SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to section 13 or 15(d)
of the Securities Exchange Act of 1934. For the quarterly
period ended June 30, 2000.
[ ] Transition report pursuant to section 13 or
15(d) of the Securities Exchange Act of 1934. For the
Transition
period from _______________ to _______________.
Commission File Number 0-14714
Astec Industries, Inc.
(Exact Name of Registrant as Specified in its Charter)
Tennessee 62-0873631
(State or other jurisdiction of I.R.S. Employer
Identification No.)
incorporation or organization)
4101 Jerome Avenue, Chattanooga, Tennessee 37407
(Address of Principal Executive Offices) (Zip Code)
(423) 867-4210
(Registrant's 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 X NO _______
Indicate the number of shares outstanding of each of the
registrant's classes of stock as of the latest
practicable date.
Class Outstanding at August 11, 2000
Common Stock, par value $0.20 19,248,362
ASTEC INDUSTRIES, INC.
INDEX Page Number
PART I - Financial Information
Item 1. Financial Statements-Unaudited
Consolidated Balance Sheets as of
June 30, 2000 and December 31, 1999 1
Consolidated Statements of Income
for the Three and Six Months Ended
June 30, 2000 and 1999 2
Consolidated Statements of Cash Flows
for the Six Months Ended June 30,
2000 and 1999 3
Notes to Unaudited Consolidated Financial
Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 6
PART II - Other Information
Item 1. Legal Proceedings 12
Item 5. Other Items 12
Item 6. Exhibits and Reports on Form 8-K 12
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
ACCOUNT DESCRIPTION JUNE 30, DECEMBER 31,
2000 1999
(Unaudited) (Note 1)
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 14,258 $ 3,725
RECEIVABLES - NET 116,800 72,948
INVENTORIES 104,693 104,842
PREPAID EXPENSES AND OTHER 11,362 11,734
TOTAL CURRENT ASSETS 247,113 193,249
PROPERTY AND EQUIPMENT - NET 112,177 109,388
GOODWILL 34,633 36,300
OTHER ASSETS 5,757 15,604
TOTAL ASSETS $399,680 $354,541
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
NOTES PAYABLE $ 3,882 $ 85
CURRENT MATURITIES OF LONG-TERM DEBT 518 511
ACCOUNTS PAYABLE - TRADE 37,993 36,430
OTHER ACCRUED LIABILITIES 46,267 41,334
TOTAL CURRENT LIABILITIES 88,660 78,360
LONG-TERM DEBT, LESS CURRENT MATURITIES 115,099 102,685
OTHER LONG-TERM LIABILITIES 6,819 6,763
TOTAL SHAREHOLDERS' EQUITY 189,102 166,733
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $399,680 $354,541
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30,
2000 1999 2000 1999
NET SALES $159,726 $119,958 $300,598 $232,436
COST OF SALES 118,868 86,119 225,982 170,588
GROSS PROFIT 40,858 33,839 74,616 61,848
S,G, A & E EXPENSES 19,717 15,830 37,972 29,770
INCOME FROM OPERATIONS 21,141 18,009 36,644 32,078
INTEREST EXPENSE 2,102 948 4,288 1,642
OTHER INCOME, NET OF EXPENSE 2,087 1,219 2,889 1,862
INCOME BEFORE INCOME TAXES 21,126 18,280 35,245 32,298
INCOME TAXES 8,407 7,125 13,899 12,576
NET INCOME $ 12,719 $ 11,155 $ 21,346 $ 19,722
EARNINGS PER COMMON SHARE
BASIC $ 0.66 $ 0.59 $ 1.11 $ 1.04
DILUTED $ 0.64 $ 0.55 $ 1.08 $ 0.99
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
BASIC 19,220,217 19,051,990 19,180,255 19,020,445
DILUTED 19,852,454 20,111,740 19,840,509 19,963,481
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
JUNE 30 JUNE 30
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $21,346 $19,722
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 6,179 5,511
PROVISION FOR DOUBTFUL ACCOUNTS 351 274
PROVISION FOR INVENTORY RESERVE 1,159 340
PROVISION FOR WARRANTY RESERVE 1,767 1,794
(GAIN) ON SALE OF FIXED ASSETS (45) (21)
(GAIN) ON SALE OF LEASE PORTFOLIO (1,890) (204)
PROVISION FOR LEGAL RESERVES 248
(INCREASE) DECREASE IN:
TRADE RECEIVABLES (26,593) (11,124)
FINANCE RECEIVABLES (18,691) (16,505)
INVENTORIES (1,010) (6,457)
PREPAID EXPENSES AND OTHER 628 (906)
OTHER RECEIVABLES (156) 296
OTHER NON-CURRENT ASSETS 1,238 1,001
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE 1,563 5,127
ACCRUED PRODUCT WARRANTY (1,565) (1,242)
OTHER ACCRUED LIABILITIES AND DEFERRED (1,451) (796)
INCOME TAXES PAYABLE 5,883 3,876
NET CASH (USED) BY OPERATING ACTIVITIES (11,039) 686
CASH FLOWS FROM INVESTING ACTIVITIES
PROCEEDS FROM NOTES PAYABLE 3,795
PROCEEDS FROM SALE OF PROPERTY AND
EQUIPMENT - NET 13 53
PROCEEDS FROM SALE OF LEASE PORTFOLIO 41,340 11,808
EXPENDITURES FOR - PROPERTY AND EQUIPMENT (8,862) (17,366)
EXPENDITURES FOR EQUIPMENT ON
OPERATING LEASE (27,812) (13,841)
NET CASH USED BY INVESTING ACTIVITIES 8,474 (19,346)
CASH FLOWS FROM FINANCING ACTIVITIES:
NET BORROWINGS UNDER REVOLVING CREDIT
AGREEMENT 12,421 17,946
PROCEEDS FROM ISSUANCE OF COMMON STOCK 677 1,036
NET CASH PROVIDED BY FINANCING ACTIVITIES 13,098 18,982
NET INCREASE IN CASH 10,533 322
CASH AT BEGINNING OF PERIOD 3,725 5,353
CASH AT END OF PERIOD $14,258 $5,675
ASTEC INDUSTRIES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article
10 of Regulation S-X promulgated under the Securities Act of 1933.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three-month period
ended June 30, 2000 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2000.
The balance sheet at December 31, 1999 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Astec Industries, Inc. and subsidiaries
annual report on Form 10-K for the year ended December 31, 1999.
Note 2. Receivables.
Receivables are net of allowance for doubtful accounts of $1,890,000
and $1,966,000 for June 30, 2000 and December 31, 1999, respectively.
Note 3. Inventories
Inventories are stated at the lower of first-in, first-out
cost or market and consist of the following:
(in thousands)
June 30, 2000 December 31, 1999
Raw Materials $ 38,286 $ 45,641
Work-in-Process 23,575 15,884
Finished Goods 42,832 43,317
Total $ 104,693 $ 104,842
Note 4. Property and Equipment
Property and equipment is stated at cost. Property and equipment is net
of accumulated depreciation of $49,594,000 and $44,503,000 for June 30, 2000
and December 31, 1999, respectively.
Notes to Unaudited Financial Statements - Continued
Note 5. Earnings Per Share
Basic and diluted earnings per share are calculated in accordance with
SFAS No. 128. Basic earnings per share exclude any dilutive effects of options,
warrants and convertible securities. The following table sets forth the
computation of basic and diluted earnings per share:
Three Months Ended June 30, Six Months Ended June 30,
2000 1999 2000 1999
Numerator:
Net income $12,719,000 $11,155,000 $21,346,000 $19,722,000
Denominator:
Denominator for
basic earnings
per share 19,220,217 19,051,990 19,180,255 19,020,445
Effect of
dilutive
securities:
Employee stock
options 632,237 1,059,750 660,254 943,036
Denominator for
diluted earnings
per share 19,852,454 20,111,740 19,840,509 19,963,481
Earnings per common share:
Basic $0.66 $0.59 $1.11 $1.04
Diluted $0.64 $0.55 $1.08 $0.99
Note 6. Comprehensive Income
Total comprehensive income was $21,346,000 for the six months
ended June 30, 2000 and $19,722,000 for the six months ended June 30, 1999.
Note 7. Contingent Matters
Certain customers have financed purchases of Astec products through
arrangements in which the Company is contingently liable for customer debt
aggregating approximately $12,676,000 at June 30, 2000 and $11,776,000 at
December 31, 1999.
<TABLE>
Note 8. Segment Information
Three months ended
June 30, 2000
(in thousands)
Hot-mix Aggregate Mobile Asphalt Pipeline and
Asphalt Processing Construction Underground Utility All
Plants Equipment Equipment Construction Group Others Total
Revenues
from external
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
customers $53,434 $43,582 $20,733 $19,234 $22,743 $159,726
Intersegment
revenues 3,309 3,658 0 481 ( 3,812) 3,636
Segment profit $ 8,162 $ 6,924 $ 4,093 $ 2,278 ($9,794) $ 11,663
Three months ended
June 30, 1999
(in thousands)
Hot-mix Aggregate Mobile Asphalt Pipeline and
Asphalt Processing Construction Underground Utility All
Plants Equipment Equipment Construction Group Others Total
Revenues from
external
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
customers $50,450 $39,544 $23,711 $6,759 $ (506) $119,958
Intersegment
revenues 3,366 3,294 1 7 2,565 9,233
Segment profit $ 7,725 $ 5,723 $ 4,970 $ 329 $(7,664) $11,083
Six months ended
June 30, 2000
(in thousands)
Mobile Pipeline and
Hot-mix Asphalt Aggregate Underground Utility
Asphalt Equipment Processing Construction
Plants Equipment Utility All
Construction Group Others Total
Revenues from
external
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
customers $109,252 $110,077 $ 37,936 $ 39,969 $ 3,364 $300,598
Intersegment
revenues $ 5,432 $ 8,866 0 $ 481 656 $ 15,435
Segment profit $ 13,234 $ 13,822 $ 7,453 $ 3,311 $(17,155) $ 20,665
Six months ended
June 30, 1999
(in thousands)
Hot-mix Mobile
Asphalt Construction Aggragate Pipeline and
Plants Asphalt Processing Construction
Equipment Equipment Underground Utility All
Construction Group Others Total
Revenues
from external
<CAPTION)
<S> <C> <C> <C> <C> <C> <C> <C>
customers $100,150 $ 77,751 $ 41,214 $ 13,110 $ 211 $232,436
Intersegment
revenues 5,780 6,210 1 120 3,609 15,720
Segment profit $ 14,577 $ 11,167 $ 8,150 $ 808 $(14,872) $ 19,830
</TABLE>
In prior periods the Pipeline and Underground Utility Construction
Group did not meet the requirements for disclosure as a separate reportable
segment. American Augers, Inc., which the Company acquired in October 1999
and Trencor, Inc. comprise the Pipeline and Underground Utility Construction
segment.
Reconciliations of the reportable segment totals for profit or loss to the
Company's consolidated totals are as follows:
(in thousands)
Three months ended June 30,
2000 1999
Profit:
Total profit for reportable segments $21,457 $18,747
Other profit (loss) (9,794) (7,664)
Equity in (loss)/income of joint venture (8) 9
Elimination of intersegment profit 1,064 63
Total consolidated net income $12,719 $11,155
Notes to Unaudited Financial Statements - Continued
(in thousands)
Six months ended June 30,
2000 1999
Profit:
Total profit for reportable segments $37,820 $34,702
Other profit (loss) (17,155) (14,872)
Equity in (loss)/income of joint venture (40) 52
Elimination of intersegment profit 721 (160)
Total consolidated net income $21,346 $19,722
Note 9. Legal Matters
There have been no material developments in legal proceedings
previously reported. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Contingencies" in Part I - Item 2 of this
Report.
Note 10. Seasonality
Due to varied product lines, the Company's business is becoming less
seasonal. Approximately 50% to 55% of the Company's business volume
typically occurs during the first six months of the year.
Item 2. Management's Discussion and Analysis Of Financial
Condition And Results Of Operations
When used in this report, press releases and elsewhere by management
or the Company from time to time, the words, "believes," "anticipates," and
"expects" and similar expressions are intended to identify forward-looking
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995) that involve certain risks and uncertainties. All statements regarding
future events, future financial performance and operating results, business
strategy and financing plans are forward-looking statements. These statements
are only predictions. A variety of factors could cause actual results to differ
materially from those anticipated in the Company's forward-looking statements,
which include the risk factors discussed in this report, and other risk
factors that are discussed from time to time in the Company's reports
filed with the SEC. An additional statement made pursuant to the Private
Securities Litigation Reform Act of 1995 and summarizing certain of the
principal risks and uncertainties inherent in the Company's business is
included herein under the caption "Forward Looking Statements." You are
encouraged to read this statement carefully.
Results of Operations
For the three months ended June 30, 2000, net sales increased to
$159,726,000 from $119,958,000 for the three months ended June 30, 1999,
representing a 33.2% increase. The Company completed three acquisitions
during the last two quarters of 1999. The 1999 consolidated financial
statements include the operating results of Breaker Technology, Inc. since
August 13, 1999, and include operating results of American Augers, Inc. and
Superior Industries of Morris, Inc. for the last two months of 1999. The prior
year acquisitions accounted for 72.6% of the increase in net sales during the
second quarter of 2000 over the second quarter of 1999. International sales for
the second quarter of 2000 increased to $16,626,000 from $14,117,000 for the
same period of 1999.
Net sales for the six months ended June 30, 2000 increased
approximately 29.3% to $300,598,000 from $232,436,000 for the same period
of 1999. For the six months ended June 30, 2000, approximately 84% of the
increase in net sales are attributable to the 1999 acquisitions.
Gross profit for the three months ended June 30, 2000
increased to $40,858,000 from $33,839,000 for the three months ended
June 30, 1999, while the gross profit percentage for the three months ended June
30, 2000 decreased to 25.6% from 28.2% for the three months ended June 30,
1999. The decrease in gross profit percentage related primarily to less than
expected sales volume, product mix and under utilization of plant capacity at
the Telsmith, Inc. and Roadtec, Inc. subsidiaries.
Gross profit for the six months ended June 30, 2000 was $74,616,000
compared to gross profit of $61,848,000 for the same period
of 1999. The gross profit percentage for the six months ended June 30, 2000
was 24.8% compared to 26.6% for the six months ended June 30, 1999. The
decrease in the gross profit percentage for the six months ended June 30, 2000
related to product mix, under utilization of plant capacity, and product pricing
at the Telsmith, Inc. and Trencor, Inc. subsidiaries.
Selling, general and administrative expenses for the three
months ended June 30, 2000 were $19,717,000 or 12.3% of net sales,
compared to $15,830,000 or 13.2% of net sales for the three months
ended June 30, 1999. Approximately $3,467,000, or 89.2% of the increase in
selling, general and administrative expenses for the three months ended June 30,
2000 compared to the same quarter in 1999, related to the 1999 acquisitions.
Selling, general and administrative expenses for the six
months ended June 30, 2000 increased to $37,972,000, or 12.6% of net
sales, from $29,770,000, or 12.8% of net sales, for the six months
ended June 30, 1999, an increase of $8,202,000, or 27.6%. Approximately 80.0%
ofthe increase in selling, general and administrative expenses for the six
months ended June 30, 2000 compared to the same period last year related to the
1999 acquisitions.
Interest expense increased to $2,102,000 for the three
months ended June 30, 2000 from $948,000 for the three months ended June
30, 1999. Interest expense as a percentage of net sales increased to
approximately 1.3% for the three months ended June 30, 2000 from 0.8% for the
quarter ended June 30, 1999. Interest expense for the six months ended June
30, 2000 compared to the six months ended June 30, 1999 increased to $4,288,000
from $1,642,000, respectively. Interest expense was 1.4% and 0.7% of net
sales for the six months ended June 30, 2000 and 1999, respectively. The
increase in interest expense related mainly to debt incurred in connection with
the 1999
acquisitions.
Other income, net of other expense, was $2,087,000, or
1.3% of net sales for the quarter ended June 30, 2000, compared to
other income, net of expense of $1,219,000, or 1.0% of net sales for the quarter
ended June 30, 1999. Other income, net of other expense for the six months ended
June 30, 2000 was $2,889,000 compared to other income, net of other expense
for the six months ended June 30, 1999 of $1,862,000, an increase of
$1,027,000. The increase in other income, net of other expense for the three
and six months ended June 30, 2000 related largely to gains from lease
portfolio sales.
Income tax expense for the second quarter of 2000 increased to
$8,407,000 from $7,125,000 at June 30, 1999, an increase of $1,282,000 or
18%. Tax expense is 5.3% and 5.9% of net sales for the three months ended
June 30, 2000 and 1999, respectively. Income tax expense for the six months
ended June 30, 2000 was $13,899,000 or 4.6% of net sales, while income tax
expense for the six months ended June 30, 1999 was $12,576,000, or 5.4% of
net sales. The effective tax rate for the three and six months ended June 30,
2000 was 39.8% and 39.4%, respectively. The effective tax rate for the three
and six months ended June 30, 1999 was 39.0% and 38.9%, respectively.
Backlog of orders at June 30, 2000 was $68,847,000 compared to
$93,266,000 at June 30, 1999, restated for acquisitions. The backlog of
confirmed orders on June 30, 2000 was down due primarily to decreased asphalt
plant orders at Astec, Inc. and aggregate processing equipment orders at
Kolberg-Pioneer, Inc.
Liquidity and Capital Resources
As of June 30, 2000, the Company had working capital of
$158,453,000 compared to $114,889,000 at December 31, 1999.
Total short-term borrowings, including current maturities
of long-term debt, were $4,400,000 at June 30, 2000 compared to $587,000
at June 30, 1999. A financing agreement for imported manufacturing inventory
accounts for $3,800,000 of the short-term borrowings at June 30, 2000,
while outstanding Industrial Development Revenue Bonds accounted for $500,000
of the current maturities of long-term debt at June 30, 2000 and December
31, 1999.
Long-term debt, less current maturities, increased to
$115,099,000 at June 30, 2000 from $102,685,000 at December 31, 1999, an
increase of $12,414,000. At June 30, 2000 debt of approximately
$95,325,000 was outstanding under the revolving credit facility and
$19,700,000 was the aggregate principal amount of Industrial Revenue Bonds
outstanding. The increase in debt from December 31, 2000 related to the
funding of working capital needs using the revolving credit facility.
Capital expenditures in 2000 for plant expansion and for further
modernization of the Company's manufacturing processes are
expected to be approximately $20,000,000. The Company expects to finance
these expenditures using the revolving credit facility. Capital
expenditures for the six months ended June 30, 2000 were $8,862,000.
Effective April 7, 2000, the Company renegotiated its
revolving credit facility and increased the amount of available credit from
$90,000,000 to $150,000,000. As part of the revolving credit facility,
Astec Industries, Inc. may borrow up to $130,000,000, while Astec Financial
Services, Inc. has a segregated portion of up to $50,000,000, total borrowing
limited to $150,000,000. The Company had two term loans related to the
1999 acquisitions outstanding at December 31, 1999 totaling
$35,000,000, which were rolled into the revolving credit facility. At June
30, 2000, the Company's total outstanding debt under the revolving credit
facility was $95,325,000 with Astec Financial Services' portion at $30,325,000
on that date. Advances to Astec Financial Services, Inc. under this line of
credit are limited to "Eligible Receivables" of Astec Financial Services, Inc.
as defined in the credit agreement that governs the credit facility. The
Company was in compliance with all financial covenants related to the line of
credit at June 30, 2000.
Contingencies
The Company is engaged in certain pending litigation involving claims
or other matters arising in the ordinary course of business. Most of these
claims involve product liability or other tort claims for property
damage or personal injury against which the Company is insured. As a part of
its litigation management program, the Company maintains general liability
insurance covering product liability and other similar tort claims
providing the Company coverage of $8,000,000 subject to a substantial self-
insured retention under the terms of which the Company has the right to
coordinate and control the management of its claims and the defense of these
actions.
Management has reviewed all claims and lawsuits and, upon
the advice of its litigation counsel, has made provision for any
estimable losses. Notwithstanding the foregoing, the Company is unable to
predict the ultimate outcome of any outstanding claims and lawsuits.
Risk Factors
A decrease in government funding of highway construction and
maintenance may adversely affect our operating results
Many of our customers depend substantially on government funding of
highway construction and maintenance and other infrastructure projects.
Federal government funding of infrastructure projects is usually accomplished
through bills, which establish funding over a multi-year period. The most
recent spending bill was signed into law in June 1998 and covers
federal spending through 2003. We cannot assure you that this legislation
will not be revised in future congressional sessions, that recent increases in
federal funding of infrastructure will continue or that federal funding will
not decrease in the future, especially in the event of an economic recession.
In addition, Congress could pass legislation in future sessions, which would
allow for the diversion of highway funds for other national purposes or could
restrict funding of infrastructure projects unless states comply with certain
federal policies. Any decrease or delay in government funding of highway
construction and maintenance and other infrastructure projects could reduce
our revenues and profits.
Downturns in the general economy or the commercial
construction industry may adversely affect our revenues and operating results
Demand for many of our products, especially in the
commercial construction industry, is cyclical. Sales of our products
are sensitive to the state of the U.S., foreign and regional economies in
general, and in particular, changes in commercial construction spending and
government infrastructure spending. We could face a downturn in the commercial
construction industry based upon a number of factors, including:
- the level of interest rates;
- availability of funds for construction;
- labor disputes in the construction industry causing work
stoppages;
- energy or building materials shortages; and
- inclement weather.
General economic downturns, including any downturns in the commercial
construction industry, could result in a material decrease in our revenues and
operating results.
Acquisitions that we have made in the past and future acquisitions involve
risks that could adversely affect our future financial results
We have completed eight acquisitions since 1994 and plan to
acquire additional businesses in the future. We cannot guarantee
that we will achieve the benefits expected to be realized from our
acquisitions. Our future success may be limited because of unforeseen
expenses, difficulties, complications, delays and other risks inherent in
acquiring businesses, including the following:
- we may have difficulty integrating the financial and
administrative
functions of acquired businesses
- acquisitions may divert management's attention from our
existing
operations
- we may have difficulty in competing successfully for
available acquisition
candidates, completing future acquisitions or accurately
estimating the
financial effect of any businesses we acquire
- we may have delays in realizing the benefits of our
strategies for an acquired business
- we may not be able to retain key employees necessary to
continue the operations of the acquired business
- acquisition costs may deplete significant cash amounts or
may decrease our operating income
- we may choose to acquire a company that is less
profitable than we are or has lower profit margins than we do
- future acquired companies may have unknown liabilities
that could require us to spend significant amounts of additional capital
Competition could reduce revenue from our products and services
We currently face strong competition in product performance, price
and service. Some of our national competitors have greater
financial, product development and marketing resources than we have. If
competition in our industry intensifies or our current competitors lower their
prices for competing products, we may be required to lower the prices we charge
for our products. We may also lose sales and be required to lower our prices
as our competitors further develop and enhance their product lines. This may
reduce revenue from our products and services.
We may face product liability claims or other liabilities
due to the nature of our business We manufacture heavy machinery, which is
used by our customers at excavation and construction sites and on high-traffic
roads. Any defect in, or improper operation of, our equipment can result in
personal injury and death, and damage to or destruction of property, any of
which could cause product liability claims to be filed against us. The amount
and scope of our insurance coverage may not be adequate to cover all losses or
liabilities we may incur in the event of a product liability claim. We may not
be able to maintain insurance of the types or at the levels we deem necessary
or adequate or at rates we consider reasonable. Any liabilities not covered by
insurance could reduce our profitability or have an adverse effect on our
financial condition.
We may be adversely affected by governmental regulations
Our hot-mix asphalt plants contain air pollution control
equipment that must comply with performance standards promulgated by the
Environmental Protection Agency. We cannot assure you that these
performance standards will not be increased in the future. Changes in these
requirements could cause us to undertake costly measures to redesign or modify
our equipment or otherwise adversely affect the manufacturing processes of our
products. Such changes could have a material adverse effect on our operating
results.
Also, due to the size and weight of some of the equipment that we
manufacture, we often are required to comply with conflicting state regulations
on the maximum weight transportable on highways and roads.
In addition, some states regulate the operation of our component
equipment, including asphalt mixing plants and soil remediation equipment, and
most states regulate the accuracy of weights and measures, which affect some of
the control systems that we manufacture. We cannot assure you that we will not
incur material costs or liabilities in connection with the regulatory
requirements applicable to our business.
An increase in the price of oil or decrease in the
availability of oil could reduce demand for our products.
A significant portion of our revenues relates to the sale
of equipment that produces asphalt mix. A major component of asphalt
is oil and asphalt prices correlate with the price and availability of oil. A
material rise in the price of oil or a material decrease in the availability of
oil would increase the cost of producing asphalt, which would likely decrease
demand for asphalt, resulting in decreased demand for our products. This could
have a material adverse effect on our revenues and results of operations.
We rely on proprietary technologies that we may be unable
to protect from infringement or which may infringe technology owned by
others We hold numerous patents covering technology and
applications related to many of our products and systems, and numerous
trademarks and trade names registered with the U.S. Patent and Trademark
Office and in foreign countries. There can be no assurance that the breadth or
degree of protection of our existing or future patents or trademarks will
adequately protect us against infringements, or that any pending patent or
trademark applications will result in issued patents or trademarks. There can
also be no assurance that our patents, registered trademarks or patent
applications, if any, will be upheld if challenged,
or that competitors will not develop similar or superior
methods or products outside the protection of our patents. This could reduce
demand for our products and materially decrease our revenues. It is
possible that our existing patents, trademarks or other rights may not be valid
or that we may infringe existing or future patents, trademarks or proprietary
rights of our competitors. In the event that our products are deemed to
infringe upon the patents or proprietary rights of others, we could be required
to modify the design of our products, change the name of our products or
obtain a license for the use of some of the technologies used in our products.
There can be no assurance that we would be able to do any of the foregoing in a
timely manner, upon acceptable terms and conditions, or at all, and the failure
to do so could have an adverse effect on our business and results of operations.
Our success depends on key members of our management and
other employees Dr. J. Don Brock, our Chairman and President, is of
significant importance to our business and operations. The loss of his
services may adversely affect our business. In addition, our ability to
attract and retain qualified engineers, skilled manufacturing personnel and
other professionals, either through direct hiring, or acquisition of other
businesses employing such professionals, will also be an important factor in
determining our future success.
We face risks of managing and expanding in international
markets
For the first half of 2000, international sales
represented approximately 9.6% of our total sales. We plan to continue to
increase our presence in international markets. In connection with any
increase in international sales efforts, we will need to hire, train and retain
qualified personnel in countries where language, cultural or regulatory
barriers may exist. In addition, international revenues are subject to the
following risks:
- fluctuating currency exchange rates which can reduce the
profitability of foreign sales;
- the burden of complying with a wide variety of foreign
laws and regulations;
- dependence on foreign sales agents;? political and economic instability of
governments; and
- the imposition of protective legislation such as import or export barriers.
Our quarterly operating results are likely to fluctuate,
which may decrease our stock price
Our quarterly revenues, expenses and operating results
have varied significantly in the past and are likely to vary
significantly from quarter to quarter in the future. As a result, our
operating results may fall below the expectations of securities analysts and
investors in some quarters, which could result in a decrease in the market
price of our common stock. The reasons our quarterly results may
fluctuate include:
- general competitive and economic conditions;
- delays in, or uneven timing in the delivery of, customer
orders;
- the introduction of new products by us or our competitors;
- product supply shortages; and
- reduced demand due to adverse weather conditions.
Period to period comparisons of such items are not
necessarily meaningful and, as a result, should not be relied on as
indications of future performance.
Our Articles of Incorporation, Bylaws, Rights Agreement and
Tennessee law may inhibit a takeover
Our charter, bylaws and Tennessee law contain provisions
that may delay, deter or inhibit a future acquisition, or an attempt
to obtain control, of Astec. This could occur even if our shareholders are
offered an attractive value for their shares or if a substantial number or even
a majority of our shareholders believe the takeover is in their best interest.
These provisions are intended to encourage any person interested in acquiring
us or obtaining control of us to negotiate with and obtain the approval of our
Board of Directors in connection with the transaction. Provisions that could
delay, deter or inhibit a future acquisition, or an attempt to obtain control,
of us include the following:
- a staggered Board of Directors;
- requiring a two-thirds vote of the total number of shares
issued and outstanding to remove directors other than for cause;
- requiring advanced notice of actions proposed by shareholders for
consideration at shareholder meetings;
- limiting the right of shareholders to call a special meeting of
shareholders;
- requiring that all shareholders entitled to vote on an
action provide written consent in order for shareholders to act without
holding a shareholders meeting; and
- the Tennessee Control Share Acquisition Act.
In addition, the rights of holders of our common stock will be subject
to, and may be adversely affected by, the rights of the holders of our
preferred stock that may be issued in the future and that may be
senior to the rights of holders of our common stock. On December 22, 1995, our
Board of Directors approved a Shareholder Protection Rights Agreement, which
provides for one preferred stock purchase right in respect of each share of
our common stock. These rights become exercisable upon a person or group of
affiliated persons acquiring 15% or more of our then-outstanding common stock
by all persons other than an existing 15% shareholder. This Rights
Agreement also could discourage bids for your shares of common stock at a
premium and could have a material adverse effect on the market price of your
shares.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that are based on the beliefs of our management as well as
assumptions that are based on the beliefs of our management. Forward-looking
statements are inherently subject to risks and uncertainties, many of which
cannot be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, financial and otherwise, could
differ materially from those set forth in or contemplated by the forward-looking
statements contained herein. Readers are referred to risk factors described
herein and to documents filed by us with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof. We do
not undertake any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. Subsequent
written and oral forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained in this Quarterly Report on Form 10-Q.
Item 2. Quantitative and Qualitative Disclosures About Market Risk.
Borrowings under our credit facility accrue interest at
various rates, which, at the Company's option, can be based on either the
prime rate or the London Interbank Offering Rate. As of June 30, 2000, we
had approximately $95,325,000 outstanding under the facility which exposes
the Company to interest rate risk. Changes in interest rates which
dramatically increase the interest rate on the credit facility would make it
more costly to borrow under this facility. Astec Financial Services, Inc. is
currently using interest rate derivative instruments to manage exposure to
interest rate changes. We do not currently engage in foreign currency hedging
transactions to manage exposure for transactions denominated in currencies
other than U.S. dollars.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There have been no material developments in the legal
proceedings previously reported by the registrant since the filing of
its Annual Report on Form 10-K for the year ended December 31, 1999. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations - Contingencies" in Part I - Item 2 of this Report.
Item 5. Other Items
The proxy statement solicited by the Board of Directors of the
Company with respect to the 2000 Annual Meeting of Shareholders will confer
discretionary authority on the proxies named therein to vote on any
shareholder proposals intended to be presented for consideration at
such Annual Meeting that are submitted to the Company after November 23, 2000.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No. Description
3.1 Restated Charter of the Company (incorporated by reference
to the Company's Registration Statement on Form S-1,
effective June 18, 1986, File No. 33-5348).
3.2 Articles of Amendment to the Restated Charter of the
Company, effective September 12, 1988 (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1988, File No. 0-14714).
3.3 Articles of Amendment to the Restated Charter of the
Company, effective June 8, 1989 (incorporated by reference
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989, File No. 0-14714).
3.4 Articles of Amendment to the Restated Charter of the
Company, effective January 15, 1999 (incorporated by
reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999, File No. 0-14714).
3.5 Amended and Restated Bylaws of the Company, adopted
March 14, 1990 (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December
31, 1989, File No. 0-14714).
4.1 Trust Indenture between City of Mequon and FirstStar
Trust Company, as Trustee, dated as of February 1, 1994
(incorporated by reference to the Company's Annual Report
on Form 10-K for the year ended December 31, 1993, File
No. 0-14714).
4.2 Indenture of Trust, dated April 1, 1994, by and between
Grapevine Industrial Development Corporation and Bank
One, Texas, NA, as Trustee (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993, File No. 0-14714).
4.3 Shareholder Protection Rights Agreement, dated December
22, 1995 (incorporated by reference to the Company's
Current Report on Form 8-K dated December 22, 1995, File No. 0-14714).
10.1 Third Amended and Restated Credit Agreement dated as
of April 7, 2000 by and amoung Astec Industries, Inc., Astec
Financial Services, Inc. the financial institution parties thereto
in their capacities as lenders and Bank One, NA, as agent.
27 Financial Data Schedule (EDGAR Filing Only).
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the quarter ended June 30, 2000.
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.
ASTEC INDUSTRIES, INC.
(Registrant)
August 14, 2000 /s/ J. Don Brock
Date J. Don Brock
Chairman of the Board
and President
August 14, 2000 /s/ F. McKamy Hall
Date F. McKamy Hall
Vice President
and Chief
Financial Officer
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
ASTEC INDUSTRIES, INC. and
ASTEC FINANCIAL SERVICES, INC.
as Borrowers,
THE LENDERS NAMED HEREIN
and
BANK ONE, NA(f/k/a The First National Bank of Chicago)
as Agent
DATED AS OF
April 7, 2000
BANC ONE CAPITAL MARKETS, INC.
as Lead Arranger and Sole Book Runner
AMSOUTH BANK
and
SUNTRUST BANK
as Co-Agents
TABLE OF CONTENTS Page
ARTICLE I DEFINITIONS 1
ARTICLE II THE CREDITS 17
2.1. Revolving Commitment. 17
2.1.1 Tranche A Commitment 17
2.1.2 Tranche B Commitment 17
2.1.3 Limitations on Obligations 18
2.2. Loans. 18
2.2.1 Ratable Loans; Types of Advances 18
2.2.2 Minimum Amount of Each Advance 18
2.2.3 Method of Selecting Types and Interest
Periods for New Advances 18
2.2.4 Conversion and Continuation of Outstanding
Advances 19
2.2.5 Changes in Interest Rate, etc 20
2.2.6 Interest Payment Dates; Interest and Fee
Basis 20
2.2.7 Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions 20
2.2.8 Rates Applicable After Default 20
2.3. Swing Line Loans. 21
2.3.1 Making of Swing Line Loans. 21
2.3.2 Conversions of and Participations in Swing
Line Loans. 22
2.4. Fees; Reductions in Aggregate Commitment. 23
2.4.1 Fees. 23
2.4.2 Voluntary Reductions; Prepayments 23
2.4.3 Mandatory Reductions in Aggregate
Commitment. 24
2.4.4 Mandatory Reduction of Tranche B Loans 24
2.5. Method of Payment 24
2.6. Notes; Telephonic Notices 25
2.7. Lending Installations 25
2.8. Non-Receipt of Funds by the Agent 25
2.9. [Intentionally Omitted]. 26
2.10. Application of Payments 26
2.11. Facility Letters of Credit. 26
2.11.1 Obligation to Issue 26
2.11.2 Conditions for Issuance 26
2.11.3 Procedure for Issuance of Facility Letters of
Credit. 27
2.11.4 Reimbursement Obligations. 27
2.11.5 Participation. 28
2.11.6 Compensation for Facility Letters of Credit 29
2.11.7 Letter of Credit Collateral Account 30
2.11.8 Nature of Obligations. 30
2.11.9 Existing Letters of Credit 31
ARTICLE III TAXES; YIELD PROTECTION 31
3.1. Taxes 31
3.2. Yield Protection 33
3.3. Changes in Capital Adequacy Regulations 34
3.4. Availability of Types of Advances 34
3.5. Funding Indemnification 35
3.6. Lender Statements; Survival of Indemnity 35
ARTICLE IV CONDITIONS PRECEDENT 35
4.1. Initial Credit Extension 35
4.2. Each Credit Extension 37
ARTICLE V REPRESENTATIONS AND WARRANTIES OF
THE BORROWERS 37
5.1. Corporate Existence and Standing 37
5.2. Authorization and Validity 37
5.3. No Conflict; Government Consent 38
5.4. Financial Statements 38
5.5. Material Adverse Change 38
5.6. Taxes 38
5.7. Litigation and Contingent Obligations 38
5.8. Subsidiaries and Affiliates 39
5.9. ERISA 39
5.10. Accuracy of Information 39
5.11. Regulation U 39
5.12. Material Agreements 39
5.13. Compliance With Laws 40
5.14. Environmental Warranties 40
5.15. Ownership of Properties 41
5.16. Investment Company Act 41
5.17. Public Utility Holding Company Act 41
5.18. Plan Assets; Prohibited Transactions 41
5.19. Intellectual Property 41
5.20. Solvency 41
5.21. Licenses 42
5.22. Pledge Agreement 42
ARTICLE VI COVENANTS 42
6.1. Financial Reporting 43
6.2. Use of Proceeds 44
6.3. Notice of Default 44
6.4. Conduct of Business 44
6.5. Taxes 44
6.6. Insurance 45
6.7. Compliance with Laws 45
6.8. Maintenance of Properties 45
6.9. Inspection 45
6.10. Dividends 45
6.11. Indebtedness 45
6.12. Merger 46
6.13. Sale of Assets 46
6.14. Sale of Accounts 46
6.15. Sale and Leaseback 46
6.16. Investments and Acquisitions 47
6.17. Contingent Obligations 48
6.18. Liens 48
6.19. Transactions with Affiliates 49
6.20. Letters of Credit 49
6.21. Amendments to Certain Agreements 49
6.22. Financial Covenants. 49
6.22.1 Leverage Ratio 49
6.22.2 Consolidated Tangible Net Worth 50
6.22.3 Rentals 50
6.22.4 Interest Coverage Ratio 50
6.22.5 AFS Leases 50
6.23. Fixed Asset Expenditures 50
6.24. Subordinated Indebtedness 50
6.25. Accounting Method 50
6.26. Environmental Covenant 50
6.27. Litigation and Other Notices 51
6.28. Pledge of Stock of Foreign Subsidiaries 51
ARTICLE VII DEFAULTS 51
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS
AND REMEDIES 54
8.1. Acceleration. 54
8.2. Amendments 55
8.3. Preservation of Rights 56
ARTICLE IX GENERAL PROVISIONS 57
9.1. Survival of Representations 57
9.2. Governmental Regulation 57
9.3. Taxes 57
9.4. Headings 57
9.5. Entire Agreement 57
9.6. Several Obligations; Benefits of this Agreement 57
9.7. Expenses; Indemnification 57
9.8. Numbers of Documents 58
9.9. Accounting 58
9.10. Severability of Provisions 58
9.11. Nonliability of Lenders 58
9.12. Confidentiality 58
9.13. New Credit Facilities 59
9.14. Interest Limitation 59
9.15. Loan Documents 60
9.16. Interpretation 60
9.17. Nonreliance 60
9.18. Disclosure 60
ARTICLE X THE AGENT 61
10.1. Appointment; Nature of Relationship 61
10.2. Powers 61
10.3. General Immunity 61
10.4. No Responsibility for Loans, Recitals, etc 61
10.5. Action on Instructions of Lenders 62
10.6. Employment of Agents and Counsel 62
10.7. Reliance on Documents; Counsel 62
10.8. Agent's Reimbursement and Indemnification 62
10.9. Rights as a Lender 63
10.10. Lender Credit Decision 63
10.11. Successor Agent 63
10.12. Notice of Default 64
10.13. Delegation to Affiliates 64
10.14. Execution of Collateral Documents 64
10.15. Collateral Releases 64
10.16. Co-Agents 64
ARTICLE XI SETOFF; RATABLE PAYMENTS 65
11.1. Setoff 65
11.2. Ratable Payments 65
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS 65
12.1. Successors and Assigns 65
12.2. Participations. 66
12.2.1 Permitted Participants; Effect 66
12.2.2 Voting Rights 66
12.2.3 Benefit of Setoff 66
12.3. Assignments. 66
12.3.1 Permitted Assignments 67
12.3.2 Effect; Effective Date 67
12.4. Dissemination of Information 67
12.5. Tax Treatment 68
ARTICLE XIII NOTICES 68
13.1. Giving Notice 68
13.2. Change of Address 68
ARTICLE XIV COUNTERPARTS 68
ARTICLE XV CHOICE OF LAW, CONSENT TO
JURISDICTION, WAIVER OF JURY TRIAL 69
15.1. CHOICE OF LAW 69
15.2. CONSENT TO JURISDICTION 69
15.3. WAIVER OF JURY TRIAL 69
ARTICLE XVI ASTEC GUARANTY 70
16.1. Guaranty of Payment and Performance of Obligations of AFS 70
16.2. Additional Amounts 70
16.3. Waivers by Astec: Agent's and Lenders' Freedom to Act 70
16.4. Unenforceability of AFS Obligations Against AFS 71
16.5. Subrogation; Subordination 71
16.6. Termination 72
16.7. Effect of Bankruptcy 72
16.8. Setoff 72
16.9. Further Assurances 72
EXHIBITS
EXHIBIT A Compliance Certificate
EXHIBIT B-1 Tranche A Note
EXHIBIT B-2 Tranche B Note
EXHIBIT B-3 Swing Line Note
EXHIBIT C-1 Form of Opinion of Counsel to Astec
EXHIBIT C-2 Form of Opinion of Special Canadian Counsel
EXHIBIT D Pledge Agreement
EXHIBIT E Assignment Agreement
EXHIBIT F Borrowing Base Certificate
SCHEDULES
Schedule 1 Revolving Commitments/Percentages
Schedule 2.11.9 Existing Letters of Credit
Schedule 5.7 Litigation
Schedule 5.8 Subsidiaries and Affiliates
Schedule 5.14 Environmental Matters
Schedule 5.15 Properties and Liens
Schedule 5.19 Intellectual Property
Schedule 6.11 Indebtedness
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Third Amended and Restated Credit Agreement, dated as of
April 7, 2000, is among Astec Industries, Inc., a Tennessee corporation,
Astec Financial Services, Inc., a Tennessee corporation, the financial
institutions from time to time parties hereto as Lenders and Bank One,
NA (f/k/a The First National Bank of Chicago), a national banking
association having its principal office in Chicago, Illinois, as Agent.
RECITALS
A. The Borrowers, the Lenders named therein and the
Agent entered into a certain Second Amended and Restated Credit
Agreement dated as of November 24, 1997, as amended by a First
Amendment and Waiver dated as of October 30, 1998, a Second Amendment dated
as of June 3, 1999, and a Third Amendment dated as
of August 11, 1999 (as so amended, the "Existing Credit Agreement"),
pursuant to which such Lenders have provided certain revolving credit,
letter of credit and swing line facilities to the Borrowers.
B. Astec has requested that the Existing Credit Agreement
be amended and restated in order to (i) increase the
Aggregate Commitment to $150,000,000 and (ii) make certain other
amendments thereto.
AGREEMENT NOW, THEREFORE, in consideration of the undertakings
set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by
which any Credit Party (a) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction
in a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the
election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding partnership interests of a partnership.
"Adjusted EBITDA" means for any period EBITDA for such period
calculated on a proforma basis assuming that any Acquisition occurring
during such period and permitted under this Agreement occurred on and
as of the first day of such period.
"Advance" means a borrowing hereunder (or conversion or continuation thereof)
consisting of the aggregate amount of the several
Loans made on the same Borrowing Date (or date of conversion or
continuation) by the Lenders to a Borrower of the same Type and, in the
case of Eurodollar Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities (or
other ownership interests) of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.
"AFS" means Astec Financial Services, Inc., a Tennessee
corporation and a Borrower hereunder, its successors and assigns.
"Agent" means Bank One in its capacity as contractual
representative of the Lenders pursuant to Article X, and
not in its individual capacity as a Lender, and any successor Agent
appointed pursuant to Article X.
"Aggregate Commitment" means $150,000,000 as such amount
may be reduced from time to time pursuant to the terms hereof.
"Aggregate Tranche A Sublimit" means $130,000,000, as such
amount may be reduced from time to time pursuant to the terms hereof.
"Aggregate Tranche B Sublimit" means $50,000,000, as such
amount may be reduced from time to time pursuant to the terms hereof.
"Agreement" means this Third Amended and Restated Credit
Agreement, as it may be amended or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in a manner
consistent with that used in preparing the financial statements referred to
in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per
annum equal to the higher of (a) the Prime Rate for such day and (b) the
sum of Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Margin" means, with respect to the Commitment Fee
and each Type of Loan described below, the rate of interest per annum
shown below for the range of Leverage Ratios specified below:
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6
Leverage
Ratio >3.75 >3.25 # >2.75 # >2.25 # > 1.75 # # 1.75
3.75 3.25 2.75 2.25
Floating
Rate
Advances .50% .25% 0% -.25% -.25% -.25%
Eurodollar
Advances 2.00% 1.75% 1.50% 1.25% 1.00% .75%
Commitment
Fee .50% .375% .375% .25% .25% .25%
The Leverage Ratio shall be calculated as of the end of each fiscal
quarter, and shall be reported to the Agent pursuant to a Compliance
Certificate executed by an Authorized Officer of Astec and delivered in
accordance with Section 6.1(d) hereof. Not later than five (5) Business
Days after receipt by the Agent of each Compliance Certificate delivered
by Astec in accordance with Section 6.1(d) for each fiscal
quarter or fiscal year, as applicable, Astec, subject to the approval of the
Agent, shall determine the Leverage Ratio for the applicable period and
shall promptly notify the Agent, who shall in turn promptly notify the
Lenders of such determination and of any change in each Applicable Margin
resulting therefrom. Each Applicable Margin shall be adjusted
(upwards or downwards, as appropriate), if necessary, based on the
Leverage Ratio as of the end of the fiscal quarter immediately preceding
the date of determination. The adjustment, if any, to the Applicable
Margin shall be effective as to all Advances and Commitment Fees commencing
on the fifth (5th) Business Day after the delivery of such
quarterly or annual financial statements delivered in accordance with Sections
6.1(a) and 6.1(b) and such related Compliance Certificate of an
Authorized Officer of Astec delivered in accordance with Section 6.1(d) and
shall be effective from and including the fifth (5th) Business Day after the
date the Agent receives such Compliance Certificate to but excluding the
fifth (5th) Business Day after the date on which the next Compliance
Certificate is required to be delivered pursuant to Section 6.1(d);
provided, however, that, in the event that Astec shall fail at any time to
furnish to the Lenders such financial statements and any such Compliance
Certificate required to be delivered pursuant to Sections 6.1(a), 6.1(b) and
6.1(d), the Applicable Margin set forth in Level 1 above shall apply
until the fifth (5th) Business Day after such time as all such financial
statements and each such Compliance Certificate are so delivered to the Agent
and the Lenders. Each determination of the Leverage Ratio by Astec
(subject to approval by the Agent) and each determination of the
Applicable Margin by the Agent in accordance with this definition shall be
conclusive and binding on the parties absent manifest error.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead
Arranger and Sole Book Runner.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Asset Disposition" means any sale, lease or other
disposition of any asset of any Credit Party in a single transaction or in
a series of related transactions, other than (a) the sale of inventory
in the ordinary course of business, (b) sales, leases or other dispositions
by any Credit Party to Astec or any Wholly-Owned Subsidiary of Astec, (c)
sales, leases or other dispositions of used, worn-out or surplus
equipment in the ordinary course of business, (d) other sales, leases and
dispositions of any Property in a single transaction or series of related
transactions to the extent that (x) the fair market value of the Property
transferred in any such single transaction or series of related transactions
does not exceed $1,000,000 and (y) the aggregate fair market value of all
such Property transferred after the date hereof does not exceed
$5,000,000, (e) Permitted Recourse Lease Sales and (f) sales by AFS of
financing or operating leases (including Qualifying Financing Leases and
Qualifying Operating Leases) and other chattel paper (including
Qualifying Chattel Paper), on a non-recourse basis provided that the Tranche B
Revolving Loans at no time exceed the Tranche B Borrowing Base.
"Astec" means Astec Industries, Inc., a Tennessee corporation
and a Borrower hereunder, its successors and assigns.
"Authorized Officer" means any of the President, Vice
President and Corporate Counsel, or Vice President and Corporate
Controller of a Borrower acting singly, or other employee of a Borrower
designated in writing to the Lenders.
"Bank One" means Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, in its individual
capacity, and its successors.
"Bank One Letter Agreements" means collectively (a) the Letter
Agreement dated as of August 13, 1999, as amended by a First
Amendment dated as of December 29, 1999, between Astec and Bank
One and (b) the Letter Agreement dated as of October 29, 1999, as
amended by a First Amendment dated as of December 29, 1999,
between Astec and Bank One.
"Bank One Term Loans" means collectively (a) the term loan in
the amount of $15,000,000 made by Bank One to Astec on August 13,
1999 and (b) the term loan in the amount of $20,000,000
made by Bank One to Astec on October 29, 1999, in each case made by Bank
One pursuant to, and subject to the terms and conditions of,
the applicable Bank One Letter Agreement.
"Bond Transactions" means (a) the issuance of the Trencor
Letter of Credit and (b) the issuance of Variable Rate Demand Industrial
Revenue Bonds Series 1994 in the approximate value of $6,000,000 to
finance the expansion of Telsmith, Inc.'s Mequon, Wisconsin
facility and the acquisition of equipment to be used in the operating of
Telsmith, Inc.'s business.
"Borrowers" means collectively Astec and AFS. Reference to a
Borrower hereunder shall mean each of Astec and AFS unless the
context specifically refers to one of them. Reference to Borrowers
hereunder shall mean both of Astec and AFS jointly and severally.
"Borrowing Base Certificate" means a Borrowing Base Certificate
in substantially the form of Exhibit F hereto.
"Borrowing Date" means a date on which a Loan is made hereunder.
"Borrowing Notice" is defined in Section 2.2.3.
"Business Day" means (a) with respect to any borrowing,
payment or rate selection of Eurodollar Advances, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago,
Illinois and New York, New York for the conduct of substantially all of
their commercial lending activities, interbank wire transfers can be made
on the Fedwire system and dealings in United States dollars are carried
on in the London interbank market and (b) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in
Chicago, Illinois for the conduct of substantially all of their commercial
lending activities and interbank wire transfers can be made on the
Fedwire system.
"Capitalized Lease Obligations" of a Person means, without
duplication, any rental obligation which under Agreement Accounting
Principles is or will be required to be capitalized on a balance sheet of
such Person, or for which the amount of the asset and liability
thereunder as if so capitalized should be disclosed in a note to such
balance sheet, in each case taken at the amount thereof account for as
indebtedness (net of interest expense) in accordance with Agreement
Accounting Principles.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from
time to time.
"CERCLIS" means the Comprehensive Environmental Response
Compensation Liability Information System List, as amended
from time to
time.
"Change in Control" means the acquisition by any Person, or two
or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of twenty-five percent (25%)
or more of the outstanding shares of voting stock of Astec.
"Closing Date" is defined in Section 4.1.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Collateral" has the meaning attributed to such term in the Pledge
Agreement.
"Collateral Shortfall Amount" is defined in Section 8.1(a).
"Commitment Fee" is defined in Section 2.4.1.
"Compliance Certificate" means a compliance certificate, in
substantially the form of Exhibit A hereto, with appropriate insertions,
signed by Astec's Chief Financial Officer, showing the calculations
necessary to determine compliance with this Agreement and stating that
no Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, describing the nature and status thereof and any action
the Borrowers are taking or propose to take with respect thereto.
"Condemnation" is defined in Section 7.8.
"Consolidated Funded Debt" means for the Credit Parties on a
consolidated basis the sum of (x) items (a) through (e) of the definition of
Indebtedness, plus (y) Contingent Obligations (other than Contingent
Obligations for notes and accounts receivable sold of up to $5,000,000)
plus (z) unreimbursed drawings on Subsidiary Letters of Credit (but
excluding other Letters of Credit).
"Consolidated Net Income" means, for any period, the
consolidated net income of the Credit Parties determined on a
consolidated basis in accordance with Agreement Accounting Principles.
"Consolidated Net Revenue" means the consolidated net
revenue of the Credit Parties for the most recently completed fiscal year
determined on a consolidated basis in accordance with Agreement
Accounting Principles.
"Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' equity of the Credit Parties determined in
accordance with Agreement Accounting Principles, less their
consolidated Intangible Assets, all determined as of such date. For
purposes of this definition, "Intangible Assets" means the amount (to the
extent reflected in determining such consolidated stockholders' equity) of
all unamortized debt discount and expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, organizational or developmental expenses and other
intangible items, all determined in accordance with Agreement
Accounting Principles.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person, or agrees to maintain the net
worth or working capital or other financial condition of any other Person,
or otherwise assures any creditor of such other Person against loss,
including, without limitation, any comfort letter, operating agreement,
take-or-pay contract or application for a Letter of Credit.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with any Credit Party, are treated
as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.2.4.
"Credit Extension" means the making of any Advance or the
issuance of any Facility Letter of Credit or Swing Line Loan pursuant to
this Agreement.
"Credit Extension Date" means the date on which any Credit
Extension is made hereunder.
"Credit Parties" means Astec, AFS and each Subsidiary of Astec and AFS.
"Cumulative Consolidated Net Income" means, for any period,
the cumulative net income of the Credit Parties determined on a
consolidated basis in accordance with Agreement Accounting Principles.
"Default" means an event described in Article VII.
"Domestic Subsidiary" means each Subsidiary of Astec that is
organized under the laws of the United States or any state
thereof.
"EBITDA" means for any period Consolidated Net Income plus
(a) current and deferred income taxes, plus (b) the amount
of all amortization of intangibles and depreciation that was
deducted in arriving at Consolidated Net Income, plus (c) interest expense
(including interest expense associated with Capitalized Lease Obligations),
plus (d) unusual non-cash charges, minus (e) equity in net income of
Affiliates, and minus (f) interest income (except for interest income of AFS),
in each case on a consolidated basis for the Credit Parties.
"Eligible Leased Equipment Amount" means the book value of
equipment subject to Qualifying Operating Leases.
"Eligible Equipment Receivable Amount" means the receivable
amount reflected on the financial statements of AFS from
time to time
due from lessees/purchasers under Qualifying Financing
Leases or
Qualifying Chattel Paper.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and other governmental
restrictions relating to (i) the protection of the environment, (ii) the effect
of the environment on human health, (iii) emissions,
discharges or releases of pollutants, contaminants, hazardous substances
or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation issued
thereunder.
"Eurodollar Advance" means an Advance which bears interest at
the Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Advance for the relevant Interest Period, the rate determined by the
Agent to be the rate at which Bank One or one of its Affiliate banks offers
to place deposits in U.S. dollars with first-class banks in the London
interbank market at approximately 11 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period, in the
approximate amount of Bank One's relevant Eurodollar Loan and having
a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at the Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance
for the relevant Interest Period, the sum of (a) the quotient of (i) the
Eurodollar Base Rate applicable to such Interest Period, divided by (ii)
one minus the Reserve Requirement (expressed as a decimal) applicable
to such Interest Period, plus (b) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its
overall net income, and franchise taxes imposed on it, by (i) the
jurisdiction under the laws of which such Lender or the Agent is
incorporated or organized or (ii) the jurisdiction in which the Agent's or
such Lender's principal executive office or such Lender's applicable
Lending Installation is located.
"Existing Credit Agreement" is defined in the Recitals.
"Facility Letter of Credit" means a Letter of Credit issued by the
Issuer pursuant to Section 2.11.
"Facility Letter of Credit Limit" means the lesser of (i)
$25,000,000, and (ii) the Aggregate Tranche A Sublimit at
any time, as the same may be reduced pursuant to the terms of this
Agreement.
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of Astec
with respect to the Facility Letters of Credit, including the sum of (a)
Reimbursement Obligations and (b) the aggregate undrawn face amount
of the outstanding Facility Letters of Credit.
"Facility Termination Date" means November 22, 2002.
"Federal Funds Effective Rate" means, for any day, an interest
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 for such
day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day which is a Business Day, the average of
the quotations at approximately 10 a.m. (Chicago time) on such day on
such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by the Agent in its sole
discretion.
"Floating Rate" means, for any day, a rate per annum equal to
the sum of (a) the Alternate Base Rate for such day, changing when and
as the Alternate Base Rate changes plus (b) the Applicable Margin.
"Floating Rate Advance" means an Advance which bears interest
at the Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the
Floating Rate.
"Foreign Plan" is defined in Section 5.9.
"Foreign Subsidiary" means each Subsidiary of Astec that is not
a Domestic Subsidiary.
"Governmental Agency" means any government (foreign or
domestic) or any state or other political subdivision thereof or any
governmental body, agency, authority, department or commission
(including, without limitation, any taxing authority or
political subdivision) or any instrumentality or officer thereof (including,
without limitation, any court or tribunal) exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government and any corporation, partnership or other entity directly or
indirectly owned or controlled by or subject to the control of any of the
foregoing.
"Hazardous Materials" means (a) any chemical, material or
substance defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic
pollutants," "contaminants," "pollutants," "toxic substances" or words
of similar import under any applicable local, state or federal law or under
the regulations adopted or publications promulgated pursuant thereto,
including Environmental Laws, (b) any oil, petroleum or petroleum
derived substances, any drilling fluids, produced waters or other
wastes associated with the exploration, development or production
of crude oil, any flammable substances or explosives, any radioactive
materials, any hazardous wastes or substances, any toxic wastes or
substances or any other materials or pollutants which (i) pose a hazard to
any Property of any Credit Party or to Persons on or about such Properties,
or (ii) cause such properties to be in violation of any Environmental
Laws, (c) asbestos in any form which is or could become friable,
radon gas, urea, formaldehyde, foam insulation, or polychlorinated
biphenyls, and (d) any other chemical, material or substance, exposure to which
is prohibited, limited or regulated by any governmental authority.
"Indebtedness" of a Person means, without duplication, such
Person's (a) obligations for borrowed money, (b) obligations representing
the deferred purchase price of Property or services (other than accounts
payable arising in the ordinary course of such Person's business payable
on terms customary in the trade), (c) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or production
from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or other
instruments, (e) Capitalized Lease Obligations, (f) Contingent
Obligations, (g) obligations for which such Person is obligated pursuant to
or in connection with a Letter of Credit or Reimbursement Agreement, (h)
obligations of such Person under conditional sale or other title retention
agreement relating to Property purchased by such Person, and (i) Rate
Hedging Obligations.
"Interest Period" means a period of one, two, three, six or twelve
months commencing on a Business Day selected by a Borrower pursuant
to this Agreement. Such Interest Period shall end on (but exclude) the
day which corresponds numerically to such date one, two, three, six or
twelve months thereafter; provided, however, that if there is no such
numerically corresponding day in such next, second, third, sixth or twelfth
succeeding month, such Interest Period shall end on the last Business
Day of such next, second, third, sixth or twelfth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business
Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls
in a new calendar month, such Interest Period shall end on the
immediately preceding Business Day.
"Investment" of a Person means any loan, advance, extension of
credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade), deposit account or
contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, the stock, partnership
interests, notes, debentures or other securities of any
other Person made by such Person.
"Issuer" means Bank One, in its capacity as issuer of Facility
Letters of Credit under Section 2.11.
"KPI Letter of Credit" means that certain Irrevocable Transferable
Letter of Credit, or its successor, issued by Bank One in connection with
the issuance of Industrial Development Revenue Bonds in the approximate
amount of $9,200,000 to finance certain manufacturing
facilities to be used in the operation of Kolberg-Pioneer,
Inc.'s business, all pursuant to the Existing Credit Agreement.
"LC Issuance Request" is defined in Section 2.11.3.
"Lenders" means the lending institutions listed on the signature
pages of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Agent, any office, branch, Subsidiary or Affiliate of such Lender or the
Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon
which such Person is an account party or for which such Person is in any
way liable.
"Letter of Credit Collateral Account" is defined in Section 2.11.7.
"Leverage Ratio" means, as at any date of determination thereof,
the ratio of (a) Consolidated Funded Debt of the Credit Parties to (b)
Adjusted EBITDA of the Credit Parties for the four (4) most recently
ended fiscal quarters, all calculated on a consolidated basis in
accordance with Agreement Accounting Principles.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional sale,
Capitalized Lease Obligation or other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of
any Advance.
"Loan Documents" means this Agreement, the Notes, the Pledge
Agreement, the Reimbursement Agreements, the documents relating to
the Subsidiary Letters of Credit (including the Trencor LC
Agreement) and the other documents and agreements contemplated hereby and
executed by any Credit Party in favor of the Agent or any
Lender or otherwise in connection with any Loan, Facility Letter of
Credit or Swing Line Loan, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Margin Stock" is defined in Section 5.11.
"Material Adverse Effect" means a material adverse effect on (a)
the business, Property, condition (financial or otherwise), results of
operations, or prospects of the Credit Parties taken as a
whole, (b) the ability of any Credit Party to perform its obligations
under the Loan Documents, or (c) the validity or enforceability of any of
the Loan Documents or the rights or remedies of the Agent or the Lenders
thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to
which any Credit Party or any member of the Controlled Group is a
party to which more than one employer is obligated to make contributions.
"Net Available Proceeds" means, with respect to an Asset
Disposition, the sum of cash or readily marketable cash
equivalents received (including by way of a cash generating sale or
discounting of a note or receivable, but excluding any other consideration
received in the form of assumption by the acquiring Person of debt or other
obligations relating to the properties or assets so disposed of or
received in any other non-cash form) therefrom, whether at the time of such
disposition or subsequent thereto, net of all legal, title and
recording tax expenses, commissions and other fees and all costs and expenses
incurred and all federal, state, local and other taxes required to be
accrued as a liability as a consequence of such transactions and of all
payments made by any Credit Party on any Indebtedness which is secured by such
assets pursuant to a permitted Lien upon or with respect to such
assets or which must by the terms of such Lien, or in order to obtain a
necessary consent to such Asset Disposition or by applicable law, be repaid
out of the proceeds from such Asset Disposition.
"Notes" means the Revolving Notes and the Swing Line Notes.
"Notice of Swing Line Loan" is defined in Section 2.3.1(d).
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes (including all interest accruing after the
commencement of any proceeding against or with respect to any
Borrower under the United States Bankruptcy Code, Title 11
of the United States Code, or any other federal or state bankruptcy,
insolvency, receivership or similar law, at the rates specified in this
Agreement), all accrued and unpaid fees, all Facility Letter of Credit
Obligations and all expenses, reimbursements, indemnities and other obligations
of any Credit Party to the Lenders or to any Lender, the Agent or
any indemnified party hereunder arising under the Loan
Documents.
"Original Closing Date" means November 24, 1997.
"Other Taxes" is defined in Section 3.1(ii).
"Participants" is defined in Section 12.2.1.
"Payment Date" means the first day of each March, June, September and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto.
"Percentage" means, for each Lender the percentage set forth
opposite its name on Schedule 1 attached hereto, as such percentage
(and such schedule) may be modified from time to time pursuant to the
terms hereof, including but not limited to the provisions of Section 12.3.2.
"Permitted Acquisition" means an Acquisition of the capital stock
or equity interests in a Person or the assets of a Person engaged in the
production of aggregate processing or mining equipment, hot mix asphalt
production equipment, thermal heating or storage equipment, mobile road
construction equipment, trenching, underground construction, utility or
related equipment or pavement analyzing equipment, that has been
approved or consented to by the board of directors or equivalent
governing body of such Person.
"Permitted Recourse Lease Sales" means recourse sales of
leases or accounts or notes receivable relating to leases by AFS;
provided, however, that the Contingent Obligations of any Credit Party
with respect to such sales shall not exceed $15,000,000 at any one time.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise,
trust or other entity or organization, or any government or political
subdivision or any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code as to which any Credit Party or any member of
the Controlled Group may have any liability.
"Pledge Agreement" means that certain Pledge Agreement, in
substantially the form of Exhibit D hereto, executed and delivered by
Astec in favor of the Agent, for the benefit of itself and the Lenders, as
the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Portec Acquisition" shall mean the purchase of assets
comprising the construction equipment division of Portec,
Inc. pursuant to that certain Asset Purchase Agreement dated as of October
16, 1997 between Portec, Inc. and Astec.
"Prime Rate" means a rate per annum equal to the prime rate of
interest announced from time to time by Bank One or its
parent (which is not necessarily the lowest rate charged to any customer),
changing when and as said prime rate changes.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person,
or other assets owned, leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Qualifying Chattel Paper" means valid and enforceable written
installment notes financing the purchase of products manufactured or
distributed by the Subsidiaries or other third parties together with any
accessories, attachments or equipment relating thereto, secured by
written security agreements, which are payable to the order
of AFS, payments under which are not more than ninety (90) days past due.
"Qualifying Operating Leases" means valid and enforceable
written operating leases of equipment legally and beneficially owned by
AFS and leased to third parties not Affiliates of AFS, payments under
which are not more than ninety (90) days past due.
"Qualifying Financing Leases" means valid and enforceable
written financing leases of equipment between AFS and third
parties not Affiliates of AFS, payments under which are not more than
ninety (90) days past due. Qualifying Financing Leases shall not
include any leases or related obligations sold in a Permitted Recourse Lease
Sale or otherwise.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all agreements, devices or
arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward
rate currency or interest rate options, puts and warrants, and (b) any and
all cancellations, buy backs, reversals, terminations or assignments of any of
the foregoing.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor thereto or other regulation or official interpretation of said
Board of Governors relating to reserve requirements applicable to
member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the
Federal Reserve System.
"Reimbursement Agreement" means a reimbursement
agreement, substantially in such form as the Issuer may employ in the
ordinary course of business, with such modifications thereto as may be
agreed upon by the Issuer and Astec; provided, however,
that in the event of any conflict between the terms of any
Reimbursement Agreement and this Agreement, the terms of this Agreement
shall control.
"Reimbursement Obligations" means, at any time, the aggregate
of the obligations of Astec to the Lenders and the Issuer
in respect of all unreimbursed payments or disbursements made by the Issuer
and the Lenders under or in respect of the Facility Letters of
Credit (including, without limitation, Astec's obligation to reimburse the
Issuer for draws on Facility Letters of Credit pursuant to Section 2.11.4(b)).
"Release" means a "release", as such term is defined in CERCLA.
"Rentals" of a Person means the aggregate fixed amounts
payable by such Person under any lease of Property having an original
term (including any required renewals or any renewals at the option of the
lessor or lessee) of one year or more.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such section,
with respect to a Plan, excluding, however, such events as to which the
PBGC has by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event;
provided, however, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at
least 67% of the Aggregate Commitment or, if the Aggregate
Commitment has been terminated, Lenders in the aggregate
holding at least 67% of the Revolving Loan Obligations.
"Reserve Requirement" means, with respect to an Interest
Period, the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed under Regulation D on Eurocurrency liabilities.
"Revolving Advance" means a borrowing under Section 2.1.1 or
2.1.2 consisting of the aggregate amount of the several Revolving Loans
(including Tranche A Revolving Loans and Tranche B Revolving Loans)
made by the Lenders to a Borrower of the same Type and, in the case of
Eurodollar Advances, for the same Interest Period.
"Revolving Commitment" means, for each Lender, the obligation
of such Lender to make Loans (including Tranche A Revolving Loans and
Tranche B Revolving Loans) and participate in Facility Letters of Credit
and Swing Line Loans not exceeding an amount equal to the product of
(a) the then existing Aggregate Commitment and (b) the Percentage
applicable to such Lender.
"Revolving Loans" is defined in Section 2.1.2.
"Revolving Notes" means the Tranche A Notes and the Tranche B Notes.
"Revolving Loan Obligations" means, at any particular time, the
sum of (a) the outstanding principal amount of the Advances under
Section 2.1.1 and Section 2.1.2 at any time, plus (b) the outstanding
principal amount of the Swing Line Loans at such time, plus (c) the
Facility Letter of Credit Obligations at such time.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Single Employer Plan" means a Plan maintained by any Credit
Party or any member of the Controlled Group for employees of any Credit
Party or any member of the Controlled Group.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to
payment of the Obligations to the written satisfaction of
the Lenders; provided, however, that Indebtedness related to, or
incurred in connection with, the Bond Transactions shall not constitute
Subordinated Indebtedness.
"Subsidiary" of a Person means (a) any corporation more
than 50% of the outstanding securities having ordinary voting
power of which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by such
Person and one or more of its Subsidiaries, or (b) any partnership,
limited liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Astec. At all times during the term of this
Agreement all references to Subsidiaries of Astec shall include AFS.
"Subsidiary Letters of Credit" means (a) the Trencor Letter of
Credit, (b) the KPI Letter of Credit, and (c) that certain letter of credit
issued by M&I Marshall and Ilsley Bank for the account of Telsmith, Inc.
in connection with the issuance of Variable Rate Demand Industrial
Revenue Bonds Series 1994 in the approximate value of $6,000,000 to
finance the construction and acquisition of a facility and equipment to be
used in the operation of Telsmith, Inc.'s business.
"Substantial Portion" means, with respect to the Property of any
Credit Party, Property which (a) represents more than 10% of the
consolidated assets of the Credit Parties as would be shown in the
consolidated financial statements of the Credit Parties as at the beginning
of the twelve-month period ending immediately prior to the month in
which such determination is made, or (b) is responsible for more than ten
percent (10%) of the consolidated net sales or of the consolidated net
income of the Credit Parties as reflected in the consolidated financial
statements referred to in clause (a) above.
"Swing Line Lender" means Bank One in its capacity as Swing
Line Lender under Section 2.3.1.
"Swing Line Limit" means the lesser of (a) $10,000,000, and (b)
the Aggregate Tranche A Sublimit at any time, as the same may be
reduced pursuant to the terms of this Agreement.
"Swing Line Loan" is defined in Section 2.3.1.
"Swing Line Note" means a promissory note, in substantially
the form of Exhibit B-3 hereto, duly executed by Astec and
payable to the order of the Swing Line Lender in the amount of the Swing
Line Limit, including any amendment, restatement, modification, renewal or
replacement of such Swing Line Note.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities
with respect to the foregoing, but excluding Excluded Taxes and Other
Taxes.
"Tranche A Commitment" means, for each Lender, the obligation
of such Lender to make Loans and participate in Facility Letters of Credit
and Swing Line Loans not exceeding an amount equal to the product of
(a) the then existing Aggregate Tranche A Sublimit and (b) the
Percentage applicable to such Lender.
"Tranche A Loan Obligations" means, at any particular time, the
sum of (a) the outstanding principal amount of Advances under Section
2.1.1, plus (b) the outstanding principal amount of the Swing Line Loans
at such time, plus (c) the Facility Letter of Credit Obligations at such time.
"Tranche A Notes" means a promissory note, in substantially the
form of Exhibit B-1 hereto, duly executed by Astec and payable to the
order of a Lender in the amount of its Tranche A Commitment, including
any amendment, modification, renewal or replacement of such promissory note.
"Tranche A Revolving Loan" is defined in Section 2.1.1.
"Tranche B Borrowing Base" means 85% of the sum of (a) the
Eligible Leased Equipment Amount and (b) the Eligible Equipment
Receivable Amount.
"Tranche B Commitment" means, for each Lender, the obligation
of such Lender to make Loans not exceeding an amount equal
to the product of (a) the then existing Aggregate Tranche B
Sublimit and (b) the Percentage applicable to such Lender.
"Tranche B Notes" means a promissory note, in substantially the
form of Exhibit B-2 hereto, duly executed by AFS and payable to the
order of a Lender in the amount of its Tranche B Commitment, including
any amendment, modification, renewal or replacement of such promissory note.
"Tranche B Revolving Loan" is defined in Section 2.1.2.
"Transferee" is defined in Section 12.4.
"Trencor Letter of Credit" means that certain Irrevocable
Transferable Letter of Credit No. 00315672, or its successor, issued by
Bank One for the account of Astec in connection with the issuance of
Industrial Development Revenue Bonds in the approximate amount of
$8,000,000 to finance the construction and acquisition of a facility and
equipment to be used in the operation of Trencor, Inc.'s business, all
pursuant to the Trencor LC Agreement.
"Trencor LC Agreement" means the Letter of Credit Agreement between Bank One
and Trencor Jetco, Inc. (now known as Trencor,
Inc.), dated as of April 1, 1994, as amended from time to
time, pursuant to which the Trencor Letter of Credit was issued.
"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested and unvested accrued benefits under all
Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plans using PBGC actuarial assumptions
for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (a) any
Subsidiary all of the outstanding voting securities of which shall at the
time be owned or controlled, directly or indirectly, by
such Person or one or more Wholly-Owned Subsidiaries of such Person, or by
such Person and one or more Wholly-Owned Subsidiaries of such Person,
or (b) any partnership, limited liability company, association, joint
venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms.
THE CREDITS
Revolving Commitment.
Tranche A Commitment. From and including the Closing Date to (but
excluding) the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to (a) make Loans (each, a
"Tranche A Revolving Loan") to Astec, (b) to participate in Facility Letters of
Credit for the account of Astec up to but not exceeding the Facility Letter of
Credit Limit, (c) to participate in Swing Line Loans for the account of Astec
up to but not exceeding the Swing Line Limit, each from time
to time in amounts not to exceed in the aggregate at any one time outstanding
the lesser of (x) such Lender's Tranche A Commitment, and (y) such Lender's
Revolving Commitment (less such Lender's Percentage of any Revolving
Loan Obligations at such time). Subject to the terms of this Agreement,
Astec may borrow, repay and reborrow, and Astec may request the issuance of
Facility Letters of Credit, at any time prior to the Facility Termination Date.
The Tranche A Commitment shall expire on the Facility Termination Date.
Tranche B Commitment. From and including the Closing Date
to (but excluding) the Facility Termination Date, each Lender
severally agrees, on the terms and conditions set forth in this Agreement, to
make Loans (each, a
"Tranche B Revolving Loan" and collectively with Tranche A Revolving Loans,
the "Revolving Loans") to AFS from time to time in amounts not to exceed in
the aggregate at any one time outstanding the least of (a) such Lender's
Percentage of the Tranche B Borrowing Base, (b) such Lender's Tranche B
Commitment and (c) such Lender's Revolving Commitment (less such Lender's
Percentage of any Revolving Loan Obligations at such time). Subject to the
terms of this Agreement, AFS may borrow, repay and reborrow, at any time
prior to the Facility Termination Date. The Tranche B Commitment shall expire
on the Facility Termination Date.Limitations on Obligations. Notwithstanding
anything to the contrary contained in this Agreement or in any other Loan
Document, (a) the Revolving Loan
Obligations shall at no time exceed the Aggregate
Commitment, (b) Tranche A Loan Obligations shall at no time exceed the
Aggregate Tranche A Sublimit and
(c) Tranche B Revolving Loans shall at no time exceed the Aggregate Tranche
B Sublimit. The Borrowers agree that if at any time any such excess shall
arise, the applicable Borrower(s) shall immediately pay to the
Agent (or deposit into the Letter of Credit Collateral Account, to the extent
that all Loans have been fully repaid) the amount necessary to eliminate such
excess, without presentment, demand, protest or notice of any kind from the
Agent or any Lender, all of which the Borrowers each hereby expressly
waive. The Borrowers acknowledge that the Aggregate Commitment is less
than the sum of the Aggregate Tranche A Sublimit and the Aggregate Tranche
B Sublimit and that consequently the Borrowers may be in violation of
clause (a) without being in violation of clauses (b) and (c), in which case,
Astec shall immediately pay to the Agent (or deposit into the Letter of Credit
Collateral Account, to the extent that all Loans have been fully repaid) the
amount necessary to eliminate such excess, but have the option to designate the
application of payment of such excess and in absence of such designation, the
payment thereof shall be applied to the Tranche A Loan Obligations.
Loans.
Ratable Loans; Types of Advances. Each Advance hereunder shall consist of
Loans made from the several Lenders each ratably in proportion to its
respective Percentage. Any reduction in the Aggregate Commitment shall
reduce ratably each of the Tranche A Commitment and the
Tranche B Commitment of each Lender. The Advances may be Floating Rate
Advances or Eurodollar Advances, or a combination thereof,
selected by the applicable Borrower in accordance with Sections 2.2.3 and 2.2.4.
Minimum Amount of Each Advance. Each Eurodollar Advance shall be in the
minimum amount of $100,000 (and in multiples of
$100,000 if in excess thereof), and each Floating
Rate Advance shall be in the minimum amount
of $100,000 (and in multiples of $100,000 if in
excess thereof); provided, however, that any
Floating Rate Advance may be in the amount of
the unused Aggregate Commitment, subject to
the limitations set forth in Section 2.1.
Method of Selecting Types and Interest Periods for
New Advances. The applicable Borrower shall
select the Type of Advance and, in the case of
each Eurodollar Advance, the Interest Period
applicable to each Advance from time to time.
The applicable Borrower shall give the Agent
irrevocable notice (a "Borrowing Notice") not
later than 11:00 a.m. (Chicago time) on the same
Business Day as the Borrowing Date of each
Floating Rate Advance and three (3) Business
Days before the Borrowing Date for each
Eurodollar Advance, specifying:
the Borrowing Date, which shall be a Business Day, of such Advance,
the aggregate amount of such Advance,the Type of Advance selected,
the Borrower and commitment to which such Advance applies, and
in the case of each Eurodollar Advance, the Interest Period applicable
thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Agent at its address specified pursuant to
Article XIII. The Agent will make the funds so received from the Lenders
available to the applicable Borrower at the Agent's aforesaid address.
Conversion and Continuation of Outstanding Advances. Floating Rate Advances
shall continue as Floating Rate Advances unless and
until such Floating Rate Advances are converted
into Eurodollar Advances. Each Eurodollar
Advance shall continue as a Eurodollar Advance
until the end of the then applicable Interest
Period therefor, at which time such Eurodollar
Advance shall be automatically converted into a
Floating Rate Advance unless the applicable
Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined
below) requesting that, at the end of such Interest
Period, such Eurodollar Advance continue as a
Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section
2.2.2 and except as limited by Section 2.3.1(b),
the applicable Borrower may elect from time to
time to convert all or any part of an Advance of
any Type into any other Type or Types of
Advances; provided, however, that any
conversion of any Eurodollar Advance shall be
made on, and only on, the last day of the Interest
Period applicable thereto. The applicable
Borrower shall give the Agent irrevocable notice
(a "Conversion/Continuation Notice") of each
conversion of an Advance or continuation of a
Eurodollar Advance not later than 11:00 a.m.
(Chicago time) at least three (3) Business Days
prior to the date of the requested conversion or
continuation, specifying:
(a) the requested date, which shall be a Business
Day, of such conversion or continuation;
(b) the aggregate amount and Type of the Advance
which is to be converted or continued; and
(c) the amount and Type(s) of Advance(s) into
which such Advance is to be converted or continued and, in the case of a
conversion into or continuation of a Eurodollar Advance, the duration of
the Interest Period applicable thereto.
Changes in Interest Rate, etc. Each Floating Rate
Advance shall bear interest on the outstanding
principal amount thereof, for each day from and
including the date such Advance is made or is
converted from a Eurodollar Advance into a
Floating Rate Advance pursuant to Section 2.2.4
to but excluding the date it becomes due or is
converted into a Eurodollar Advance pursuant to
Section 2.2.4, at a rate per annum equal to the
Floating Rate for such day. Changes in the rate
of interest on any Floating Rate Advance will
take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar
Advance shall bear interest from and including
the first day of the Interest Period applicable
thereto to (but not including) the last day of such
Interest Period at the interest rate determined as
applicable to such Eurodollar Advance. No
Interest Period may end after the Facility
Termination Date or, with respect to any
Advance required to be repaid to satisfy the
mandatory reduction requirements of Section
2.4.3, the date of such mandatory reduction.
Interest Payment Dates; Interest and Fee Basis.
Interest accrued on each Floating Rate Advance
shall be payable in arrears (a) on each Payment
Date, commencing with the first such date to
occur after the date hereof, on (b) any date the
Floating Rate Advance is prepaid due to
acceleration and (c) at maturity. Interest accrued
on that portion of the outstanding principal
amount of any Floating Rate Advance converted
into a Eurodollar Advance on a day other than a
Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar
Advance shall be payable in arrears (x) on the
last day of its applicable Interest Period, (y) on
any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise,
and (z) at maturity. Interest accrued on each
Eurodollar Advance having an Interest Period
longer than three months shall also be payable
on the last day of each three-month interval
during such Interest Period. Interest for
Advances and fees shall be calculated for actual
days elapsed on the basis of a 360-day year.
Interest shall be payable for the day an Advance
is made but not for the day of any payment on
the amount paid if payment is received prior to
noon (Chicago time) at the place of payment. If
any payment of principal of or interest on an
Advance shall become due on a day which is not
a Business Day, such payment shall be made on
the next succeeding Business Day and, in the
case of a principal payment, such extension of
time shall be included in computing interest in
connection with such payment.
Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions.
Promptly after receipt thereof, the Agent will
notify each Lender of the contents of each
Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation
Notice, and repayment notice received by it
hereunder. The Agent will notify each Lender of
the interest rate applicable to each Eurodollar
Advance promptly upon determination of such
interest rate and will give each Lender prompt
notice of each change in the Alternate Base Rate.
Rates Applicable After Default. Notwithstanding
anything to the contrary contained in Section
2.2.3 or 2.2.4, during the continuance of a
Default or Unmatured Default the Required
Lenders may, at their option, by notice to Astec
(which notice may be revoked at the option of
the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous
consent of the Lenders to changes in interest
rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar
Advance. During the continuance of a Default,
the Required Lenders may, at their option, by
notice to Astec (which notice may be revoked at
the option of the Required Lenders
notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to
changes in interest rates), declare that (a) each
Eurodollar Advance shall bear interest for the
remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period
plus 2% per annum and (b) each Floating Rate
Advance shall bear interest at a rate per annum
equal to the Floating Rate otherwise applicable
to the Floating Rate Advance plus 2% per annum.
Swing Line Loans.
Making of Swing Line Loans.
Subject to the terms and conditions of this Agreement, the Swing Line
Lender agrees, at any time and from time to time on and after the Closing
Date and prior to the Facility Termination Date, to make a loan or loans on
a revolving basis (each, a "Swing Line Loan") to Astec, which Swing Line
Loans in the aggregate shall not at any time exceed the Swing Line Limit;
provided that no Swing Line Loan shall be made hereunder if, after giving
effect to any Swing Line Loan and the use of proceeds thereof, (i) the
aggregate outstanding balance of the Tranche A Loan Obligations would
exceed the Aggregate Tranche A Sublimit or (ii) the Revolving Loan
Obligations would exceed the Aggregate Commitment.
Notwithstanding the foregoing, no Swing Line Loans shall be made hereunder
if, after giving effect to any Swing Line Loan and the use of proceeds
thereof, the aggregate outstanding principal amount of Swing Line Loans
would exceed the Swing Line Limit, or to the extent that the Swing Line
Limit of the Swing Line Lender would exceed the Tranche A Commitment of
such Lender at such time. The Swing Line Limit shall terminate
on the Facility Termination Date without further action being required on
the part of the Agent or the Swing Line Lender. No more than five (5)
Swing Line Loans shall be outstanding at any time.
Swing Line Loans may, subject to the terms of this Agreement, be repaid
and reborrowed. All Swing Line Loans shall be made as
Floating Rate Loans and shall not be entitled to be converted into
Eurodollar Loans. Swing Line Loans made on any date shall be in an aggregate
minimum amount of $10,000 and integral multiples of $10,000 in
excess of that amount.
If, after giving effect to any assignment pursuant
to Section 12.3 or reduction in Tranche A
Commitments pursuant to the terms of this
Agreement, the remaining Tranche A
Commitment of the Swing Line Lender is less
than the Swing Line Limit, the Swing Line
Limit shall be permanently reduced by an
amount equal to such difference.
Whenever Astec desires to make a borrowing of
Swing Line Loans under this Section 2.3.1,
Astec shall give the Agent and the Swing Line
Lender (no later than 3:30 p.m. (Chicago
time) on the proposed date for such Advance)
notice by telephone (confirmed promptly in
writing) or notice in writing of such Advance
(a "Notice of Swing Line Loan"), which shall
be irrevocable and shall specify (i) the
aggregate principal amount of the Swing Line
Loans to be made pursuant to such Advance,
(ii) the date of such Advance (which shall be a
Business Day), (iii) the maturity date for such
Swing Line Loan (which shall be on demand
and in any event no later than seven days
after the making thereof or, if earlier, the
Facility Termination Date), (iv) the account to
which such Advance is to be funded and (v)
confirming that such Swing Line Loan shall be a Floating Rate Loan.
Conversions of and Participations in Swing Line Loans.
The Swing Line Lender shall, in its sole and
absolute discretion, be entitled to require an
Advance of Tranche A Revolving Loans
hereunder, the proceeds of which shall be
applied to the pro rata prepayment of all
Swing Line Loans then outstanding by giving
notice (by telephone promptly confirmed in
writing or in writing) to the Agent, Astec and
the Lenders to such effect, which notice shall
set forth the aggregate outstanding principal
amount of such Swing Line Loans. Upon the
giving of such notice, Astec shall be deemed to
have timely given a Borrowing Notice to the
Agent requesting Tranche A Revolving Loans
which are Floating Rate Loans on the
Business Day following such notice, the
Lenders shall, on such date, make Tranche A
Revolving Loans which are Floating Rate
Loans in the amount of such Swing Line
Loans, the proceeds of which shall be applied
by the Agent to the prepayment of such Swing
Line Loans; provided, however, that for the
purposes solely of such Advance the
conditions precedent set forth in Section 4.2
shall not be applicable. Unless Astec shall
have notified the Agent and the Swing Line
Lender prior to 11:00 a.m. (Chicago time) on
the date which is six days following the date
on which any Swing Line Loan has been made
by the Swing Line Lender that Astec intends
to reimburse the Swing Line Lender with
funds other than the proceeds of Tranche A
Revolving Loans, the Agent shall give such
notice on behalf of the Swing Line Lender.
Upon the giving of notice to the Agent and each
Lender by the Swing Line Lender in its sole
and absolute discretion, any deemed
Borrowing Notice given under this Section
2.3.2 pursuant to which no Advance has been
made shall be deemed cancelled and each
Lender shall be deemed to, and hereby agrees
to, have irrevocably purchased from the
Swing Line Lender a participation in Swing
Line Loans made by the Swing Line Lender in
an aggregate outstanding principal amount
equal to such Lender's Percentage of such
Swing Line Loans, and shall make available to
the Swing Line Lender an amount equal to its
respective participation in the Swing Line
Lender's Swing Line Loans in immediately
available funds, at the office of the Swing Line
Lender specified by notice to the Agent and
each Lender in such notice, not later than
1:00 p.m. (Chicago time) on the second
Business Day after the giving of such notice.
In the event that any Lender fails to make
available to the Swing Line Lender the
amount of such Lender's participation as
provided in this Section 2.3.2(b), the Swing
Line Lender shall be entitled to recover such
amount on demand from such Lender
together with interest at the Federal Funds
Effective Rate for three (3) Business Days and
thereafter at the Floating Rate, and the Swing
Line Lender shall, until such time as all such
amounts have been paid, be deemed to have
outstanding a Swing Line Loan in the amount
of such unpaid participation for all purposes
of this Agreement other than those provisions
requiring Lenders to purchase an interest
therein. The Swing Line Lender shall
distribute to each other Lender which has
paid all amounts payable by it under this
Section 2.3.2(b) with respect to Swing Line
Loans made by the Swing Line Lender such
other Lender's Percentage of all payments
received by the Swing Line Lender in respect
of such Swing Line Loans when such payments are received.
The obligations of the Lenders under Section
2.3.2(b) above shall be unconditional and
irrevocable and shall be paid strictly in
accordance with the terms of this Agreement
under all circumstances including, without
limitation, the fact that a Default or
Unmatured Default shall have occurred and
be continuing or any other circumstance or
happening whatsoever.
Fees; Reductions in Aggregate Commitment.
Fees. Commitment Fees. The Borrowers agree to pay to
the Agent for the account of each Lender in
accordance with their Percentage a
commitment fee (the "Commitment Fee") for
each day accruing at a rate per annum equal
to the Applicable Margin (determined for the
Commitment Fee in accordance with the
definition of Applicable Margin) on the daily
unused portion of such Lender's Revolving
Commitment from the Closing Date to and
including the Facility Termination Date,
payable in arrears on each Payment Date
hereafter and on the Facility Termination
Date. For the purpose of calculating the
Commitment Fee, Swing Line Loans shall be
considered usage of the Swing Line Lender's
Tranche A Commitment. All accrued
Commitment Fees shall be payable on the
effective date of any termination of the
obligations of the Lenders to make Credit Extensions hereunder.
Agent's Fees. The Borrower agrees to pay to the Agent, for its own account,
the fees agreed to by the Borrower in that certain letter agreement dated
October 28, 1997, or as otherwise agreed from time to time.
Voluntary Reductions; Prepayments. The Borrowers
may permanently reduce the Aggregate
Commitment in whole, or in part ratably among
the Lenders in integral multiples of $100,000,
upon at least one (1) Business Day's written
notice to the Agent, which notice shall specify
the amount of any such reduction; provided,
however, that (a) the amount of the Aggregate
Commitment may not be reduced below the
Revolving Loan Obligations at such time, (b) the
Tranche A Commitment may not be reduced
below the Tranche A Loan Obligations at such
time and (c) the Tranche B Commitment may
not be reduced below the Tranche B Revolving
Loans at such time. Any reduction of the
Aggregate Commitment shall automatically
reduce, at the option of the Borrowers, either the
Aggregate Tranche A Sublimit or the Aggregate
Tranche B Sublimit (or a combination thereof) as
designated by Astec, or in absence of such
designation, such reduction shall reduce ratably
the Aggregate Tranche A Sublimit and the
Aggregate Tranche B Sublimit. The Borrowers
may from time to time pay, without penalty or
premium, all of its outstanding Floating Rate
Advances, or, in a minimum aggregate amount
of $100,000, any portion of its outstanding
Floating Rate Advances upon notice to the Agent
prior to 10:00 a.m. (Chicago time) on the
proposed date for such prepayment. A
Eurodollar Advance may not be paid prior to the
last day of the applicable Interest Period, unless,
at the time of such payment, the applicable
Borrower pays to the Agent pursuant to Section
3.5 below all losses and costs incurred by the
Lenders as the result of such payment. Any
outstanding Advances and all other unpaid
Obligations shall be paid in full by the
Borrowers on the Facility Termination Date.
Mandatory Reductions in Aggregate Commitment.
Sale of Assets. On each date after the Closing Date on
which any Credit Party receives any Net Available Proceeds upon any Asset
Disposition, the Borrowers shall permanently reduce the Aggregate Commitment
in an amount equal to one hundred percent (100%) of the Net
Available Proceeds of such Asset Disposition, within three (3) days of the
consummation of such Asset Disposition or receipt of such Net Available
Proceeds.
Issuance of Debt. On each date after the Closing Date on
which any Credit Party incurs, or issues any instruments relating to, any
Indebtedness (other than Indebtedness borrowed by the Borrowers under this
Agreement or permitted to be borrowed by any Credit Party pursuant to
Section 6.11 of this Agreement), the Aggregate Commitment shall be
permanently reduced in an amount equal to one hundred percent (100%) of the
cash proceeds realized therefrom, in each case net of underwriting
discounts, commissions and other reasonable costs and expenses directly
attributable to such incurrence or issuance, within three (3) days of any such
incurrence or issuance.
Issuance of Equity. On each date after the Closing Date on
which any Credit Party issues and sells any common stock, preferred
stock, warrant or other equity securities of any Credit Party
(other than options of a Credit Party issued in the ordinary course of
business in favor of employees, officers or directors), the Aggregate
Commitment shall be permanently reduced in an amount equal to fifty
percent (50%) of the cash proceeds realized therefrom, in each case
net of any brokerage commissions and any other reasonable costs or
expenses directly attributable to such issuance, within three (3)
days of any such issuance and sale.
Application of Mandatory Prepayments. All proceeds to be
applied to reduce the outstanding Loans and the Aggregate Commitment
under Sections 2.4.3(a), (b) and (c) above shall be applied (i)
to Tranche A Revolving Loans (and reduction of the Aggregate Tranche A
Sublimit) in the case of sales of assets, issuance of debt or
issuance of equity by any Credit Party (other than AFS), and (ii) to Tranche B
Revolving Loans (and the reduction of Aggregate Tranche B Sublimit)
in the case of sales of assets, issuance of debt or issuance of equity
by AFS. Any reduction of the Aggregate Tranche A Sublimit or the
Aggregate Tranche B Sublimit shall automatically reduce the Aggregate
Commitment by the same amount.Permitted Transactions. Nothing in this Section
2.4 shall be construed to constitute the Required Lenders' consent to any
transaction referred to in Section 2.4 above which is not expressly permitted
by the terms of this Agreement.
Mandatory Reduction of Tranche B Loans. If at anytime the Tranche B
Revolving Loans exceed the Tranche B Borrowing Base, AFS shall immediately
pay to the Agent the amount necessary to eliminate such excess, which amount
shall be applied to the outstanding Tranche B Revolving Loans.
Method of Payment. All payments of the Obligations hereunder shall
be made, without setoff, deduction, or counterclaim, in immediately available
funds to the Agent at the Agent's address specified pursuant to Article XIII,
or at any other Lending Installation of the Agent specified in
writing by the Agent to Astec, by noon (Chicago time) on the date when due and
shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the
account of any Lender shall be delivered promptly by the Agent to such Lender
in the same type of funds that the Agent received at its
address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge any account of the Borrowers maintained with Bank
One for each payment of principal, interest and fees as it becomes due
hereunder.
Notes; Telephonic Notices. Each Lender is hereby authorized to record
the principal amount of each of its Loans and each repayment on the schedule
attached to its Notes; provided, however, that the failure
to so record (or any error in such recording) shall not affect the Borrowers'
obligations under each such Note. The Borrowers hereby authorize the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by
any person or persons the Agent or any Lender in good faith believes to be
acting on behalf of the Borrowers. Each Borrower agrees to deliver promptly
to the Agent a written confirmation, if such confirmation is requested by the
Agent or any Lender, of each telephonic notice signed by one of its Authorized
Officers. If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error.
Lending Installations. Each Lender may book its Loans and
participations in Facility Letters of Credit and Swing Line
Loans at any Lending Installation selected by such Lender and may change its
Lending Installation from time to time. All terms of this Agreement shall
apply to any such Lending Installation and the Notes shall be deemed held by
each Lender for the benefit of such Lending Installation. Each Lender may, by
written or telex notice to the Agent and Astec, designate a Lending
Installation through which Loans will be
made and participations in Facility Letters of Credit and
Swing Line Loans purchased by it and for whose account Loan payments are to
be made.
Non-Receipt of Funds by the Agent. Unless a Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on
which it is scheduled to make payment to the Agent of (a) in the case of a
Lender, the proceeds of a Loan or a payment under Section 2.11.5(b) or (b) in
the case of a Borrower, a payment of principal, interest, fees or Reimbursement
Obligations to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall
not be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender
or Borrower, as the case may be, has not in fact made such payment to the
Agent, the recipient of such payment shall, on demand by the Agent, repay to
the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the
Agent until the date the Agent recovers such amount at a
rate per annum equal to (x) in the case of payment by a Lender, the Federal
Funds Effective Rate for such day for the first three (3) days and, thereafter,
the interest rate applicable to the relevant Loan or (y) in the case of payment
by a Borrower, the interest rate applicable to the relevant Loan or
Reimbursement Obligation or if no such
interest rate is specified, at the Floating Rate.
[Intentionally Omitted].
Application of Payments. The Borrowers irrevocably waive the right
to direct the application of payments and collections received by the Agent for
the account of any of the Lenders from or on behalf of the
Borrowers, and the Borrowers agree that the Agent and the Lenders shall have
the continuing exclusive right to apply and reapply any and all such
payments and collections against the Obligations in such manner as the Agent
and the Lenders may deem appropriate, notwithstanding any entry by the Agent or
any of the Lenders upon any of its respective books and records; provided,
however, that so long as the Borrowers are not delinquent in the payment to the
Agent or any Lender of any
amounts (including principal, interest and fees) owing under the Loans, this
Agreement and any of the other Loan Documents, nothing contained herein
shall limit a Borrower's rights under Section 2.2.4 above. To the extent that
a Borrower makes a payment or payments to the Agent for the
account of any of the Lenders, which payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy act, state or federal
law, common law or equitable cause, then, to the extent of
such payment received, the Obligations or part thereof intended to be
satisfied shall be revived and shall continue in full force and effect, as if
such payments had not been
received by the Agent for the account of any of the Lenders.
Facility Letters of Credit.
Obligation to Issue. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of the
Borrowers herein set forth, the Issuer hereby agrees to issue upon the request
of and for the account of Astec, through such of the Issuer's Lending
Installations or Affiliates as the Issuer and Astec may jointly agree, one or
more Facility
Letters of Credit in
accordance with this Section 2.11, from time to time during
the period,
commencing on the Closing Date and ending on the Business
Day prior to the
Facility Termination Date.
Conditions for Issuance. In addition to being subject to
the satisfaction
of the conditions contained in Section 4.2, the obligation
of the
Issuer to issue any Facility Letter of Credit is subject to
the
satisfaction in full of the following conditions:
(a) the aggregate maximum amount then available
for drawing under Facility Letters of Credit issued by the
Issuer, after giving effect to the Facility Letter of Credit requested
hereunder, shall not
exceed (i) any limit imposed by law or regulation upon the
Issuer or (ii) the Facility Letter of Credit Limit;
(b) after giving effect to the requested issuance of
any Facility Letter of Credit, (i) the Tranche A Loan
Obligations shall not exceed the Aggregate Tranche A Sublimit and (ii) the
Revolving Loan Obligations shall not exceed the Aggregate Commitment;
(c) the requested Facility Letter of Credit has an
expiration date not later than the Business Day prior to
the Facility Termination Date;
(d) if required by the Issuer, Astec shall have
delivered to the Issuer, at such times and in such manner
as the Issuer may reasonably prescribe, a Reimbursement Agreement and
such other documents and materials as may be required by the Issuer
pursuant to the terms of the proposed Facility Letter of Credit and the
proposed Facility Letter of Credit shall be satisfactory to the
Issuer as to form and
content and shall be consistent with the Issuer's ordinary
practice with respect to terms of its letters of credit; and
(e) as of the date of issuance, no order, judgment or
decree of any court, arbitrator or governmental authority
shall purport by its terms to enjoin or restrain the Issuer from issuing the
Facility Letter of Credit and no law, rule or regulation applicable to the
Issuer and no request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over the Issuer
shall prohibit or request that the Issuer refrain from the issuance of
Letters of Credit generally or the issuance of that Facility Letter of
Credit.
Procedure for Issuance of Facility Letters of Credit.
(a) Astec shall give the Issuer three (3) Business
Days' prior written notice of any requested issuance of a
Facility Letter of Credit under this Agreement. Such notice (the "LC Issuance
Request") shall be on such standard form as may be prescribed by the
Issuer, shall be irrevocable and shall specify (i) the stated amount of
the Facility Letter of Credit requested, (ii) the effective date (which day
shall be a Business Day) of issuance of such requested Facility Letter of
Credit, (iii) the date on which such requested Facility Letter of Credit is to
expire (which date shall be a Business Day and shall in no event be later than
the Facility Termination Date), (iv) the purpose for which such Facility
Letter of Credit is to be issued, (v) the Person for whose benefit the
requested Facility Letter of Credit is to be issued, (vi) the amount of
Facility Letter of Credit Obligations and Obligations then outstanding, (vii)
the then unused portions of the Aggregate Commitment and the Aggregate
Tranche A Sublimit and (viii) the terms on which the Facility Letter
of Credit is to be issued. At the time such LC Issuance Request is delivered,
Astec shall also provide the Issuer with a copy of the form of the
Facility Letter of Credit it is requesting be issued. The Issuer shall
promptly forward to the Agent and the Lenders a copy of the LC Issuance Request.
(b) Subject to the terms and conditions of this
Section 2.11.3 and provided that the applicable conditions
set forth in Sections 4.2 and 2.11.2 hereof have been satisfied, the
Issuer shall, on the requested date, issue a Facility Letter of Credit on
behalf of Astec in accordance with the Issuer's usual and customary business
practices.
(c) The Issuer shall not extend or amend any
Facility Letter of Credit unless the requirements of this Section 2.11.3 are
met as though a new Facility Letter of Credit was being requested and
issued.
Reimbursement Obligations.
(a) Notwithstanding any provisions to the contrary in any Reimbursement
Agreement:
(i) Astec shall reimburse the Issuer for drawings
under a Facility Letter of Credit issued by it no later
than the earlier of (1) the time specified in such Reimbursement
Agreement and (2) three (3) Business Days after the payment by
the Issuer of such drawing; and
(ii) any Reimbursement Obligation with respect to
any Facility Letter of Credit shall bear interest from the date of
the relevant drawing under the pertinent Facility Letter of Credit
at the higher of the interest rate (1) specified in the applicable
Reimbursement Agreement with respect to such amount, and (2)
for past due Floating Rate Loans calculated in accordance with
Section 2.2.8 above.
(b) Astec agrees to pay to the Agent the amount of
all Reimbursement Obligations, interest and other amounts payable to
the Agent under or in connection with such Facility Letter of Credit
immediately when due, irrespective of any claim, set-off, defense or other
right which Astec or any Subsidiary or Affiliate of Astec
may have at any time against the Issuer or any other Person, under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which Astec or any Subsidiary or Affiliate of
Astec may have at any time against a beneficiary named in a Facility
Letter of Credit or any transferee of any Facility Letter of
Credit (or any Person for whom any such transferee may be acting), the
Issuer, any Lender, or any other Person, whether in connection with
this Agreement, any Facility Letter of Credit, the transactions
contemplated herein or any unrelated transactions
(including any
underlying transactions between Astec, or any Subsidiary or
Affiliate of Astec and the beneficiary named in any
Facility Letter of Credit);
(iii) any draft, certificate or any other document
presented under the Facility 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 (except
to the extent any such invalidity or insufficiency is found in a
final judgment of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the
Agent);
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents; and
(v) the occurrence of any Default or Unmatured Default.
Participation.
(a) Immediately upon issuance by the Issuer of any
Facility Letter of Credit in accordance with the procedures
set forth in Section 2.11.3, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuer,
without recourse or warranty, an undivided interest and participation equal
to its Percentage of such Facility Letter of Credit (including,
without limitation, all obligations of Astec with respect thereto) and any
security therefor or guaranty pertaining thereto.
(b) In the event that the Issuer makes any payment
under any Facility Letter of Credit and Astec shall not
have repaid such amount to the Issuer pursuant to Section 2.11.4, the Issuer
shall promptly notify each Lender of such failure, and each Lender shall
promptly and unconditionally pay to the Agent for the account of the
Issuer the amount of such Lender's Percentage of the unreimbursed amount of
any such payment. If any Lender fails to make available to the
Issuer, any amounts due to the Issuer pursuant to this Section
2.11.5(b), the Issuer shall be entitled to recover such amount, together with
interest thereon at the Federal Funds Effective Rate, for the first three (3)
Business Days after such Lender receives such notice and thereafter, at
the Floating Rate, payable (i) on demand, (ii) by setoff against any
payments made to the Issuer for the account of such Lender or (iii) by
payment to the Issuer by the Agent of amounts otherwise payable to such Lender
under this Agreement. The failure of any Lender to make available to
the Agent its Percentage of the unreimbursed amount of any such payment
shall not relieve any other Lender of its obligation hereunder to
make available to the Agent its Percentage of the unreimbursed amount of any
payment on the date such payment is to be made, but no Lender shall be
responsible for the failure of any other Lender to make available to
the Agent its Percentage of the unreimbursed amount of any payment on the
date such payment is to be made.
(c) Whenever the Issuer or the Agent receives a
payment on account of a Reimbursement Obligation, including
any interest thereon, it shall promptly pay to each Lender
which has funded its participating interest therein, in immediately
available funds, an amount equal to such Lender's Percentage thereof.
(d) The obligations of a Lender to make payments to
the Agent with respect to a Facility Letter of Credit shall
be absolute, unconditional and irrevocable, not subject to any
counterclaim, set-off, qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances.
(e) In the event any payment by Astec or any
Subsidiary or Affiliate of Astec received by the Issuer or
the Agent with respect to a Facility Letter of Credit and distributed by
the Issuer or the Agent to the Lenders on account of their participations is
thereafter set aside, avoided or recovered from the Issuer or the Agent in
connection with any receivership, liquidation, reorganization or
bankruptcy proceeding, each Lender which received such distribution
shall, upon demand by the Issuer or the Agent, contribute such Lender's
Percentage of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by the Issuer or the Agent
upon the amount required to be repaid by it.
Compensation for Facility Letters of Credit. Astec shall
pay letter of credit fees with respect to each Facility Letter of Credit
equal to (a) a rate per annum equal to .25% of the face amount of such
Facility Letter of Credit, payable to the Issuer in arrears on each
Payment Date (the "Issuer Fronting Fee"), and (b) (i) a rate per
annum equal to the difference between (A) the then effective Applicable
Margin for Eurodollar Loans minus (B) the Issuer Fronting Fee,
times (ii) the outstanding undrawn face amount of such Facility Letter
of Credit, payable to the Agent for the account of the
Lenders, in each case payable in arrears on each Payment Date. In
addition to the foregoing, Astec shall pay to the Issuer any other
processing, issuance, amendment and other similar fees customarily
charged by it in respect of Facility Letters of Credit issued by
it, including, without limitation, customary fees charged by it in
connection with commercial Facility Letters of Credit, together with the
Issuer's out-of-pocket costs of issuing and servicing Facility
Letters of Credit. Notwithstanding anything to the contrary contained
in Section 2.4(b) of the Trencor LC Agreement, the Letter of
Credit Fees described therein shall be calculated as described in
this Section 2.11.6. All other fees described in Section 2.4 of
the Trencor LC Agreement shall remain unchanged.
Letter of Credit Collateral Account. Astec agrees that it
will, until the final expiration date of any Facility Letter of Credit and
thereafter as long as any amount is payable to the Lenders in respect
of any Facility Letter of Credit, maintain a special collateral
account (the "Letter of Credit Collateral Account") at the Agent's
office at the address specified pursuant to Article XIII, in the name of
Astec but under the sole dominion and control of the Agent, for the
benefit of the Lenders and in which Astec shall have no interest
other than as set forth in Section 8.1. The Agent will invest any
funds on deposit from time to time in the Letter of Credit
Collateral Account in certificates of deposit of the Agent having a
maturity not exceeding thirty (30) days. Nothing in this Section
2.11.7 shall either obligate the Agent to require Astec to deposit any
funds in the Letter of Credit Collateral Account or limit the right
of the Agent to release any funds held in the Letter of Credit
Collateral Account other than as required by Section 8.1.
Nature of Obligations.
(a) In addition to amounts payable as elsewhere
provided in this Section 2.11, Astec hereby agrees to
protect, indemnify, pay and save the Issuer, the Agent and the Lenders harmles
from and against any and all loss, liability, damage and expense
(including attorneys' fees and expenses) which the Issuer, the Agent
or the Lenders may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of a Facility Letter of Credit, other than as a
result of its gross negligence or willful misconduct, or (ii) the failure of
the Issuer to honor a drawing under such Facility Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto governmental authority.
(b) As among Astec, the Issuer, the Agent and the
Lenders, Astec assumes all risks of the acts and omissions
of, or misuse of the Facility Letters of Credit by, the respective
beneficiaries of the Facility Letters of Credit. In furtherance and not in
limitation of the foregoing, the Issuer, the Agent and the Lenders shall not
be responsible for (i) the forms, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Facility Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Facility Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of a
Facility Letter of Credit to comply fully with conditions required in order
to draw upon such Facility Letter of Credit; (iv) errors, omissions,
interruptions or delays in
transmission or delivery of any messages by mail, cable,
telegraph, telex or otherwise; (v) errors in interpretation of technical
terms; (vi) misapplication by the beneficiary of a Facility Letter of
Credit of the proceeds of any drawing under such Facility Letter of
Credit; (viii) any consequences arising from causes beyond the control of the
Issuer, the Agent or the Lenders, except in each case caused solely by
the gross negligence or willful misconduct of the Issuer, the Agent
or the Lenders.
(c) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action taken or
omitted by the Issuer, the Agent or any Lender under or in
connection with the Facility Letters of Credit or any related
certificates, if taken or
omitted in good faith, shall not put the Issuer, the Agent
or such Lender under any resulting liability to Astec or relieve Astec of
any of its obligations hereunder to the Issuer, the Agent or any
Lender. Existing Letters of Credit. The Trencor Letter of Credit,
the KPI Letter of Credit and each letter of credit listed on Schedule
2.11.9 shall be deemed a Facility Letter of Credit under this Agreement
and shall count against the Facility Letter of Credit Limit,
and the Issuer shall be deemed for all purposes of this Agreement
to have sold to each Lender, and each Lender shall be deemed,
without further action by any party hereto, to have purchased from
the Issuer, a participation interest equal to its Percentage of
the face amount of the Trencor Letter of Credit, the KPI Letter of
Credit and each letter of credit listed on Schedule 2.11.9 and the
related Facility Letter of Credit Obligations. Except as provided
in Section 2.11.6 above, the terms and conditions (including
the provisions relating to reimbursements for drawings) of the
Trencor LC Agreement shall govern the Trencor Letter of Credit.
Astec agrees that this Agreement shall be the "Credit Agreement"
defined in the Trencor LC Agreement for all purposes from
and after the Original Closing Date. Bank One hereby agrees
that, during the term of this Agreement and any extensions or
renewals hereof, the Trencor Letter of Credit will be extended or
renewed upon request of Astec and Trencor, Inc.; provided, however,
that Astec and Trencor, Inc. have satisfied and complied with
the terms and conditions for extension and renewal contained herein
and in the Trencor LC Agreement.
TAXES; YIELD PROTECTION
Taxes. (i) All payments by the Borrowers to or for the
account of any Lender or the Agent hereunder or under any Note shall be
made free and clear of and without deduction for any and all Taxes. If any
Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Lender or the Agent, (a) 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
3.1) such Lender or the Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (b) such
Borrower shall make such deductions, (c) such Borrower shall pay the full
amount deducted to the relevant authority in accordance with applicable law and
(d) such Borrower shall furnish
to the Agent the original copy of a receipt evidencing payment thereof within
thirty (30) days after such payment is made.
(ii) In addition, the Borrowers hereby agree to pay any present or
future stamp or documentary taxes and any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or under any Note or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note ("Other Taxes").
(iii) The Borrowers hereby agree to indemnify the Agent and
each Lender for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on amounts
payable under this Section 3.1) paid by the Agent or such Lender and
any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto. Payments due under this indemnification shall be
made within thirty (30) days of the date the Agent or such Lender makes
demand therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof (each a "Non-
U.S. Lender") agrees that it will, not less than ten (10) Business Days
after the date of this Agreement, (i) deliver to each of Astec and the Agent
two (2) duly completed copies of United States Internal Revenue Service
Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to
each of Astec and the Agent a United States Internal Revenue Form W-8 or W-9,
as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of Astec and the Agent (x) renewals or
additional copies of such form (or any successor form) on or before
the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so
delivered by it, such additional forms or amendments thereto as may be
reasonably requested by Astec or the Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent
such Lender from duly completing and delivering any such form or
amendment with respect to it and such Lender advises Astec and the Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide Astec with an appropriate form pursuant to clause (iv), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a
form originally was required to be provided), such Non-U.S. Lender shall
not be entitled to indemnification under this Section 3.5 with respect to
Taxes imposed by the United States; provided that, should a Non-U.S.
Lender which is otherwise exempt from or subject to a reduced rate of
withholding tax become subject to Taxes because of its failure to deliver
a form required under clause (iv), above, the Borrowers shall take such
steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to payments under this Agreement or any
Note pursuant to the law of any relevant jurisdiction or any treaty shall
deliver to the Borrowers (with a copy to the Agent), at the time or times
prescribed by applicable law, 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.
(vii) If the U.S. Internal Revenue Service or any other
governmental authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or properly completed,
because such Lender failed to notify the Agent of a change in
circumstances which rendered its exemption from withholding ineffective,
or for any other reason), such Lender shall indemnify the Agent fully for
all amounts paid, directly or indirectly, by the Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including
taxes imposed by any jurisdiction on amounts payable to the Agent under
this subsection, together with all costs and expenses related thereto
(including attorneys' fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent). The obligations of the
Lenders under this Section 3.1(vii) shall survive the payment of the
Obligations and termination of this Agreement.
Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not
having the force of law), or any change in the interpretation or administration
thereof by any governmental or quasi-governmental authority, central bank
or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender or applicable Lending Installation with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) subjects any Lender or any applicable Lending
Installation to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to any Lender
in respect of its Eurodollar Loans or Facility Letters of Credit (or
participations therein), or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender or any applicable Lending Installation
(other than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining its Eurodollar Loans or
Facility Letters of Credit (or participations therein) or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with its Eurodollar Loans or in connection with Facility Letters of
Credit (or participations therein), or requires any Lender or any
applicable Lending Installation to make any payment calculated by reference to
the amount of Eurodollar Loans held, Facility Letters of Credit issued
or participated in, or interest received, by it, by an amount deemed
material by such Lender,
and the result of any of the foregoing is to increase the
cost to such Lender or applicable Lending Installation of making or
maintaining its Eurodollar Loans or Revolving Commitment or of issuing or
participating in Facility Letters of Credit or to reduce the return
received by such Lender or applicable Lending Installation in connection
with such Eurodollar Loans, Revolving Commitment or Facility Letters
of Credit, then, within fifteen (15) days of demand by such Lender,
the Borrowers shall pay such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction
in amount received. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by
such Lender, any Lending Installation of such Lender or any corporation
controlling such Lender is increased as a result of a Change, then, within
fifteen (15) days of demand by such Lender, the Borrowers shall pay such Lender
the amount necessary to compensate for any shortfall in the rate of return on
the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its Revolving Commitment or its
Facility Letters of Credit (or participations therein) (after taking into
account such Lender's policies as to capital adequacy). "Change" means (i) any
change after the date of this Agreement in the Risk-Based Capital Guidelines or
(ii) any adoption of or change in any other law, governmental or quasi-
governmental rule, regulation, policy, guideline, interpretation, or directive
(whether or not having the force of law) after the date of this Agreement which
affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations
adopted prior to the date of this Agreement.
Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, the Agent shall suspend the
availability of the affected Type of Advance and require any Eurodollar Advance
of the affected Type to be repaid;
or if the Required Lenders determine that (a) deposits of a
type and maturity appropriate to match fund Eurodollar Advances are not
available, the Agent shall suspend the availability of the affected Type of
Advance with respect to any Eurodollar Advances made after the date of such
determination, or (b) the interest rate applicable to a Type of Advance does
not accurately reflect the cost of making or maintaining such Type, then, if
for any reason whatsoever the provisions of Section 3.2 are inapplicable, the
Agent shall suspend the availability of the affected Type of Advance with
respect to any Eurodollar Advance made after the date of any such
determination. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Advance is not made on the date specified by a
Borrower for any reason other than default by the Lenders, such Borrower will
indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Eurodollar Advance.
Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of
the Borrowers to such Lender under Sections 3.1, 3.2 and 3.3 or to avoid the
unavailability of Eurodollar Advances under Section 3.4, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to Astec
(with a copy to the Agent) as to the amount due, if any, under Section 3.1,
3.2, 3.3 or 3.5. Such written statement shall set forth in reasonable detail
the calculations upon which such Lender determined such amount and shall be
final, conclusive and binding on the Borrowers in the absence of manifest
error. Determination of amounts payable under such Sections in connection with
a Eurodollar Loan shall be calculated as though each Lender funded its
Eurodollar Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by Astec of such written
statement. The obligations of the Borrowers under Sections 3.1, 3.2, 3.3 and
3.5 shall survive payment of the Obligations and termination of this Agreement.
CONDITIONS PRECEDENT
Initial Credit Extension. The Lenders shall not be required to make the
initial Credit Extension hereunder and this Agreement shall not become
effective unless the Borrowers have furnished to the Agent with sufficient
copies for the Lenders the following items (and the date upon which all such
items shall have been so furnished is referred to as the "Closing Date":
(a) Copies of the articles of incorporation together with all amendments
thereto, and a certificate of good standing of each of
the Borrowers, all certified by the appropriate
governmental officer in each Borrower's jurisdiction of incorporation.
(b) Copies certified by the Secretary or Assistant
Secretary of each Borrower, of their respective by-laws and of their
respective Board of Directors' resolutions (and resolutions
of other bodies, if any are deemed necessary by counsel for the
Agent) authorizing the execution, delivery and performance of the
Loan Documents to which such Borrower is a party.
(c) Copies of the articles or certificate of
incorporation and by-laws, together with all amendments
thereto, of Breaker Technology, Inc., Breaker Technology Ltd., American
Augers, Inc. and Superior Industries of Morris, Inc., certified by
their respective Secretaries or Assistant Secretaries.
(d) An incumbency certificate, executed by the
Secretary or Assistant Secretary of each Borrower, which
shall identify by name and title and bear the signature of the officers of
each Borrower authorized to sign the Loan Documents to which such
Borrower is a party and to make borrowings hereunder, upon which certificate
the Agent and the Lenders shall be entitled to rely until informed of any
change in writing by Astec.
(e) A certificate, signed by the Chief Financial
Officer of Astec, stating that on the initial Borrowing Date, the
representations and warranties contained in this Agreement
are true and correct and that no Default or Unmatured Default has
occurred and is continuing.
(f) A written opinion of counsel for the Borrowers, in
substantially the form of Exhibit C-1 hereto and of special
Canadian counsel to Astec, in substantially the form of Exhibit C-2
hereto, in each case addressed to the Agent and the Lenders.
(g) Notes payable to the order of each Lender duly
executed by the applicable Borrower and a Swing Line Note
payable to the order of the Swing Line Lender duly executed by Astec.
(h) The Pledge Agreement duly executed by Astec,
together with certificates representing the capital stock
pledged pursuant
thereto and customary duly executed blank stock powers with
respect thereto.
(i) A UCC-1 financing statement suitable for filing
with the Secretary of State of Tennessee showing Astec as
debtor and the Agent as secured party covering the Collateral (which
the Agent shall only file in accordance with Section 4.1.5 of the Pledge
Agreement).
(j) Evidence that concurrently with the making of
the initial Advance, Astec shall have repaid the Bank One
Term Loans, together with all accrued and unpaid thereon and all other
amounts required to be paid pursuant to the Bank One Letter
Agreements in connection with the repayment of the Bank One Term Loans.
(k) Evidence that Astec shall have paid all fees,
costs and expenses required to be paid by it pursuant to
Section 9.7 hereof and for which an invoice has been submitted to it.
(l) Such other documents as the Lenders or
their counsel may have reasonably requested.
On the Closing Date, the Borrowers shall repay all
Tranche A Revolving Loans and Tranche B Revolving Loans
outstanding under the Existing Credit Agreement, together
with accrued and unpaid interest thereon and all amounts
required to be paid pursuant to Section 3.5 of the Existing Credit
Agreement in connection with the repayment of such Loans on the Closing
Date.Each Credit Extension. The Lenders shall not be required
to make any Credit Extension and the Issuer shall not be required to
issue any Facility Letter of Credit, and the Swing Line Lender shall not be
required to required to make any Swing Line Loan, unless on the applicable
Credit Extension Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties contained in
Article V of this Agreement and in Section 3 of the Pledge Agreement are
true and correct as of such Credit Extension Date except to
the extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation or warranty shall
be true and correct on and as of such earlier date.
(c) All legal matters incident to the making of such
Credit Extension shall be satisfactory to the Lenders and
their counsel.Each Borrowing Notice or LC Issuance Request or Notice of
Swing Line Loan with respect to each such Credit Extension
shall constitute a representation and warranty by the Borrowers
that the conditions contained in Sections 4.2(a) and (b) have been
satisfied. The Agent may require a duly completed Compliance Certificate
as a condition to making a Credit Extension.
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
The Borrowers jointly and severally represent and warrant to the
Lenders that: Corporate Existence and Standing. Each Credit Party is a
corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all requisite
authority, including all licenses, registrations, permits, franchises, patents,
copyrights, trademarks, tradenames, consents and approvals, to own its property
and assets and consummate the transactions contemplated hereby and to
conduct its business, and is qualified to do business and is in good standing
or otherwise authorized to conduct business in each jurisdiction in which its
business is conducted and where such qualification is necessary.
Authorization and Validity. Each Borrower has the corporate power
and authority and legal right to execute and deliver the
Loan Documents to which it is a party and to perform its obligations
thereunder. The execution and delivery by each Borrower of the Loan Documents
to which it is a party and the performance of its obligations hereunder and
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents to which it is a party constitute legal, valid and binding
obligations of each Borrower, enforceable against such Borrower in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally. No Conflict; Government Consent. Neither the execution and
delivery by either Borrower of the Loan Documents to which it is a
party, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on any
Credit Party or any Credit Party's articles of incorporation or by-laws or the
provisions of any indenture, instrument or agreement to which any Credit Party
is a party or is subject, or by which it, or its Property, is bound, or conflict
with or constitute a default thereunder, or result in, or require, the creation
or imposition of any Lien in, of or on the Property of any Credit Party
pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with,
or exemption by, or other action in respect of any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of,
or the legality, validity, binding effect or enforceability of, any of the
Loan Documents.
Financial Statements. The December 31, 1999 consolidated financial
statements of the Credit Parties heretofore delivered to the Agent and the
Lenders were prepared in accordance with Agreement Accounting Principles in
effect on the date such statements were prepared and fairly present the
consolidated financial condition and operations of the Credit Parties at
such date and the consolidated results of their operations for the
period then ended. All financial projections will be prepared by the Borrowers
in good faith, based upon information and assumptions reasonably believed to be
sound and accurate and represent reasonable forecasts of the Credit Parties'
future operations and financial performance.
Material Adverse Change. Since December 31, 1999, there
has been no change in the business, Property, prospects, condition
(financial or otherwise) or results of operations of the Credit Parties,
which could have a Material Adverse Effect.
Taxes. Each Credit Party has filed all United States
federal tax returns and all other tax returns which are required to be filed
and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by any Credit Party, except such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided in accordance with Agreement Accounting Principles and as to which no
Lien exists. No tax liens have been filed and no claims are being asserted
with respect to any such taxes. The charges, accruals and reserves on the
books of each Credit Party in respect of any taxes or other governmental
charges are adequate.
Litigation and Contingent Obligations. Except as listed on
Schedule 5.7 hereto, there is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the best
knowledge of any of their officers, threatened against or affecting any Credit
Party which could have a Material Adverse Effect or which seeks to prevent,
enjoin or delay the making of any Credit Extension. Other than any liability
incident to such litigation, arbitration or proceedings, no Credit Party has
any material contingent obligations not provided for or disclosed in the
financial statements referred to in Section 5.4.
Subsidiaries and Affiliates. Schedule 5.8 hereto contains
an accurate and complete list of all presently existing Subsidiaries of
Astec setting forth their respective jurisdictions of incorporation or
organization and the percentage of their respective capital stock or other
ownership interests owned by Astec or
other Subsidiaries. All of the issued and outstanding
shares of capital stock of such Subsidiaries are free from Liens and have been
duly authorized and issued and are fully paid and non-assessable. All of such
Subsidiaries (including AFS) are Wholly-Owned Subsidiaries. AFS has no
Subsidiaries. ERISA. The Unfunded Liabilities of all Single Employer
Plans do not in the aggregate exceed $5,000,000. No Credit Party nor
any other member of the Controlled Group has incurred, or is reasonably
expected to incur, any withdrawal liability to Multiemployer Plans in excess of
$1,000,000 in the aggregate. Each Plan complies in all material respects
with all applicable requirements of law and regulations, no Reportable Event
has occurred with respect to any Plan, no Credit Party nor any other members
of the Controlled Group has withdrawn from any Plan or initiated steps to do
so, and no steps have been taken to reorganize or terminate any Plan. Each
foreign employee benefit plan sponsored or maintained by any Credit Party or
any other member of the Controlled Group, or with respect to which any
Credit Party or any other member of the Controlled Group has any material
liability (a "Foreign Plan"), is in compliance in all material respects with
all applicable laws. No Credit Party or any other member of the Controlled
Group has incurred or expects to incur any liability with respect to a
Foreign Plan which could have a Material Adverse Effect.
Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of any Credit Party to the Agent
or the Lenders for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all other such factual information
hereafter furnished by or on behalf of any Credit Party to the Agent or the
Lenders will be, true and accurate (taken as a whole) on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at such time.
Regulation U. No Credit Party is engaged principally, or as one of its
important activities, in the business of purchasing or carrying margin stock
(as defined in Regulation U) ("Margin Stock"). Neither the
Loans nor any of the proceeds thereof, are for the purpose, whether immediate,
incidental or ultimate of (a) buying or carrying Margin Stock, or (b) extending
credit to others for the purpose of buying or carrying Margin Stock, or (c)
refunding indebtedness originally incurred for such purpose, or for any purpose
which entails a violation of, or which is inconsistent with, the provisions
of Regulations of the Board of Governors of the Federal Reserve System,
including Regulation U.
Both before and after giving effect to any stock repurchases permitted by
Section 6.10, Margin Stock constitutes less than twenty-five percent (25%) of
the value of those assets of all Credit Parties which are subject to any
limitation on sale, pledge or other restriction hereunder.
Material Agreements. No Credit Party is a party to any agreement or
instrument or subject to any charter or other corporate restriction which could
have a Material Adverse Effect. No Credit Party is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could have a Material Adverse Effect or (ii) any agreement
or instrument evidencing or governing Indebtedness, including, without
limitation, Contingent Obligations.
Compliance With Laws. Each Credit Party has complied with all
applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency
thereof, having jurisdiction over the conduct of their respective businesses or
the ownership of their respective Properties, including, without limitation,
Environmental Laws and ERISA. No Credit Party has received any notice to the
effect that its operations are not in material compliance with any of the
requirements of applicable foreign, federal, state and local environmental,
health and safety statutes and regulations or the subject of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a Release of any Hazardous Materials into the environment, which non-
compliance or remedial action could have a Material Adverse Effect.
Environmental Warranties. Except as set forth on Schedule 5.14
hereto:
(a) all facilities and property (including underlying
groundwater) owned or leased by any Credit Party has been, and
continues to be, owned or leased by such entity in material
compliance with all Environmental Laws;
(b) there has been no past, and there are no
pending or threatened (1) claims, complaints, notices or
requests for information received by any Credit Party with respect to
any alleged violation of any Environmental Law, or (ii) complaints,
notices or inquiries to any Credit Party regarding potential liability under
any Environmental Law which, in either case, have caused or could reasonably
be expected to cause liabilities in excess of $1,000,000;
(c) there have been no Releases of Hazardous
Materials at, on or under any property now or previously
owned or leased by any Credit Party that, singly or in the aggregate, have,
or may reasonably be expected to have, a Material Adverse Effect;
(d) each Credit Party has been issued and is in
compliance with all permits, certificates, approvals, licenses and other
authorizations relating to environmental matters and
necessary or desirable for their businesses;
(e) no property now or previously owned or leased
by any Credit Party is listed or proposed for listing (with
respect to owned property only) on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list of sites requiring
investigation or clean-up;
(f) there are no underground storage tanks, active
or abandoned, including petroleum storage tanks, at, on or
under any property now or previously owned or leased by any Credit
Party that, singly or in the aggregate, have, or may reasonably be
expected to have, a Material Adverse Effect;
(g) no Credit Party has directly transported or
directly arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on CERCLIS or on any similar state
list or which is the subject of federal, state or local enforcement
actions or other investigations which may lead to material claims against
any Credit Party for any remedial work, damage to natural resources or
personal injury, including, but not limited to, claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable
asbestos present at any property now or previously owned or
leased by any Credit Party that, singly or in the aggregate, have, or
may reasonably be expected to have, a Material Adverse Effect; and
(i) in the ordinary course of its business, the officers
of Astec consider the effect of Environmental Laws on the
business of Astec and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the
Credit Parties due to Environmental Laws. On the basis of this consideration,
Astec has concluded that Environmental Laws cannot reasonably be
expected to have a Material Adverse Effect.
Ownership of Properties. Except as set forth on Schedule
5.15 hereto, on the date of this Agreement, each Credit Party will have
good title, free of all Liens other than those permitted by Section 6.18, to
all of the Property and assets reflected in the most recent consolidated
financial statements provided to the Agent as owned by them.
Investment Company Act. No Credit Party is an "investment
company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
Public Utility Holding Company Act. No Credit Party is a
"holding company" or a "subsidiary company" of a "holding company",
or an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
Plan Assets; Prohibited Transactions. Neither Borrower is an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor any Credit Extension
gives rise to a prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Code.Intellectual Property. Each Credit Party
owns or possesses all of the patents, trademarks, service marks, trade names,
copyrights and licenses necessary for the present and planned future conduct of
its respective business except as set forth on Schedule 5.19.
Solvency. (a) No Credit Party (other than Astec Export Company,
Inc., a Barbados corporation, and Astec Investments, Inc.,
a Tennessee corporation) is insolvent and the consummation of the
transactions contemplated herein will not render any Credit Party insolvent.
Immediately after the consummation of the transactions to occur on the date
hereof and immediately following the making of each Credit Extension, if any,
made on the date hereof and after giving effect to the application of the
proceeds of such Credit Extensions, (i) the fair value of the assets of the
Credit Parties on a consolidated basis, at a fair valuation, will exceed the
debts and liabilities, whether or not subordinated, absolute, fixed or
contingent, material or immaterial, liquidated or
unliquidated or otherwise (taking into account, with
respect to all contingent liabilities, the likelihood of such liabilities
becoming actual), of the Credit Parties on a consolidated basis; (ii) the
present fair saleable value of the property of the Credit Parties on a
consolidated basis will be greater than the amount that
will be required to pay the probable liability of the
Credit Parties on a consolidated basis on their debts and other liabilities,
whether or not subordinated, absolute, fixed or contingent, material or
immaterial, liquidated or unliquidated or otherwise (taking into account, with
respect to all contingent liabilities, the likelihood of such liabilities
becoming actual), as such debts and
other liabilities become absolute and matured; (iii) the Credit Parties on a
consolidated basis will be able to pay their debts and liabilities, whether or
not subordinated, absolute, fixed or contingent, material or
immaterial, liquidated or unliquidated or otherwise (taking into account, with
respect to all contingent liabilities, the likelihood of such liabilities
becoming actual), as such debts and liabilities become absolute and matured;
and (iv) the Credit Parties on a consolidated basis will not have unreasonably
small capital with which to conduct the businesses in which they are engaged
as such businesses are now conducted and are proposed to be conducted after the
date hereof.
(b) The Borrowers do not intend to, or to permit any Credit
Party to, and the Borrowers do not believe that they or any Credit Party
will, incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by it
or any such Credit Party and the timing of the amounts of cash to be
payable on or in respect of its Indebtedness or the Indebtedness of any
such Credit Party.
Licenses. Each Credit Party possesses adequate assets, licenses,
permits, authorizations, patents, patent applications, copyrights, trademarks,
trademark applications and tradenames to continue to conduct its business as
heretofore conducted. No event has occurred which permits, or after notice or
lapse of time or both would permit, the revocation or termination of any of the
foregoing which taken in isolation or when considered with all other such
revocations or terminations could have a Material Adverse
Effect. The Borrowers have no notice or knowledge of any fact or any
past, present or threatened occurrence that could preclude or impair any
Credit Party's ability to retain or obtain any authorization necessary for the
operation of their respective businesses.
Pledge Agreement. The provisions of the Pledge Agreement are
effective to create, in favor of the Agent, for the benefit of itself and the
Lenders, a legal, valid and enforceable security interest in the Collateral.
COVENANTS
During the term of this Agreement, unless the Required Lenders
shall otherwise consent in writing, the Borrowers hereby jointly and
severally make the following agreements for themselves and on behalf of
each Credit Party.
Financial Reporting. The Borrowers will and will cause each Credit
Party to maintain a system of accounting established and administered in
accordance with Agreement Accounting Principles, and furnish to the Lenders:
(a) Within one hundred twenty (120) days after the close of each of its fiscal
years, an unqualified (except for qualifications
relating to changes in accounting principles or practices
reflecting changes in generally accepted principles of accounting and
required or approved by Astec's independent certified public
accountants) audit report certified by independent certified public
accountants, acceptable to the Lenders, prepared in accordance with Agreement
Accounting Principles as in effect at such time on a consolidated and
consolidating basis (consolidating statements need not be certified by
such accountants) for itself and the Credit Parties including
without limitation balance sheets as of the end of such period, related profit
and loss and reconciliation of surplus statements, and a statement of
cash flows, accompanied by (a) any management letter prepared by said
accountants, (b) a certificate of said accountants that, in
the course of their examination necessary for their certification of the
foregoing, they have obtained no knowledge of any Default or Unmatured
Default, or if, in the opinion of such accountants, any Default or Unmatured
Default shall exist, stating the nature and status thereof and (c) a
letter from said accountants addressed to the Lenders acknowledging that
such Lenders are extending credit in primary reliance on such financial
statements and authorizing such reliance.
(b) Within forty-five (45) days after the close of each
of the first three quarterly periods of each of its fiscal years, for Astec,
consolidated and consolidating unaudited balance sheets as at the close
of each such period and consolidated and consolidating profit and loss
and a statement of cash flows for such quarter and for the period from
the beginning of such fiscal year to the end of such quarter, all certified
by Astec's Chief Financial Officer.
(c) As soon as available, but in any event within
sixty (60) days after the beginning of each fiscal year of Astec, a copy of
the plan and forecast (including, without limitation, a projected
consolidated and consolidating balance sheet, income statement and
funds flow statement) of the Credit Parties for such fiscal year, certified
by Astec's Chief Financial Officer.
(d) Together with the financial statements required hereunder, a Compliance
Certificate.
(e) Within two hundred seventy (270) days after the
close of each Plan year, a statement of the Unfunded Liabilities of each
Single Employer Plan.
(f) As soon as possible and in any event within five
(5) days after any Borrower knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed by Astec's Chief
Financial Officer, describing said Reportable Event and the action which
Astec proposes to take with respect thereto.
(g) Without limitation to Section 6.26, as soon as
possible and in any event within ten (10) days after
receipt by any Credit Party, a copy of (a) any notice or claim to the effect
that any Credit Party is or may be liable to any Person as a result of the
Release by any Credit Party, or any other Person of any Hazardous Materials
into the environment, and (b) any notice alleging any violation of any
Environmental Law by any Credit Party which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(h) Promptly upon the furnishing thereof to the
shareholders of Astec, copies of all financial statements, reports and
proxy statements so furnished.
(i) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which Astec files with the Securities and Exchange Commission
or with the Federal Trade Commission.
(j) Within 30 days after the end of each calendar month, a Borrowing Base
Certificate .
(k) Such other information (including, without
limitation, non-financial information) as the Agent or any Lender may from
time to time reasonably request.
Use of Proceeds. Astec will use the proceeds of Loans made under the
Tranche A Commitment (i) in the case of the initial Advance, to repay the Bank
One Term Loans and Tranche A Revolving Loans outstanding under the
Existing Credit Agreement, (ii) for Acquisitions permitted by Section 6.16, and
(iii) for working capital purposes. AFS will use the proceeds of Loans under
the Tranche B Commitment (a) in the case of the initial
Advance, to repay Tranche B Revolving Loans outstanding under the Existing
Credit Agreement, and (b) to
finance Qualifying Financing Leases, Qualifying Operating
Leases and Qualifying Chattel Paper. The Borrowers will not, nor will
they permit any Subsidiary to, use any of the proceeds of the Loans to
purchase or carry any Margin Stock.
Notice of Default. The Borrowers will, and will cause each Credit
Party to, give prompt notice in writing to the Agent and the Lenders of the
occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which could reasonably be expected to have a Material
Adverse Effect.
Conduct of Business. The Borrowers will, and will cause each Credit
Party to, (i) carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is
presently conducted, (ii) do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction
in which its business is conducted, and (iii) do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect the rights, licenses, registrations, authorization, permits,
franchises, patents, copyrights, trademarks and tradenames material to the
conduct of its business.
Taxes. The Borrowers will, and will cause each Credit Party to, pay
when due all taxes, assessments and governmental chargesn and levies upon it or
its income profits or Property, and pay all charges for labor and materials
which if unpaid might give rise to liens on such Property, except
those which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves have been set aside in accordance with
Agreement Accounting Principles.
Insurance. The Borrowers will, and will cause each Credit Party to,
maintain with financially sound and reputable insurance
companies insurance on all their Property in such amounts and covering such
risks as is consistent with sound business practice, including, without
limitation, casualty, liability and worker's compensation insurance, and each
Borrower will furnish to any Lender
upon request full information as to the insurance carried
by it and each Credit Party. All such insurance policies shall contain
provisions providing that the insurance shall not be cancelable except on
thirty (30) days' prior notice to the Lenders.
Compliance with Laws. The Borrowers will, and will cause
each Credit Party to, comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may
be subject, including, without limitation, Environmental Laws, ERISA and laws
and regulations governing Foreign Plans.
Maintenance of Properties. The Borrowers will, and will cause each
Credit Party to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition,
and make all necessary and proper repairs, renewals and replacements so that
its business carried on in
connection therewith may be properly conducted at all times.
Inspection. The Borrowers will, and will cause each Credit
Party to, permit the Lenders, by their respective representatives and
agents, to inspect any of the Property, corporate books and financial records
of each Credit Party, to
examine and make copies of their respective books of
accounts and other financial records, and to discuss the affairs, finances and
accounts of each Credit Party with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Lenders may
designate.
Dividends. The Borrowers will not, nor will they permit any Credit
Party to, declare or pay, directly or indirectly, any dividends or make any
other distributions, whether in cash or property, or a
combination thereof, on its capital stock or other equity interests (other than
dividends payable in its own capital stock) or redeem, repurchase or otherwise
acquire or retire any of its capital stock or other equity interests at any
time outstanding, except that (a) any
Subsidiary of Astec may declare and pay dividends to Astec
or to a Wholly-Owned Subsidiary of Astec, and (b) Astec may repurchase in
accordance with applicable law and Regulation U up to 1,500,000 shares of
its common stock if after giving effect to such repurchase, the Borrowers are
in compliance with all of the terms hereof, including, without limitation,
Section 6.22.1 on a pro forma
basis and Section 5.11.
Indebtedness. The Borrowers will not, nor will they permit
any Credit Party to, create, incur or suffer to exist any
Indebtedness, except:
(a) The Credit Extensions.
(b) Indebtedness described in Schedule 6.11 hereto.
(c) Indebtedness of any Subsidiary to Astec or to any Wholly-Owned Subsidiary
of Astec.
(d) Indebtedness incurred in the ordinary course of
business with respect to customer deposits, trade payables and all other
unsecured current liabilities not the result of borrowing and not evidenced
by any note or any other similar instrument.
(e) Indebtedness assumed in connection with
Acquisitions permitted by Section 6.16(i); provided,
however, that any such Indebtedness assumed in connection therewith does not
exceed in the aggregate $10,000,000 at any time.
(f) Indebtedness in respect of Rate Hedging
Obligations incurred on an unsecured basis on terms and in
amounts satisfactory to the Agent.
(g) Indebtedness in connection with industrial
revenue bond financings where the Letter of Credit thereunder is issued
pursuant to Section 2.11.
(h) Contingent Obligations permitted by Section 6.17.
(i) Other unsecured Indebtedness of the Borrowers
not to exceed $10,000,000 in the aggregate at any time
outstanding.
Merger. The Borrowers will not, nor will they permit any Credit Party
to, merge or consolidate with or into any other Person, except that a
Subsidiary of Astec (other than AFS) may merge with and into Astec or
a Wholly-Owned Subsidiary of Astec.
Sale of Assets. The Borrowers will not, nor will they permit any Credit
Party to, lease, sell or otherwise dispose of its Property
to any other Person except for (a) sales of inventory in the ordinary course of
business, (b) leases, sales or other dispositions of its Property that,
together with all other Property of
the Credit Parties previously leased, sold or disposed of
(other than inventory in the ordinary course of business) as permitted by this
Section during the twelve-month period ending with the month in which any such
lease, sale or other disposition occurs, do not constitute a Substantial
Portion of the Property of the Credit Parties and do not materially adversely
affect the business or operations
of the Credit Parties, (c) Permitted Recourse Lease Sales,
and (d) other sales by AFS of financing and operating leases (including
Qualifying Operating Leases
and Qualifying Financing Leases) and other chattel paper (including Qualifying
Chattel Paper) on a non-recourse basis provided that the Tranche B Revolving
Loans at no time exceed the Tranche B Borrowing Base. Each of the
Subsidiaries of Astec shall at all times be a Wholly-Owned
Subsidiary of Astec. Sale of Accounts. Except for Permitted Recourse Lease
Sales, the Borrowers will not, nor will they permit any Credit Party
to, sell or otherwise dispose of any leases or notes or accounts receivable,
with recourse.Sale and Leaseback. The Borrowers will not, nor will they
permit any Credit Party to, sell or transfer any of its Property in
order to concurrently or subsequently lease as lessee such or similar Property.
Investments and Acquisitions. The Borrowers will not, nor
will they permit any Credit Party to, make or suffer to exist any
Investments (including, without limitation, loans and advances to, and other
Investments in, its Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint
venture, or to make any Acquisition of any Person, except:
(a) Short-term obligations of, or fully guaranteed by,
the United States of America.
(b) Commercial paper rated A-1 or better by
Standard and Poor's Rating Group, a division of McGraw-Hill
Corporation
or P-1 or better by Moody's Investors Service, Inc.
(c) Demand deposit accounts maintained in the
ordinary course of business.
(d) Certificates of deposit issued by and time
deposits with commercial banks (whether domestic or
foreign) having
capital and surplus in excess of $100,000,000.
(e) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof and described in Schedule
5.8 hereto.
(f) Additional Investment or capital contributions in
AFS, subsequent to the Closing Date not to exceed
$5,000,000 in the aggregate.
(g) Additional Investment in domestic Wholly-Owned
Subsidiaries of Astec, other than AFS.
(h) Such other Investments, subject to the
reasonable approval of the Required Lenders.
(i) Permitted Acquisitions by Astec; provided,
however, that (i) the aggregate purchase price (including any
portion thereof that is deferred) of such Acquisitions, including
consideration in the form of cash, cash equivalents and common
stock and assumed Indebtedness and Indebtedness paid at the time
of the consummation thereof, does not exceed $60,000,000 during
any one fiscal year, (ii) the aggregate purchase price (including any
portion thereof that is deferred) of such Acquisitions, including
consideration in the form of cash and cash equivalents only and
assumed Indebtedness and Indebtedness paid at the time of the
consummation thereof, does not exceed $25,000,000 during any
one fiscal year, (iii) no Unmatured Default or Default has occurred
and is continuing or will result therefrom and Astec submits a
certificate to the Agent at the time of the consummation of each
such Acquisition to such effect and certifying that the Credit
Parties are and will be in compliance on a pro forma basis with the
financial and other covenants hereunder after giving effect to such
Acquisition, (iv) 100% of the outstanding capital stock or other
equity interests in each Subsidiary acquired or formed in
connection with each such Acquisition shall be and, except as
permitted by Section 6.13, shall remain directly owned by Astec,
and (v) the Agent shall have, pursuant to the Pledge Agreement, a
perfected first priority security interest in 100% of the capital stock
or other equity interests in each Domestic Subsidiary acquired or
formed in connection with each such Acquisition and 65% (or such
greater percentage in which a security interest may be granted
without resulting in adverse tax consequences to Astec under the
Code as in effect from time to time) of each Foreign Subsidiary
acquired or formed in connection with each such Acquisition, and
Astec shall deliver to the Agent a supplement to Schedule A to the
Pledge Agreement describing such capital stock or other equity
interests, the certificates, if any, representing such capital stock or
other equity interests, customary duly executed blank stock powers
with respect thereto and such other documentation as the Agent
shall request to effect the perfection of such security interest,
together with such evidence of requisite corporate action and
opinions of counsel as the Agent may reasonably request..
Contingent Obligations. Except as permitted pursuant to Section
6.11(d), the Borrowers will not, nor will they permit any Credit Party to, make
or suffer to exist any Contingent Obligation (including, without limitation,
any Contingent Obligation with respect to the obligations of a
Subsidiary), except
(a) by endorsement of instruments for deposit or collection
in the ordinary course of business, (b) the guaranty by Astec of the
Obligations of AFS pursuant to Article XVI, (c) the guaranty by Astec of
certain liabilities of Pavement Technology, Inc. in an amount not to exceed
$1,250,000 at any time, and (d) Contingent Obligations relating to Permitted
Recourse Lease Sales.
Liens. The Borrowers will not, nor will they permit any
Credit Party to, create, incur, assume or suffer to exist any Lien in,
of or on its Property (now owned or hereafter acquired) or income of any Credit
Party, except:
(a) Liens for taxes, assessments or governmental
charges or levies on its Property in the ordinary course of business if the
same shall not at the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with
Agreement Accounting Principles shall have been set aside on its books.
(b) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in
the ordinary course of business which secure payment of obligations not
more than sixty (60) days past due or which are being contested in good
faith by appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
(c) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or similar
legislation.
(d) Utility easements, building restrictions and such
other encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character and
which do not in any material way affect the marketability of the same or
interfere with the use thereof in the business of any Credit Party.
(e) Liens existing on the date hereof and described in Schedule 5.15 hereto.
(f) Liens securing Indebtedness permitted under
Section 6.11(e); provided, however, that such Liens
encumber only assets purchased in connection with any such Acquisition
and not any other Property of any Credit Party.
(g) Liens granted by Kolberg-Pioneer, Inc. in its
assets in favor of Astec Holdings, Inc. or another Credit
Party securing intercompany loans made to Kolberg-Pioneer, Inc. in
connection with the Portec Acquisition.
(h) Liens granted by Breaker Technology, Inc. and
Breaker Technology, Ltd., in their respective assets in
favor of Astec Holdings, Inc. or another Credit Party securing
intercompany loans made to Breaker Technology, Inc. and Breaker Technology,
Ltd. in connection with the acquisition of certain assets from Teledyne
Industries Canada Limited and Teledyne CM Products, Inc.
(i) Liens arising out of (i) Permitted Recourse Lease
Sales or (ii) permitted sales by AFS of financing or
operating leases (including Qualifying Operating Leases and Qualifying
Financing Leases) or other chattel paper (including Qualifying Chattel Paper)
on a non-recourse basis; provided, however, that such Liens pertain
only to assets purchased in connection with such sales.
Transactions with Affiliates. The Borrowers will not, nor
will they permit any Credit Party to, enter into any transaction
(including, without limitation, the purchase or sale of any Property or
service) with, or make any payment or transfer to, any Affiliate except in the
ordinary course of business and pursuant to the reasonable requirements of such
Credit Party's and such Affiliate's business and upon fair and reasonable terms
no less favorable to such Credit Party or such Affiliate than such Credit Party
or such Affiliate would obtain in a comparable arms-length transaction.
Letters of Credit. The Borrowers will not, nor will they
permit any Credit Party to, apply for or become liable upon any Letter
of Credit other than the Facility Letters of Credit and the Subsidiary Letters
of Credit.Amendments to Certain Agreements. The Borrowers will not,
nor will they permit any Credit Party to, amend or waive any
substantive term or provision of its certificate or articles of incorporation
of by-laws, without in
each case, the prior written consent of the Required
Lenders.
Financial Covenants.
Leverage Ratio. At all times after the date hereof, the
Borrowers will cause to be maintained a Leverage Ratio of
not more than the
following during each of the following periods, measured as
of the end of each
fiscal quarter during each such period.
Period Leverage Ratio
Prior to and including June 30, 2000 3.5:1.0
July 1, 2000 and thereafter 3.0:1.0
Consolidated Tangible Net Worth. The Borrowers will at all
times cause to be maintained a minimum Consolidated
Tangible Net Worth of
not less than $82,000,000, plus fifty percent (50%) of the
Cumulative Consolidated Net Income after December 31, 1996, plus the
cash proceeds from the issuance and sale of any common stock, preferred stock,
warrant or other equity securities of the Credit Parties, net of any
brokerage commissions and any other reasonable costs or expenses directly
attributable to such issuance. Rentals. The Borrowers will not, nor will they
permit any Credit Party to, create, incur or suffer to exist
obligations for Rentals in excess of $6,000,000 during any one fiscal year on a
non-cumulative basis in the aggregate for the Credit Parties.
Interest Coverage Ratio. The Borrowers will cause to be
maintained, as at the last day of each fiscal quarter, a
ratio of (a) Consolidated Net Income, minus extraordinary gains or plus
extraordinary losses, plus income
tax expense, plus interest expense to (b) interest expense
of the Credit Parties on a consolidated basis, for the four most recently ended
fiscal quarters of not less than 2.50 to 1.0.
AFS Leases. AFS shall not retain financing and operating
leases (including Qualifying Financing Leases and
Qualifying Operating Leases) with respect to which the aggregate residual value
of the equipment leased at the end of the term of such leases exceeds in the
aggregate $20,000,000 at any time.
Fixed Asset Expenditures. The Borrowers will not, nor will they
permit any Credit Party to, expend, or be committed to
expend, in the acquisition of fixed assets, in excess of eight percent
(8%) of Consolidated Net Revenue during any one fiscal year on a non-cumulative
basis in the aggregate for the Credit Parties.
Subordinated Indebtedness. The Borrowers will not, and
will not permit any Credit Party to, make any amendment or
modification to the indenture, note or other agreement evidencing or governing
any Subordinated Indebtedness, or directly or indirectly voluntarily prepay,
defease or in substance defease, purchase, redeem, retire or otherwise
acquire, any Subordinated Indebtedness.
Accounting Method. The Borrowers will not, and will not
permit any Credit Party to, change its fiscal year or method of
accounting, except as required by Agreement Accounting Principles.
Environmental Covenant. The Borrowers will, and will cause
each Credit Party to:
(a) use and operate all of its facilities and properties
in compliance with all Environmental Laws, keep all necessary
environmental permits, approvals, certificates and licenses
in effect and remain in compliance therewith, and handle all Hazardous
Materials in compliance with all applicable Environmental Laws;
(b) immediately notify the Lenders and provide
copies upon receipt of all written claims, complaints,
notices or inquiries relating to the environmental condition of its facilities
and properties or compliance with Environmental Laws, and promptly cure and
have dismissed with prejudice any such actions and proceedings
to the satisfaction of the Lenders; and
(c) provide such information and certifications which
any Lender may reasonably request from time to time to insure
compliance with this Section 6.26.
Litigation and Other Notices. The Borrowers will, and will
cause each Credit Party to, give the Lenders prompt written notice of
the following:
(a) the issuance by any court or governmental
agency or authority of any injunction, order, decision or other restraint
prohibiting, or having the effect of prohibiting, the
making of the Advances or other Credit Extensions or the initiation of any
litigation or similar proceeding seeking any such injunction, order or other
restraint; and
(b) the filing or commencement of any action, suit or
proceeding against any Credit Party whether at law or in
equity or by or before any court or any federal, state, municipal or other
governmental agency or authority and which, if adversely determined
against any Credit Party, as the case may be, is likely to (in such Borrower's
reasonable judgment) result in liability in excess of $2,000,000 in
the aggregate.
Pledge of Stock of Foreign Subsidiaries. In the event that
a Default or Unmatured Default has occurred and is continuing, Astec
will, at the request of the Agent, grant to the Agent, for the benefit of
itself and the Lenders, pursuant
to the Pledge Agreement, a security interest in each
Foreign Subsidiary's capital stock or other equity interests in which it does
not then have a security interest, and will deliver to the Agent the
certificates, if any, representing such capital
stock or other equity interests, customary duly executed
stock powers with respect thereto and such other documentation as the Agent
shall request to effect such grant of a security interest and the perfection
thereof, together with such evidence of requisite corporate action and opinions
of counsel as the Agent may reasonably request.
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default: 7.1. Any representation or warranty made or deemed made
by or on behalf of any Credit Party to the Lenders or the Agent
under or in connection with this Agreement, any other Loan Document, any Credit
Extension, or any certificate or information delivered in connection with
this Agreement or any other Loan Document shall be materially false or
misleading on the date as of which made.
7.2. Nonpayment of (a) principal of any Note or of any
Reimbursement Obligation when due (including, without
limitation, failure to make any payment required by Section 2.1.3), or (b)
interest upon any Note or of any commitment fee or other obligation under any
of the Loan Documents
within five (5) days after the same becomes due.
7.3. The breach by any Borrower of any of the terms or provisions
of any of Sections 6.2, 6.4, 6.10, 6.11, 6.12, 6.13, 6.14,
6.15, 6.16, 6.22.1, 6.22.2, 6.22.3, 6.22.4, 6.23, 6.24 or 6.28.
7.4. The breach by any Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any
of the terms or provisions of this Agreement which is not remedied within
twenty (20) days after written notice from the Agent or any Lender, provided
that if such breach is not capable of being cured within such twenty (20) day
period, such cure period shall be extended for a period of sixty (60)
additional days so long as such Borrower has diligently begun to cure such
breach and diligently pursues such cure thereafter.
7.5. Failure of any Credit Party to pay any Indebtedness,
including, without limitation, any Contingent Obligation,
when due; or the default by any Credit Party in the performance of any term,
provision or condition contained in any agreement under which any
Indebtedness, including, without limitation, any Contingent Obligation, was
created or is governed, after
the expiration of all applicable cure periods, or any other
event shall occur or condition exist, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness
to become due prior to its stated maturity; or any Indebtedness of any Credit
Party shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity
thereof; or any Credit Party shall not pay, or admit in writing its inability
to pay, its debts generally as they become due.
7.6. Any Credit Party shall (a) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect or similar state or foreign laws, (b) make an assignment
for the benefit of creditors,
(c) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar
official for it or any Substantial Portion of its Property, (d) institute any
proceeding seeking an order
for relief under the Federal bankruptcy laws as now or
hereafter in effect or similar state or foreign laws, or seeking to adjudicate
it a bankrupt or insolvent,
or seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (e) take any corporate
action to authorize or effect
any of the foregoing actions set forth in this Section 7.6
or (f) fail to contest in good faith any appointment or proceeding described in
Section 7.7.
7.7. Without the application, approval or consent of any
Credit Party, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for any Credit Party or any Substantial Portion
of their respective Property, or a proceeding described in Section 7.6(d)
shall be instituted against any Credit Party and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of sixty (60) consecutive days.
7.8. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or
control of (each a "Condemnation"), all or any portion of the Property of any
Credit Party which, when taken together with all other Property of the Credit
Parties so condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such
Condemnation occurs, constitutes a Substantial Portion of.
7.9. Any Credit Party shall fail within thirty (30) days to pay, bond
or otherwise discharge one or more (a) judgments or orders for the payment of
money in excess of $500,000 (or the equivalent thereof in currencies other than
U.S. Dollars) in the aggregate, or (b) nonmonetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, which judgment(s), in any such
case, is/are not stayed on appeal or otherwise being appropriately contested in
good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $5,000,000, any Reportable Event
shall occur in connection with any Plan or any Credit Party or any member
of the Controlled Group incurs liability under a Foreign Plan which could
have a Material Adverse Effect.
7.11. Any Credit Party or any other member of the
Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal liability to such
Multiemployer Plan in an amount which, when aggregated with all other amounts
required to be paid to Multiemployer Plans by any Credit Party or any other
member of the Controlled
Group as withdrawal liability (determined as of the date of such notification),
exceeds $500,000 or requires payments exceeding $100,000 per annum.
7.12. Any Credit Party or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if as a result of such
reorganization or termination the aggregate annual contributions of such
Credit Party and the other members of the Controlled Group (taken as a whole)
to all Multiemployer Plans which are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan years of each such Multiemployer
Plan immediately preceding the plan year in which the reorganization or
termination occurs by an amount exceeding $1,000,000.
7.13. Any Credit Party shall be the subject of any
proceeding pertaining to the release by (i) any Credit Party, (ii) any
Person acting on any Credit Party's behalf or (iii) any predecessor in interest
to the assets and properties of any Credit Party of Hazardous Material into
the environment, or any violation of any Environmental Laws which, in either
case, could have a Material Adverse Effect.
7.14. Any Change in Control shall occur.
7.15. The occurrence of any "default" or "event of
default", as defined in any Loan Document (other than this Agreement) or
the breach of any of the terms or provisions of any Loan Document (other than
this Agreement), which default or breach continues beyond any period of
grace therein provided.
7.16. Nonpayment by any Credit Party of any Rate Hedging
Obligation or the breach by any Credit Party of any term, provision or
condition contained in any agreement, device or arrangement giving
rise to any Rate Hedging Obligation.
7.17. The Agent shall fail to have a valid and perfected
first priority security interest in all of the capital stock or other
equity interests of each Subsidiary of Astec (or such lesser amount in the case
of Foreign Subsidiaries as
is required by this Agreement) and in all other Collateral,
except as permitted by the terms of the Pledge Agreement, the Pledge Agreement
shall fail to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability thereof, or Astec
shall fail to comply with any of the terms or provisions of the Pledge
Agreement.
7.18. An event shall have occurred that could give rise to a Material
Adverse Effect.
7.19. The representations and warranties set forth in
Section 5.18 shall at any time not be true and correct.
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
Acceleration.
(a) If any Default described in Section 7.6 or 7.7
occurs with respect to any Credit Party, (i) the
obligations of the Lenders
to make Loans hereunder and the obligations of the Issuer to issue
Facility Letters of Credit shall automatically terminate
and the Obligations shall immediately become due and payable without
presentment, demand, protest or notice of any kind, all of which each
Borrower hereby expressly waives and without any election or action on the
part of the Agent or any Lender and (ii) each Borrower will be and
become thereby unconditionally obligated, without the need for demand or
the necessity of any act or evidence, to deliver to the Agent, at its
address specified pursuant to Article XIII, for deposit into the Letter of
Credit Collateral Account, an amount (the "Collateral Shortfall Amount")
equal to the excess, if any, of
(A) 100% of the sum of the aggregate maximum
amount remaining available to be drawn under the
Facility Letters of Credit (assuming compliance with all
conditions for drawing thereunder) issued by the Issuer
and outstanding as of such time, over
(B) the amount on deposit in the Letter of Credit
Collateral Account at such time that is free and clear of
all rights and claims of third parties and that has not been
applied by the Lenders against the Obligations.
(b) If any Default occurs and is continuing (other
than a Default described in Section 7.6 or 7.7), (i) the Required Lenders
may terminate or suspend the obligations of the Lenders to
make Loans and the obligation of the Issuer to issue Facility Letters
of Credit hereunder, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind,
all of which the Borrowers hereby expressly waive and (ii) the Required
Lenders may, upon notice delivered to Astec and in addition to the
continuing right to demand payment of all amounts payable under this
Agreement, make demand on Astec to deliver (and Astec will, forthwith upon
demand by the Required Lenders and without necessity of further act or
evidence, be and become thereby unconditionally and jointly and
severally obligated to deliver), to the Agent, at its address specified
pursuant to Article XIII, for
deposit into the Letter of Credit Collateral Account an amount equal to the
Collateral Shortfall Amount.
(c) If at any time while any Default is continuing, the
Agent determines that the Collateral Shortfall Amount at
such time is greater than zero, the Agent may make demand on Astec to
deliver (and Astec will, forthwith upon demand by the Agent and without
necessity of further act or evidence, be and become thereby
unconditionally obligated to deliver), to the Agent as additional funds to be
deposited and held in the Letter of Credit Collateral Account an amount equal
tosuch Collateral Shortfall Amount at such time.
(d) The Agent may at any time or from time to time
after funds are deposited in the Letter of Credit Collateral Account, apply
such funds to the payment of the Obligations and any other
amounts as shall from time to time have become due and payable by the
Borrowers to the Lenders under the Loan Documents.
(e) At any time while any Default is continuing,
neither the Borrowers nor any Person claiming on behalf of
or through the Borrowers shall have any right to withdraw any of the funds
held in the Letter of Credit Collateral Account. After all of the
Obligations have been indefeasibly paid in full, any funds remaining in the
Letter of Credit Collateral Account shall be returned by the Agent to Astec
or paid to whoever may be legally entitled thereto at such time.
(f) The Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Letter of
Credit Collateral Account and shall be deemed to have exercised
such care if such funds are accorded treatment substantially equivalent
to that which the Agent accords its own property, it being understood
that the Agent shall not have any responsibility for taking any necessary
steps to preserve rights against any Persons with respect to any
such funds.
Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing
of the Required Lenders) and the Borrowers may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
the Loan Documents or changing in any manner the rights of the Lenders or the
Borrowers hereunder or waiving any Default hereunder; provided, however, that
no such supplemental agreement shall, without the consent of each Lender
directly or indirectly affected thereby:
(a) Extend the maturity of any Loan or Note or
forgive all or any portion of the principal amount thereof,
or reduce the rate or extend the time of payment of interest or fees thereon.
(b) Reduce or extend the Reimbursement
Obligations, or reduce the rate or change the time of payment of any fees
related to Facility Letters of Credit or Swing Line Loans;
(c) Reduce the percentage specified in the definition of Required Lenders.
(d) Extend the Facility Termination Date, or reduce
the amount or extend the payment date for the scheduled or mandatory
commitment reductions or prepayments required under
Sections 2.1.3
and 2.4, or increase the amount of the Revolving Commitment, the
Tranche A Commitment or the Tranche B Commitment of any
Lender hereunder, or permit either Borrower to assign its rights
under this Agreement.
(e) Amend this Section 8.2.
(f) Release all or substantially all of the Collateral.
No amendment of any provision of this Agreement relating to
the Agent, the Issuer or the Swing Line Lender shall be effective
without the written consent of the Agent, the Issuer or the Swing Line Lender,
as the case may be. The Agent may waive payment of the fee required
under Section 12.3.2 without obtaining the consent of any other
party to this Agreement.
Preservation of Rights. No delay or omission of the
Lenders or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the
inability of any Borrower to satisfy the conditions precedent to such Credit
Extension shall not constitute any waiver or acquiescence.
Any single or partial exercise of any such right shall not preclude other or
further exercise thereof or the exercise of any other right, and no waiver,
amendment or other variation of
the terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Agent and the Lenders until the
Obligations have been paid in full.
GENERAL PROVISIONS
Survival of Representations. All representations and
warranties of the Borrowers contained in this Agreement shall survive
delivery of the Notes and the making of the Loans herein contemplated.
Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated
to extend credit to any Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
Taxes. Any Taxes (excluding Excluded Taxes) or other
similar assessments or charges made by any governmental or revenue
authority in respect of the Loan Documents shall be paid by the
Borrowers, together with interest and penalties, if any.
Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents.
Entire Agreement. The Loan Documents, together with the
letter agreement referred to in Section 2.4.1(b), embody the
entire agreement and understanding among the Borrowers, the Agent and the
Lenders and supersede all prior agreements and understandings among the
Borrowers, the Agent and the Lenders relating to the subject matter thereof.
Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not
joint and no Lender shall be the partner or agent of any other (except to the
extent to which the Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer
any right or benefit upon any Person other than the parties
to this Agreement and their respective successors and assigns; provided,
however, that the parties
hereto expressly agree that the Arranger shall enjoy the
benefits of the provisions of Sections 9.7, 9.11 and 10.10 to the extent
specifically set forth therein and shall have the right to enforce such
provisions on its own behalf and
in its own name to the same extent as if it were a party to
this Agreement.
Expenses; Indemnification. The Borrowers shall reimburse
the Agent and the Arranger for any and all costs, internal charges
and out-of-pocket expenses (including without limitation attorneys' fees and
time charges of attorneys for the Agent, which attorneys may be employees
of the Agent) paid or incurred by the Agent or the Arranger in connection with
the preparation, negotiation, execution, delivery, syndication, review,
amendment, modification and administration of the Loan Documents. The
Borrowers also agree to
reimburse the Agent, the Arranger and the Lenders for any
costs, internal charges and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Agent, the Arranger and the Lenders,
which attorneys may be employees of the Agent, the Arranger or the Lenders)
paid or incurred by the Agent, the Arranger or any Lender in connection with
the collection and enforcement of the Loan Documents. The Borrowers further
agree to indemnify the Agent, the Arranger, each Lender, their respective
affiliates, and each of their directors, officers and employees against all
losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or
not the Agent, the Arranger, any Lender or any affiliate is a party thereto)
which any of them may pay or incur arising out of or relating to (i) this
Agreement, (ii) the other Loan
Documents, (iii) the transactions contemplated hereby, (iv)
the direct or indirect application or proposed application of the proceeds of
any Loan hereunder or
the use of any Facility Letter of Credit, (v) the Release
of Hazardous Materials in, onto or from any Credit Party's owned or leased
property and (vi) any violation of Environmental Laws. The obligations of the
Borrowers under this
Section shall survive the termination of this Agreement and
the payment and performance of the Obligations.
Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of
the Lenders.Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles.
Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the
remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and
to this end the provisions of all Loan Documents are declared to be severable.
Nonliability of Lenders. The relationship between the
Borrowers, on the one hand, and the Lenders and the Agent, on the other,
shall be solely that of borrower and lender. Neither the Agent, the Arranger
nor any Lender shall have
any fiduciary responsibilities to the Borrowers. Neither the Agent, the
Arranger nor any Lender undertakes any responsibility to the
Borrowers to review or inform the Borrowers of any matter in connection with
any phase of any Credit
Party's business or operations. The Borrowers agree that
neither the Agent, the Arranger nor any Lender shall have liability to any
Credit Party (whether
sounding in tort, contract or otherwise) for losses
suffered by any Credit Party in
connection with, arising out of, or in any way related to,
the transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined by a court of competent jurisdiction in a final and non-
appealable order that such losses resulted from the gross negligence or willful
misconduct of the party from which recovery is sought. Neither the Agent, the
Arranger nor any Lender shall have any liability with respect to, and each
Borrower hereby waives,
releases and agrees not to sue for, any special, indirect or consequential
damages suffered by it in connection with, arising out of, or in
any way related to the Loan Documents or the transactions contemplated thereby.
Confidentiality. Each Lender agrees to hold any
confidential information which it may receive from the Borrowers
pursuant to this Agreement in confidence, except for disclosure (a) to other
Lenders and their respective Affiliates, (b) to legal counsel, accountants,
and other professional advisors to that Lender or to a Transferee each of whom
shall be subject to the restrictions set forth in this Section, (c) to
regulatory officials, (d) to any Person
as requested pursuant to or as required by law, regulation, or legal process,
(e) to any Person in connection with any legal proceeding to which
that Lender is a party, (f) to such Lender's direct or indirect contractual
counterparties in swap agreements or to legal counsel, accountants and other
professional advisors to such counterparties, each of whom shall be subject to
the restrictions set forth in
this Section, and (g) as permitted by Section 12.4.
New Credit Facilities. The Borrowers, the Agent, and the
Lenders agree that on the Closing Date the following transactions
shall be deemed to occur automatically, without further action by any party
thereto:(a) The Existing Credit Agreement shall be
amended, restated and superseded in its entirety in the
form of this Agreement; and
(b) All Indebtedness, liabilities and obligations
outstanding under the Existing Credit Agreement and the
promissory notes delivered thereunder shall, to the extent not paid on
the Closing Date, be deemed to be Obligations outstanding hereunder.
Each Lender party to the Existing Credit Agreement shall, promptly
after receipt of its Notes hereunder, return to Astec the promissory notes
received by it in connection with the Existing Credit Agreement.
(c) The participations in the Facility Letters of Credit
deemed to have been purchased by the Lenders pursuant to
Section 2.11.5(a) shall be reallocated so that the Lenders shall be
deemed to have purchased participations in the Facility Letters of
Credit in the amount of their respective Percentages (as defined in this
Agreement).The Borrowers, the Agent, and the Lenders agree that (i)
all terms and conditions of the Existing Credit Agreement which are
amended and restated by this Agreement shall remain effective until
such amendment and restatement becomes effective hereunder; and (ii) the
representations, warranties and covenants set forth herein
shall become effective concurrently with the occurrence of the Closing
Date.
Notwithstanding the modification effected by this Agreement of the
representations, warranties and covenants of the Borrowers contained in
the Existing Credit Agreement, the Borrowers acknowledge and agree
that any choses in action or other rights created in favor of any Lender
and its respective successors arising out of the representations and
warranties of the Borrowers contained in or delivered (including
representations and warranties delivered in connection with the making of
Loans, issuance of Facility Letters of Credit or other extensions of credit
thereunder) in connection with the Existing Credit Agreement, shall
survive the execution and delivery of this Agreement.
Interest Limitation. Anything in this Agreement, the Notes
or any other Loan Document to the contrary notwithstanding, a
Borrower shall never be required to pay interest at a rate in excess of the
highest lawful rate, and if the
effective rate of interest that would otherwise be payable
under this Agreement, the Notes or any other Loan Document would exceed the
highest lawful rate, or if any holder of any Note shall receive monies that are
deemed to constitute interest which would increase the effective rate of
interest payable under this Agreement, the Notes or any other Loan Document to
a rate in excess of the
highest lawful rate, then (a) the amount of interest that
would otherwise be payable under this Agreement, the Notes and the other Loan
Documents shall be reduced to the amount allowed under applicable law, and (b)
any interest paid in excess of the highest lawful rate shall, at the option of
the holder of such Note, be either refunded to the payor or credited on the
principal of the Note.Loan Documents. In the event of any conflict or
inconsistency between the terms and provisions of this Agreement and
those of any other Loan Document, the terms and provisions of this Agreement
shall govern and control to the extent of such conflict or inconsistency.
Interpretation. In this Agreement and each other Loan
Document, unless a clear contrary intention appears:
(a) The singular number includes the plural number and vice versa;
(b) Reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by the Loan Documents, and reference
to a Person in a particular capacity excludes such Person in any other
capacity;(c) reference to either gender includes the other gender;
(d) reference to any agreement (including this
Agreement and the Schedules and Exhibits and the other Loan
Documents), document or instrument means such agreement,
document or instrument as amended or modified and in effect from
time to time in accordance with the terms thereof and, if applicable, the
terms hereof and the other Loan Documents, and reference to any
promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor; and
(e) reference to any law, rule, regulation, order,
decree, requirement, policy, guideline, directive or
interpretation means as amended, modified, codified, replaced or reenacted, in
whole or in part, and in effect on the determination date, including
rules and regulations promulgated thereunder.
Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any Margin Stock for the repayment of the Loans
or the Reimbursement Obligations provided for herein.
Disclosure. The Borrowers and the Lenders hereby (a)
acknowledge and agree that Bank One and/or its Affiliates from time to
time may hold investments in, make other loans to or have other
relationships with the Borrowers and their Affiliates, and (b) waive any
liability of Bank One or such
Affiliate of Bank One to the Borrowers or any Lender, respectively, arising
out of or resulting from such investments, loans or
relationships other than liabilities
arising out of the gross negligence or willful misconduct of Bank One or its
Affiliates.
THE AGENT
Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act
as the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees
to act as such contractual representative upon the express conditions
contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as
the Lenders' contractual representative, the Agent (i) does not hereby
assume any fiduciary duties to any of the Lenders, (ii) is a "representative"
of the Lenders within the
meaning of Section 9-105 of the Uniform Commercial Code and
(iii) is acting as an independent contractor, the rights and duties of which
are limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Lenders hereby agrees to assert no claim against the
Agent on any agency theory or any other theory of liability for breach of
fiduciary duty, all of which claims each Lender hereby waives.
Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent
by the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the Lenders, or
any obligation to the
Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to any Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
from the gross negligence or willful misconduct of such Person.
No Responsibility for Loans, Recitals, etc. Neither the
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain,
inquire into, or verify (a) any statement, warranty or
representation made in connection with any Loan Document or
any borrowing hereunder; (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e)
the validity, enforceability, effectiveness, sufficiency or genuineness
of any Loan Document or any other instrument or writing furnished in connection
therewith; (f) the value, sufficiency, creation, perfection or priority of any
Lien in any collateral security; or (g) the financial condition of any Borrower
or any guarantor of any of the Obligations or of any of Astec's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose
to the Lenders information that is not required to be furnished by a
Borrower to the Agent at such time, but is voluntarily furnished by a Borrower
to the Agent (either in its
capacity as Agent or in its individual capacity).
Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required
Lenders or the Lenders, as the case may be, and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders and
on all holders of Notes. The Lenders hereby acknowledge
that the Agent shall be under no duty to take any discretionary action
permitted to be taken by it
pursuant to the provisions of this Agreement or any other
Loan Document unless it shall be requested in writing to do so by the
Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing
to take any such action.
Employment of Agents and Counsel. The Agent may execute
any of its duties as Agent hereunder and under any other Loan
Document by or through employees, agents, and attorneys-in-fact and shall not
be answerable to the
Lenders, except as to money or securities received by it or
its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by
it with reasonable care. The Agent shall be entitled to
advice of counsel concerning the contractual arrangement between the Agent
and the Lenders and all matters pertaining to the Agent's duties hereunder and
under any other Loan Document.
Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and,
in respect to legal matters, upon the opinion of counsel selected by the Agent,
which counsel may be employees of the Agent.
Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to
their respective Revolving Commitments (or, if the Revolving Commitments
have been terminated, in proportion to their Revolving Commitments
immediately prior to
such termination) (i) for any amounts not reimbursed by the
Borrowers for which the Agent is entitled to reimbursement by the
Borrowers under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration
and enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Agent in connection with any dispute between the
Agent and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may
be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated
thereby (including, without limitation, for any such amounts incurred by or
asserted against the Agent in connection with any dispute between the Agent and
any Lender or between two or more of the Lenders), or the enforcement of
any of the terms of the Loan Documents or of any such other documents, provided
that (i) no Lender shall be liable for any of the foregoing to the
extent any of the foregoing is found in a final non-appealable judgment by a
court of competent jurisdiction
to have resulted from the gross negligence or willful misconduct of the Agent
and (ii) any indemnification required pursuant to Section 3.1(vii) shall,
notwithstanding the provisions of this Section 10.8, be
paid by the relevant Lender in accordance with the provisions thereof. The
obligations of the Lenders under this Section 10.8 shall survive payment of
the Obligations and termination of this Agreement.
Rights as a Lender. In the event the Agent is a Lender, the Agent shall
have the same rights and powers hereunder and under any other Loan Document
with respect to its Revolving Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent
and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with Astec or any of its Subsidiaries in which Astec or such Subsidiary
is not restricted hereby
from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent, the
Arranger or any other Lender and based on the financial statements prepared by
Astec and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent, the Arranger 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 this Agreement and the other Loan Documents.
Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and Astec, such resignation
to be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days after the retiring Agent gives
notice of its intention to resign. The Agent may be removed at any time with
or without cause by written notice received by the Agent from the Required
Lenders, such removal to be
effective on the date specified by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the
right to appoint, on behalf of the Borrowers and the Lenders, a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days
after the resigning Agent's giving notice of its intention
to resign, then the resigning Agent may appoint, on behalf of the Borrowers and
the Lenders, a successor Agent. Notwithstanding the previous sentence,
the Agent may at any time without the consent of the Borrowers or any Lender,
appoint any of its Affiliates which is a commercial bank as a successor Agent
hereunder. If the Agent has resigned or been removed and no successor Agent
has been appointed, the Lenders may perform all the duties of the
Agent hereunder and the Borrowers shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $100,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Agent. Upon the effectiveness of the resignation
or removal of the Agent, the resigning or removed Agent shall be discharged
from its duties and obligations hereunder and under the Loan Documents. After
the effectiveness of the resignation or removal of an Agent, the provisions
of this Article X shall continue in effect for the benefit of such Agent in
respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and under
the other Loan Documents. In the event that there is a
successor to the Agent by merger, or the Agent assigns its duties and
obligations to an Affiliate pursuant to
this Section 10.12, then the term "Prime Rate" as used in
this Agreement shall mean the prime rate, base rate or other analogous rate of
the new Agent. In the event that there is a successor to the Agent by merger,
or the Agent assigns its duties and obligations to an Affiliate pursuant to
this Section 10.11, then the term "Prime Rate" as used in this Agreement
shall mean the prime rate, base rate
or other analogous rate of the new Agent.
Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Unmatured Default hereunder
unless the Agent has received written notice from a Lender or a Borrower
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
Delegation to Affiliates. The Borrowers and the Lenders
agree that the Agent may delegate any of its duties under this Agreement
to any of its Affiliates. Any such Affiliate (and such Affiliate's
directors, officers, agents and employees) which performs duties in connection
with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective
provisions to which the Agent is entitled under Articles IX and X.
Execution of Collateral Documents. The Lenders hereby
empower and authorize the Agent to execute and deliver to Astec on
their behalf the Pledge Agreement and all related financing statements and any
financing statements, agreements, documents or instruments as shall
be necessary or appropriate to effect the purposes of the Pledge Agreement.
Collateral Releases. The Lenders hereby empower and authorize the
Agent to execute and deliver to Astec on their behalf any
agreements, documents or instruments as shall be necessary or
appropriate to effect any releases of Collateral which shall be permitted by
the terms hereof or of any
other Loan Document or which shall otherwise have been
approved by the Required Lenders (or, if required by the terms of Section
8.2, all of the Lenders) in writing.
Co-Agents. Neither AmSouth Bank nor SunTrust Bank shall, by virtue
of being identified as a "co-agent", have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing,
neither of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender. Each
Lender hereby makes the same acknowledgments with respect
to such Lenders as it makes with respect to the Agent in Section 10.10.
SETOFF; RATABLE PAYMENTS
Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if any Borrower becomes
insolvent, however evidenced, or any Default or Unmatured Default occurs, any
and all deposits (including all account balances, whether provisional or
final and whether or not collected or available) and any other Indebtedness at
any time held or owing by any Lender or any Affiliate of any Lender to or for
the credit or account of any Borrower may be offset and applied toward the
payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part thereof, shall then be due.
Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans or participations in
Facility Letters of Credit or Swing Line Loans (other than payments received
pursuant to Sections 3.1, 3.2, 3.3 or 3.5) in a greater proportion than that
received by any other Lender,
such Lender agrees, promptly upon demand, to purchase a
portion of the Loans or participations in Facility Letters of Credit or Swing
Line Loans held by the other Lenders so that after such purchase each Lender
will hold its ratable proportion of Loans and participations in Facility
Letters of Credit. If any Lender, whether in connection with setoff or amounts
which might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject to setoff,
such Lender agrees, promptly upon demand, to take such action necessary such
that all Lenders share in the benefits of such collateral ratably in
proportion to their Loans, Facility Letters of Credit and Swing Line Loans.
In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of
the Borrowers and the Lenders and their respective successors and assigns,
except that (a) no Borrower shall have the right to assign its rights or
obligations under the Loan Documents and (b) any assignment by any Lender must
be made in compliance with Section 12.3. The parties to this Agreement
acknowledge that clause (b) of this Section relates only to absolute
assignments and does not prohibit
assignments creating security interests, including, without
limitation, any pledge or assignment by any Lender of all or any portion of its
rights under this Agreement and its Notes to a Federal Reserve Bank;
provided, however, that no such pledge or assignment creating a security
interest shall release the transferor
Lender from its obligations hereunder unless and until the
parties thereto have complied with the provisions of Section 12.3. The Agent
may treat the payee of any Note as the owner thereof for all purposes hereof
unless and until such payee complies with Section 12.3; provided, however, that
the Agent may in its discretion (but shall not be required to) follow
instructions from the Person
which holds any Note to direct payments relating to such
Note to another Person. Any assignee of the rights to any Loan or any Note
agrees by acceptance of such assignment to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of
any Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder or assignee of such Note or of any Note or Notes issued in
exchange therefor.
Participations.
Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such Lender, any
participation in Facility Letters
of Credit owned by such Lender, any Note held by such
Lender, any Revolving Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrowers under
this Agreement shall be determined
as if such Lender had not sold such participating interests, and the Borrowers
and the Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
the Loan Documents.
Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan, Facility
Letter of Credit, Swing Line Loan or Revolving Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable with respect to any such Loan,
Facility Letter of Credit, Swing
Line Loan or Revolving Commitment, postpones any date fixed
for any regularly-scheduled payment of principal of, or interest or
fees on, any such Loan, Facility Letter of Credit, Swing Line Loan or
Revolving Commitment, releases any guarantor of any such Loan, Facility Letter
of Credit or Swing Line
Loan or releases any substantial portion of collateral, if
any, securing any such Loan, Facility Letter of Credit or Swing Line Loan.
Benefit of Setoff. The Borrowers agree that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing under
the Loan Documents to the
same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, provided that
each Lender shall retain
the right of setoff provided in Section 11.1 with respect
to the amount of participating interests sold to each Participant. The
Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided
in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts
to be shared in accordance
with Section 11.2 as if each Participant were a Lender.
Assignments.
Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable
law, nd with the consent of the Agent and the Issuer, at any time assign to
one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the
Loan Documents, provided that no such assignment shall be
of less than $5,000,000 of such selling Lender's Revolving Commitment or
(if the Aggregate Commitment has been terminated) of aggregate
principal amount of such selling Lender's Loans, unless such assignment is of
the entire remaining amount of such selling Lender's Revolving Commitment and
Loans. All assignments shall include a pro rata portion of such
Lender's Tranche A Commitment (and the Tranche A Loan Obligations) and Tranche
B Commitment (and the Tranche B Revolving Loans). Such
assignment shall be substantially in the form of Exhibit E hereto or in such
other form as may be agreed to by the parties thereto and the Agent. The
consent of the Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an Affiliate
thereof.Effect; Effective Date. Upon (i) delivery to the Agent of
an assignment, together with any consents required by Section
12.3.1, and (ii) payment of a $3,500 fee to the Agent for processing such
assignment (unless such fee is waived by the Agent), such assignment shall
become effective on the effective date specified in such assignment. The
assignment shall contain a representation by the Purchaser to the effect that
none of the consideration used
to make the purchase of the Revolving Commitment, Loans,
participation in Facility Letters of Credit and Swing Line Loans under the
applicable assignment agreement constitutes "plan assets" as defined under
ERISA and that the rights
and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be a party to
this Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and no further consent or
action by the Borrowers, the Lenders or the Agent shall be required
to release the transferor Lender with respect to the percentage of the
Aggregate Commitment, Loans, participation in Facility Letters of Credit and
Swing Line Loans assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser
pursuant to this Section 12.3.2, the transferor Lender, the
Agent and the Borrowers shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Revolving Commitment, as adjusted pursuant
to such assignment. In addition, within a reasonable time after the effective
date of any assignment, the Agent shall, and is hereby authorized and directed
to, revise Schedule 1 reflecting the revised Percentages of each of the Lenders
and shall distribute such revised Schedule 1 to each of the Lenders and Astec
and such revised Schedule 1 shall replace the old Schedule 1 and become part
of this Agreement.
Dissemination of Information. The Borrowers authorize each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Credit Parties; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.12 of
this Agreement.
Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.9.
NOTICES
Giving Notice. Except as otherwise permitted by Section 2.6 with
respect to borrowing notices, all notices, requests and
other communications to any party hereunder shall be in writing (including
electronic transmission, facsimile transmission or similar writing) and shall
be given to such party: (x) in the case of a Borrower or the Agent, at its
address or facsimile number set forth on the signature pages hereof, (y) in the
case of any Lender, at its address or facsimile number set forth below its
signature hereto or in its administrative
information sheet or (z) in the case of any party, at such
other address or facsimile number as such party may hereafter specify for
the purpose by notice to the Agent and Astec in accordance with the provisions
of this Section 13.1.
Each such notice, request or other communication shall be
effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of receipt is
received, (ii) if given by mail, seventy-two (72) hours after such
communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid, or
(iii) if given by any other means, when delivered (or, in the case of
electronic transmission, received) at
the address specified in this Section; provided that
notices to the Agent under Article II shall not be effective until received.
Change of Address. A Borrower, the Agent and any Lender may
change the address for service of notice upon it by a
notice in writing to the other parties hereto.
COUNTERPARTS
This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one agreement,
and any of the parties hereto may execute this Agreement by signing any
such counterpart. This Agreement shall be effective when (a) it
has been executed by the Borrowers, the Agent and the Lenders and
each party has either notified the Agent, by telex or telephone, that
it has taken such action and (b) the conditions precedent set forth in
Section 4.1 have been satisfied.
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL
CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN
THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW
PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS
SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT REGARD TO
THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS,
BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
CONSENT TO JURISDICTION. EACH BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING
IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND EACH BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
ANY BORROWER MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT
OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY BORROWER AGAINST THE AGENT
OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY
LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.
WAIVER OF JURY TRIAL. EACH BORROWER, THE AGENT
AND EACH LENDER HEREBY EXPRESSLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER. THE TERMS AND
PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
ASTEC GUARANTY
Guaranty of Payment and Performance of Obligations of AFS. Astec
hereby guarantees to the Agent and the Lenders, as a primary obligor and not
merely as a surety, the full and punctual payment when due
(whether at maturity, by acceleration or otherwise), as well as the
performance, of all of the Obligations incurred or owed by or chargeable to AFS
(the "AFS Obligations"). Astec's obligation under this Article XVI is an
absolute, unconditional and continuing guaranty of the full and punctual
payment and performance of all of the AFS Obligations and not of their
collectability only and is in no way
conditioned upon any requirement that the Agent or the
Lenders first attempt to collect any of the AFS Obligations from AFS or resort
to any collateral security, any balance of any deposit account or credit on the
books of any Lender in favor of AFS or any other Person or other means of
obtaining payment. Should AFS default in the payment or performance of any of
the AFS Obligations, the Agent
may cause the obligations of Astec (as guarantor) hereunder with respect to
such AFS Obligations to become forthwith due and payable to the
Agent and the Lenders, without demand or notice of any nature, all of
which are expressly waived by Astec.
Additional Amounts. Astec further agrees, as the primary
obligor and not as a guarantor only, to pay to the Agent and the
Lenders, forthwith upon demand in funds immediately available to the Agent and
the Lenders, all reasonable costs and expenses (including court costs and
legal fees and expenses) incurred or expended by the Agent and the Lenders
in connection with the AFS Obligations, this Article XVI and the
enforcement thereof, together with interest on amounts recoverable under this
Article XVI from the time when such amounts become due until payment, at a rate
of interest equal to the rate after default for Floating Rate Advances set
forth in Section 2.2.8.Waivers by Astec: Agent's and Lenders' Freedom to Act.
Astec waives notice of acceptance of this Article XVI, notice of
any action taken or omitted by the Agent or any Lender in reliance on this
Article XVI, and any requirement that the Agent or the Lenders be diligent or
prompt in making demands under this Article XVI, giving notice of any
default by AFS or asserting any other rights of the Agent or any Lender under
this Article XVI. Astec also irrevocably waives all defenses that at any time
may be available in respect of the AFS Obligations by virtue of any statute of
limitations, valuation, stay, moratorium law or other similar law now or
hereafter in effect. Astec also
irrevocably waives any benefit of any collateral which may
from time to time secure the AFS Obligations and authorizes the Agent and the
Lenders to take any action or exercise any remedy with respect thereto
which they in their discretion shall determine, without notice to Astec. Astec
agrees that the validity and enforceability of this Article XVI shall not
be impaired or affected by any of the following: (a) any extension,
modification or renewal of, or indulgence with respect to, or substitutions
for, the AFS Obligations or any part
thereof or any agreement relating thereto at any time; (b)
any failure or omission to enforce any right, power or remedy with respect to
the AFS Obligations or any part thereof or any agreement relating thereto, or
any collateral securing the AFS Obligations or any part thereof; (c) any waiver
of any right, power or remedy or of any default with respect to the AFS
Obligations or any part thereof or any agreement relating thereto; (d) any
release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any other obligation of any
Person with respect to the AFS Obligations or any part thereof; (e) the
enforceability or validity of the AFS Obligations or any part thereof or the
genuineness, enforceability or validity of
any agreement relating thereto or with respect to the AFS
Obligations or any part thereof; (f) the application of payments received from
any source to the payment of Indebtedness other than the AFS Obligations, any
part thereof or amounts which are not covered by this Article XVI even
though the Lenders or the Agent might lawfully have elected to apply such
payments to any part or all of the AFS Obligations or to amounts which are not
covered by this Article XVI
or (g) the existence of any claim, setoff or other rights
which Astec may have at any time against any of AFS in connection herewith or
any unrelated
transaction, all whether or not Astec shall have had notice or knowledge of any
act or omission referred to in the foregoing clauses (a) through (g) of this
Section 16.3. Unenforceability of AFS Obligations Against AFS.
Notwithstanding (a) any change of ownership of AFS or the insolvency,
bankruptcy or any other change in the legal status of AFS; (b) the change in or
the imposition of any law,
decree, regulation or other governmental act which does or might impair, delay
or in any way affect the validity, enforceability or the payment when due of
the AFS Obligations; (c) the failure of AFS or the undersigned
to maintain in full force, validity or effect or to obtain or renew when
required all governmental and other approvals, licenses or consents required in
connection with AFS Obligations or this Article XVI, or to take any other
action required in connection with the performance of all obligations pursuant
to the AFS Obligations or this Article XVI; or (d) if any of the
moneys included in the AFS Obligations have become irrecoverable from AFS for
any other reason other than indefeasible payment in full of the AFS Obligations
in accordance with their terms, this Article XVI shall nevertheless be binding
on Astec. This Article XVI shall be in addition to any other guaranty or
other security for the AFS Obligations, and it shall not be rendered
unenforceable by the invalidity of
any such other guaranty or security. In the event that acceleration of the
time for payment of any of the AFS Obligations is stayed upon
the insolvency, bankruptcy or reorganization of AFS, or for any other
reason, all such amounts otherwise subject to acceleration under the terms of
this Agreement, the other Loan Documents or any other agreement evidencing,
securing or otherwise executed in connection with the AFS Obligations shall be
immediately due and payable by Astec.
Subrogation; Subordination. Astec shall not enforce or otherwise
exercise any right of subrogation to any of the rights of any Lender against
AFS until all of the AFS Obligations are indefeasibly paid in
full. The payment of any amounts due with respect to any indebtedness of AFS
now or hereafter owed to Astec is hereby subordinated to the prior payment
in full of all of the AFS Obligations. Astec agrees that, after the occurrence
of any default in the payment or performance of any of the AFS Obligations,
Astec will not demand, sue for or otherwise attempt to collect any such
indebtedness of AFS to Astec until all of the AFS Obligations shall have been
paid in full. If, notwithstanding
the foregoing sentence, Astec shall collect, enforce or receive any amounts
in respect of such indebtedness while AFS Obligations are
still outstanding, such amounts shall be collected, enforced and received by
Astec as trustee for the Agent and the Lenders and be paid over to the Agent
on account of the AFS Obligations without affecting in any manner the liability
of Astec under the other provisions of this Article XVI. The provisions of
this Section 16.5 shall be supplemental to and not in derogation of any rights
and remedies of the Agent and the Lenders under any separate subordination
agreement which the Agent and the Lenders may at any time and from time to time
enter into with Astec.
Termination. Astec's obligations hereunder shall continue
in full force and effect until AFS Obligations are indefeasibly paid in
full and this Agreement is terminated, provided that this Article XVI
shall continue to be effective or shall be reinstated, as the case may be, if
at any time payment or other satisfaction of any of the AFS Obligations is
rescinded or must otherwise be restored or returned upon the bankruptcy,
insolvency, or reorganization of
AFS, or otherwise, as though such payment had not been made
or other satisfaction occurred, whether or not the Lenders or the
Agent is in possession of this Agreement. No invalidity, irregularity or
unenforceability by reason of the federal bankruptcy code or any insolvency or
other similar law, or any law or order of any government or agency thereof
purporting to reduce, amend or otherwise affect the AFS Obligations shall
impair, affect, be a defense to or claim against the obligations of Astec
under this Article XVI.
Effect of Bankruptcy. Astec's obligations under this Article XVI shall
survive the insolvency of AFS and the commencement of any case or
proceeding by or against AFS under the federal bankruptcy code or other
federal, state or other applicable bankruptcy, insolvency or reorganization
statutes. No automatic stay under the federal bankruptcy code or other
federal, state or other applicable bankruptcy, insolvency or
reorganization statutes to which any AFS is subject shall postpone the
obligations of Astec under this Article XVI.
Setoff. Regardless of the other means of obtaining payment of any of
the AFS Obligations, each of the Agent and the Lenders is
hereby authorized at any time and from time to time, without notice to Astec
(any such notice being expressly waived by Astec) and to the fullest extent
permitted by law, to set off and apply such deposits and other sums against the
obligations of Astec under this Article XVI, whether or not the Agent and the
Lenders shall have made any demand under this Article XVI and although such
obligations may be contingent or unmatured.
Further Assurances. Astec agrees to do all such things and execute all
such documents as the Agent and the Lenders may consider necessary or
desirable to give full effect to this Article XVI and to perfect and
preserve the rights and powers of the Agent and the Lenders hereunder.
[Signature Pages Follow]
IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent
have executed this Agreement as of the date first above
written.
ASTEC INDUSTRIES, INC.
By: /s/F. McKamy Hall
Print Name: F. McKamy Hall
Title: Vice President, Treasurer
Address: 4101 Jerome Avenue
Chattanooga, Tennessee 37407
Facsimile: (423) 867-4127
Telephone: (423) 867-4210
Attention: F. McKamy Hall
ASTEC FINANCIAL SERVICES, INC.
By: /s/ Albert E. Guth
Print Name: Albert E. Guth
Title: President
Address: 1725 Shepherd Road
Chattanooga, Tennessee 37421
Facsimile: (423) 899-4456
Telephone: (423) 899-5898
Attention: Albert E. Guth
For purposes of Section
2.11:
TRENCOR, INC.
By: /s/ F. McKamy Hall
Print Name: F. McKamy Hall
Title: Vice President, Treasurer
Address: 4101 Jerome Avenue
Chattanooga, Tennessee 37407
Facsimile: (423) 867-4127
Telephone: (423) 867-4210
Attention: F. McKamy Hall
BANK ONE, NA, individually and as Agent
By: /s/ David T. McNeela
Print Name: David T. McNella
Title: Vice President
Address: 1 Bank One Plaza
Chicago, Illinois 60670
Facsimile: (312) 732-5296
Telephone: (312) 732-5730
Attention: David T. McNeela
SUNTRUST BANK, successor in interest to SunTrust
Bank Chattanooga, NA
By: /s/ Jon Long
Print Name: Jon Long
Title: Vice President
Address: 201 Fourth Avenue North
Nashville, Tennessee 37219
Facsimile: (615) 748-5269
Telephone: (615) 748-5502
Attention: Jon Long
AMSOUTH BANK (successor-in-interest to First
American National Bank)
By: /s/ Ryan Murphy
Print Name: Ryan Murphy
Title: Vice President
Address: 601 Market Center
Chattanooga, Tennessee 37402
Facsimile: (423) 752-1558
Telephone: (423) 752-1621
Attention: Ryan Murphy
Schedule 1
Revolving Commitments/Percentages
Lender Revolving Tranche A Tranche B
Commitment Commitment* Commitment* Percentage
Bank One, NA $55,000,000 $47,666,667 $18,333,333 36-2/3%
Amsouth Bank** $50,000,000 $43,333,333 $16,666,667 33-1/3%
SunTrust Bank. $45,000,000 $39,000,000 $15,000,000 30%
Total $150,000,000 $130,000,000* $50,000,000* 100%
*The Tranche A Commitment and Tranche B Commitment of any
Lender are sublimits of the Revolving
Commitment of such Lender and the obligation of any Lender
to make Loans under the Tranche A
Commitment and the Tranche B Commitment is limited by the
Revolving Commitment of such Lender and
the limitations, terms and conditions set forth in Section 2.1.
