilities
.
Prior to the Execution
Date, the Company has delivered to each Purchaser copies of the audited consolidated balance sheets
of the Company as of January 3, 2010, December 28, 2008 and December 30, 2007, and the related
consolidated statements of income, stockholders equity and cash flows for the fiscal years ended
as of January 3, 2010, December 28, 2008 and December 30, 2007, and the unaudited condensed
consolidated balance sheet of the Company and its Subsidiaries for the fiscal quarter ended April
4, 2010 and the related condensed consolidated statements of income and cash flows of the Company
and its Subsidiaries for such quarter. All of said financial statements and the financial
statements delivered pursuant to Section 4.12 hereof (including in each case the related schedules
and notes) fairly present, and with respect to the financial statements delivered pursuant to
Section 4.12, will fairly present, in all material respects the consolidated financial position of
the Company and its Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective periods so specified and
have been prepared in accordance with GAAP consistently applied throughout the periods involved
except as set forth in the notes thereto (subject, in the case of any interim financial statements,
to normal year-end adjustments). Except for liabilities incurred in the ordinary course of
business since January 3, 2010, the Company, its Material Subsidiaries and the Subsidiary
Guarantors do not have any Material liabilities that, as of the Execution Date, are not disclosed
on the January 3, 2010 or the April 4, 2010 financial statements and required to be so disclosed,
or otherwise disclosed in the Disclosure Documents.
Section 5.6. Compliance with Laws, Other Instruments, Etc
.
The execution, delivery
and performance by
the Company of this Agreement and the Notes will not (a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of any property of the
Company or any Material Subsidiary under, (i) any indenture, mortgage, deed of trust, loan or
credit agreement with a financial institution, (ii) corporate charter or by-laws (or similar
organizational documents), or (iii) any other agreement or instrument to which the Company or any
Material Subsidiary is bound or by which the Company or any Material Subsidiary or any of their
respective properties may be bound or affected, (b) conflict with or result in a breach of any of
the terms, conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Material Subsidiary, or (c)
violate any provision of any statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary, except in the case of
-8-
clause (a)(iii), (b) or (c)
above, such instances that, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
Section 5.7. Governmental Authorizations, Etc
.
No consent, approval or authorization
of, or registration, filing or declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by the Company of this Agreement or the
Notes other than the filing of Form D and Form 8-K with the SEC.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders
.
(a) There
are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, would reasonably be expected to have a Material
Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term of any agreement or
instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling
of any court, arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws or the USA Patriot
Act) of any Governmental Authority, which default or violation, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes
.
The Company and its Subsidiaries have filed all tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and
payable on such returns and all other taxes and assessments levied upon them or their properties,
assets, income or franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent, except for any taxes and assessments (a) the amount of
which is not individually or in the aggregate Material or (b) the amount, applicability or validity
of which is currently being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP. The Company knows of no basis for any other tax or assessment that,
individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of Material Federal, state or other taxes for all
fiscal periods are adequate. The Federal income tax liabilities of the Company and its
Subsidiaries have been finally determined (whether by reason of completed audits or the statute of
limitations having run) for all fiscal years up to and including the fiscal year ended January 1,
2006.
Section 5.10. Title to Property; Leases
.
The Company and its Subsidiaries have good
and sufficient title to their respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited balance sheet referred
to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said
date (except as sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement. All leases that individually or in the
aggregate are Material are valid and subsisting and are in full force and effect in all material
respects.
-9-
Section 5.11. Licenses, Permits, Etc
.
(a) The Company and its Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, proprietary software, service marks, trademarks and
trade names, or rights thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others, except for such conflicts that, individually or in
the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
(b) To the best knowledge of the Company, no product of the Company or any of its
Subsidiaries infringes in any respect any license, permit, franchise, authorization, patent,
copyright, proprietary software, service mark, trademark, trade name or other right owned by
any other Person except for such infringements that, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect.
(c) To the best knowledge of the Company, there is no violation by any Person of any
right of the Company or any of its Subsidiaries with respect to any patent, copyright,
proprietary software, service mark, trademark, trade name or other right owned or used by
the Company or any of its Subsidiaries except for such violations that, individually or in
the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
Section 5.12. Compliance with ERISA
.
(a) The Company and each ERISA Affiliate have
operated and administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA
Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA),
and no event, transaction or condition has occurred or exists that could reasonably be expected to
result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax provisions or to section 436 or 430 of the
Code or section 4068 of ERISA, other than such liabilities or Liens as would not be individually or
in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plans plan year ended December 31, 2008, on
the basis of the actuarial assumptions specified for funding purposes in such Plans most recently
delivered actuarial valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities by more than $20,000,000 in the aggregate for all
Plans. The term
benefit liabilities
has the meaning specified in section 4001 of ERISA and the
terms
current value
and
present value
have the meaning specified in section 3 of ERISA.
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(c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not
subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will not involve any transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of
the Code. The representation by the Company in the first sentence of this Section 5.12(d) is made
in reliance upon and subject to the accuracy of such Purchasers representation in Section 6.3 as
to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by
such Purchaser.
Section 5.13. Private Offering by the Company
.
None of the Company, Banc of America
Securities LLC or U.S. Bancorp Investments, Inc., the only entities authorized to act on the
Companys behalf, has offered the Notes or any similar securities for sale to, or solicited any
offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with,
any Person other than the Purchasers and not more than 75 other Institutional Investors, each of
which has been offered the Notes in connection with a private sale for investment. None of the
Company, Banc of America Securities LLC or U.S. Bancorp Investments, Inc., the only entities
authorized to act on the Companys behalf, has taken, or will take, any action that would subject
the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities
Act or to the registration requirements of any securities or blue sky laws of any applicable
jurisdiction.
Section 5.14. Use of Proceeds; Margin Regulations
.
The proceeds of the sale of the
Notes will be used to refinance existing Indebtedness and for general corporate purposes, including
acquisitions. No part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock in violation of Regulation U
of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying
or carrying or trading in any securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than
25% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 25% of the value of such assets. As used in
this Section, the terms
margin stock
and
purpose of buying or carrying
shall have the meanings
assigned to them in said Regulation U.
Section 5.15. Existing Indebtedness; Future Liens
. (a) Except as described therein, Schedule
5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its
Subsidiaries as of January 3, 2010 in an aggregate outstanding amount of at least $10,000,000
(including a description of the obligors and obligees, principal amount outstanding and collateral
therefor, if any, and Guaranty thereof, if any), since which date (i) to the Execution Date there
has been no Material change in the amounts, interest rates, sinking funds, installment payments or
maturities of such Indebtedness of the Company or its Subsidiaries and (ii) to the Closing Date,
there has there has been no change in the amounts,
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interest rates, sinking funds, installment
payments or maturities of such Indebtedness of the Company or its Subsidiaries which, individually
or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in
the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary in
an aggregate outstanding amount of at least $5,000,000 and no event or condition exists with
respect to such Indebtedness of the Company or any Subsidiary that would permit (or that with
notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness
to become due and payable before its stated maturity or before its regularly scheduled dates of
payment
(b) Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of a contingency or otherwise) any
of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.4.
(c) Neither the Company nor any Subsidiary is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary,
any agreement relating thereto or any other agreement (including, but not limited to, its charter
or other organizational document) which limits the amount of, or otherwise imposes restrictions on
the incurring of, Indebtedness of the Company, except as specifically indicated in Schedule 5.15.
Section 5.16. Foreign Assets Control Regulations, Etc
.
(a) Neither the sale of the
Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.
(b) Neither the Company nor any Subsidiary (i) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or
in Section 1 of the Anti-Terrorism Order or (ii) to the knowledge of the Company,
engages in any dealings or transactions with any such Person. The Company and its Subsidiaries are
in compliance, in all material respects, with the USA Patriot Act.
(c) No part of the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for any payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an official capacity,
in order to obtain, retain or direct business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such
Act applies to the Company.
Section 5.17. Status under Certain Statute
s.
Neither the Company nor any Subsidiary
is subject to regulation under the Investment Company Act of 1940, as amended or the Public Utility
Holding Company Act of 2005, as amended.
-12-
Section 5.18. Environmental Matters
. (a) Neither the Company nor any Subsidiary has knowledge
of any claim or has received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them, or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case, such as is adequately
reserved for in the Companys April 4, 2010 financial statements or that would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary has knowledge of any facts which would give rise to
any claim, public or private, of violation of Environmental Laws or damage to the environment
emanating from, occurring on or in any way related to real properties now or formerly owned, leased
or operated by any of them or to other assets or their use, except, in each case, such as is
adequately reserved for in the Companys April 4, 2010 financial statements or that would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(c) Neither the Company nor any Subsidiary has stored any Hazardous Materials on real
properties now or formerly owned, leased or operated by any of them in a manner contrary to any
Environmental Laws and (ii) has not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws, except in each such case for such storage and disposal that would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 5.19. Notes Rank Pari Passu.
Except as otherwise required by law, the obligations of
the Company under this Agreement and the Notes rank
pari passu
in right of payment with all other
senior unsecured Indebtedness (actual or contingent) of the Company, including, without limitation,
all senior unsecured Indebtedness of the Company described in Schedule 5.15 hereto.
Section 6.
Representations of the Purchasers.
Section 6.1. Purchase for Investment
.
Each Purchaser severally represents, as of the
Execution Date and as of the Closing, that it is purchasing the Notes for its own account or for
one or more separate accounts maintained by such Purchaser or for the account of one or more
pension or trust funds and not with a view to the distribution thereof,
provided
that the
disposition of such Purchasers or such pension or trust funds property shall at all times be
within such Purchasers or such pension or trust funds control. Each Purchaser understands that
the Notes have not been registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from registration is available,
except under circumstances where neither such registration nor such an exemption is required by
law, and that the Company is not required to register the Notes, and that the Company has no
obligation to so register the Notes.
Section 6.2. Accredited Investor
. Each Purchaser represents, as of the Execution Date and as
of the Closing, that it is an accredited investor (as defined in Rule 501(a)(1), (2), (3) or
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(7) of Regulation D under the Securities Act acting for its own account (and not for the account of
others) or as a fiduciary or agent for others (which others are also accredited investors). Each
Purchaser further represents that such Purchaser has had the opportunity to ask questions of the
Company and received answers concerning the terms and conditions of the sale of the Notes.
Section 6.3. Source of Funds
. Each Purchaser severally represents, as of the Execution Date
and as of the Closing, that at least one of the following statements is an accurate representation
as to each source of funds (a
Source
) to be used by such Purchaser to pay the purchase price of
the Notes to be purchased by such Purchaser hereunder:
(a) the Source is an insurance company general account (as the term is defined in the
United States Department of Labors Prohibited Transaction Exemption (
PTE
) 95-60) in
respect of which the reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance Commissioners (the
NAIC Annual Statement
)) for the general account contract(s) held by or on behalf of any
employee benefit plan together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total reserves
and liabilities of the general account (exclusive of separate account liabilities) plus
surplus as set forth in the NAIC Annual Statement filed with such Purchasers state of
domicile; or
(b) the Source is a separate account that is maintained solely in connection with such
Purchasers fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment performance of the separate
account; or
(c) the Source is either (i) an insurance company pooled separate account, within the
meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE
91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this
clause (c), no employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(d) the Source constitutes assets of an investment fund (within the meaning of Part V
of PTE 84-14 (the
QPAM Exemption
)) managed by a qualified professional asset manager or
QPAM (within the meaning of Part V of the QPAM Exemption), no employee benefit plans
assets that are included in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, as of the last day of
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its most recent calendar quarter, the QPAM does not own a
10% or more interest in the Company and no person controlling or controlled by the QPAM
(applying the definition of control in Section V(e) of the QPAM Exemption) owns a 20% or
more interest in the Company (or less than 20% but greater than 10%, if such person
exercises control over the management or policies of the Company by reason of its ownership
interest) and (i) the identity of such QPAM and (ii) the names of each employee benefit plan
having assets invested in such investment fund that equal or exceed 10% of the total of such
investment fund have been disclosed to the Company in writing pursuant to this clause (d);
or
(e) the Source constitutes assets of a plan(s) (within the meaning of Section IV of
PTE 96-23 (the
INHAM Exemption
)) managed by an in-house asset manager or INHAM (within
the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of control in Section IV(d) of the INHAM Exemption)
owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have been
disclosed to the Company in writing pursuant to this clause (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been identified to
the Company in writing pursuant to this clause (g); or
(h) the Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.
As used in this Section 6.3, the terms
employee benefit plan, governmental plan,
and
separate
account
shall have the respective meanings assigned to such terms in section 3 of ERISA.
Section 7.
Information as to Company.
Section 7.1. Financial and Business Information
. The Company shall deliver to each holder of
Notes that is an Institutional Investor (and prior to the Closing Date, to each Purchaser):
(a)
Quarterly Statements
within 60 days after the end of each quarterly fiscal
period in each fiscal year of the Company (other than the last quarterly fiscal period of
each such fiscal year),
(i) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and
-15-
(ii) consolidated statements of income and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and third quarters)
for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments,
provided
that filing with the SEC within the
time period specified above the Companys Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy
the requirements of this Section 7.1(a);
provided, further,
that the Company shall be deemed
to have made such delivery of such Form 10 Q if it shall (1) have timely made such Form 10 Q
available on EDGAR and under the investor relations tab on its home page on the worldwide
web (at the date of this Agreement located at: http//www.teledyne.com) and (2) the Company
shall have notified each holder (by telecopier or electronic mail) of the posting of such
Form 10 Q (such availability and notice thereof being referred to as
Electronic Delivery
);
(b)
Annual Statements
within 105 days after the end of each fiscal year of the
Company,
(i) a consolidated balance sheet of the Company and its Subsidiaries, as at the
end of such year, and
(ii) consolidated statements of income, changes in shareholders equity and
cash flows of the Company and its Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion
thereon of independent certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in all material respects,
the financial position of the companies being reported upon and their results of operations
and cash flows and have been prepared in conformity with GAAP, and that the examination of
such accountants in connection with such financial statements has been made in accordance
with generally accepted auditing standards, and that such audit provides a reasonable basis
for such opinion in the circumstances,
provided
that filing with the SEC within the time
period specified above of the Companys Annual Report on Form 10-K for such fiscal year
(together with the Companys annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor
shall be deemed to satisfy the requirements of this Section 7.1(b);
provided, further
, that
the Company shall be deemed to have made such delivery of such Form 10 K if it shall have
timely made Electronic Delivery thereof.
-16-
(c)
SEC and Other Reports
except for filings referred to in Section 7.1(a) and (b)
above, promptly upon their becoming available and, to the extent applicable, one copy of (i)
each financial statement, report, notice or proxy statement sent by the Company or any
Subsidiary to its principal lending banks as a whole (excluding information sent to such
banks in the ordinary course of administration of a bank facility, such as information
relating to pricing and borrowing availability) or, to the extent such information is
Material, to public securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly requested by such holder),
and each prospectus and all amendments thereto filed by the Company or any Subsidiary with
the SEC and of all press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are Material,
provided
that the Company shall be deemed to have satisfied its delivery obligation under clause (ii)
hereof of such regular and periodic reports, registration statements, prospectuses and any
amendments if the Company shall have timely made Electronic Delivery thereof;
provided
further
, that in the event such information is not Material, the Company need not comply
with clause (2) of the definition of Electronic Delivery;
(d)
Notice of Default or Event of Default
promptly, and in any event within ten days
after a Responsible Officer becomes aware of the existence of any Default or Event of
Default or that any Person has given any notice or taken any action with respect to a
claimed default hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(g), a written notice
specifying the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e)
ERISA Matters
promptly, and in any event within five days after a Responsible
Officer becomes aware of any of the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with
respect thereto:
(i) with respect to any Plan, any reportable event, as defined in
Section 4043(c) of ERISA and the regulations thereunder, for which notice thereof
has not been waived pursuant to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer Plan;
or
(iii) any event, transaction or condition that could result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating
-17-
to employee
benefit plans, or the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or
such penalty or excise tax provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing, would reasonably be expected
to have a Material Adverse Effect;
(f)
Notices from Governmental Authority
promptly, and in any event within 30 days of
receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or
state Governmental Authority relating to any order, ruling, statute or other law or
regulation that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect; and
(g)
Requested Information
with reasonable promptness, such other data and
information relating to the business, operations, affairs, financial condition, assets or
properties of the Company or any of its Subsidiaries or relating to the ability of the
Company to perform its obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes or such information regarding the Company
required to satisfy the requirements of 17 C.F.R. §230.144A, as amended from time to time,
in connection with any contemplated transfer of the Notes.
Section 7.2. Officers Certificate
. Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a
Senior Financial Officer setting forth (which, in the case of Electronic Delivery of any such
financial statements, shall be by separate concurrent delivery of such certificate to each holder
of Notes):
(a)
Covenant Compliance
the information (including detailed calculations and
reconciliations to GAAP if Agreement Accounting Principles differ from GAAP at the time such
compliance certificate is delivered) required in order to establish whether the Company was
in compliance with the requirements of Section 10.1 through Section 10.5 hereof, inclusive,
during the quarterly or annual period covered by the statements then being furnished
(including with respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence) and, in the case of Section 10.1, whether and to what extent
and degree the Consolidated Leverage Ratio exceeded 3.25 to 1.00 at the end of the
applicable fiscal quarter to which such compliance certificate relates and, as applicable,
when the related Interest Rate Adjustment Period begins, the amount of interest payable on
the Notes constituting the Interest Rate Adjustment and the date on which such amount of
interest is payable or was paid; and
(b)
Event of Default
a statement that such Senior Financial Officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Subsidiaries from the
beginning of the quarterly or annual period covered by the statements then being furnished
to the date of the certificate and that such review shall
-18-
not have disclosed the existence
during such period of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company or any Subsidiary to
comply with any Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with respect thereto.
Section 7.3. Visitation
. The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(a)
No Default
if no Default or Event of Default then exists, at the expense of such
holder and upon reasonable prior notice to the Company, and in any case not more than once
in any fiscal year, to visit during normal business hours the principal executive office of
the Company, to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Companys officers, and (with the consent of the Company, which
consent will not be unreasonably withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be unreasonably withheld, and not more than
once in any fiscal year) to visit during normal business hours the other offices and
properties of the Company and each Subsidiary, all at such reasonable times and as may be
reasonably requested in writing; and
(b)
Default
if a Default or Event of Default then exists, at the expense of the
Company, upon reasonable prior notice, to visit and inspect during normal business hours any
of the offices or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with their
respective officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of the Company and
its Subsidiaries), all at such times and as often as may be requested.
(c) Notwithstanding anything in Section 7.3, neither the Company nor any Subsidiary
shall be required to disclose (i) any agreement, technical information or any
other item which disclosure is prohibited by law, (ii) any agreement or technical
information that is subject to a confidentiality obligation binding upon the Company or such
Subsidiary (but provided further that the Company or such Subsidiary, as the case may be,
shall, at the request of the Purchaser, use commercially reasonable efforts to obtain
permission for such disclosure and, in the event permission cannot be obtained, furnish such
information regarding the matters to which such information relates as can reasonably be
furnished without violation of such confidentiality obligations) or (iii) any communications
protected by attorney-client privilege, the disclosure of which might waive such privilege.
Section 8.
Payment of the Notes.
Section 8.1. Maturity.
(a) The entire unpaid principal amount of the Series A Notes shall
become due and payable on September 15, 2015.
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(b) The entire unpaid principal amount of the Series B Notes shall become due and payable on
September 15, 2017.
(c) The entire unpaid principal amount of the Series C Notes shall become due and payable on
September 15, 2020.
Section 8.2. Optional Prepayments with Make-Whole Amount
. (a) Subject to the terms of Section
8.2(b), the Company may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes of any Series in an amount not less than 10% of the
aggregate principal amount of the Notes of such Series then outstanding in the case of a partial
prepayment (or such lesser amount as shall be required to effect a partial prepayment resulting
from an offer of prepayment pursuant to Section 10.5), at 100% of the principal amount so prepaid,
together with interest accrued thereon to the date of such prepayment, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal amount. The Company will give
each holder of Notes of each applicable Series written notice of each optional prepayment under
this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date (which shall be a Business Day), the
aggregate principal amount of the Notes of the applicable Series to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in accordance with
Section 8.3), and the interest to be paid on the prepayment date with respect to such principal
amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to
the estimated respective Make-Whole Amount due in connection with such prepayment (calculated as if
the date of such notice were the date of the prepayment), setting forth the details of such
computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder
of Notes of the Series to be prepaid a certificate of a Senior Financial Officer specifying the
calculation of each such Make-Whole Amount as of the specified prepayment date.
(b) Notwithstanding anything contained in Section 8.2(a) to the contrary, if and so long as
any Default or Event of Default exists, or any full or partial prepayment is made in contemplation
or avoidance of any Default or Event of Default, any full or partial prepayment of
the Notes pursuant to the provisions of this Section 8.2 may not be made by the Company by Series
but rather shall be made by the Company with respect to all of the Notes (without regard to Series)
and, with respect to a partial prepayment, shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof (without regard to Series).
Section 8.3. Allocation of Partial Prepayments
. In the case of each partial prepayment of the
Notes of any Series pursuant to the provisions of Section 8.2, the principal amount of the Notes of
the Series to be prepaid shall be allocated among all of the Notes of such Series to be prepaid at
the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment. In the case of each partial prepayment made
pursuant to the provisions of Section 8.8, the principal amount of the Notes to be prepaid shall be
made to such holders who have accepted any offer of prepayment pursuant to the provisions of
Section 8.8, and such partial prepayment shall be allocated among the Notes of
-20-
such holders in
proportion, as nearly as practicable, to the respective unpaid principal amounts thereof of the
Notes of all holders who have accepted such offer of prepayment.
Section 8.4. Maturity; Surrender, Etc.
In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment (which shall be a Business Day), together with
interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such principal amount when so
due and payable, together with the interest and Make-Whole Amount as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to
the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.
Section 8.5. Purchase of Notes
. The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes
of any Series except (a) upon the payment or prepayment of the Notes in accordance with the terms
of this Agreement and the Notes or (b) pursuant to a written offer to purchase any outstanding
Notes made by the Company or an Affiliate pro rata to the holders of the Notes of all Series upon
the same terms and conditions. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any such Notes.
Section 8.6. Make-Whole Amount for the Notes
.
Make-Whole Amount
means, with respect to any
Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of such Called
Principal,
provided
that the Make-Whole Amount may in no event be less than zero. For the purposes
of determining the Make-Whole Amount, the following terms have the following meanings:
Called Principal
means, with respect to any Note, the principal of such Note that is to be
prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
Discounted Value
means, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from
their respective scheduled due dates to the Settlement Date with respect to such Called Principal,
in accordance with accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield
with respect to such Called Principal.
Reinvestment Yield
means, with respect to the Called Principal of any Note, 0.50% over the
yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such Called Principal, on the
display designated as Page PX1 (or such other display as may replace Page PX1) on Bloomberg
Financial Markets for the most recently issued actively traded on the run
-21-
U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or
(ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable (including by way of interpolation), the Treasury
Constant Maturity Series Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication)
for U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date.
In the case of each determination under clause (i) or clause (ii), as the case may be, of the
preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S.
Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between (1) the applicable U.S. Treasury security with the maturity
closest to and greater than such Remaining Average Life and (2) the applicable U.S. Treasury
security with the maturity closest to and less than such Remaining Average Life. The Reinvestment
Yield shall be rounded to the number of decimal places as appears in the interest rate of the
applicable Note.
Remaining Average Life
means, with respect to any Called Principal, the number of years
(calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into
(ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to
the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled Payment.
Remaining Scheduled Payments
means, with respect to the Called Principal of any Note, all
payments of such Called Principal and interest thereon that would be due after the Settlement Date
with respect to such Called Principal if no payment of such Called Principal were made prior to its
scheduled due date,
provided
that if such Settlement Date is not a date on which
interest payments are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest accrued to such
Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section
12.1. For the avoidance of doubt, the Applicable Interest Rate then in effect shall be used in
connection with any computation of the Remaining Scheduled Payments.
Settlement Date
means, with respect to the Called Principal of any Note, the date on which
such Called Principal is to be prepaid pursuant to Section 8.2 or 8.8 or has become or is declared
to be immediately due and payable pursuant to Section 12.1, as the context requires.
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Section 8.7. Prepayment in Connection with a Change in Control
.
(a)
Notice of Change in Control.
The Company will, within 15 Business Days after any
Responsible Officer has knowledge of the occurrence of any Change in Control, give written notice
of such Change in Control to each holder of Notes. If a Change in Control has occurred, such
notice shall contain and constitute an offer to prepay Notes of each Series as described in
subparagraph (b) of this Section 8.7 and shall be accompanied by the certificate described in
subparagraph (e) of this Section 8.7.
(b)
Offer to Prepay Notes.
The offer to prepay Notes contemplated by subparagraphs (a) and
(b) of this Section 8.7 shall be an offer to prepay, in accordance with and subject to this Section
8.7, all, but not less than all, the Notes held by each holder (in this case only,
holder
in
respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the
Proposed Prepayment Date
). If such
Proposed Prepayment Date is in connection with an offer contemplated by subparagraph (a) of this
Section 8.7, such date shall be not less than 20 days and not more than 30 days after the date of
such offer (if the Proposed Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the 20th day after the date of such offer).
(c)
Rejection.
A holder of Notes may accept or reject the offer to prepay made pursuant to
this Section 8.7 by causing a notice of such acceptance or rejection to be delivered to the Company
at least 5 Business Days prior to the Proposed Prepayment Date. A failure by a holder of Notes to
respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute a
rejection of such offer by such holder.
(d)
Prepayment.
Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be
at 100% of the principal amount of such Notes, together with interest on such Notes accrued to the
date of prepayment but without any Make-Whole Amount or premium. The prepayment shall be made on
the Proposed Prepayment Date except as provided in subparagraph (f) of this Section 8.7.
(e)
Officers Certificate.
Each offer to prepay the Notes pursuant to this Section 8.7 shall
be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated
the date of such offer, specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made
pursuant to this Section 8.7; (iii) that the entire principal amount of each Note is offered to
be prepaid; (iv) the interest that would be due on each Note is offered to be prepaid, accrued to
the Proposed Prepayment Date; (v) that the conditions of this Section 8.7 have been fulfilled; and
(vi) in reasonable detail, the nature and date or proposed date of the Change in Control.
(f)
Change in Control Defined. Change in Control
means the occurrence of the following
event or circumstance:
if any Person or Persons acting in concert, together with Affiliates
thereof, shall become in the aggregate, directly or indirectly, the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
-23-
Exchange Act) of more than 50% (by number of shares) of the issued
and outstanding Voting Stock of the Company.
Section 8.8. Prepayment in Connection with Asset Sales.
If the Company is required, in
accordance with Section 10.5, to offer to prepay the Notes of all Series using the proceeds of a
sale of a substantial part of the assets of the Company and its Subsidiaries, the Company will give
written notice thereof to each holder of a Note, which notice shall describe such sale in
reasonable detail and (a) refer specifically to this Section 8.8, (b) specify the pro rata portion
of each Note being so offered to be so prepaid (determined based on the unpaid principal amount of
each Note in proportion to the aggregate unpaid principal of all Notes at the time outstanding),
(c) specify a date not less than 30 days and not more than 60 days after the date of such notice
(the
Asset Sale Prepayment Date
) and specify the Asset Sale Response Date (as defined below) and
(d) offer to prepay on the Asset Sale Prepayment Date such pro rata portion of each Note, together
with interest accrued thereon to the Asset Sale Prepayment Date. Each holder of a Note shall
notify the Company of such holders acceptance or rejection of such offer by giving written notice
thereof to the Company on a date at least 10 days prior to the Asset Sale Prepayment Date (such
date 10 days prior to the Asset Sale Prepayment Date being the
Asset Sale Response Date
), and the
Company shall prepay on the Asset Sale Prepayment Date such pro rata portion of each Note held by
the holders who have accepted such offer in accordance with this Section 8.8 at a price in respect
of each Note held by such holder equal to 100% of the principal amount of such pro rata portion,
together with interest accrued thereon to the Asset Sale Prepayment Date but without any Make-Whole
Amount or premium;
provided
, however, that the failure by a holder of any Note to respond to such
offer in writing on or before the Asset Sale Response Date shall be deemed to be a rejection of
such offer.
Section 9.
Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law
. Without limiting Section 10.8, the Company will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation, ERISA, the USA Patriot
Act and Environmental Laws, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-
compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other governmental
authorizations would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
Section 9.2. Insurance
. The Company will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such types, on such terms
as are customary and in such amounts as are no less than customary, and including deductibles,
co-insurance and self-insurance as are customary, in each instance, in the case of entities of
established reputations engaged in the same or a similar business and similarly situated.
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Section 9.3. Maintenance of Properties
. The Company will, and will cause each of its
Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties
in good repair, working order and condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly conducted in all material respects,
provided
that this Section shall not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is desirable in the
conduct of its business and the Company has concluded that such discontinuance would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims
. The Company will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties, assets, income or
franchises, to the extent the same have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have or might become a
Lien on properties or assets of the Company or any Subsidiary not permitted by Section 10.4,
provided
that neither the Company nor any Subsidiary need pay any such tax, assessment, charge,
levy, or claim if (i) the amount, applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or
a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the
Company or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies
and claims in the aggregate would not reasonably be expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc
. Subject to Section 10.6, the Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to Sections 10.5 and
10.6, the Company will at all times preserve and keep in full force and effect the corporate
existence of each of its Subsidiaries (unless merged into the Company or a Wholly Owned Subsidiary)
and all rights and franchises of the Company and its Subsidiaries unless, in the good faith
judgment of the Company, the termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise would not, individually or in the aggregate,
have a Material Adverse Effect.
Section 9.6. Notes to Rank Pari Passu.
The Notes and all other obligations under this
Agreement of the Company are and at all times shall remain direct and unsecured obligations of the
Company (except to the extent such obligation becomes secured pursuant to the ratable Lien
provision of Section 10.4) ranking (a)
pari passu
as against the assets of the Company with all
other Notes from time to time issued and outstanding hereunder without any preference among
themselves and (b)
pari passu
with all Indebtedness outstanding under the Bank Credit Agreement and
all other present and future unsecured Indebtedness (actual or contingent) of the Company which is
not expressed to be subordinate or junior in rank to any other unsecured Indebtedness of the
Company.
Section 9.7. Additional Subsidiary Guarantors
. The Company will cause any Subsidiary which is
required by the terms of the Bank Credit Agreement to become a party to, or
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otherwise guarantee,
Indebtedness in respect of the Bank Credit Agreement, to enter into the Subsidiary Guaranty and
deliver to each of the holders of the Notes (substantially concurrently with the incurrence of any
such obligation pursuant to the Bank Credit Agreement) the following items:
(a) a joinder agreement in respect of the Subsidiary Guaranty substantially in the form
of Exhibit A to the Subsidiary Guaranty;
(b) a certificate signed by an authorized Responsible Officer of the Company making
representations and warranties to the effect of those contained in the Subsidiary Guaranty,
with respect to such Subsidiary and the Subsidiary Guaranty, as applicable; and
(c) an opinion of counsel (who may be in-house counsel for the Company) addressed to
each of the holders of the Notes satisfactory to the Required Holders, to the effect that
the Subsidiary Guaranty by such Person has been duly authorized, executed and delivered and
that the Subsidiary Guaranty constitutes the legal, valid and binding contract and agreement
of such Person and enforceable in accordance with its terms, except as an enforcement of
such terms may be limited by bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting the enforcement of creditors rights generally and by general equitable
principles.
Section 9.8. Books and Records.
The Company will maintain proper books of record and account
in all material respects in conformity with GAAP. The Company will, and will cause each of its
Subsidiaries to, maintain their books of record and account in material conformity with all
applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over
the Company or such Subsidiary, as the case may be.
Section 10.
Negative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Consolidated Leverage Ratio.
The Company will not at any time permit the
Consolidated Leverage
Ratio as of the end of any fiscal quarter of the Company to be greater than 3.25 to 1.00;
provided,
however,
that if an Acquisition Event shall have occurred during such fiscal quarter, the Company
shall have the right, subject to compliance with the following sentence, to permit the Consolidated
Leverage Ratio to exceed 3.25 to 1.00, so long as (a) it does not exceed 3.50 to 1.00 (the
Elevated Ratio
) and (b) it does not exceed 3.25 to 1.00 for more than four (4) consecutive fiscal
quarters. If the Company should desire to apply the Elevated Ratio at the end of a particular
fiscal quarter as contemplated by the preceding proviso, the Company must (A) pay to each holder of
a Note, as additional interest, the Interest Rate Adjustment for such Interest Rate Adjustment
Period on the unpaid principal balance of such Note on the earlier to occur of (1) the 15th day of
September and March next succeeding the Companys election to apply the Elevated Ratio or (2) the
date the Notes have become due and payable as a result of their maturity or acceleration and (B)
deliver to the holders of the Notes a written notice from a Senior Financial Officer of the Company
(1) complying with Section 7.2(a)
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hereof, (2) stating that the Company is applying the Elevated
Ratio for such fiscal quarter and (3) certifying that there has been an Acquisition Event during
such fiscal quarter.
Section 10.2. Consolidated Interest Coverage Ratio.
The Company will not permit the
Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of the Company to be less
than 3.00 to 1.00.
Section 10.3. Priority Indebtedness.
The Company will not, and will not permit any Subsidiary
to, incur any Priority Indebtedness at any time unless at the time of the incurrence thereof and
after giving effect thereto, the aggregate amount of all Priority Indebtedness would not exceed 20%
of Consolidated Net Worth, determined as of the end of the then most recently ended fiscal quarter
of the Company.
Section 10.4. Limitation on Liens
. The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to any property or asset
(including, without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Subsidiary, whether now owned or held or hereafter acquired,
or any income or profits therefrom, or assign or otherwise convey any right to receive income or
profits (unless it makes, or causes to be made, effective provision whereby the Notes will be
equally and ratably secured with any and all other obligations thereby secured, such security to be
pursuant to an agreement reasonably satisfactory to the Required Holders (it being understood and
agreed by all present parties hereto and subsequent holders of the Notes that the Required Holders
are hereby authorized to execute and deliver any intercreditor, collateral agency or similar
agreements and security documents in connection with the grant of a ratable Lien to secure the
Notes in form and substance satisfactory to the Required Holders and that execution thereof by the
Required Holders will bind all holders from time to time of the Notes) and, in any such case, the
Notes shall have the benefit, to the fullest extent that, and with such priority as, the holders of
the Notes may be entitled under applicable law, of an equitable Lien on such property), except:
(a) Liens existing on the Execution Date and reflected on Schedule 10.4 hereof;
(b) Liens (other than Liens imposed under ERISA) for taxes, assessments or governmental
charges or levies not yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP;
(c) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and suppliers and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary course of business,
provided
that such Liens secure only amounts not yet due and payable or, if due and payable, are
unfiled and no other action has been taken to enforce the same or are being contested in
good faith by appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established;
-27-
(d) pledges or deposits in the ordinary course of business in connection with workers
compensation, unemployment insurance and other social security legislation, other than any
Lien imposed by ERISA;
(e) deposits and other customary Liens to secure the performance of bids, trade
contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other obligations of a
like nature incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar encumbrances affecting
real property which, in the aggregate, are not substantial in amount, and which do not in
any case materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the applicable Person;
(g) Liens securing judgments for the payment of money not constituting an Event of
Default hereunder or securing appeal or other surety bonds related to such judgments;
(h) leases or subleases granted to others not interfering in any material respect with
the business of the Company or any of its Subsidiaries;
(i) normal and customary rights of setoff (a) upon deposits of cash in favor of banks
or other depository institutions or (b) contained in trade contracts entered into in the
ordinary course of business;
(j) Liens of a collection bank arising under Section 4-210 of the UCC on items in the
course of collection;
(k) Liens of sellers of goods to the Company and any of its Subsidiaries arising under
Article 2 of the UCC or similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid purchase price for such
goods and related expenses;
(l) Liens granted in favor of any Governmental Authority created pursuant to cost-type
contracts, progress-billing contracts or advance-pay contracts with such Governmental
Authority to which the Company or any of its Subsidiaries is a party in the materials and
products of the Company and its Subsidiaries subject to such contracts or, in the case of
advance-pay contracts only, any advance payments made thereunder to the Company and its
Subsidiaries by such Governmental Authority;
(m) Liens securing Indebtedness of a Subsidiary to the Company or to a Subsidiary;
(n) Liens incurred after the Execution Date given to secure the payment of the purchase
price incurred in connection with the acquisition, construction or improvement of property
(other than accounts receivable or inventory) useful and intended to be used
-28-
in carrying on
the business of the Company or a Subsidiary, including Liens existing on such property at
the time of acquisition or construction thereof or Liens incurred within 365 days of such
acquisition or completion of such construction or improvement,
provided
that (i) the Lien
shall attach solely to the property acquired, purchased, constructed or improved and the
proceeds thereof and, if required by the terms of the instrument originally creating such
Lien, other property (or improvement thereon) which is an improvement to or is acquired for
specific use in connection with such acquired or constructed property (or improvement
thereon); (ii) at the time of acquisition, construction or improvement of such property (or,
in the case of any Lien incurred within three hundred sixty-five (365) days of such
acquisition or completion of such construction or improvement, at the time of the incurrence
of the Indebtedness secured by such Lien), the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such property, whether or not assumed by the Company or a
Subsidiary, shall not exceed the lesser of (y) the cost of such acquisition, construction or
improvement or (z) the Fair Market Value of such property (as determined in good faith by
one or more officers of the Company or Subsidiary to whom authority to enter into the
transaction has been delegated by the board of directors of the Company or the Subsidiary);
and (iii) at the time of such incurrence and after giving effect thereto, no Default or
Event of Default would exist;
(o) any Lien existing on property of a Person immediately prior to its being
consolidated with or merged into the Company or a Subsidiary or its becoming a Subsidiary,
or any Lien existing on any property acquired by the Company or any Subsidiary at the time
such property is so acquired (whether or not the Indebtedness secured thereby shall have
been assumed),
provided
that (i) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Persons becoming a Subsidiary or such
acquisition of property, (ii) each such Lien shall extend solely to the item or items of
property or assets of the Person so acquired and, if required by the terms of the instrument
originally creating such Lien, other property which is an improvement to or is acquired for
specific use in connection with such acquired property, and (iii) at the time of such
incurrence and after giving effect thereto, no Default or Event of Default would exist;
(p) any extensions, renewals or replacements of any Lien permitted by the preceding
subparagraphs (a), (m), (n) and (o) of this Section 10.4,
provided
that (i) no additional
property shall be encumbered by such Liens, (ii) the unpaid principal amount of the
Indebtedness or other obligations secured thereby shall not be increased on or after the
date of any extension, renewal or replacement, and (iii) at such time and immediately after
giving effect thereto, no Default or Event of Default shall have occurred and be continuing;
(q) licenses or sublicenses granted to third parties so long as such licenses or
sublicenses would not, individually or in the aggregate, have a Material Adverse Effect or
otherwise interfere in any material respect with the business of the Company or any of its
Subsidiaries;
-29-
(r) Liens on insurance proceeds and deposits arising in the ordinary course of business
in connection with the financing of insurance premiums and so long as such Liens would not,
individually or in the aggregate, have a Material Adverse Effect;
(s) Liens in favor of a securities intermediary granted in the ordinary course of
business on securities in a securities account;
(t) Liens attaching solely to cash earnest money deposits in connection with any letter
of intent or purchase agreement in connection with any Acquisition permitted hereby and so
long as such Liens would not, individually or in the aggregate, have a Material Adverse
Effect; and
(u) Liens securing Indebtedness of the Company or any Subsidiary,
provided
that the
incurrence of any such Indebtedness shall be permitted by Section 10.3, and,
provided
further
that, no such Liens may secure any obligations under the Bank Credit Agreement
unless effective provision is made whereby the Notes will be equally and ratably secured
with any and all other obligations thereby secured as described above and in form and
substance reasonably satisfactory to the Required Holders.
Section 10.5. Sales of Assets.
The Company will not, and will not permit any Subsidiary to,
sell, lease or otherwise dispose of any substantial part (as defined below) of the assets of the
Company and its Subsidiaries;
provided, however,
that the Company or any Subsidiary may sell, lease
or otherwise dispose of (a) assets or Capital Stock of Teledyne Continental Motors, Inc. and/or
Teledyne Mattituck Services, Inc., including without limitation, any intellectual property owned by
the Company or any other Subsidiary necessary for the use and operation of the assets of Teledyne
Continental Motors, Inc. and/or Teledyne Mattituck Services, Inc. (the
TCM IP
), substantially for
cash consideration (subject, in each case, to such Subsidiary not having acquired any Material
assets from the Company or any other Subsidiary subsequent to January 3, 2010 other than the TCM
IP) and (b) assets constituting a substantial part of the assets of the Company and its
Subsidiaries if such assets are sold in an arms length transaction and, at such time and
immediately after giving effect thereto, no Default or Event of Default would exist (it being
agreed that, for purposes of determining compliance with Sections 10.1 and 10.2, such transaction
shall be treated on a pro
forma basis for the relevant period as having been consummated as of the last day of the most
recent fiscal quarter for which financial statements have been delivered and, for purposes of
determining compliance with Section 10.3, that all Priority Debt will be deemed to have been
incurred as of the last day of the most recent fiscal quarter for which financial statements have
been delivered) and an amount equal to the net proceeds received from such sale, lease or other
disposition (but in the case of clause (b) above, only with respect to that portion of such assets
that exceeds the definition of substantial part set forth below) shall be used within 365 days of
such sale, lease or disposition, in any combination:
(1) to acquire productive assets used or useful in carrying on the business of the
Company and its Subsidiaries and having a value at least equal to the value of such assets
sold, leased or otherwise disposed of; and/or
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(2) to prepay or retire Senior Indebtedness of the Company and/or its Subsidiaries,
provided
that
,
the Company shall, in accordance with Section 8.8, offer to prepay each
outstanding Note in a principal amount which equals the Ratable Portion for such Note.
As used in this Section 10.5, a sale, lease or other disposition of assets shall be deemed to
be a
substantial part
of the assets of the Company and its Subsidiaries, taken as a whole, if the
book value of such assets, when added to the book value of all other assets sold, leased or
otherwise disposed of by the Company and its Subsidiaries, taken as a whole, during the period of
12 consecutive months ending on the date of such sale, lease or other disposition, exceeds 15% of
the book value of Consolidated Total Assets, determined as of the end of the fiscal quarter
immediately preceding such sale, lease or other disposition;
provided
that there shall be excluded
from any determination of a substantial part any (i) sale or disposition of assets in the
ordinary course of business of the Company and its Subsidiaries, (ii) any transfer of assets from
the Company to any Subsidiary or from any Subsidiary to the Company or a Subsidiary and (iii) any
sale or transfer of property acquired by the Company or any Subsidiary after the date of this
Agreement to any Person within 365 days following the acquisition or construction of such property
by the Company or any Subsidiary if the Company or a Subsidiary shall concurrently with such sale
or transfer, lease such property, as lessee.
Section 10.6. Merger and Consolidation.
The Company will not, and will not permit any
Subsidiary Guarantor or any of its Material Subsidiaries to, consolidate with or merge with any
other Person or convey, transfer or lease substantially all of its assets in a single transaction
or series of transactions to any Person;
provided
that:
(1) any Subsidiary Guarantor or Material Subsidiary of the Company may (x) consolidate
with or merge with, or convey, transfer or lease substantially all of its assets in a single
transaction or series of transactions to, (i) the Company or a Subsidiary so long as in any
merger or consolidation involving the Company, the Company shall be the surviving or
continuing corporation or (ii) any other Person so long as the survivor is a Subsidiary
after giving effect to such transaction, or (y) convey, transfer or lease all of its assets
in compliance with the provisions of Section 10.5; and
(2) the foregoing restriction does not apply to the consolidation or merger of the
Company with, or the conveyance, transfer or lease of substantially all of the assets of the
Company in a single transaction or series of transactions to, any Person so long as:
(a) the successor formed by such consolidation or the survivor of such merger
or the Person that acquires by conveyance, transfer or lease substantially all of
the assets of the Company as an entirety, as the case may be (the
Successor
Corporation
), shall be a solvent entity organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia;
(b) if the Company is not the Successor Corporation, such Successor Corporation
shall have executed and delivered to each holder of Notes its assumption of the due
and punctual performance and observance of each covenant
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and condition of this
Agreement and the Notes (pursuant to such agreements and instruments as shall be
reasonably satisfactory to the Required Holders), and the Successor Corporation
shall have caused to be delivered to each holder of Notes (A) an opinion of
nationally recognized independent counsel (or such other counsel as may be
reasonably acceptable to the Required Holders), to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with their terms
and (B) an acknowledgment from each Subsidiary Guarantor that the Subsidiary
Guaranty continues in full force and effect; and
(c) immediately after giving effect to such transaction no Default or Event of
Default would exist (it being agreed that, for purposes of determining compliance
with Sections 10.1 and 10.2, such transaction shall be treated on a pro forma basis
for the relevant period as having been consummated as of the last day of the most
recent fiscal quarter for which financial statements have been delivered and, for
purposes of determining compliance with Section 10.3, that all Priority Debt will be
deemed to have been incurred as of the last day of the most recent fiscal quarter
for which financial statements have been delivered).
Section 10.7. Transactions with Affiliates
. The Company will not and will not permit any
Subsidiary to enter into directly or indirectly any Material transaction or Material group of
related transactions (including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate (other than the Company
or another Subsidiary), except in the ordinary course and upon fair and reasonable terms that are
not materially less favorable to the Company or such Subsidiary, taken as a whole, than would be
obtainable in a comparable arms-length transaction with a Person not an Affiliate.
Section 10.8. Terrorism Sanctions Regulations
. The Company will not and will not permit any
Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and
Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (b) except to the extent permitted by applicable law, knowingly engage in any dealings or
transactions with any such Person.
Section 11.
Events of Default.
An
Event of Default
shall exist if any of the following conditions or events shall occur and
be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole Amount, if any,
on any Note when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note for more than five
Business Days after the same becomes due and payable; or
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(c) the Company defaults in the performance of or compliance with any term contained in
Section 7.1(d) or Section 10; or
(d) the Company or any Subsidiary Guarantor defaults in the performance of or
compliance with any term contained herein or in the Subsidiary Guaranty (other than those
referred to in paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default or (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a notice of default and
to refer specifically to this Section 11(d)); or
(e) any Subsidiary Guaranty ceases to be a legally valid, binding and enforceable
obligation or contract of a Subsidiary Guarantor (other than upon a release of any
Subsidiary Guarantor from a Subsidiary Guaranty in accordance with the terms of Section
2.2(b) hereof or upon the consolidation, merger or transfer of assets of such Subsidiary
Guarantor in a transaction permitted by Section 10.5 or 10.6 hereof but subject to the terms
of Section 2.2(b) hereof), or any Subsidiary Guarantor or any party by, through or on
account of any such Person, challenges the validity, binding nature or enforceability of any
such Subsidiary Guaranty; or
(f) any representation or warranty made in writing by or on behalf of the Company or
Subsidiary Guarantor in this Agreement or any Subsidiary Guaranty or by any officer of the
Company or any Subsidiary Guarantor in any writing furnished in connection with the
transactions contemplated hereby or by any Subsidiary Guaranty proves to have been false or
incorrect in any material respect on the date as of which made; or
(g) (i) the Company or any Subsidiary is in default (as principal or as guarantor or
other surety) in the payment of any principal of or premium or make-whole amount or interest
on any Indebtedness that is outstanding in an aggregate principal amount of at least
$50,000,000 beyond any period of grace provided with respect thereto, or (ii) the Company or
any Subsidiary is in default in the performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate outstanding principal amount of at least
$50,000,000 or of any mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has, after the giving of required notice, been declared, due and
payable before its stated maturity or before its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or continuation of any event or condition (other
than the passage of time or the right of the holder of Indebtedness to convert such
Indebtedness into equity interests), the Company or any Subsidiary has become obligated to
purchase or repay Indebtedness before its regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding principal amount of at least $50,000,000; or
(h) the Company, any Material Subsidiary or any Subsidiary Guarantor (i) is generally
not paying, or admits in writing its inability to pay, its debts as they become
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due, (ii)
files, or consents by answer or otherwise to the filing against it of, a petition for relief
or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar
law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv)
consents to the appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose
of any of the foregoing; or
(i) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by the Company, any of its Material Subsidiaries or any of the
Subsidiary Guarantors, a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company, any of its Material Subsidiaries or any of the Subsidiary Guarantors, or any
such petition shall be filed against the Company, any of its Material Subsidiaries or any of
the Subsidiary Guarantors and such petition shall not be dismissed within 60 days; or
(j) a final judgment or judgments at any one time outstanding for the payment of money
(a) aggregating in excess of $50,000,000, net of amounts covered by insurance, are rendered
against one or more of the Company, its Material Subsidiaries or any Subsidiary Guarantor or
(b) aggregating in excess of $50,000,000, net of amounts covered by insurance, are rendered
against one or more Subsidiaries which are not Material Subsidiaries or Subsidiary
Guarantors and such judgments would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, which judgments, in either case, are not, within
60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within 60 days after the expiration of such stay; or
(k) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
Code for any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under Section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under Section 4042 of ERISA to
terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate amount of unfunded benefit liabilities (within the meaning of Section
4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $150,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee benefit plans, or (v) the Company
or any ERISA Affiliate withdraws from any Multiemployer Plan;
provided that
any such event
or events
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described in clauses (i) through (v) above, either individually or together with
any other such event or events, would reasonably be expected to have a Material Adverse
Effect.
As used in Section 11(k), the term employee benefit plan shall have the meaning assigned to such
term in Section 3 of ERISA.
Section 12.
Remedies on Default, Etc.
Section 12.1. Acceleration
. (a) If an Event of Default with respect to the Company described
in Section 11(h) or (i) (other than an Event of Default described in clause (i) of Section 11(h) or
described in clause (vi) of Section 11(h) by virtue of the fact that such clause encompasses clause
(i) of Section 11(h)) has occurred, all the Notes of every Series then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any holder or holders of
more than 50% in aggregate principal amount of the Notes at the time outstanding may at any time at
its or their option, by notice or notices to the Company, declare all the Notes then outstanding to
be immediately due and payable.
(c) If any Event of Default described in Section 11(a) or (b) has occurred and is continuing
with respect to any Notes, any holder or holders of Notes at the time outstanding affected by such
Event of Default may at any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by such holder or holders to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes,
plus (i) all accrued and unpaid interest thereon (including, but not limited to, interest accrued
thereon at the Default Rate) and (ii) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be immediately due and payable,
in each and every case without presentment, demand, protest or further notice, all of which are
hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment by the Company (except as
herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the
Company in the event that the Notes are prepaid or are accelerated
as a result of an Event of Default, is intended to provide compensation for the deprivation of
such right under such circumstances.
Section 12.2. Other Remedies
. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been declared immediately due
and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement contained herein or
in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or otherwise.
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Section 12.3. Rescission
. At any time after the Notes have been declared due and payable
pursuant to Section 12.1(b) or (c), the holders of not less than 51% in aggregate principal amount
of the Notes then outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount on any Notes that are due and payable and are unpaid other than
by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if
any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes,
at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which
have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other
than non-payment of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered
for the payment of any monies due pursuant hereto or to any Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc
. No course of dealing and no
delay on the part of any holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holders rights, powers or remedies. No right,
power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of each Note on demand such further
amount as shall be sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation, reasonable
attorneys fees, expenses and disbursements.
Section 13.
Registration; Exchange; Substitution of Notes.
Section 13.1. Registration of Note
s. The Company shall keep at its principal executive office
a register for the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer
thereof and the name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person in whose name any
Note shall be registered shall be deemed and treated as the owner and holder thereof for all
purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.
The Company shall give to any holder of a Note that is an Institutional Investor promptly upon
request therefor, a complete and correct copy of the names and addresses of all registered holders
of Notes.
Section 13.2. Transfer and Exchange of Notes
. (a) Upon surrender of any Note to the Company
at the address and to the attention of the designated officer (all as specified in Section
18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration
of transfer accompanied by a written instrument of transfer duly executed by the registered holder
of such Note or such holders attorney duly authorized in writing and accompanied by the relevant
name, address and other information for notices of each transferee of such Note or part thereof),
within ten Business Days thereafter, the Company shall execute
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and deliver, at the Companys
expense (except as provided below), one or more new Notes (as requested by the holder thereof) of
the same Series in exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. Each such new Note shall be payable to such Person as
such holder may request and shall be substantially in the form of Exhibit 1(a), Exhibit 1(b), or
Exhibit 1(c), as applicable. Each such new Note shall be dated and bear interest (including,
without limitation, any additional interest in the form of the Interest Rate Adjustment for any
applicable Interest Rate Adjustment Period) from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $250,000,
provided
that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $250,000. Any transferee, by its acceptance of a Note registered in its
name (or the name of its nominee), shall be deemed to have made as of the date of transfer the
representations set forth in Section 6, including Section 6.3,
provided
, that in lieu of such
representation in Section 6.3, such holder may (in reliance upon information provided by the
Company, which shall not be unreasonably withheld) make a representation to the effect that the
purchase by any holder of any Note will not constitute a non-exempt prohibited transaction under
section 406(a) of ERISA.
(b) The Notes have not been registered under the Securities Act or under the securities laws
of any state and may not be transferred or resold unless registered under the Securities Act and
all applicable state securities laws or unless an exemption from the requirement for such
registration is available.
(c) Without limiting the foregoing, each Purchaser and each subsequent holder of any Note
severally agrees that it will not, directly or indirectly, resell any Notes purchased by it to a
Person which, to such Purchasers knowledge, is a Competitor (it being understood that such
Purchaser shall advise any broker or intermediary acting on its behalf that such resale to a
Competitor is limited hereby). The Company shall not be required to recognize any sale or other
transfer of a Note to a Competitor and no such transfer shall confer any rights hereunder upon such
transferee.
Section 13.3. Replacement of Notes
. Upon receipt by the Company at the address and to the
attention of the designated officer (all as specified in Section 18(iv)) of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it (
provided
that if the holder of such Note is, or is a nominee for, an original Purchaser
or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified
Institutional Buyer, such Persons own unsecured agreement of indemnity shall be deemed to
be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
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the Company at its own expense shall execute and deliver not more than five Business Days
following satisfaction of such conditions, in lieu thereof, a new Note of the same Series,
dated and bearing interest from the date to which interest shall have been paid on such
lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed
or mutilated Note if no interest shall have been paid thereon.
Section 14.
Payments on Notes.
Section 14.1. Place of Payment
. Subject to Section 14.2, payments of principal, Make-Whole
Amount and interest becoming due and payable on the Notes shall be made in New York, New York at
the principal office of Banc of America Securities LLC in such jurisdiction. The Company may at
any time, by notice to each holder of a Note, change the place of payment of the Notes so long as
such place of payment shall be either the principal office of the Company in such jurisdiction or
the principal office of a bank or trust company in such jurisdiction.
Section 14.2. Home Office Payment
. So long as any Purchaser or such Purchasers nominee shall
be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note
to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole
Amount and interest by the method and at the address specified for such purpose for such Purchaser
on Schedule A hereto or by such other method or at such other address as such Purchaser shall have
from time to time specified to the Company in writing for such purpose, without the presentation or
surrender of such Note or the making of any notation thereon, except that upon written request of
the Company made concurrently with or reasonably promptly after payment or prepayment in full of
any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any
such request, to the Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to any sale or other
disposition of any Note held by any Purchaser or such Purchasers nominee, such Person will, at its
election, either endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or
Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note.
Section 15.
Expenses, Etc.
Section 15.1. Transaction Expenses
. Whether or not the transactions contemplated hereby are
consummated, the Company will pay all reasonable costs and expenses (including reasonable
attorneys fees of a special counsel for the Purchasers and, if reasonably required by the Required
Holders, local or other counsel) incurred by each Purchaser and each other holder of a Note in
connection with such transactions and in connection with any amendments, waivers or consents under
or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent
becomes effective), including, without limitation: (a) the reasonable costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the Notes, or by reason of being a
holder of any Note, (b) the reasonable costs and expenses,
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including financial advisors fees,
incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated hereby and by the
Notes and (c) the costs and expenses incurred in connection with the initial filing of this
Agreement and all related documents and financial information with the SVO
provided,
that such
costs and expenses under this clause (c) shall not exceed $5,000. The Company will pay, and will
save each Purchaser and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses if any, of brokers and finders authorized by the Company in connection with
the purchase of the Notes (other than those, if any, retained by a Purchaser or other holder in
connection with its purchase of the Notes).
Section 15.2. Survival
. The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.
Section 16.
Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the Notes, the purchase or transfer by any Purchaser of any such Note or
portion thereof or interest therein and the payment of any Note and may be relied upon by any
subsequent holder of any such Note, regardless of any investigation made at any time by or on
behalf of any Purchaser or any other holder of any such Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between the Purchasers and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
Section 17.
Amendment and Waiver.
Section 17.1. Requirements
. This Agreement and the Notes may be amended, and the observance
of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and
only with) the written consent of (y) prior to the Closing Date, the Company and the Purchasers who
will be purchasing at least 51% of the Notes to be issued on the Closing Date and (z) from and
after the Closing Date, the Company and the Required Holders, except that (i) no amendment or
waiver of any of the provisions of (A) Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used in any such Section), and (B) solely with respect to amendments and waivers
occurring prior to the Closing Date, Section 10.1, 10.2 or 10.3 hereof, will be effective (1)
prior to the Closing Date, as to any Purchaser, unless consented to by such Purchaser in writing
and (2) from and after the Closing Date, any holder of Notes unless consented to by such holder of
Notes in writing, and (ii) no such amendment or waiver may, without the written consent of (A)
prior to the Closing Date, all of the Purchasers and (B) from and after the Closing Date, all of
the holders of Notes at the time outstanding affected thereby, (1) subject to the provisions of
Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or method of computation
of interest (if such change results in a decrease in
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the interest rate) or of the Make-Whole Amount
on, the Notes, (2) change the percentage of the principal amount of the Notes the holders or the
Purchasers, in each case, of which are required to consent to any such amendment or waiver, or (3)
amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes
.
(a)
Solicitation.
The Company will provide each holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or
of the Notes. The Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and delivered by, or receives
the consent or approval of, the requisite holders of Notes.
(b)
Payment.
The Company will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any
security or provide other credit support, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof or of the Subsidiary Guaranty unless such remuneration is concurrently
paid, or security is concurrently granted or other credit support is concurrently
provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.
(c)
Consent in Contemplation of Transfer
. Any consent made pursuant to this Section 17 by a
holder of Notes that has transferred or has agreed to transfer its Notes to the Company, any
Subsidiary or any Affiliate of the Company and has provided or has agreed to provide such written
consent as a condition to such transfer shall be void and of no force or effect except solely as to
such holder, and any amendments effected or waivers granted or to be effected or granted that would
not have been or would not be so effected or granted but for such consent (and the consents of all
other holders of Notes that were acquired under the same or similar conditions) shall be void and
of no force or effect except solely as to such holder.
Section 17.3. Binding Effect, Etc
. Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between the Company and the holder of
any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein, the term this Agreement and
references thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
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Section 17.4. Notes Held by Company, Etc.
Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this Agreement or the
Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon
the direction of the holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall
be deemed not to be outstanding.
Section 18.
Notices.
All notices and communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), (b) by a recognized overnight delivery service (with
charges prepaid) or (c) with respect to any Electronic Delivery provided hereunder, by legible
telecopy or electronic mail. Any such notice must be sent:
(i) if to any Purchaser or its nominee, to such Purchaser or its nominee at the address
or, in the case of clause (c) above, the electronic mail address or telecopy number
specified for such communications in Schedule A to this Agreement, or at such other address,
electronic mail address or telecopy number as such Purchaser or nominee shall have specified
to the Company in writing pursuant to this Section 18;
(ii) if to any other holder of any Note, to such holder at such address as such other
holder shall have specified to the Company in writing pursuant to this Section 18; or
(iii) if to the Company, to the Company at its address set forth at the beginning
hereof to the attention of General Counsel, or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under clauses (a) and (b) of this Section 18 will be deemed given only when actually
received and notices under clause (c) will be deemed given when sent unless the sender receives an
out of office or undeliverable message in response to an attempted electronic mail delivery.
Section 19.
Reproduction of Documents.
This Agreement and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b) documents received by any
Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished to any Purchaser, may be reproduced by such
Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such
Purchaser may destroy any original document so reproduced. The Company agrees and stipulates that,
to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such
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reproduction was made by such Purchaser in the regular course of
business) and any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other
holder of Notes from contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
Section 20.
Confidential Information
.
For the purposes of this Section 20,
Confidential Information
means information delivered to
any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that was clearly marked or labeled or
otherwise adequately identified when received by such Purchaser as being confidential information
of the Company or such Subsidiary,
provided
that such term does not include information that (a)
was publicly known or otherwise known to such Purchaser prior to the time of such disclosure and
not obtained from a source known by such Purchaser to be subject to a confidentiality or fiduciary
obligation or to have been obtained through unlawful means, (b) subsequently becomes publicly known
through no act or omission by such Purchaser or any Person acting on such Purchasers behalf, (c)
otherwise becomes known to such Purchaser other than (i) through disclosure by the Company or any
Subsidiary or (ii) from a source known by such Purchaser to be subject to a confidentiality or
fiduciary obligation or to have obtained through unlawful means or (d) constitutes financial
statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.
Each Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such Purchaser in good faith
to protect confidential information of third parties delivered to such Purchaser,
provided
that
such Purchaser may deliver or disclose Confidential Information to (i) such Purchasers Affiliates
and its and their respective directors, trustees, officers, employees, agents, and attorneys (to
the extent such disclosure reasonably relates to the administration of the investment represented
by such Purchasers Notes and the Person to whom such information is disclosed is directed to hold
such information confidential in accordance with the terms of this Section 20), (ii) such
Purchasers financial advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this Section 20, (iii) any
other holder of any Note, (iv) any Institutional Investor to which such Purchaser sells or offers
to sell such Note or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the provisions of this
Section 20), (v) any Person from which such Purchaser offers to purchase any security of the
Company (if such Person has agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 20), (vi) any Federal or state regulatory authority
having jurisdiction over such Purchaser to the extent required by such authority, (vii) the NAIC or
the SVO or, in each case any similar organization, or any nationally recognized rating agency that
requires access to information about such Purchasers investment portfolio, or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to such Purchaser, but only to the
extent so required, (x) in response to any subpoena or other legal process, but only after
reasonable notice to the Company to permit the Company to obtain a protective order (unless such
subpoena or process prohibits such notice) and then only to the extent required by such subpoena or
process, (y) in connection with any litigation to which such
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Purchaser is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably
determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under such Purchasers Notes, the Subsidiary Guaranty and
this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed
to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to
this Agreement. On reasonable request by the Company in connection with the delivery to any holder
of a Note of information required to be delivered to such holder under this Agreement or requested
by such holder (other than a holder that is a party to this Agreement or its nominee), such holder
will enter into an agreement with the Company embodying the provisions of this Section 20.
Section 21.
Substitution of Purchaser.
Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser
of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which
notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliates
agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such
notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be
deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such
Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company
of notice of
such transfer, any reference to such Affiliate as a Purchaser in this Agreement (other than
in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall refer to such
original Purchaser, and such original Purchaser shall again have all the rights of an original
holder of the Notes under this Agreement.
Section 22.
Miscellaneous.
Section 22.1. Successors and Assigns
. All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent holder of a Note)
whether so expressed or not.
Section 22.2. Payments Due on Non-Business Days
. Anything in this Agreement or the Notes to
the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice
of any optional prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next succeeding Business
Day; provided that if the maturity date of any Note is a date other than a Business Day, the
payment otherwise due on such maturity date shall be made on the next succeeding Business Day and
shall include the additional days elapsed in the computation of interest payable on such next
succeeding Business Day.
-43-
Section 22.3. Accounting Terms
. All accounting terms used herein that are not expressly
defined in this Agreement have the meanings respectively given to them in accordance with GAAP.
Except as otherwise specifically provided herein, (i) all computations made pursuant to this
Agreement shall be made in accordance with Agreement Accounting Principles and (ii) all
consolidated financial statements shall be prepared in accordance with GAAP. For purposes of
determining compliance with the financial covenants set out in this Agreement, any election by the
Company to measure an item of Indebtedness using fair value (as permitted by Accounting Standards
Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards No.
159) or any other Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) shall be disregarded and such determination shall be made by valuing
indebtedness at 100% of the outstanding principal amount (except to the extent that such
Indebtedness was issued at a discount or premium in which case the value of such indebtedness shall
be valued at the 100% of the outstanding principal amount less any unamortized discount or plus any
unamortized premium, as the case may be).
Section 22.4. Severability
. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by
law) not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.5. Construction
. Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any provision herein refers to action to be taken
by any Person, or which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.
For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be
deemed to be a part hereof.
Section 22.6. Counterparts
. This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.
Section 22.7. Governing Law
. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would permit the application of
the laws of a jurisdiction other than such State.
Section 22.8. Jurisdiction and Process; Waiver of Jury Trial
. (a) The Company irrevocably
submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in the
Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or
relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the
Company irrevocably waives and agrees not to assert, by way of motion, as a
-44-
defense or otherwise,
any claim that it is not subject to the jurisdiction of any such court, any objection that it may
now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in
any such court and any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
(b) The Company consents to process being served by or on behalf of any holder of Notes in any
suit, action or proceeding of the nature referred to in Section 22.8(a) by mailing a copy thereof
by registered or certified mail (or any substantially similar form of mail), postage prepaid,
return receipt requested, to it at its address specified in Section 18 or at such other address of
which such holder shall then have been notified pursuant to said Section. The Company agrees that
such service upon receipt (i) shall be deemed in every respect effective service of process upon it
in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by
applicable law, be taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt
furnished by the United States Postal Service or any reputable commercial delivery service.
(c) Nothing in this Section 22.8 shall affect the right of any holder of a Note to serve
process in any manner permitted by law, or limit any right that the holders of any of the Notes
may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or
to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(d)
The parties hereto hereby waive trial by jury in any action brought on or with respect
to this Agreement, the Notes or any other document executed in connection herewith or
therewith.
* * * * *
-45-
The execution hereof by the Purchasers shall constitute a contract among the Company and
the Purchasers for the uses and purposes hereinabove set forth.
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Very truly yours,
Teledyne Technologies Incorporated
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By
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/s/ Dale A. Schnittjer
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Name:
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Dale A. Schnittjer
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Title:
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Senior Vice President and
Chief Financial Officer
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Accepted as of the date first written above.
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Metropolitan Life Insurance Company
General American Life Insurance Company
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By:
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Metropolitan Life Insurance Company, as
investment manager for the above entity
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By
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/s/ Judith A. Gulotta
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Name:
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Judith A. Gulotta
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Title:
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Managing Director
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
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ING USA Annuity and Life Insurance Company
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ReliaStar Life Insurance Company
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ING Life Insurance and Annuity Company
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ReliaStar Life Insurance Company of New York
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By:
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ING Investment Management LLC, as Agent
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By
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/s/ Fitzhugh Wickham
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Name: Fitzhugh Wickham
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Title: Vice President
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
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New York Life Insurance Company
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By
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/s/ Gail A. McDermott
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Name: Gail A. McDermott
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Title: Vice President
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New York Life Insurance and Annuity Corporation
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By:
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New York Life Investment Management LLC,
its Investment Manager
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By
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/s/ Gail A. McDermott
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Name: Gail A. McDermott
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Title: Managing Director
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Forethought Life Insurance Company
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By:
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New York Life Investment Management LLC,
its Investment Manager
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By
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/s/ Gail A. McDermott
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Name: Gail A. McDermott
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Title: Managing Director
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
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Massachusetts Mutual Life Insurance Company
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By:
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Babson Capital Management LLC
as Investment Adviser
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By
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/s/ Emeka Onukwugha
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Name: Emeka Onukwugha
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Title: Managing Director
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C.M. Life Insurance Company
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By:
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Babson Capital Management LLC
as Investment Adviser
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By
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/s/ Emeka Onukwugha
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Name: Emeka Onukwugha
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Title: Managing Director
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
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The Prudential Insurance Company of
America
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By
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Illegible Signature
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Vice President
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Prudential Retirement Insurance and Annuity
Company
By: Prudential Investment Management, Inc.,
as investment manager
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By
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Illegible Signature
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Vice President
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Pruco Life Insurance Company
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By
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Illegible Signature
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Vice President
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Forethought Life Insurance Company
By: Prudential Private Placement Investors,
L.P. (as Investment Advisor)
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By: Prudential Private Placement Investors,
Inc. (as its General Partner)
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By
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Illegible Signature
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Vice President
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
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Sun Life Assurance Company of Canada (U.S.)
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By
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/s/ Deborah J. Foss
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Name:
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Deborah J. Foss
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Title:
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Managing Director, Head of Private
Debt Private Fixed Income
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By
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/s/ Ann C. King
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Name:
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Ann C. King
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Title:
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Assistant Vice President and
Senior Counsel
|
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
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Great-West Life & Annuity Insurance
Company
|
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By
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/s/ Eve Hampton
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Name:
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Eve Hampton
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Title:
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Vice President, Investments
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By
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/s/ Tad Anderson
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Name:
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Tad Anderson
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Title:
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Asst. Vice President, Investments
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
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Jackson National Life Insurance Company
By: PPM America, Inc., as attorney in fact,
on behalf of Jackson National Life
Insurance Company
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By
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/s/ Brian Manezak
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Name:
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Brian Manezak
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Title:
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Vice President
|
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
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Monumental Life Insurance Company
|
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By
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/s/ Christopher D. Pahlke
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Name:
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Christopher D. Pahlke
|
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|
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Title:
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Vice President
|
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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United of Omaha Life Insurance Company
|
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By
|
/s/ Justin P. Kavan
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Name:
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Justin P. Kavan
|
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|
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Title:
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Vice President
|
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Companion Life Insurance Company
|
|
|
By
|
/s/ Justin P. Kavan
|
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|
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Name:
|
Justin P. Kavan
|
|
|
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Title:
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Authorized Signer
|
|
|
Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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American United Life Insurance Company
|
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|
By
|
/s/ John C. Mason
|
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|
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Name:
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John C. Mason
|
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|
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Title:
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V. P. Fixed Income Securities
|
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The State Life Insurance Company
|
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By:
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American United Life Insurance Company
|
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Its: Agent
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By
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/s/ John C. Mason
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Name:
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John C. Mason
|
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|
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Title:
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V. P. Fixed Income Securities
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Pioneer Mutual Life Insurance Company
|
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By:
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American United Life Insurance Company
|
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Its: Agent
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By
|
/s/ John C. Mason
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|
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Name:
|
John C. Mason
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|
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Title:
|
V. P. Fixed Income Securities
|
|
|
Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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Allianz Life Insurance Company of North America
|
|
|
By:
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Allianz of America, Inc. as the authorized
|
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|
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signatory and investment manager
|
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|
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By
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/s/ Gary Brown
|
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|
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Name:
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Gary Brown
|
|
|
|
Title:
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Chief Investment Officer, Fixed Income
|
|
|
Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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Knights of Columbus
|
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By
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/s/ Donald R. Kehoe
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Name:
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Donald R. Kehoe
|
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|
|
Title:
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Supreme Secretary
|
|
|
Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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Phoenix Life Insurance Company
|
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|
By
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/s/ Christopher M. Wilkos
|
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|
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Name:
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Christopher M. Wilkos
|
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|
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Title:
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Executive Vice President
|
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PHL Variable Insurance Company
|
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|
By
|
/s/ Christopher M. Wilkos
|
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|
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Name:
|
Christopher M. Wilkos
|
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|
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Title:
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Executive Vice President
|
|
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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|
Country Life Insurance Company
|
|
|
By
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/s/ John Jacobs
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Name:
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John Jacobs
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Title:
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Director Fixed Income
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Country Mutual Insurance Company
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By
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/s/ John Jacobs
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Name:
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John Jacobs
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|
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Title:
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Director Fixed Income
|
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Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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The Union Central Life Insurance Company
|
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By:
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Summit Investment Advisors Inc., as Agent
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By
|
/s/ Andrew S. White
|
|
|
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Andrew S. White, Managing Director Private
|
|
|
|
Placements
|
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Ameritas Life Insurance Corp.
|
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By:
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Summit Investment Advisors Inc., as Agent
|
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By
|
/s/ Andrew S. White
|
|
|
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Andrew S. White, Managing Director Private
|
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Placements
|
|
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|
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Acacia Life Insurance Company
|
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By:
|
Summit Investment Advisors Inc., as Agent
|
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|
|
By
|
/s/ Andrew S. White
|
|
|
|
Andrew S. White, Managing Director Private
|
|
|
|
Placements
|
|
|
Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
|
|
|
|
|
Southern Farm Bureau Life Insurance
Company
|
|
|
By
|
/s/ David Divine
|
|
|
|
Name:
|
David Divine
|
|
|
|
Title:
|
Portfolio Manager
|
|
Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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|
|
|
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The Travelers Indemnity Company
|
|
|
By
|
Illegible Signature
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
Teledyne Technologies Incorporated
Note Purchase Agreement
Accepted as of the date first written above.
|
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|
|
|
|
CUNA Mutual Insurance Society
|
|
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By:
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MEMBERS Capital Advisors, Inc., acting
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|
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as Investment Advisor
|
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|
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|
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By
|
/s/ John W. Petchler
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|
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Name:
|
John W. Petchler
|
|
|
|
Title:
|
Director, Investments
|
|
Teledyne Technologies Incorporated
Note Purchase Agreement
|
|
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Principal Amount
|
|
|
|
|
of the Series A
Notes to Be
|
Name of Purchasers
|
|
Series
|
|
Purchased
|
|
|
|
|
|
[_____________________]
|
|
A
|
|
$[____________]
|
[_____________________]
|
|
B
|
|
|
[_____________________]
|
|
C
|
|
|
[_____________________]
|
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|
|
|
[_____________________]
|
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|
|
Payments
All payments on or in respect of the Notes to be by bank wire transfer of Federal or other
immediately available funds (identifying each payment as [Company Name], and as to interest rate,
security description, Series ___ Notes, maturity date, PPN, principal, premium or interest) to:
[_____________________]
[_____________________]
[_____________________]
With telephone advice of payment to the [_____________________] Department of
[_____________________] at [(___) _______].
Notices
All notices and communications to be addressed as first provided above, except notices with respect
to payments, to be addressed Attention: [_____________________] Department [_________].
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: [_________]
Schedule A
(to Note Purchase Agreement)
Defined Terms
As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:
Acquisition,
by any Person, means the acquisition by such Person, in a single transaction or
in a series of related transactions, of all or substantially all of the Property of another Person
or all or substantially all of the Voting Stock of another Person, in each case whether or not
involving a merger or consolidation with such other Person and whether for cash, property,
services, assumption of Indebtedness, securities or otherwise.
Acquisition Event
means an Acquisition, or series of Acquisitions, by the Company and its
Subsidiaries.
Affiliate
means, at any time, and with respect to any Person, (a) any other Person that at
such time directly or indirectly through one or more intermediaries Controls, or is Controlled by,
or is under common Control with, such first Person, and (b) any Person beneficially owning or
holding, directly or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own
or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity
interests. As used in this definition,
Control
means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise. Unless the context otherwise
clearly requires, any reference to an
Affiliate
is a reference to an Affiliate of the Company.
Agreement Accounting Principles
means GAAP, provided that with respect to the calculations
for purposes of determining compliance with the covenants set forth in Sections 10.1 through 10.5,
such term means generally accepted accounting principles in effect as of the Execution Date applied
on a basis consistent with that used in the preparation of the most recent audited consolidated
financial statements of the Company listed in Section 5.5.
Anti-Terrorism Order
means Executive Order No. 13,224 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.
Applicable Interest Rate
means, (a) with respect to the Series A Notes, the sum of (i) 4.04%
per annum
plus
(ii), during any Interest Rate Adjustment Period, the Interest Rate Adjustment, (b)
with respect to the Series B Notes, the sum of (i) 4.74% per annum
plus
(ii), during any Interest
Rate Adjustment Period, the Interest Rate Adjustment and (c) with respect to the Series C Notes,
the sum of (i) 5.30% per annum
plus
(ii), during any Interest Rate Adjustment Period, the Interest
Rate Adjustment.
Asset Sale Prepayment Date
is defined in Section 8.8.
Asset Sale Response Date
is defined in Section 8.8.
Schedule B
(to Note Purchase Agreement)
Attributable Indebtedness
means, on any date, (a) in respect of any Capital Lease of any
Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared
as of such date in accordance with Agreement Accounting Principles, (b) in respect of any Synthetic
Lease, the capitalized amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance with Agreement
Accounting Principles if such lease were accounted for as a Capital Lease and (c) in respect of any
Securitization Transaction of any Person, the outstanding principal amount of such financing, after
taking into account reserve accounts and making appropriate adjustments, determined in good faith
by the board of directors of the Company in its reasonable judgment.
Bank Credit Agreement
means the Amended and Restated Credit Agreement dated as of July 14,
2006 by and among the Company, certain Subsidiaries of the Company identified therein, Bank of
America, N.A., as administrative agent, swing line lender and L/C Issuer, The Bank of New York, as
syndication agent, The Bank of Tokyo-Mitsubishi UFJ Trust Company, JPMorgan Chase Bank, N.A. and
SunTrust Bank, as co-documentation agents and the other lenders party thereto, as amended,
restated, joined, supplemented or otherwise modified from time to time, and any renewals,
extensions, replacements or increases in the principal amount thereof, which constitute the primary
bank credit facility of the Company and its Subsidiaries.
Bank Lenders
means the banks and financial institutions party to the Bank Credit Agreement.
Business Day
means any day other than a Saturday, a Sunday or a day on which commercial
banks in New York, New York are required or authorized to be closed.
Capital Lease
means, at any time, a lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a liability in
accordance with Agreement Accounting Principles.
Capital Lease Obligation
means, with respect to any Person and a Capital Lease, the amount
of the obligation of such Person as the lessee under such Capital Lease which would, in accordance
with Agreement Accounting Principles, appear as a liability on a balance sheet of such Person.
Capital Stock
means (i) in the case of a corporation, capital stock, (ii) in the case of an
association or business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other interest or participation that confers on a Person the right to receive
a share of the profits and losses of, or distributions of assets of, the issuing Person.
Change in Control
is defined in Section 8.7.
Closing
is defined in Section 3.
B-2
Closing Date
means the date of the Closing.
Code
means the Internal Revenue Code of 1986, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time.
Company
means Teledyne Technologies Incorporated, a Delaware corporation or any successor
that becomes such in the manner described in Section 10.6.
Competitor
means any Person (other than a Purchaser) who is substantially engaged in the
development, manufacture, sale or provision of products and services of electronic components and
subsystems, instrumentation and communications products, aerospace engines and components,
government systems engineering services or energy and power systems and/or other activities
reasonably related thereto
provided that
: (a) the provision of investment advisory services by a
Person to a Plan which is owned or controlled by a Person which would otherwise be a Competitor
shall not of itself cause the Person providing such services to be deemed a Competitor if such
Person has established procedures which will prevent confidential information supplied to such
Person by the Company or any of its Subsidiaries from being transmitted or otherwise made available
to such Plan or Person owning or controlling such Plan; and (b) in no event shall an Institutional
Investor which maintains passive investments in any Person which is a Competitor be deemed a
Competitor, it being agreed that the normal administration of the investment and enforcement
thereof shall be deemed not to cause such Institutional Investor to be a Competitor.
Confidential Information
is defined in Section 20.
Consolidated EBITDA
means, for any period, for the Company and its Subsidiaries on a
consolidated basis, an amount equal to Consolidated Net Income for such period
plus
the following
to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated Interest
Charges for such period, (b) the provision for Federal, state, local and foreign income taxes
payable by the Company and its Subsidiaries for such period; (c) the amount of depreciation and
amortization expense for such period; (d) non-cash items that reduce Consolidated Net Income in
such period; (e) reasonably documented fees and expenses paid or payable in cash to unaffiliated
third parties in connection with the transactions contemplated hereby and with any other issuances
of debt or equity permitted hereby, whether or not such issuances are successful; and (f)
reasonably documented fees and expenses paid or payable in cash to unaffiliated third parties in
connection with Acquisitions or dispositions permitted hereby, whether or not such acquisitions or
dispositions are successful;
provided,
that for purposes of calculating the Consolidated Leverage
Ratio in Section 10.1 and the Consolidated Interest Charges Ratio in Section 10.2, Consolidated
EBITDA shall include, on a pro form basis for the period consisting of the four fiscal quarters
ending on such date, the Consolidated EBITDA attributable to all businesses and assets acquired
after the beginning of such period as if such business and/or assets had been owned for the entire
period and shall exclude, on a pro forma basis for the period consisting of the four fiscal
quarters ending on such date, the Consolidated EBITDA attributable to all businesses and assets
disposed after the beginning of such period as if such businesses and/or assets had not been owned
for the entire period.
B-3
Consolidated Funded Indebtedness
means Funded Indebtedness of the Company and its
Subsidiaries on a consolidated basis.
Consolidated Indebtedness
means as of any date of determination the total amount of all
Indebtedness of the Company and its Subsidiaries determined on a consolidated basis in accordance
with Agreement Accounting Principles.
Consolidated Interest Charges
means, for any period, for the Company and its Subsidiaries on
a consolidated basis, an amount equal to the sum of (i) all interest, premium payments, debt
discount, fees, charges and related expenses of the Company and its Subsidiaries in connection with
Indebtedness (including capitalized interest and other fees and charges incurred under any asset
securitization program) or in connection with the deferred purchase price of assets, in each case
to the extent treated as interest in accordance with Agreement Accounting Principles,
plus
(ii) the
portion of rent expense of the Company and its Subsidiaries with respect to such period under
Capital Leases or Synthetic Leases that is treated as interest in accordance with Agreement
Accounting Principles.
Consolidated Interest Coverage Ratio
means, as of any date of determination, the ratio of
(a) Consolidated EBITDA for the period of the four fiscal quarters most recently ended for which
the Company has delivered financial statements pursuant to Section 7.1(a) or (b) to (b)
Consolidated Interest Charges for the period of the four fiscal quarters most recently ended.
Consolidated Leverage Ratio
means, as of any date of determination, the ratio of (a)
Consolidated Funded Indebtedness, net of unencumbered cash and cash equivalents, as of such date to
(b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended.
Consolidated Net Income
means, for any period, for the Company and its Subsidiaries on a
consolidated basis, the net income of the Company and its Subsidiaries (excluding extraordinary
non-cash gains, extraordinary non-cash losses and any other non-cash impairment charges related to
goodwill or acquired intangible assets) for that period, as determined in accordance with Agreement
Accounting Principles.
Consolidated Net Worth
means, as of any date of determination, consolidated shareholders
equity of the Company and its Subsidiaries as of that date determined in accordance with Agreement
Accounting Principles.
Consolidated Total Assets
means, as of any date of determination, the total amount of all
assets of the Company and its Subsidiaries, determined on a consolidated basis in accordance with
Agreement Accounting Principles.
Default
means an event or condition the occurrence or existence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default.
Default Rate
means with respect to the Notes of any Series that rate of interest that is 2%
per annum above the Applicable Interest Rate for such Series.
B-4
Earn Out Obligations
means, with respect to an Acquisition, all obligations of the Company
or any Subsidiary to make earn out or other contingency payments pursuant to the documentation
relating to such Acquisition. The amount of any Earn Out Obligation shall be
deemed to be the aggregate liability in respect thereof as recorded on the balance sheet of
the Company and its Subsidiaries in accordance with Agreement Accounting Principles.
Electronic Delivery
is defined in Section 7.1(a).
Elevated Ratio
is defined in Section 10.1.
Environmental Laws
means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to Hazardous Materials.
ERISA
means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in effect.
ERISA Affiliate
means any trade or business (whether or not incorporated) that is treated as
a single employer together with the Company under section 414 of the Code.
Event of Default
is defined in Section 11.
Exchange Act
means the Securities Exchange Act of 1934, as amended.
Execution Date
is defined in Section 3.
Fair Market Value
means, at any time and with respect to any property, the sale value of
such property that would be realized in an arms-length sale at such time between an informed and
willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell),
as reasonably determined in the good faith opinion of the Companys board of directors.
Funded Indebtedness
means, as to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in accordance with
Agreement Accounting Principles:
(a) all obligations for borrowed money, whether current or long-term and all
obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;
(b) all purchase money Indebtedness;
B-5
(c) all obligations arising under letters of credit (including standby), bankers
acceptances, bank guaranties, surety bonds and similar instruments (for the avoidance of
doubt, this clause (c) shall not be deemed to include performance bonds);
(d) all obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business), including without
limitation, any Earn Out Obligations;
(e) the Attributable Indebtedness of Capital Leases and Synthetic Leases;
(f) the Attributable Indebtedness of Securitization Transactions;
(g) all preferred stock or other equity interests providing for mandatory redemptions,
sinking fund or like payments prior to the last scheduled maturity of the Notes; and
(h) all Guarantees with respect to Indebtedness of the types specified in clauses (a)
through (g) above of another Person; and
(i) all Indebtedness of the types referred to in clauses (a) through (h) above of any
partnership or joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or joint venturer,
except to the extent such Indebtedness is expressly made non-recourse to such Person.
For purposes hereof, (x) the amount of any obligation arising under letters of credit
(including standby and commercial), bankers acceptances, bank guaranties, surety bonds and similar
instruments shall be the maximum amount available to be drawn thereunder and (y) the amount of any
Guarantee shall be the amount of the Indebtedness subject to such Guarantee.
GAAP
means those generally accepted accounting principles as in effect from time to time in
the United States of America.
Governmental Authority
means
(a) the government of
(i) the United States of America or any state or other political subdivision
thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary conducts all or
any part of its business, or which has jurisdiction over any properties of the
Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
B-6
Government Obligations
shall mean direct obligations of the United States of America or any
agency or instrumentality of the United States of America, the payment or guarantee of which
constitutes a full faith and credit obligation of the United States of America.
Guarantee
means, as to any Person, (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the
primary obligor
) in any manner, and
including any obligation of such Person, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of such Indebtedness or
other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to
maintain working capital, equity capital or any other financial statement condition or liquidity or
level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness or other obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof (in whole or in
part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is assumed by such
Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by the guaranteeing Person in good faith. The term Guarantee as
a verb has a corresponding meaning.
Hazardous Material
means any and all pollutants, toxic or hazardous wastes or other
substances that might pose a hazard to health and safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law including, but not
limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum,
petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized
substances.
holder
means, with respect to any Note, the Person in whose name such Note is registered in
the register maintained by the Company pursuant to Section 13.1.
Indebtedness
means, as to any Person at any time, without duplication, all items which
would, in conformity with Agreement Accounting Principles, be classified as indebtedness on a
balance sheet of such Person at such time, as well as the following, whether or not included as
indebtedness or liabilities in accordance with Agreement Accounting Principles:
(a) all Funded Indebtedness;
(b) net obligations under any Swap Contract;
B-7
(c) all Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) and (b) above of any other Person; and
(d) all Indebtedness of the types referred to in clauses (a) through (c) above of any
partnership or joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which the Company or a Subsidiary is a general partner or
joint venturer, unless such Indebtedness is expressly made non-recourse to the Company or
such Subsidiary.
For purposes hereof (y) the amount of any net obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date and (z) the amount of any
Guarantee shall be the amount of the Indebtedness subject to such Guarantee.
Institutional Investor
means (a) any original purchaser of a Note, (b) any holder of more
than $2,000,000 of the aggregate principal amount of the Notes then outstanding, and (c) any bank,
trust company, savings and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other similar financial
institution or entity, regardless of legal form.
Interest Rate Adjustment
means 0.50% per annum.
Interest Rate Adjustment Period
means the entirety of any fiscal quarter at the end of which
the Consolidated Leverage Ratio exceeds 3.25 to 1.00. For the avoidance of doubt, an Interest Rate
Adjustment Period shall include the entire applicable fiscal quarter, notwithstanding that the
Consolidated Leverage Ratio did not exceed 3.25 to 1.00 until the end of such fiscal quarter.
Lien
means, with respect to any Person, any mortgage, lien, pledge, charge, security
interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title retention agreement
(other than an operating lease) or Capital Lease, upon or with respect to any property or asset of
such Person.
Make-Whole Amount
shall have the meaning set forth in Section 8.6 with respect to any Note.
Material
means material in relation to the business, operations, affairs, financial
condition, assets, or properties of the Company and its Subsidiaries taken as a whole.
Material Adverse Effect
means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a
whole, or (b) the ability of the Company and the Subsidiary Guarantors, taken as a whole, to
perform their obligations under this Agreement, the Notes and the Subsidiary Guaranty or (c) the
validity or enforceability of this Agreement, the Notes or the Subsidiary Guaranty.
B-8
Material Subsidiary
means, at any time, any Subsidiary of the Company which, together with
all other Subsidiaries of such Subsidiary, accounts for more than (i) 10% of the consolidated
assets of the Company and its Subsidiaries or (ii) 10% of consolidated revenue of the Company and
its Subsidiaries.
Memorandum
is defined in Section 5.3.
Multiemployer Plan
means any Plan that is a multiemployer plan (as such term is defined in
Section 4001(a)(3) of ERISA).
NAIC
means the National Association of Insurance Commissioners or any successor thereto.
Notes
is defined in Section 1.
Officers Certificate
means a certificate of a Senior Financial Officer or of any other
officer of the Company whose responsibilities extend to the subject matter of such certificate.
PBGC
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.
Person
means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, business entity or a Government Authority.
Plan
means an employee benefit plan (as defined in Section 3(3) of ERISA) that is or,
within the preceding five years, has been established or maintained, or to which contributions are
or, within the preceding five years, have been made or required to be made, by the Company or any
ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.
Priority Indebtedness
means (without duplication), as of the date of any determination
thereof, the sum of (i) all unsecured Indebtedness of Subsidiaries (including all Guarantees of
Indebtedness of the Company but excluding (x) Indebtedness owing to the Company or any other
Subsidiary, (y) Indebtedness outstanding at the time such Person became a Subsidiary, provided that
such Indebtedness shall have not been incurred in contemplation of such person becoming a
Subsidiary, and (z) all Subsidiary Guarantees and all Indebtedness of any Subsidiary which has also
guaranteed the Notes) and (ii) all Indebtedness of the Company and its Subsidiaries secured by
Liens other than Indebtedness secured by (x) Liens permitted by subparagraphs (a) through (t),
inclusive, of Section 10.4. or (y) Liens as to which the Company or such Subsidiary has made, or
caused to be made, effective provision whereby the Notes are equally and ratably secured with the
other obligations thereby secured in accordance with Section 10.4.
property
or
properties
means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.
B-9
Proposed Prepayment Date
has the meaning set forth in Section 8.7(c) hereof.
Purchasers
means the purchasers of the Notes named in Schedule A hereto.
QPAM Exemption
means Prohibited Transaction Class Exemption 84-14 issued by the United
States Department of Labor.
Qualified Institutional Buyer
means any Person who is a qualified institutional buyer within
the meaning of such term as set forth in Rule 144(a)(1) under the Securities Act.
Ratable Portion
means, with respect to any Note, an amount equal to the product of (x) the
amount equal to the net proceeds being so applied to the prepayment of Senior Indebtedness in
accordance with Section 10.5(2), multiplied by (y) a fraction the numerator of which is the
outstanding principal amount of such Note and the denominator of which is the aggregate principal
amount of Senior Indebtedness of the Company and its Subsidiaries being prepaid pursuant to Section
10.5(2).
Required Holders
means, at any time, the holders of not less than 51% in principal amount of
the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates and any Notes held by parties who are contractually required to abstain from voting with
respect to matters affecting the holders of the Notes).
Responsible Officer
means any Senior Financial Officer and any other officer of the Company
with responsibility for the administration of the relevant portion of this Agreement.
SEC
shall mean the Securities and Exchange Commission of the United States, or any successor
thereto.
Securities Act
means the Securities Act of 1933, as amended from time to time.
Securitization Transaction
means any financing transaction or series of financing
transactions (including factoring arrangements) pursuant to which the Company or any Subsidiary may
sell, convey or otherwise transfer, or grant a security interest in, accounts, payments,
receivables, rights to future lease payments or residuals or similar rights to payment to a special
purpose subsidiary or affiliate of the Company.
Senior Indebtedness
means, as of the date of any determination thereof, all Consolidated
Indebtedness, other than Subordinated Indebtedness.
Senior Financial Officer
means the chief financial officer, principal accounting officer,
treasurer or controller of the Company.
Series
means any series of Notes issued pursuant to this Agreement.
Series A Notes
is defined in Section 1 of this Agreement.
B-10
Series B Notes
is defined in Section 1 of this Agreement.
Series C Notes
is defined in Section 1 of this Agreement.
Subordinated Indebtedness
means all unsecured Indebtedness of the Company which shall
contain or have applicable thereto subordination provisions providing for the subordination
thereof to other Indebtedness of the Company (including, without limitation, the obligations
of the Company under this Agreement or the Notes).
Subsidiary
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of Capital Stock having ordinary
voting power for the election of directors or other governing body (other than Capital Stock having
such power only by reason of the happening of a contingency) are at the time beneficially owned, or
the management of which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a
Subsidiary shall refer to a Subsidiary of the Company.
Subsidiary Guarantor
means each Subsidiary which is party to the Subsidiary Guaranty.
Subsidiary Guaranty
is defined in Section 2.2 of this Agreement.
Swap Contract
means (a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or
options or forward bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a
Master Agreement
), including any such
obligations or liabilities under any Master Agreement.
Swap Termination Value
means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts.
B-11
SVO
means the Securities Valuation Office of the NAIC or any successor to such Office.
Synthetic Lease
means any synthetic lease, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing arrangement whereby the arrangement is
considered borrowed money indebtedness for tax purposes but is classified as an operating
lease or does not otherwise appear on the balance sheet under Agreement Accounting Principles.
UCC
means the Uniform Commercial Code as in effect in any applicable jurisdiction.
USA Patriot Act
means United States Public Law 107-56, Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as amended from time to time, and the rules and regulations promulgated thereunder from time
to time in effect.
Voting Stock
means, with respect to any Person, Capital Stock issued by such Person, the
holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even though the right so to
vote has been suspended by the happening of such a contingency.
Wholly Owned Subsidiary
means, at any time, any Subsidiary one hundred percent of all of the
equity interests (except directors qualifying shares) and voting interests of which are owned by
any one or more of the Company and the Companys other Wholly Owned Subsidiaries at such time.
B-12
[Form of Series A Note]
This Note has not been registered pursuant to the Securities Act of 1933, as amended, or
under the securities laws of any state. This Note may be offered or sold only if registered under
applicable securities laws or if an exemption from such registration is available. This Note is
subject to certain additional restrictions on transfer set forth in the Note Purchase Agreement
(defined below).
Teledyne Technologies Incorporated
4.04% Senior Note, Series A, due September 15, 2015
|
|
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No. [
]
|
|
[Date]
|
$[
]
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PPN 879360 A*6
|
For Value Received
, the undersigned,
Teledyne Technologies Incorporated
(herein called the
Company
), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [
] or registered assigns, the principal
sum of [
]
Dollars
(or so much thereof as shall not have been prepaid) on
September 15, 2015 with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate equal to 4.04% per annum, as may be adjusted pursuant
to the terms of the hereinafter defined Note Purchase Agreement, from the date hereof, payable
semi-annually, (i) with respect to the stated rate of interest, on the 15
th
day of March
and September in each year and at maturity and (ii) with respect to the Interest Rate Adjustment
(if any), on the 15th day of September and March next succeeding the Companys election to apply
the Elevated Ratio (as defined in the Note Purchase Agreement) and at maturity, in each case,
commencing on March 15, 2011, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law, at a rate per annum from time to time equal to 2% above the
Applicable Interest Rate, on any overdue payment of interest and, during the continuance of an
Event of Default, on the unpaid balance hereof and on any overdue payment of any Make-Whole Amount,
payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).
Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of Banc of
America Securities LLC in New York, New York or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.
This Note is one of a series of Senior Notes (herein called the
Notes
) issued pursuant to
the Note Purchase Agreement, dated as of May 12, 2010 (as from time to time amended, supplemented
or modified, the
Note Purchase Agreement
), between the Company and the respective Purchasers
named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20
of the Note Purchase Agreement and (ii) made the
Exhibit 1
(
a)
(to Note Purchase Agreement)
representations set forth in Section 6.3 of the Note Purchase Agreement,
provided,
that in lieu of such representation
in Section 6.3, such holder may (in reliance upon information provided by the Company, which shall
not be unreasonably withheld) make a representation to the effect that the purchase by any holder
of any Note will not constitute a non-exempt prohibited transaction under section 406(a) of ERISA.
Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings
ascribed to such terms in the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holders attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be affected by any notice to the
contrary.
This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.
Pursuant to the Subsidiary Guaranty Agreement dated as of September [___], 2010 (as amended,
restated or otherwise modified from time to time, the
Subsidiary Guaranty
), certain Subsidiaries
of the Company have absolutely and unconditionally guaranteed payment in full of the principal of,
Make-Whole Amount, if any, and interest on this Note and the performance by the Company of its
obligations contained in the Note Purchase Agreement all as more fully set forth in said Subsidiary
Guaranty.
If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.
|
|
|
|
|
|
Teledyne Technologies Incorporated
|
|
|
By
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
E-1(a)-2
[Form of Series B Note]
This Note has not been registered pursuant to the Securities Act of 1933, as amended, or
under the securities laws of any state. This Note may be offered or sold only if registered under
applicable securities laws or if an exemption from such registration is available. This Note is
subject to certain additional restrictions on transfer set forth in the Note Purchase Agreement
(defined below).
Teledyne Technologies Incorporated
4.74% Senior Note, Series B, due September 15, 2017
|
|
|
No. [
]
|
|
[Date]
|
$[
]
|
|
PPN 879360 A@4
|
For Value Received
, the undersigned,
Teledyne Technologies Incorporated
(herein called the
Company
), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [
] or registered assigns, the principal
sum of [
]
Dollars
(or so much thereof as shall not have been prepaid) on
September 15, 2017 with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate equal to 4.74% per annum, as may be adjusted pursuant
to the terms of the hereinafter defined Note Purchase Agreement, from the date hereof, payable
semi-annually, (i) with respect to the stated rate of interest, on the 15
th
day of March
and September in each year and at maturity and (ii) with respect to the Interest Rate Adjustment
(if any), on the 15th day of September and March next succeeding the Companys election to apply
the Elevated Ratio (as defined in the Note Purchase Agreement) and at maturity, in each case,
commencing on March 15, 2011, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law, at a rate per annum from time to time equal to 2% above the
Applicable Interest Rate, on any overdue payment of interest and, during the continuance of an
Event of Default, on the unpaid balance hereof and on any overdue payment of any Make-Whole Amount,
payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).
Payments of principal of, interest on and any prepayment premium with respect to this Note are
to be made in lawful money of the United States of America at the principal office of Banc of
America Securities LLC in New York, New York or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.
This Note is one of a series of Senior Notes (herein called the
Notes
) issued pursuant to
the Note Purchase Agreement, dated as of May 12, 2010 (as from time to time amended, supplemented
or modified, the
Note Purchase Agreement
), between the Company and the respective Purchasers
named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20
of the Note Purchase Agreement and (ii) made the
Exhibit 1(b)
(to Note Purchase Agreement)
representations set forth in Section 6 of the Note Purchase Agreement,
provided,
that in lieu of such representation in
Section 6.3, such holder may (in reliance upon information provided by the Company, which shall not
be unreasonably withheld) make a representation to the effect that the purchase by any holder of
any Note will not constitute a non-exempt prohibited transaction under section 406(a) of ERISA.
Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings
ascribed to such terms in the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holders attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be affected by any notice to the
contrary.
This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.
Pursuant to the Subsidiary Guaranty Agreement dated as of September [___], 2010 (as amended,
restated or otherwise modified from time to time, the
Subsidiary Guaranty
), certain Subsidiaries
of the Company have absolutely and unconditionally guaranteed payment in full of the principal of,
Prepayment Premium, if any, and interest on this Note and the performance by the Company of its
obligations contained in the Note Purchase Agreement all as more fully set forth in said Subsidiary
Guaranty.
If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.
|
|
|
|
|
|
Teledyne Technologies Incorporated
|
|
|
By
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
E-1(b)-2
[Form of Series C Note]
This Note has not been registered pursuant to the Securities Act of 1933, as amended, or
under the securities laws of any state. This Note may be offered or sold only if registered under
applicable securities laws or if an exemption from such registration is available. This Note is
subject to certain additional restrictions on transfer set forth in the Note Purchase Agreement
(defined below).
Teledyne Technologies Incorporated
5.30% Senior Note, Series C, due September 15, 2020
|
|
|
No. [
]
|
|
[Date]
|
$[
]
|
|
PPN 879360 A#2
|
For Value Received
, the undersigned,
Teledyne Technologies Incorporated
(herein called the
Company
), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [
] or registered assigns, the principal
sum of [
]
Dollars
(or so much thereof as shall not have been prepaid) on
September 15, 2020 with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate equal to 5.30% per annum, as may be adjusted pursuant
to the terms of the hereinafter defined Note Purchase Agreement, from the date hereof, payable
semi-annually, (i) with respect to the stated rate of interest, on the 15
th
day of March
and September in each year and at maturity and (ii) with respect to the Interest Rate Adjustment
(if any), on the 15th day of September and March next succeeding the Companys election to apply
the Elevated Ratio (as defined in the Note Purchase Agreement) and at maturity, in each case,
commencing on March 15, 2011, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law, at a rate per annum from time to time equal to 2% above the
Applicable Interest Rate, on any overdue payment of interest and, during the continuance of an
Event of Default, on the unpaid balance hereof and on any overdue payment of any Make-Whole Amount,
payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).
Payments of principal of, interest on and any prepayment premium with respect to this Note are
to be made in lawful money of the United States of America at the principal office of Banc of
America Securities LLC in New York, New York or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.
This Note is one of a series of Senior Notes (herein called the
Notes
) issued pursuant to
the Note Purchase Agreement, dated as of May 12, 2010 (as from time to time amended, supplemented
or modified, the
Note Purchase Agreement
), between the Company and the respective Purchasers
named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by
its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20
of the Note Purchase Agreement and (ii) made the
Exhibit 1(c)
(to Note Purchase Agreement)
representations set forth in Section 6 of the Note Purchase Agreement,
provided,
that in lieu of the representation in
Section 6.3, such holder may (in reliance upon information provided by the Company, which shall not
be unreasonably withheld) make a representation to the effect that the purchase by any holder of
any Note will not constitute a non-exempt prohibited transaction under section 406(a) of ERISA.
Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings
ascribed to such terms in the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holders attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the Company may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company will not be affected by any notice to the
contrary.
This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.
Pursuant to the Subsidiary Guaranty Agreement dated as of September , 2010 (as amended,
restated or otherwise modified from time to time, the
Subsidiary Guaranty
), certain Subsidiaries
of the Company have absolutely and unconditionally guaranteed payment in full of the principal of,
Prepayment Premium, if any, and interest on this Note and the performance by the Company of its
obligations contained in the Note Purchase Agreement all as more fully set forth in said Subsidiary
Guaranty.
If an Event of Default, as defined in the Note Purchase Agreement, occurs and is continuing,
the principal of this Note may be declared or otherwise become due and payable in the manner, at
the price (including any applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the rights of the issuer and
holder hereof shall be governed by, the law of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the laws of a
jurisdiction other than such State.
|
|
|
|
|
|
Teledyne Technologies Incorporated
|
|
|
By
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
E-1(c)-2
SCHEDULE 4.9
to Note Purchase Agreement
(Changes in Corporate Structure)
None.
SCHEDULE 5.3
to Note Purchase Agreement
(Disclosure)
None.
2
SCHEDULE 5.4
to Note Purchase Agreement
(Subsidiaries of the Company; Ownership of Subsidiary Stock)
SUBSIDIARIES OF THE COMPANY
** = Subsidiary Guarantor
= Material Subsidiary
|
|
|
|
|
SUBSIDIARY
|
|
JURISDICTION OF
|
|
STOCKHOLDER/PERCENTAGE OF
|
NAME
|
|
FORMATION
|
|
OWNERSHIP OF OUTSTANDING SHARES
|
Ensambles de Precision S.A. de C.V.
|
|
Mexico
|
|
Teledyne Technologies Incorporated 99%;
Teledyne Instruments, Inc. 1%
|
|
|
|
|
|
Gulfcoast Aerospace Alliance, LLC
|
|
Delaware
|
|
Teledyne Brown Engineering- Inc. 50%
|
|
|
|
|
|
Hurricane Acquisition Company
|
|
California
|
|
Teledyne Technologies Incorporated 100%
|
|
|
|
|
|
Teledyne ODI, Inc.
|
|
Delaware
|
|
Teledyne Instruments, Inc. 100%
|
|
|
|
|
|
Teledyne ODI Limited
|
|
United Kingdom
|
|
Teledyne ODI, Inc. 100%
|
|
|
|
|
|
Ocean Design Ltda.
|
|
Brazil
|
|
Teledyne ODI, Inc. 99.33%
Teledyne ODI Limited. .67%
|
|
|
|
|
|
Reynolds Industries Limited
|
|
United Kingdom
|
|
Teledyne Limited 100%.
|
|
|
|
|
|
Teledyne RD Technologies (Shanghai) Co. Ltd.
|
|
China
|
|
Teledyne RD Instruments, Inc. 100%
|
|
|
|
|
|
TCM Acquisition, LLC
|
|
Delaware
|
|
Teledyne Continental Motors, Inc. 100%
|
|
|
|
|
|
Teledyne Australia Pty Ltd
|
|
Australia
|
|
Teledyne Wireless, LLC 100%
|
|
|
|
|
|
Teledyne Advanced Pollution
Instrumentation, Inc.
|
|
California
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Aerospace, LLC
|
|
Florida
|
|
Teledyne Brown Engineering, Inc. 50%
|
|
|
|
|
|
Teledyne & BAE Systems JV, LLC
|
|
Delaware
|
|
Teledyne Solutions, Inc. 50%
|
|
|
|
|
|
Teledyne Benthos, Inc.
|
|
Massachusetts
|
|
Teledyne Instruments, Inc. 100%
|
|
|
|
|
|
Teledyne CollaborX, Inc.
|
|
Colorado
|
|
Teledyne Brown Engineering, Inc. 100%
|
3
|
|
|
|
|
SUBSIDIARY
|
|
JURISDICTION OF
|
|
STOCKHOLDER/PERCENTAGE OF
|
NAME
|
|
FORMATION
|
|
OWNERSHIP OF OUTSTANDING SHARES
|
Teledyne Brown Engineering, Inc.**
|
|
Delaware
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Brown Netherlands, Inc.
|
|
Delaware
|
|
Teledyne Brown Engineering, Inc.
100%
|
|
|
|
|
|
Teledyne Continental Motors, Inc.**
|
|
Delaware
|
|
Teledyne Technologies Incorporated 100%
|
|
|
|
|
|
Teledyne Controls Simulation Limited
|
|
Ontario, Canada
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Controls Wichita, Inc.
|
|
Delaware
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Cormon Limited
|
|
United Kingdom
|
|
Teledyne Limited- 100%
|
|
|
|
|
|
Teledyne Cormon Technology Limited
|
|
United Kingdom
|
|
Teledyne Limited 100%
|
|
|
|
|
|
Teledyne Cormon, Inc.
|
|
Texas
|
|
Teledyne Instruments, Inc. 100%
|
|
|
|
|
|
Teledyne Cougar, Inc.
|
|
California
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Defence Limited
|
|
United Kingdom
|
|
Teledyne Limited 100%
|
|
|
|
|
|
Teledyne Energy Systems, Inc.
|
|
Delaware
|
|
Teledyne Technologies Incorporated
86%
|
|
|
|
|
|
Teledyne France
|
|
France
|
|
Teledyne RD Instruments, Inc. 100%
|
|
|
|
|
|
Teledyne Germany GmbH
|
|
Germany
|
|
Teledyne Tekmar Company 100%
|
|
|
|
|
|
Teledyne Instruments, Inc.**
|
|
Delaware
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Isco, Inc.**
|
|
Nebraska
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Lighting and Display Products, Inc.
|
|
Nevada
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Limited
|
|
United Kingdom
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Licensing, LLC
|
|
Delaware
|
|
Teledyne Scientific & Imaging,
LLC 100%
|
|
|
|
|
|
Teledyne Mattituck Services, Inc.
|
|
Delaware
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Monitor Labs, Inc.
|
|
Delaware
|
|
Teledyne Instruments, Inc. 100%
|
|
|
|
|
|
Teledyne Monitor Labs P.R., Inc.
|
|
Puerto Rico
|
|
Teledyne Monitor Labs, Inc. 100%
|
4
|
|
|
|
|
SUBSIDIARY
|
|
JURISDICTION OF
|
|
STOCKHOLDER/PERCENTAGE OF
|
NAME
|
|
FORMATION
|
|
OWNERSHIP OF OUTSTANDING SHARES
|
Teledyne Odom Hydrographic, Inc.
|
|
Louisiana
|
|
Teledyne RD Instruments, Inc. 100%
|
|
|
|
|
|
Teledyne Properties Limited
|
|
United Kingdom
|
|
Teledyne Limited 100%
|
|
|
|
|
|
Teledyne RD Instruments, Inc.
|
|
Delaware
|
|
Teledyne Technologies Incorporated 100%
|
|
|
|
|
|
Teledyne Reynolds, Inc.
|
|
California
|
|
Teledyne Technologies Incorporated 100%
|
|
|
|
|
|
Teledyne Reynolds Limited (in liquidation)
|
|
United Kingdom
|
|
Teledyne Reynolds, Inc. 100%
|
|
|
|
|
|
Teledyne RISI, Inc.
|
|
California
|
|
Teledyne Reynolds, Inc. 100%
|
|
|
|
|
|
Teledyne Scientific & Imaging, LLC**
|
|
Delaware
|
|
Teledyne Brown Engineering, Inc. 100%
|
|
|
|
|
|
Teledyne SG Brown Limited
|
|
United Kingdom
|
|
Teledyne Limited 100%
|
|
|
|
|
|
Teledyne Storm Products, Inc.
|
|
California
|
|
Teledyne Reynolds, Inc. 100%
|
|
|
|
|
|
Teledyne Singapore Private Limited
|
|
Singapore
|
|
Teledyne Technologies Incorporated 100%
|
|
|
|
|
|
Teledyne Solutions, Inc.
|
|
Alabama
|
|
Teledyne Brown Engineering, Inc. 100%
|
|
|
|
|
|
Teledyne Technologies International Corp.
|
|
Delaware
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Technologies (Bermuda) Limited
|
|
Bermuda
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
Teledyne Tekmar Company
|
|
Ohio
|
|
Teledyne Instruments, Inc. 100%
|
|
|
|
|
|
Teledyne TSS Limited
|
|
United Kingdom
|
|
Teledyne SG Brown Limited 100%
|
|
|
|
|
|
Teledyne Wireless, LLC**
|
|
Delaware
|
|
Teledyne Technologies Incorporated
100%
|
|
|
|
|
|
5
BOARD OF DIRECTORS OF THE COMPANY
|
|
|
|
|
Roxanne S. Austin
|
|
Kenneth C. Dahlberg
|
|
Paul D. Miller
|
|
|
|
|
|
Frank V. Cahouet
|
|
Simon M. Lorne
|
|
Michael T. Smith
|
|
|
|
|
|
Charles Crocker
|
|
Robert Mehrabian
|
|
Wesley W. von Shack
|
|
|
|
|
|
OFFICERS OF THE COMPANY
|
|
|
NAME
|
|
OFFICE
|
Robert Mehrabian
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
John T. Kuelbs
|
|
Executive Vice President, General Counsel and Secretary
|
|
|
|
Dale A. Schnittjer
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
Susan L. Main
|
|
Vice President and Controller
|
|
|
|
Robert W. Steenberge
|
|
Vice President and Chief Technology Officer
|
|
|
|
Ivars R. Blukis
|
|
Chief Business Risk Assurance Officer
|
|
|
|
Melanie S. Cibik
|
|
Vice President, Associate General Counsel and Assistant Secretary
|
|
|
|
Robyn E. McGowan
|
|
Vice President- Administration and Human Resources and Assistant
Secretary
|
|
|
|
Jason VanWees
|
|
Vice President- Corporate Development and Investor Relations
|
|
|
|
Stephen F. Blackwood
|
|
Vice President and Treasurer
|
|
|
|
Brian A. Levan
|
|
Assistant Controller
|
|
|
|
Caleb B. Standafer
|
|
Assistant Treasurer-Taxation
|
|
|
|
Robert L. Schaefer
|
|
Assistant Secretary
|
|
|
|
S. Paul Sassalos
|
|
Assistant Secretary
|
|
|
|
6
SCHEDULE 5.15
to Note Purchase Agreement
(Existing Indebtedness)
Bank Credit Facility:
Title
:
Amended and Restated Credit Agreement
Date
:
July 14, 2006, as amended on February 8, 2008.
Borrower
:
Teledyne Technologies Incorporated and the following subsidiary guarantors:
Teledyne Brown Engineering, Inc., Teledyne Continental Motors, Inc., Teledyne Instruments, Inc.,
Teledyne Isco, Inc., Teledyne Wireless, LLC, Teledyne Scientific & Imaging, LLC.
Lenders
:
Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer,
and the other Lenders identified therein.
Maturity Date
:
July 14, 2011
Aggregate Revolving Commitments
: $590,000,000
Amount Outstanding as of January 3, 2010 (fiscal year end 2010):
$240,000,000
Letters of Credit Outstanding as of January 3, 2010 (aggregate amount)
:
$13,721,747.45
Amount Outstanding as of April 4, 2010 (end of first quarter 2010):
$246,000,000
Letters of Credit Outstanding as of April 4, 2010 (aggregate amount)
:
$13,592,852.75
The Bank Credit Facility contains limits on the amount of and restrictions on the incurring of
Indebtedness. On March 10, 2010, the required Lenders under the Bank Credit Facility entered into
a Consent Agreement consenting to the issuance of the Notes.
Uncommitted Revolving Credit Facilities
Borrower:
Teledyne Technologies Incorporated
Lender:
Bank of America
Maturity Date
:
June 30, 2010
Aggregate Revolving Amount
: $5,000,000
Amount Outstanding as of January 3, 2010:
$0
Letters of Credit Outstanding as of January 3, 2010 (aggregate amount)
:
$211,700
Amount Outstanding as of April 4, 2010 (end of first quarter 2010):
$3,700,000
Letters of Credit Outstanding as of April 4, 2010 (aggregate amount)
:
$573,101.20
As of January 3, 2010 and April 4, 2010, the Company and its Subsidiaries had outstanding surety
bonds having an aggregate surety liability amount of $2,886,960.88 and $2,986,960.88,
respectively. Safeco Insurance Company of America is the surety on all these bonds.
See Schedule 10.4 for existing Liens.
The following intercompany Indebtedness exists between the Company and certain Subsidiaries:
Promissory Note issued by Teledyne Brown Engineering, Inc. in favor of the Company, dated August
15, 2006, with a maturity date of August 15, 2016, and an interest rate of 6.50%. As of
7
January 3, 2010, outstanding balance is $14,752,155.04, with an interest of $958,890.08 due and
payable on August 15, 2010.
Promissory Note issued by Teledyne Brown Engineering, Inc. in favor of the Company, dated September
15, 2006, with a maturity date of September 15, 2016, and an interest rate of 6.30%. As of January
3, 2010, outstanding balance is $167,500,000.00, with an interest of $10,552,500.00 due and payable
on Sept 16, 2010.
Master Note issued by Teledyne Energy Systems, Inc. in favor of the Company, dated May 19, 2008,
establishing a revolving credit line of up to $8,000,000. Outstanding amounts as of January 3,
2010, and April 4, 2010, were $4,470,000 and $4,515,000, respectively.
8
SCHEDULE 10.4
to Note Purchase Agreement
(Existing Liens)
1. Capital Leases (Real Property):
Lessor
: Shelby Holdings Limited
Lessee:
Teledyne Cormon Limited and Teledyne Limited
Property:
Units 26, 27, and 28 Timberlaine Trading Estate, Worthing.
Approximate Net Present Value at inception of the lease:
£1,300,000 (land value, £250,000 and building value, £1,050,000)
Lease termination date:
September 10
th
2024
Lessor: Vantage Point Business Village Ltd
Lessee:
Teledyne Limited
Property
: The Teledyne Building, Vantage Point Business Village, Mitcheldean
Approximate Net Present Value at inception of the lease
: £2,246,552
Lease termination date
: September 28, 2023
Lessor:
Norwich Union Life and Pensions
Lessee:
Teledyne Limited
Property:
Navigation House, Canal View Road, Newbury
Approximate Net Present Value at inception of the lease:
GBP £2,200,000
Lease termination date:
August 24, 2025
Lessor:
Greenhills Property No.46 Limited
Lessee:
Teledyne TSS Limited
Property:
1 Blackmoor Lane, Croxley Green Business Park Watford, Herfordshire, WD18 8GA
Approximate Net Present Value at inception of the lease:
GBP £3,750,000 (land value £1,600,000; and building value, £2,150,000)
Lease termination date:
August 24, 2025
2. Liens existing on the Execution Date of the type described in Section 10.4(b) through (m) and
(q) through (t).
3. Equipment leases entered into in the ordinary course of business and existing on the Execution
Date, including the following at the Company and the Subsidiary Guarantors with active UCC filings:
9
TELEDYNE TECHNOLOGIES INCORPORATED
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EXPIRATION
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SECURED
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DEBTOR
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DATE
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JURISDICTION
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PARTY
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COLLATERAL
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TDY
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08/21/2012
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CA, Secretary of State
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Canon Financial Services
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Equipment
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TDY
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07/31/2013
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DE, Dept. of State
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US Bancorp
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Equipment
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TDY
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11/19/2013
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DE, Dept. of State
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US Bancorp
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Equipment
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TDY
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09/03/2014
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DE, Dept. of State
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US Bancorp
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Equipment
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TDY
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03/09/2015
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DE, Dept. of State
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Tennant Financial Services
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Equipment- Sweeper accessories
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TDY
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03/09/2015
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DE, Dept. of State
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Konica Minolta Business Solutions USA, Inc.
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Equipment- Copiers
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TDY
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09/23/2010
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DE, Dept. of State
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US Bancorp
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Equipment- Copier
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TDY
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11/21/2010
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DE, Dept. of State
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E I du Pont de Nemours and Company
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Equipment-Image Master
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TELEDYNE BROWN ENGINEERING, INC.
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EXPIRATION
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SECURED
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DEBTOR
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DATE
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JURISDICTION
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PARTY
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COLLATERAL
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TBE
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08/21/2012
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AL, Secretary of State
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Hyundai-KIA Machine America Corp.
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Equipment-CNC Turning Machine Model
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TBE
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10/08/2013
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AL, Secretary of State
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Mighty Enterprises, Inc.
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Equipment- Vertical Machining Center Model
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TBE
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10/20/2010
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DE, Dept. of State
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Canon Financial Services, Inc.
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Equipment
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TBE
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2/27/2012
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DE, Dept. of State
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US Bancorp
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Equipment- Copiers
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TBE
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1/30/2013
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DE, Dept. of State
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US Bancorp
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Equipment
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TBE
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3/24/2013
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DE, Dept. of State
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Marlin Business Park
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Equipment
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TBE
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3/28/2013
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DE, Dept. of State
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US Bancorp
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Equipment
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TBE
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4/4/2013
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DE, Dept. of State
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US Bancorp
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Equipment
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10
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EXPIRATION
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SECURED
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DEBTOR
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DATE
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JURISDICTION
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PARTY
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COLLATERAL
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TBE
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4/25/2013
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DE, Dept. of State
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Toyota Motor Credit Corporation
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Equipment- Forklift
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TBE
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9/18/2013
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DE, Dept. of State
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US Bancorp
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Equipment
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TBE
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9/18/2013
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DE, Dept. of State
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US Bancorp
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Equipment
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TBE
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01/07/2014
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DE, Dept. of State
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Crown Credit Company
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Equipment- Lift Truck, etc.
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TBE
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01/22/2014
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DE, Dept. of State
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Air Liquide Industrial US LP
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Equipment- Gallon Nitrogen Vessel
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TBE
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02/19/2014
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DE, Dept. of State
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US Bancorp
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Equipment
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TBE
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05/06/2014
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DE, Dept. of State
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US Bancorp
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Equipment
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TBE
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05/29/2014
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DE, Dept. of State
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US Bancorp
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Equipment
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TBE
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07/07/2014
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DE, Dept. of State
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US Bancorp
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Equipment
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TBE
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08/24/2014
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DE, Dept. of State
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US Bancorp
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Equipment
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TELEDYNE CONTINENTAL MOTORS, INC.
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EXPIRATION
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SECURED
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DEBTOR
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DATE
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JURISDICTION
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PARTY
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COLLATERAL
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TCM
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01/17/2013
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DE, Dept. of State
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Toyota Machinery USA Corporation
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Equipment- Horizontal Machining
Center
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TCM
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08/08/2013
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DE, Dept. of State
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Amcor Sunclipse North America
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Equipment-Stretch Wrapper Machine
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TCM
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09/23/2013
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DE, Dept. of State
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Thompson Tractor Co., Inc.
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Equipment- CATS
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TCM
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10/14/2013
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DE, Dept. of State
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Thompson Tractor Co., Inc.
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Equipment
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TELEDYNE INSTRUMENTS, INC.
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EXPIRATION
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SECURED
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DEBTOR
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DATE
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JURISDICTION
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PARTY
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COLLATERAL
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Instruments
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06/14/2014
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DE, Dept. of State
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RICOH Americas Corporation
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Equipment- Copiers
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Instruments
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02/22/2015
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DE, Dept. of State
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Anixter, Inc.
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Equipment
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11
TELEDYNE ISCO, INC.
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EXPIRATION
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SECURED
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DEBTOR
|
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DATE
|
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JURISDICTION
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PARTY
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COLLATERAL
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Isco
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05/20/2011
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NE, Secretary of State
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LEAF Funding
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Equipment- Trucks
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Isco
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06/20/2011
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NE, Secretary of State
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Manifest Funding Services
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Equipment- Flow Module
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Isco
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06-20-2011
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NE, Secretary of State
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LEAF Funding
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Equipment
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Isco
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07/13/2011
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NE, Secretary of State
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LEAF Funding
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Equipment
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Isco
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07/05/2010
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NE, Secretary of State
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IOS Capital
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Equipment
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Isco
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09/02/2011
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NE, Secretary of State
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IOS Capital
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Equipment
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Isco
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11/08/2011
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NE, Secretary of State
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IOS Capital
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Equipment
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Isco
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08/26/2014
|
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NE, Secretary of State
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CBL, Inc.
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Equipment- Copiers
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Isco
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06/20/2011
|
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NE, Secretary of State
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LEAF Funding
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Equipment
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TELEDYNE SCIENTIFIC & IMAGING, LLC
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EXPIRATION
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SECURED
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DEBTOR
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DATE
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JURISDICTION
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PARTY
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COLLATERAL
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Scientific
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3/30/2014
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DE, Dept. of State
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Air Liquide Industrial US LP
|
|
Equipment- Teleflo Systems, etc.
|
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Scientific
|
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6/1/2014
|
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DE, Dept. of State
|
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Canon Financial Services
|
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Equipment
|
12
TELEDYNE WIRELESS, LLC
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EXPIRATION
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SECURED
|
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DEBTOR
|
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DATE
|
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JURISDICTION
|
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PARTY
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COLLATERAL
|
Wireless
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01/05/2010
|
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CA, Secretary of State
|
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CIT Technology Financing Services
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Office Equipment
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Wireless
|
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06/27/2011
|
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DE, Dept. of State
|
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EPC Funding II, Inc.
|
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Equipment
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13