EXHIBIT 10.103
Amended and Restated Credit Agreement dated November 27, 1997 between
the Company, Astec Financial Services, Inc. and First Chicago NBD.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
ASTEC INDUSTRIES, INC. and
ASTEC FINANCIAL SERVICES, INC.
as Borrowers,
THE LENDERS NAMED HEREIN
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
DATED AS OF
November 24, 1997
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
ARTICLE II THE CREDITS
2.1. Revolving Commitment
2.1.1. Tranche A Commitment
2.1.2. Tranche B Commitment
2.1.3 Limitations on Obligations
2.2. Loans
2.2.1. Ratable Loans; Types of Advances
2.2.2. Minimum Amount of Each Advance
2.2.3. Method of Selecting Types and Interest
Periods for New Advances
2.2.4. Conversion and Continuation of Outstanding
Advances
2.2.5. Changes in Interest Rate, etc.
2.2.6. Interest Payment Dates; Interest and Fee
Basis
2.2.7. Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions
2.2.8. Rates Applicable After Default
2.3. Swing Line Loans
2.3.1. Making of Swing Line Loans
2.3.2. Conversions of and Participations in Swing
Line Loans
2.4. Fees; Reductions in Aggregate Commitment
2.4.1. Fees
2.4.2. Voluntary Reductions; Prepayments
2.4.3. Mandatory Reductions in Aggregate Commitment
2.4.4. Mandatory Reduction of Tranche B Loans
2.5. Method of Payment
2.6. Notes; Telephonic Notices
2.7. Lending Installations
2.8. Non-Receipt of Funds by the Agent
2.9. Withholding Tax Exemption
2.10. Application of Payments
2.11. Facility Letters of Credit
2.11.1. Obligation to Issue
2.11.2. Conditions for Issuance
2.11.3. Procedure for Issuance of Facility Letters of
Credit
2.11.4. Reimbursement Obligations
2.11.5. Participation
2.11.6. Compensation for Facility Letters of Credit
2.11.7. Letter of Credit Collateral Account
2.11.8. Nature of Obligations
2.11.9. Existing Letters of Credit
ARTICLE III CHANGE IN CIRCUMSTANCES
3.1. Taxes
3.2. Yield Protection
3.3. Changes in Capital Adequacy Regulations
3.4. Availability of Types of Advances
3.5. Funding Indemnification
3.6. Lender Statements; Survival of Indemnity
ARTICLE IV CONDITIONS PRECEDENT
4.1. Initial Credit Extension
4.2. Each Credit Extension
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
5.1. Corporate Existence and Standing
5.2. Authorization and Validity
5.3. No Conflict; Government Consent
5.4. Financial Statements
5.5. Material Adverse Change
5.6. Taxes
5.7. Litigation and Contingent Obligations
5.8. Subsidiaries and Affiliates
5.9. ERISA
5.10. Accuracy of Information
5.11. Regulation U
5.12. Material Agreements
5.13. Compliance With Laws
5.14. Environmental Warranties
5.15. Ownership of Properties
5.16. Investment Company Act
5.17. Public Utility Holding Company Act
5.18. Insurance
5.19. Intellectual Property
5.20. Solvency
5.21. Benefits
5.22. Licenses
ARTICLE VI COVENANTS
6.1. Financial Reporting
6.2. Use of Proceeds
6.3. Notice of Default
6.4. Conduct of Business
6.5. Taxes
6.6. Insurance
6.7. Compliance with Laws
6.8. Maintenance of Properties
6.9. Inspection
6.10. Dividends
6.11. Indebtedness
6.12. Merger
6.13. Sale of Assets
6.14. Sale of Accounts
6.15. Sale and Leaseback
6.16. Investments and Acquisitions
6.17. Contingent Obligations
6.18. Liens
6.19. Transactions with Affiliates
6.20. Letters of Credit
6.21. Amendments to Certain Agreements
6.22. Financial Covenants
6.22.1. Leverage Ratio
6.22.2. Consolidated Tangible Net Worth
6.22.3. Rentals
6.22.4. Interest Coverage Ratio
6.22.5. AFS Leases.
6.23. Fixed Asset Expenditures
6.24. Subordinated Indebtedness
6.25. Accounting Method
6.26. Environmental Covenant
6.27. Litigation and Other Notices
ARTICLE VII DEFAULTS
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration
8.2. Amendments
8.3. Preservation of Rights
ARTICLE IX GENERAL PROVISIONS
9.1. Survival of Representations
9.2. Governmental Regulation
9.3. Taxes
9.4. Headings
9.5. Entire Agreement
9.6. Several Obligations; Benefits of this Agreement
9.7. Expenses; Indemnification
9.8. Numbers of Documents
9.9. Accounting
9.10. Severability of Provisions
9.11. Nonliability of Lenders
9.12. Confidentiality
9.13. New Credit Facilities
9.14. Interest Limitation
9.15. Loan Documents
9.16. Interpretation
ARTICLE X THE AGENT
10.1. Appointment
10.2. Powers
10.3. General Immunity
10.4. No Responsibility for Loans, Recitals, etc.
10.5. Action on Instructions of Lenders
10.6. Employment of Agents and Counsel
10.7. Reliance on Documents; Counsel
10.8. Agent's Reimbursement and Indemnification
10.9. Rights as a Lender
10.10. Lender Credit Decision
10.11. Successor Agent
10.12. Notice of Default
ARTICLE XI SETOFF; RATABLE PAYMENTS
11.1. Setoff
11.2. Ratable Payments
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns
12.2. Participations
12.2.1. Permitted Participants; Effect
12.2.2. Voting Rights
12.2.3. Benefit of Setoff
12.3. Assignments
12.3.1. Permitted Assignments
12.3.2. Effect; Effective Date
12.4. Dissemination of Information
12.5. Tax Treatment
ARTICLE XIII NOTICES
13.1. Giving Notice
13.2. Change of Address
ARTICLE XIV COUNTERPARTS
ARTICLE XV CHOICE OF LAW, CONSENT TO JURISDICTION,
WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW
15.2. CONSENT TO JURISDICTION
15.3. WAIVER OF JURY TRIAL
ARTICLE XVI ASTEC GUARANTY
16.1. Guaranty of Payment and Performance of
Obligations of AFS.
16.2. Additional Amounts
16.3. Waivers by Astec: Agent's and Lenders'
Freedom to Act
16.4. Unenforceability of AFS Obligations Against AFS
16.5. Subrogation; Subordination
16.6. Termination
16.7. Effect of Bankruptcy
16.8. Setoff
16.9. Further Assurances
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amended and Restated Credit Agreement,
dated as of November 24, 1997, is among Astec
Industries, Inc., a Tennessee corporation, Astec
Financial Services, Inc., a Tennessee corporation, the
institutions from time to time parties hereto as
Lenders and The First National Bank of Chicago, a
national banking association organized and existing
under the laws of the United States of America,
individually and as Agent.
RECITALS
A. Astec, the Lenders named therein and the Agent
entered into that certain Amended and Restated Credit
Agreement, dated as of May 5, 1997 (as amended from
time to time prior to the date hereof, the "Original
Agreement"), pursuant to which the Lenders agreed to
make available to Astec revolving loans in an aggregate
principal amount and on terms and conditions more fully
described therein (the "Original Credit Facilities").
B. Astec and the Lenders desire to restructure the
Original Credit Facilities so as to (i) increase the
Aggregate Commitment on the terms and in the amount set
forth herein, (ii) add AFS as a Borrower, and (iii)
amend various other provisions of the Original
Agreement.
C. Pursuant to the terms of this Agreement, on the
Closing Date, (i) the Original Credit Facilities shall
be replaced by the credit facilities as described
herein (the "New Credit Facilities"), (ii) all loans
and other obligations of Astec outstanding as of such
date under the Original Credit Facilities shall be
deemed to be loans and obligations of Astec outstanding
under the New Credit Facilities, and (iii) all
provisions of this Agreement not theretofore in effect
shall become effective.
AGREEMENT
NOW, THEREFORE, in consideration of the undertakings
set forth herein and other good and valuable
consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
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 The First National Bank of Chicago in its
capacity as agent for 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 $70,000,000 as such amount
may be reduced from time to time pursuant to the terms
hereof.
"Aggregate Tranche A Sublimit" means $50,000,000, as
such amount may be reduced from time to time pursuant
to the terms hereof.
"Aggregate Tranche B Sublimit" means $30,000,000, as
such amount may be reduced from time to time pursuant
to the terms hereof.
"Agreement" means this Second 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
Corporate Base 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<=3.75 > 2.75<=3.25 >2.25<=2.75 >1.75<=2.25 <=1.75
Floating
Rate
Advance .50% .25% 0% -.25% -.25% -.25%
Eurodollar 2.00% 1.75% 1.50% 1.25% 1.00% .75%
Advances
Commitment .50% .375% .375% .25% .25% .25%
Fee
For the period commencing on the Closing Date and
ending on the date which occurs ten (10) days after the
Agent receives the financial statements and the related
Compliance Certificate required to be delivered
pursuant to Section 6.1(b) and Section 6.1(d) of this
Agreement with respect to the last fiscal quarter of
1997, the Applicable Margin set forth in Level 4 above
shall apply to all Advances and Commitment Fees.
Thereafter, 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 tenth (10th) 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 tenth (10th) Business Day after the date
the Agent receives such Compliance Certificate to but
excluding the tenth (10th) 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 tenth (10th) 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.
"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 and (e) Permitted Recourse
Lease Sales.
"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.
"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 G
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 and on which 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.
"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 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 Accounting 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 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.
"Corporate Base Rate" means a rate per annum equal to
the corporate base rate of interest announced by First
Chicago from time to time, changing when and as said
corporate base rate changes.
"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 (including each Guarantor).
"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.
"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.
"Environmental Laws" means all applicable federal,
state or local statutes, laws, ordinances, codes,
rules, regulations and guidelines (including, without
limitation, consent decrees and administrative orders)
relating to public health and safety and protection of
the environment.
"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 at which deposits in U.S. dollars are offered
by First Chicago to 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 First
Chicago's relevant Eurodollar Loan and having a
maturity approximately 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. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/16 of 1% if
the rate is not such a multiple.
"Excluded Taxes" is defined in Section 3.1.
"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.
"First Chicago" means The First National Bank of
Chicago in its individual capacity, and its successors.
"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.
"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.
"Guarantor" means Heatec, Inc., a Tennessee
corporation, Roadtec, Inc., a Tennessee corporation,
Trencor, Inc., a Texas corporation (formerly known as
Trencor Jetco, Inc.), Telsmith, Inc., a Delaware
corporation, Astec Transportation, Inc., a Tennessee
corporation, Production Engineered Products, Inc., a
Nevada corporation, Astec, Inc., a Tennessee
corporation, CEI Enterprises, Inc., a Tennessee
corporation, AFS, Astec Investments, Inc., a Tennessee
corporation, and their respective successors and
assigns.
"Guaranty" means that certain Second Amended and
Restated Guaranty, in substantially the form of Exhibit
F hereto, duly executed by each of the Guarantors in
favor of the Lenders, as it may be amended or modified
and in effect from time to time.
"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 First Chicago, in its capacity as issuer
of Facility Letters of Credit under Section 2.11.
"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
Guaranty, 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.
"New Credit Facilities" is defined in the Preamble.
"Notes" means the Revolving Notes and the Swing Line
Notes.
"Notice of Assignment" is defined in Section 12.3.2.
"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 Agreement" is defined in the Preamble.
"Original Credit Facilities" is defined in the
Preamble.
"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 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.
"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.
"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 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 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 the maximum aggregate
reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under
Regulation D on Eurodollar 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, 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. As of
the date hereof, the sole Subsidiaries of Astec are
Heatec, Inc., a Tennessee corporation, Roadtec, Inc., a
Tennessee corporation, Trencor, Inc., a Texas
corporation, Telsmith, Inc., a Delaware corporation,
Astec Transportation, Inc., a Tennessee corporation,
Production Engineered Products, Inc., a Nevada
corporation, Astec, Inc., a Tennessee corporation, CEI
Enterprises, Inc., a Tennessee corporation, AFS, and
Astec Investments, Inc., a Tennessee corporation, each
of which is a Wholly-Owned 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, and (b) that certain letter of credit
issued by M&I Marshall and Ilsley Bank for the account
of the Borrower 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 First Chicago in its capacity
as Swing Line Lender under Section 2.3.1.
"Swing Line Limit" means the lesser of (a) $5,000,000,
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 the Borrower 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" is defined in Section 3.1.
"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 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 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 A Revolving Loan" is defined in Section 2.1.1.
"Tranche B Revolving Loan" is defined in Section 2.1.2.
"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.
"Transferee" is defined in Section 12.4.
"Trencor Letter of Credit" means that certain
Irrevocable Transferrable Letter of Credit No.
00315672, or its successor, issued by First Chicago 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 First Chicago 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 nonforfeitable
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.
"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, 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.
ARTICLE II
THE CREDITS
2.1. Revolving Commitment.
2.1.1. 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.
2.1.2. 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.
2.1.3 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.
2.2. Loans.
2.2.1. 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 Borrower in accordance with Sections 2.2.3 and
2.2.4.
2.2.2. 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.
2.2.3. 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:
(a) the Borrowing Date, which shall be a Business Day,
of such Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected,
(d) the Borrower and commitment to which such Advance
applies, and
(e) 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.
2.2.4. 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.
2.2.5. 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.
2.2.6. 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.
2.2.7. 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.
2.2.8. 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.
2.3. Swing Line Loans.
2.3.1. Making of Swing Line Loans.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
2.3.2. Conversions of and Participations in Swing
Line Loans.
(a) 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.
(b) 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.
(c) 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.
2.4. Fees; Reductions in Aggregate Commitment.
2.4.1. Fees.
(a) 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 date hereof 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.
(b) Up-Front Fee. The Borrowers agree to pay the
Agent for the account of each Lender in accordance with
their Percentage, aggregate up-front fee equal to ten
(10) basis points (.10%) of the increase in each
Lender's Revolving Commitment over such Lender's
Revolving Commitment in the Original Agreement, payable
on the Closing Date.
(c) 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.
2.4.2. 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.
2.4.3. Mandatory Reductions in Aggregate Commitment.
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
2.4.4. 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.
2.5. 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 First Chicago for each
payment of principal, interest and fees as it becomes
due hereunder.
2.6. 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.
2.7. 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.
2.8. 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 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.
2.9. Withholding Tax Exemption. At least five (5)
Business Days prior to the first date on which interest
or fees are payable hereunder for the account of any
Lender, each Lender that is not incorporated under the
laws of the United States of America, or a state
thereof, agrees that it will deliver to each of Astec
and the Agent two 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 and the Notes
without deduction or withholding of any United States
federal income taxes. Each Lender which so delivers a
Form 1001 or 4224 further undertakes to deliver to each
of Astec and the Agent two additional copies of such
form (or a successor form) on or before the date that
such form expires (currently, three successive calendar
years for Form 1001 and one calendar year for Form
4224) or becomes obsolete or after the occurrence of
any event requiring a change in the most recent forms
so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably
requested by Astec or the Agent, in each case
certifying that such Lender is entitled to receive
payments under this Agreement and the Notes 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 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.
2.10. 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.
2.11. Facility Letters of Credit.
2.11.1. 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.
2.11.2. 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.
2.11.3. 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 Submit
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.
2.11.4. 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.
2.11.5. 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.
2.11.6. 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.
2.11.7. 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.
2.11.8. 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 harmless 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.
2.11.9. Existing Letters of Credit. The Trencor
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 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 Closing Date. First Chicago 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.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Taxes. (a) Except as otherwise required by
applicable law, all sums payable by the Borrowers
whether in respect of principal, interest, fees or
otherwise shall be paid without deduction for any
present and future taxes, levies, assessments, imposts,
deductions, charges or withholdings imposed by any
country, Governmental Agency thereof or therein, any
jurisdiction from which any or all such payments are
made and any political subdivision or taxing authority
thereof or therein, excluding income and franchise
taxes (and deductions and withholdings therefor)
imposed on the Agent or any Lender (i) by the
jurisdiction under the laws of which the Agent or such
Lender is organized or any Governmental Agency or
taxing authority thereof or therein, or (ii) by any
jurisdiction in which the Agent's or such Lender's
Lending Installations are located or any Governmental
Agency or taxing authority thereof or therein (such
excluded taxes, deductions and withholdings,
collectively, "Excluded Taxes", and all such taxes,
levies, imposts, deductions, charges and withholdings
(including Excluded Taxes), collectively, "Taxes"),
which amounts shall be paid by the Borrowers as
provided in Section 3.1(b).
(b) If (i) any Borrower or any other Person is
required by law to make any deduction or withholding on
account of any Tax (other than Excluded Taxes) or other
amount from any sum paid or expressed to be payable by
any Borrower to any Lender under this Agreement; or
(ii) any party to this Agreement (or any Person on its
behalf) other than a Borrower is required by law to
make any deduction or withholding from, or (other than
on account of any Excluded Tax) any payment on or
calculated by reference to the amount of, any such sum
received or receivable by any Lender under this
Agreement, then:
(A) the applicable Borrower shall notify the Agent of
any such requirement or any change in any such
requirement as soon as such Borrower becomes aware of
it;
(B) the applicable Borrower shall pay any such Tax or
other amount before the date on which penalties
attached thereto become due and payable, such payment
to be made (if the liability to pay is imposed on such
Borrower) for its own account or (if that liability is
imposed on any other party to this Agreement) on behalf
of and in the name of that party;
(C) the sum payable by the applicable Borrower in
respect of which the relevant deduction, withholding or
payment is required shall (except, in the case of any
such payment, to the extent that the amount thereof is
not ascertainable when that sum is paid) be increased
to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, that
party receives on the due date and retains (free from
any liability in respect of any such deduction,
withholding or payment) a sum equal to that which it
would have received and so retained had no such
deduction, withholding or payment been required or
made; and
(D) within thirty (30) days after payment of any sum
from which any Borrower is required by law to make any
deduction or withholding, and within thirty (30) days
after the due date of payment of any Tax or other
amount which it is required by clause (B) above to pay,
it shall deliver to the Agent all such certified
documents and other evidence as to the making of such
deduction, withholding or payment as (1) are reasonably
satisfactory to other affected parties as proof of such
deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority and
(2) are reasonably required by any such party to enable
it to claim a tax credit with respect to such
deduction, withholding or payment.
3.2. Yield Protection. If any law or any governmental
or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force
of law), or any interpretation thereof, or the
compliance of any Lender (which term, for the purposes
of this Article III, shall be deemed to include the
Issuer in such capacity) therewith,
(a) subjects any Lender or any applicable Lending
Installation to any Tax on or from payments due from
any Borrower (excluding Excluded Taxes) or changes the
basis of taxation of payments to any Lender in respect
of its Loans or Facility Letters of Credit (or
participations therein) or other amounts due it
hereunder, or
(b) 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
(c) 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
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 Loans or 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 Loans or
Facility Letters of Credit (or participations therein)
held or interest received by it, by an amount deemed
material by such Lender,
then, within 15 days of demand by such Lender, the
Borrowers shall pay such Lender that portion of such
increased expense incurred or reduction in an amount
received which such Lender determines is attributable
to making, issuing, funding and maintaining its Loans
and Facility Letters of Credit (or participations
therein) and its Revolving Commitment.
3.3. Changes in Capital Adequacy Regulations. If a
Lender determines the amount of capital required or
expected to be maintained by such Lending
Installation of such Lender or any corporation
controlling such Lender is increased as a result of a
Change, then, within 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 and Facility Letters of Credit (or
participations therein) or its obligation to make Loans
and issue or participate in Facility Letters of Credit
hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (a)
any change after the date of this Agreement in the
Risk-Based Capital Guidelines or (b) 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 (x) the risk-based capital
guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (y)
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.
3.4. 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.
3.5. 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 the Eurodollar Advance.
3.6. 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 a Type of Advance
under Section 3.4, so long as such designation is not
disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender as to the
amount due, if any, under Sections 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 shall be
payable on demand after receipt by Astec of the 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.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. 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",
which in no event shall be later than December 31,
1997):
(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 Credit Party 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.
(c) An incumbency certificate, executed by the
Secretary or Assistant Secretary of each Credit Party,
which shall identify by name and title and bear the
signature of the officers of each Credit Party
authorized to sign the Loan Documents 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.
(d) A certificate, signed by the Chief Accounting
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.
(e) A written opinion of counsel for each Credit
Party, addressed to the Agent and the Lenders in
substantially the form of Exhibit C hereto.
(f) 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 the Borrower.
(g) Executed originals of this Agreement, the Guaranty
(executed by each Guarantor) and each of the other Loan
Documents, which shall be in full force and effect,
together with all schedules, exhibits, certificates
instruments, opinions, documents and financial
statements required to be delivered pursuant thereto.
(h) Written money transfer instructions, in
substantially the form of Exhibit D-1 or D-2, as the
case may be, addressed to the Agent and signed by an
Authorized Officer, together with such other related
money transfer authorizations as the Agent may have
reasonably requested.
(i) The insurance certificate described in Section
5.18 below and any and all certificates of insurance
required by the Lenders under Section 6.6 below.
(j) A solvency certificate executed by the Chief
Accounting Officer of Astec.
(k) An initial Compliance Certificate.
(l) An initial Borrowing Base Certificate.
(m) Repayment of Indebtedness. Evidence of repayment
in full of all Indebtedness of AFS to CIT Financial and
release of any Liens relating thereto.
Such other documents as the Lenders or their counsel
may have reasonably requested.
4.2. 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 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.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
The Borrowers jointly and severally represent and
warrant to the Lenders that:
5.1. 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.
5.2. Authorization and Validity. Each Credit Party 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 Credit Party 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 Credit Party,
enforceable against such Credit Party 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.
5.3. No Conflict; Government Consent. Neither the
execution and delivery by any Credit Party of the Loan
Documents, 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 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, approval, license, authorization, or
validation of, or filing, recording or registration
with, or exemption by, 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.
5.4. Financial Statements. The September 30, 1997
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.
5.5. Material Adverse Change. Since September 30,
1997, 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.
5.6. 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. 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.
5.7. 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. 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.
5.8. 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.
5.9. 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.
5.10. Accuracy of Information. All factual
information heretofore or contemporaneously furnished
by or on behalf of any Credit Party to 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 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.
5.11. 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 the Stock
Repurchase (as defined in the Original Agreement) and
any additional stock repurchase permitted by Section
6.10 hereof, Margin Stock owned by any Credit Party
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.
5.12. 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 or Contingent Obligations.
5.13. 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 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.
5.14. 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;
(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; and
(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.
5.15. 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
financial statements as owned by them.
5.16. 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.
5.17. 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.
5.18. Insurance. The certificate signed by the
President, Chief Accounting Officer or Corporate
Controller of Astec, that attests to the existence and
adequacy of, and summarizes, the property and casualty
insurance program carried by each Credit Party and that
has been furnished by Astec to the Agent and the
Lenders, is complete and accurate. This summary
includes the insurer's or insurers' name(s), policy
number(s), expiration date(s), amount(s) of coverage,
type(s) of coverage, exclusion(s), and deductibles.
This summary also includes similar information, and
describes any reserves, relating to any self-insurance
program that is in effect.
5.19. 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.
5.20. Solvency. (a) No Credit Party 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.
5.21. Benefits. Each Credit Party will benefit
from the financing arrangement established by this
Agreement. The Borrowers acknowledge that, but for the
agreement by each Subsidiary to execute and deliver the
Guaranty, the Agent and the Lenders would not have made
available the credit facilities established hereby on
the terms set forth herein.
5.22. 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.
ARTICLE VI
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.
6.1. 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 Accounting 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 Accounting 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 Accounting Officer,
describing said Reportable Event and the action which
Astec proposes to take with respect thereto.
(g) Without limitation to Section 6.26 below, 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.
6.2. Use of Proceeds. Astec will use the proceeds of
Loans made under the Tranche A Commitment (i) to amend
and restate certain existing indebtedness under the
Original 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 to finance Qualifying
Financing Leases and Qualifying Operating Leases. 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, except in compliance with the
representation contained in Section 5.11 as it relates
to refinancing of the Stock Repurchase (as defined in
the Original Agreement) and any stock repurchased
pursuant to Section 6.10.
6.3. 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.
6.4. 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.
6.5. Taxes. The Borrowers will, and will cause each
Credit Party to, pay when due all taxes, assessments
and governmental charges 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.
6.6. 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.
6.7. 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 and ERISA.
6.8. 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.
6.9. 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.
6.10. 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 (i) the Leverage Ratio will be 3.5:1.0 or
less and (ii) the Borrowers are in compliance with all
of the terms hereof, including Section 5.11.
6.11. 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
$4,000,000 at any time during the term of this
Agreement.
(f) Indebtedness of up to $5,000,000; provided,
however, that such Indebtedness is (i) terminated and
repaid on or before September 30, 1998, (ii) unsecured,
and (iii) on terms no less favorable to the Borrowers
than the terms of this Agreement.
(g) Indebtedness in respect of Rate Hedging
Obligations incurred on an unsecured basis on terms and
in amounts satisfactory to the Agent.
(h) Indebtedness in connection with industrial revenue
bond financings where the Letter of Credit thereunder
is issued pursuant to Section 2.11 hereof.
6.12. 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.
6.13. 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) 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 on
the date hereof (including AFS) shall at all times be a
Wholly-Owned Subsidiary of Astec.
6.14. 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.
6.15. 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.
6.16. 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 (except that a certificate of deposit in
the amount of $100,000 issued by Overton Bank and
Trust, National Association, Fort Worth, Texas, shall
be a permitted Investment hereunder).
(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 date hereof 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) Acquisitions of assets or stock of any Person
valued (in the judgment of the Required Lenders) in the
aggregate at less than $4,000,000 during the term of
this Agreement.
(j) The Portec Acquisition; provided, however, that
(i) the purchase price is no more than $30,000,000,
(ii) Astec submits a certificate prior to the closing
transaction certifying that the Credit Parties are in
compliance with the financial and other covenants
hereunder on a pro forma basis, after giving effect to
the Portec Acquisition, and (iii) the purchaser
thereunder and any Affiliate of Astec formed in
connection therewith (if not a Credit Party on the date
hereof) executes and delivers a guaranty to the Lenders
in substantially the form of the Guaranty.
6.17. Contingent Obligations. Except as permitted
pursuant to Section 6.11(d) above, 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,
(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.
6.18. 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. (a Credit
Party to be formed in connection with the Portec
Acquisition) in its assets in favor of Astec Holdings,
Inc. (a Credit Party to be formed in connection with
the Portec Acquisition) or another Credit Party
securing intercompany loans made to Kolberg-Pioneer,
Inc. in connection with the Portec Acquisition;
provided, however, that such loans and Liens are
subordinated to the Obligations and Guaranteed
Obligations (as defined in the Guaranty) in a manner
satisfactory to the Agent.
6.19. 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.
6.20. 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.
6.21. 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.
6.22. Financial Covenants.
6.22.1. 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
July 1, 1997 through June 30, 1999 4.0:1.0
July 1, 1999 through June 30, 2000 3.5:1.0
July 1, 2000 and thereafter 3.0:1.0
6.22.2. 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.
6.22.3. 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
$3,000,000 during any one fiscal year on a non-
cumulative basis in the aggregate for the Credit
Parties.
6.22.4. 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.
6.22.5. 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.
6.23. 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 $10,000,000 during any one fiscal
year, calculated on a non-cumulative basis in the
aggregate for the Credit Parties.
6.24. 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.
6.25. 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.
6.26. 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 Lender; and
(c) provide such information and certifications which
the Lender may reasonably request from time to time to
insure compliance with this Section 6.26.
6.27. 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 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.
ARTICLE VII
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 2.1.2), or (b) interest upon any Note or of any
commitment fee or other obligation under any of the
Loan Documents within five days (5) 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 or 6.24 above.
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 or 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 or 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 (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 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 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 such Property.
7.9. Any Credit Party shall fail within thirty (30)
days to pay, bond or otherwise discharge any judgment
or order for the payment of money in excess of
$500,000, which is 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
or any Reportable Event shall occur in connection with
any Plan.
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 Guaranty shall fail to remain in full
force or effect or any action shall be taken to
discontinue or to assert the invalidity or
unenforceability of the Guaranty, or any Guarantor
shall fail to comply with any of the terms or
provisions of the Guaranty, or any Guarantor denies
that it has any further liability under the Guaranty,
or gives notice to such effect.
7.18. An event shall have occurred that could give
rise to a Material Adverse Effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. 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
to such 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.
8.2. 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 the Borrower to assign its rights
under this Agreement.
(e) Amend this Section 8.2.
(f) Release any Guarantor from the Guaranty.
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.
8.3. 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.
ARTICLE IX
GENERAL PROVISIONS
9.1. 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.
9.2. 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.
9.3. 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.
9.4. 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.
9.5. 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.
9.6. 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.
9.7. Expenses; Indemnification. The Borrowers shall
reimburse the Agent 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
in connection with the preparation, negotiation,
execution, delivery, review, amendment and modification
of the Loan Documents. The Borrowers also agree to
reimburse the Agent and the Lenders for any costs,
internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the
Agent and the Lenders, which attorneys may be employees
of the Agent or the Lenders) paid or incurred by the
Agent or any Lender in connection with the collection
and enforcement of the Loan Documents. The Borrowers
further agree to indemnify the Agent and each Lender,
its 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 or any Lender 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, (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.
9.8. 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.
9.9. 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.
9.10. 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.
9.11. 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 nor any Lender
shall have any fiduciary responsibilities to the
Borrowers. Neither the Agent 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 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 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.
9.12. 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, and (f) as
permitted by Section 12.4.
9.13. 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 Original Credit Facilities shall be replaced
by the New Credit Facilities and the Original Agreement
shall be deemed to be amended, restated and superseded
in its entirety in the form of this Agreement; and
(b) All Indebtedness, liabilities and obligations
outstanding under the Original 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 Original Agreement shall, promptly after receipt
of its Notes hereunder, return to Astec the promissory
notes received by it in connection with the Original
Agreement.
The Borrowers, the Agent, and the Lenders agree that
(i) this Agreement, the Notes delivered pursuant hereto
and the other Loan Documents executed and delivered in
connection herewith do not constitute a novation,
payment and reborrowing, or termination of the
"Obligations" (as defined in the Original Agreement)
under the Original Agreement as in effect prior to the
restatement Closing Date; (ii) all terms and conditions
of the Original Agreement which are amended and
restated by this Agreement shall remain effective until
such amendment and restatement becomes effective
hereunder; and (iii) 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 Astec contained in the Original 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 Astec 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
Original Agreement, shall survive the execution and
delivery of this Agreement; provided that it is
understood and agreed that Astec's monetary obligations
under the Original Agreement in respect of the loans
and letters of credit thereunder are evidenced by this
Agreement as provided in Article II hereof.
9.14. 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.
9.15. 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.
9.16. 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.
ARTICLE X
THE AGENT
10.1. Appointment. First Chicago is hereby
appointed by the Lenders 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. 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
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 (a) does not
hereby assume any fiduciary duties to any of the
Lenders, (b) is a "representative" of the Lenders
within the meaning of Section 9-105 of the Uniform
Commercial Code and (c) 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.
10.2. 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.
10.3. 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 for its or
their own gross negligence or willful misconduct.
10.4. 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 to the Agent and not waived at
closing; or (d) the validity, effectiveness or
genuineness of any Loan Document or any other
instrument or writing furnished in connection
therewith. 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).
10.5. 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.
10.6. 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 all matters pertaining to the agency hereby
created and its duties hereunder and under any other
Loan Document.
10.7. 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.
10.8. 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) (a)
for any amounts not reimbursed by the Borrowers for
which the Agent is entitled to reimbursement by the
Borrowers under the Loan Documents, (b) 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 and (c) 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, or the enforcement of any of the
terms thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing
to the extent they arise from the gross negligence or
willful misconduct of the Agent. The obligations of
the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this
Agreement.
10.9. 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 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 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 any Borrower in which such
Borrower is not restricted hereby from engaging with
any other Person. The Agent, in its individual
capacity, is not obligated to remain a Lender.
10.10. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without
reliance upon the Agent 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 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.
10.11. 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.
Upon any such resignation, 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. If the Agent has
resigned 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 $50,000,000. 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 Agent. Upon the
effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents.
After the effectiveness of the resignation 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.
10.12. 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 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.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. 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 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 hereof, shall then be due.
11.2. 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.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. 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. Notwithstanding
clause (b) of this Section, any Lender may at any time,
without the consent of the Borrowers or the Agent,
assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank;
provided, however, that no such assignment shall
release the transferor Lender from its obligations
hereunder. 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 in the case
of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note
agrees by acceptance thereof 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, transferee or
assignee of such Note or of any Note or Notes issued in
exchange therefor.
12.2. Participations.
12.2.1. 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.
12.2.2. 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.
12.2.3. 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.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in
the ordinary course of its business and in accordance
with applicable law, and 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.
12.3.2. Effect; Effective Date. Upon (i) delivery to
the Agent of a notice of assignment, substantially in
the form attached as Annex I to Exhibit E hereto (a
"Notice of 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,
such assignment shall become effective on the effective
date specified in such Notice of Assignment. The
Notice of 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 are "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.
12.4. 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.
12.5. 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.
ARTICLE XIII
NOTICES
13.1. Giving Notice. Except as otherwise permitted
by Section 2.6 with respect to borrowing notices, any
notice required or permitted to be given under this
Agreement shall be sent by United States mail,
telegraph, telex, FAX or nationally established
overnight courier service, and shall be deemed received
(a) when received by the addressee if sent via the
United States mail, postage prepaid, (b) when delivered
to the appropriate office or machine operator for
transmission, charges prepaid, if sent by telegraph or
telex (answerback confirmed in the case of telexes),
(c) when receipt thereof by the addressee is confirmed
by telephone if sent by FAX and (d) one (1) business
day after delivery to an overnight courier service, if
sent by such service, in each case addressed to the
relevant party at the address set forth for such party
on the signature pages hereto or at such other address
as may be designated by such party in a notice to the
other parties.
13.2. 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.
ARTICLE XIV
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 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.
ARTICLE XV
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF
JURY TRIAL
15.1. 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 (AND NOT THE LAW OF CONFLICTS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
15.2. 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.
15.3. 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.
ARTICLE XVI
ASTEC GUARANTY
16.1. 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.
16.2. 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.
16.3. 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.
16.4. 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.
16.5. 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.
16.6. 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.
16.7. 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.
16.8. 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.
16.9. 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.
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/ Richard W. Bethea, Jr.
Print Name: Richard W. Bethea, Jr.
Title: Secretary / Corporate Counsel / Vice President
Address: 4101 Jerome Avenue
Chattanooga, Tennessee 37407
Telecopy: (423) 867-4127
Telephone:(423) 867-4210
Attention: F. McKamy Hall
ASTEC FINANCIAL SERVICES, INC.
By: Albert E. Guth
Print Name: Albert E. Guth
Title: President
Address: 6400 Lee Highway, Suite 107
Chattanooga, Tennessee 37421
Telecopy: (423) 899-4456
Telephone: (423) 899-5898
Attention: Albert E. Guth
For purposes of Section 2.11:
TRENCOR, INC.
By: /s/ Richard W. Bethea, Jr.
Print Name: Richard W. Bethea, Jr.
Title: Secretary
Address: 4101 Jerome Avenue
Chattanooga, Tennessee 37407
Telecopy: (423) 867-4127
Telephone: (423) 867-4210
Attention: F. McKamy Hall
IN WITNESS WHEREOF, the Borrowers, the Lenders and the
Agent have executed this Agreement as of the date first
above written.
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Agent
By: /s/ David T. McNeela
Print Name: David T. McNeela
Title: Authorized Agent
Address: One First National Plaza
Chicago, Illinois 60670
Telecopy: (312) 732-5296
Telephone: (312) 732-5730
Attention: David T. McNeela
IN WITNESS WHEREOF, the Borrowers, the Lenders and the
Agent have executed this Agreement as of the date first
above written.
FIRST AMERICAN NATIONAL BANK
By: /s/ Mary E. Buckner
Print Name: Mary E. Buckner
Title: Vice President
Address: One Union Square, Suite 100 Cattanooga,
Tennessee 37402
Telecopy: (423) 755-6014
Telephone: (423) 755-6022
Attention: Mary Buckner
IN WITNESS WHEREOF, the Borrowers, the Lenders and the
Agent have executed this Agreement as of the date first
above written.
AMSOUTH BANK
By: /s/ R. Ryan Murphy III
Print Name: R. Ryan Murphy III
Title: Sr. Vice President
Address: 601 Market Center
Cattanooga, Tennessee 37402
Telecopy: (423) 756-1576
Telephone: (423) 756-4600
Attention: Nowlin Randolph
SECOND AMENDED AND RESTATED GUARANTY
THIS SECOND AMENDED AND RESTATED GUARANTY (this
"Guaranty") is made as of November 24, 1997 by each of
the undersigned entities (each, a "Guarantor" and
collectively, the "Guarantors"), in favor of The First
National Bank of Chicago, Agent, for the ratable
benefit of the Lenders (as defined in the Credit
Agreement referred to below), and the Lenders.
RECITALS
A. Pursuant to a Second Amended and Restated Credit
Agreement dated of even date herewith (as amended,
modified, restated or supplemented from time to time,
the "Credit Agreement") executed by Astec Industries,
Inc., a Tennessee corporation ("Astec") and Astec
Financial Services, Inc., a Tennessee corporation
("AFS" and collectively with Astec, the "Borrowers"),
the Lenders have agreed to extend credit in the form of
a revolving credit facility to the Borrowers in an
aggregate principal amount of up to $70,000,000
(collectively, the "Credit"), subject to the terms and
conditions and for the purposes set forth in the Credit
Agreement.
B. Each of the Guarantors is a wholly-owned
subsidiary of Astec and will therefore receive direct
and substantial benefit and substantial support from
Astec as a result of the Lenders making available the
Credit.
C. In order to induce the Lenders to make available
the Credit and enter into the Credit Agreement, which
each Guarantor acknowledges the Lenders are doing in
reliance on this Guaranty, the Guarantors have entered
into this Guaranty as set forth below.
AGREEMENT
NOW, THEREFORE, for and in consideration of the matters
set forth in the Recitals and for other good and
valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Guarantor agrees
for the benefit of the Lenders as follows:
1. Definitions. Any defined terms used herein,
unless otherwise specified, shall have the meanings
attributed to them in the Credit Agreement.
2. Type of Guaranty and Obligations Covered. Each
Guarantor, as primary obligor, and not as surety only,
hereby absolutely, irrevocably, jointly and severally,
unconditionally and continually guarantees to the
Lenders prompt payment when due, whether by
acceleration or otherwise, by each Borrower (or its
successors in interest, including without limitation
assignees, transferees, debtor in possession and
trustee in bankruptcy) of any and all liabilities and
obligations of each Borrower to the Lenders under the
Credit Agreement, the Notes and the other Loan
Documents, whether such liabilities are direct or
indirect, absolute or contingent, joint, several or
independent, now existing or hereafter created, due or
to become due, and any and all extensions or renewals
thereof, together with all costs and expenses,
including without limitation attorneys' fees and
disbursements, incurred by the Agent and the Lenders in
collecting and enforcing any of such liabilities and
enforcing this Guaranty (collectively, the "Guaranteed
Obligations"). The obligations of AFS as a guarantor
hereunder shall not be limited or impaired because AFS
is also a Borrower and this Guaranty as it relates to
AFS only shall be a guaranty of all Guaranteed
Obligations relating to Astec.
3. Continuing Guaranty; No Discharge for Invalidity
of Underlying Obligation; Term of Guaranty; Rescinded
Payments.
(a) This Guaranty shall be a continuing guaranty and
remain in full force and effect, notwithstanding
intervening events of any kind, until the Guarantors or
the Borrowers have performed each of the Guaranteed
Obligations. No invalidity, irregularity or
unenforceability of any or all of the Guaranteed
Obligations, or any other circumstances which might
otherwise constitute a legal or equitable discharge or
defense of any Guarantor or the Borrowers shall affect,
impair, or be a defense to this Guaranty, which shall
in every respect be construed as a primary obligation
of each Guarantor. Each Guarantor waives any and all
defenses, other than payment, which may be available to
the Borrowers with respect to the Guaranteed
Obligations and agrees not to assert any such defense
hereunder. Each Guarantor agrees that it shall not be
released from its obligations hereunder by reason of
any amendment to or alteration of the terms and
conditions of the Credit Agreement or any of the other
Loan Documents or the indebtedness arising thereunder,
nor shall such Guarantor's obligations hereunder be
altered or impaired by (i) any Default or other default
by a Borrower under the Credit Agreement or any of the
other Loan Documents, (ii) any delay of the Lenders in
enforcing the terms and obligations of the Credit
Agreement or any of the other Loan Documents, (iii) any
waiver by the Lenders of any Default or other default
by a Borrower under the Credit Agreement or any of the
other Loan Documents, or (iv) the exercise of any
remedies by the Agent or the Lenders under the Credit
Agreement or any of the other Loan Documents.
(b) If at any time all or any part of any payment
theretofore applied by a Lender to any of the
Guaranteed Obligations is or must be rescinded or
returned by such Lender for any reason whatsoever,
including without limitation as a voidable preference
or transfer or pursuant to a settlement agreement or
compromise effected by such Lender with a claimant,
such Guaranteed Obligations shall, for the purposes of
this Guaranty, to the extent that such payment is or
must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such
application by such Lender, and this Guaranty shall
continue to be effective or shall be reinstated, as the
case may be, as to such Guaranteed Obligations, all as
though such application by such Lender had not been
made.
4. Waivers by Guarantors. Each Guarantor hereby
expressly waives: (a) notice of the acceptance by the
Agent and the Lenders of this Guaranty, (b) notice of
the existence or creation or nonpayment of all or any
of the Guaranteed Obligations, (c) presentment, demand,
notice of dishonor, protest, notice of protest and all
other notices whatsoever, either in respect of this
Guaranty or any or all of the Guaranteed Obligations,
(d) all diligence in collection or protection of, or
realization upon, the Guaranteed Obligations, any
obligations hereunder, or any security for or guaranty
of any of the foregoing, (e) any requirement on the
part of the Lenders to mitigate the damages resulting
from the default of a Borrower, (f) the benefit of all
appraisement, valuation, marshalling, forbearance,
stay, extension, redemption, homestead, exemption and
moratorium laws, and (g) any obligation the Lenders may
have to disclose to such Guarantor any facts the
Lenders now or hereafter may know or have reasonably
available to them regarding a Borrower or its financial
condition, whether or not the Lenders have a reasonable
opportunity to communicate such facts or have reason to
believe that any such facts are unknown to such
Guarantor or materially increase the risk to such
Guarantor beyond the risk such Guarantor intends to
assume hereunder. Each Guarantor also expressly waives
any requirement that the Lenders first commence any
action or assert any right against a Borrower or any
other obligor, enforce any right against any security
securing any of the Guaranteed Obligations, or join the
Borrowers in any action the Lenders may bring against
such Guarantor under this Guaranty. Each Guarantor
acknowledges that the Lenders have no obligation to
obtain, perfect or retain a security interest in any
property to secure any of the Guaranteed Obligations.
5. Lender Indulgences; Forbearance and Consents
Relating to the Borrowers. The Lenders may, at any
time and from time to time, whether before or after any
discontinuance of this Guaranty, without the consent of
or notice to any Guarantor, except such notice as may
be required by applicable statute and cannot be
waived, without incurring responsibility to any
Guarantor, and without impairing or releasing the
obligations of any Guarantor hereunder, upon any terms
or conditions, take any or all of the following actions
(which may or could have the effect of changing the
risk hereby undertaken by the Guarantors), to each of
which actions each Guarantor hereby consents: (a)
change the manner, place or terms of performance of any
of the Guaranteed Obligations, (b) change, extend or
renew for one or more periods (whether or not longer
than the original period), alter or exchange any of the
Guaranteed Obligations, (c) release, settle,
subordinate or compromise any obligation of the
Borrowers, any Guarantor or any other guarantor with
respect to any of the Guaranteed Obligations, (d) grant
any indulgence or forbearance to a Borrower or consent
to any action or failure to act of a Borrower, which,
in the absence of the Lenders' consent, violates or may
be deemed to violate any agreements of a Borrower with
respect to any or all of the Guaranteed Obligations,
(e) retain or obtain a security interest in any
property to secure any of the Guaranteed Obligations or
any obligation hereunder, (f) sell, substitute,
exchange, release, surrender, realize upon or otherwise
deal with in any manner all or any part of any property
securing any of the Guaranteed Obligations or any
obligation hereunder, (g) retain or obtain, or release
or compromise, the primary or secondary obligations of
any obligor or obligors, including without limitation
any Guarantor or any other guarantor, with respect to
any of the Guaranteed Obligations, (h) exercise or
refrain from exercising any rights against a Borrower
or others (including without limitation any Guarantor
or any other guarantor) or otherwise act or refrain
from acting, (i) apply any sums paid or realized to any
Guaranteed Obligations regardless of what Guaranteed
Obligations remain unpaid, (j) without limitation in
any way to Section 8 below, act or fail to act in any
manner referred to in this Guaranty which may deprive
any Guarantor of its right to subrogation against a
Borrower to recover full indemnity for any payments
made pursuant to this Guaranty and (k) resort to any
Guarantor for payment of any of the Guaranteed
Obligations, whether or not the Lenders shall have
resorted to any property securing any of the Guaranteed
Obligations or any obligation hereunder or shall have
proceeded against a Borrower or any other obligor,
including any Guarantor, or any other guarantor
primarily or secondarily obligated with respect to any
of the Guaranteed Obligations.
6. Set-off. Each Guarantor agrees that it shall make
no claim or setoff, defense, recoupment or counterclaim
of any sort whatsoever, nor shall such Guarantor seek
to impair, limit or defeat in any way its obligations
hereunder. Each Guarantor hereby waives any right to
such a claim in limitation of its obligations
hereunder.
7. Representations and Warranties. Each Guarantor
makes the following representations and warranties to
the Lender, which (i) shall survive the execution and
delivery of this Guaranty and (ii) shall be deemed to
have been renewed upon each Borrowing Date under the
Credit Agreement.
(a) Such Guarantor 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 without limitation 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 in each jurisdiction in which
its business is conducted and where such qualification
is necessary.
(b) Such Guarantor has the corporate power and
authority and legal right to execute and deliver this
Guaranty and to perform its obligations hereunder. The
execution and delivery by such Guarantor of this
Guaranty and the performance of its obligations
hereunder have been duly authorized by proper corporate
proceedings, and this Guaranty constitutes the legal,
valid and binding obligation of such Guarantor
enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of
creditors' rights generally.
(c) Neither the execution and delivery by such
Guarantor of this Guaranty, nor compliance with the
provisions hereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree
or award binding on such Guarantor or its articles of
incorporation or by-laws or the provisions of any
indenture, instrument or agreement to which it is a
party or is subject, or by which it, or its Property,
is bound, or conflict with or constitute a default
thereunder.
(d) Such Guarantor is not insolvent and the execution
and delivery of this Guaranty will not render it
insolvent.
8. Application of Payments; Waiver and Subordination
of Claims; Noninterference.
(a) Subject to the terms of the Credit Agreement, any
amounts received by a Lender from whatever source on
account of the Guaranteed Obligations may be applied by
it toward the payment of such of the Guaranteed
Obligations, and in such order of application, as such
Lender may from time to time elect in its sole
discretion.
(b) Each Guarantor hereby waives any claim or other
right, contingent or otherwise, which such Guarantor
may now have or hereafter acquire against the Borrowers
or any other Person that is primarily or contingently
liable on the Guaranteed Obligations, including without
limitation any right of subrogation, reimbursement,
exoneration, contribution, indemnification or any right
to participate in any claim or remedy of the Lenders
against the Borrowers or any collateral security
therefor, which the Lenders now have or hereafter
acquire, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common
law, including without limitation claims arising under
the Bankruptcy Code (as hereafter defined).
(c) Each Guarantor hereby agrees that neither such
Guarantor, nor any of such Guarantor's agents,
attorneys or employees will interfere in such
Guarantor's behalf in any way with the enforcement by
the Lender of any of its rights under this Guaranty.
9. Limitation on Obligations.
(a) It is the intention of each of the Guarantors and
the Lenders that, with respect to each Guarantor, such
Guarantor's obligations hereunder shall be in, but not
in excess of, as of any date, the greater of the
following (such greater amount determined hereunder
being the relevant Guarantor's "Maximum Liability"):
(i) the aggregate amount of all monies received by such
Guarantor from the Borrowers after the date hereof
(whether by loan, capital infusion or other means), or
(ii) the maximum amount (such amount being a
Guarantor's "Alternative Limitation") not subject to
avoidance under Title 11 of the United States Code, as
same may be amended from time to time, or any
applicable state law (collectively, the "Bankruptcy
Code"). To that end, but as to the Alternative
Limitation of the Guarantors, only to the extent such
obligations would otherwise be subject to avoidance
under the Bankruptcy Code if a Guarantor is not deemed
to have received valuable consideration, fair value or
reasonably equivalent value for its obligations
hereunder, any Guarantor's obligations hereunder shall
be reduced to that amount which, after giving effect
thereto, would not render such Guarantor insolvent, or
leave such Guarantor with an unreasonably small capital
to conduct its business, or cause such Guarantor to
have incurred debts (or intended to have incurred
debts) beyond its ability to pay such debts as they
mature, at the time such obligations are deemed to have
been incurred under the Bankruptcy Code. As used
herein, the terms "insolvent" and "unreasonably small
capital" shall likewise be determined in accordance
with the Bankruptcy Code. This Section 9(a) with
respect to the Alternative Limitation of the Guarantor
is intended solely to preserve the rights of the Agent
hereunder to the maximum extent not subject to
avoidance under the Bankruptcy Code, no Guarantor or
any other Person shall have any right or claim under
this Section 9(a) with respect to the Alternative
Limitation, except to the extent necessary so that the
obligations of any Guarantor hereunder shall not be
rendered voidable under the Bankruptcy Code.
(b) Each of the Guarantors agrees that the Guaranteed
Obligations may at any time and from time to time
exceed the Maximum Liability of each Guarantor, and may
exceed the aggregate Maximum Liability of all other
Guarantors, without impairing this Guaranty or
affecting the rights and remedies of the Agent
hereunder. Nothing in this Section 9(b) shall be
construed to increase any Guarantor's obligations
hereunder beyond its Maximum Liability.
(c) In the event any Guarantor (a "Paying Guarantor")
shall make any payment or payments under this Guaranty
or shall suffer any loss as a result of any realization
upon any collateral granted by it to secure its
obligations under this Guaranty, each other Guarantor
(each, a "Non-Paying Guarantor") shall contribute to
such Paying Guarantor an amount equal to such Non-
Paying Guarantor's "Pro Rata Share" of such payment or
payments made, or losses suffered, by such Paying
Guarantor. For the purposes hereof, each Non-Paying
Guarantor's "Pro Rata Share" with respect to any such
payment or loss by a Paying Guarantor shall be
determined as of the date on which such payment or loss
was made by reference to the ratio of (i) such Non-
Paying Guarantor's Maximum Liability as of such date
(without giving effect to any right to receive, or
obligation to make, any contribution hereunder) to (ii)
the aggregate Maximum Liability of all Guarantors
hereunder (including such Paying Guarantor) as of such
date (without giving effect to any right to receive, or
obligation to make, any contribution hereunder).
Nothing in this Section 9(c) shall affect any
Guarantor's several liability for the entire amount of
the Guaranteed Obligations (up to such Guarantor's
Maximum Liability). Each of the Guarantors covenants
and agrees that its right to receive any contribution
under this Guaranty from a Non-Paying Guarantor shall
be subordinate and junior in right of payment to all
the Guaranteed Obligations. The provisions of this
Section 9(c) are for the benefit of both the Agent and
the Guarantors and may be enforced by any one, or more,
or all of them in accordance with the terms hereof.
10. Guaranty to Inure to Benefit of Assignees of
Guaranteed Obligations. Subject to the terms of the
Credit Agreement, a Lender may, from time to time,
whether before or after any discontinuance of this
Guaranty, without notice to any Guarantor, assign or
transfer any or all of such Lender's Percentage of the
Guaranteed Obligations (the "Transferred Guaranteed
Obligations") or any interest therein. Notwithstanding
any such assignment or transfer or any subsequent
further assignment or transfer thereof, such
Transferred Guaranteed Obligations shall be and remain
Guaranteed Obligations for the purposes of this
Guaranty, and each and every immediate and successive
assignee or transferee of any of the Transferred
Guaranteed Obligations or of any interest therein
shall, to the extent of the interest of such assignee
or transferee in the Transferred Guaranteed
Obligations, be entitled to the benefits of this
Guaranty to the same extent as if such assignee or
transferee were a Lender hereunder, provided, however,
that unless the Lender transferring such Transferred
Guaranteed Obligations shall otherwise consent in
writing, such Lender shall have an unimpaired right,
prior and superior to that of any such assignee or
transferee, to enforce this Guaranty for the benefit of
such Lender as to those of the Guaranteed Obligations
which such Lender has not assigned or transferred or
which are then owed to the Lender.
11. Agent Lien. All funds received from any source
now or hereafter in the possession (all remittances to
be deemed in the possession of the Agent as soon as the
same is put in transit to it by mail or carrier) or
custody of the Agent (it being understood that such
funds shall be limited to the balance of any account,
whether general or special or for any specific purpose,
of or for the account of any Guarantor, or in or as to
which any Guarantor may have any interest or power,
including without limitation power of hypothecation or
disposition), and all claims of any description of any
Guarantor against the Agent, shall be held by the Agent
as security for any and all liabilities created by this
Guaranty. If any event shall occur causing the
acceleration of the Guaranteed Obligations or if any
liability of any Guarantor under this Guaranty shall
become due and owing for any reason, the Agent may at
its option appropriate and apply any or all present and
future credit balances of such Guarantor, in whatever
currencies may be held by the Agent and whether held in
general or special accounts or for any specific
purpose, or any other present or future claim of such
Guarantor against the Agent, toward the payment and
extinguishment of the Guaranteed Obligations.
12. Costs. Each Guarantor hereby agrees to pay any
and all costs and expenses, including without
limitation attorneys' fees and disbursements, which may
be incurred by the Agent and the Lenders in connection
with the enforcement, modification or waiver of this
Guaranty.
13. Loan Documents. Each Guarantor acknowledges that
a copy of the Credit Agreement, the Notes and the other
Loan Documents have been made available to it and that
it is familiar with their contents.
14. Bankruptcy. In the event of any bankruptcy,
reorganization, winding up, or similar proceedings with
respect to a Borrower or any other Guarantor, no
limitation on such Borrower's liability under the
Notes, the Credit Agreement or any of the other Loan
Documents that may now or hereafter be imposed by any
federal, state or other statute, law, regulation, or
judicial or administrative determination applicable to
such proceedings shall in any way limit the obligation
hereunder of any Guarantor which obligation is
coextensive with the liability of the Borrowers as set
forth in the Credit Agreement and the other Loan
Documents without regard to any such limitation. Each
Guarantor shall promptly file in any bankruptcy or
other proceeding in which the filing of claims is
required by law all claims and proofs of such claims
which such Guarantor may have against a Borrower, and
will collaterally assign to the Lenders or their
nominee(s) all rights of such Guarantor thereunder. In
all such cases, any party authorized to pay any such
claim shall pay to the Lenders or their nominee(s) the
full amount thereof.
15. Amendment. No modification, waiver, amendment,
discharge or change of this Guaranty shall be valid
unless the same is in writing and signed by the party
against which the enforcement of such modification,
waiver, amendment, discharge or change is sought.
16. Successors and Assigns. The duties and
obligations of each Guarantor under this Guaranty shall
be binding upon such Guarantor's heirs, legal
representatives, executors, administrators, successors
and assigns. No Guarantor may assign or delegate any
of its duties or obligations under this Guaranty
without first obtaining the express prior written
consent of the Agent.
17. Notices. Except as otherwise expressly provided
herein, any notice, demand, request or other
communication which any party hereto may be required or
may desire to give under this Guaranty shall be in
writing and shall be given in the manner set forth in
the Credit Agreement, and if to the Agent or any
Lender, addressed as set forth in the Credit Agreement,
and if to a Guarantor, addressed c/o Astec Industries,
Inc. at the address set forth for Astec in the Credit
Agreement.
18. Place of Payment. Unless otherwise directed by
the Agent or the Lenders, payment hereunder shall in
each case be made at the place of payment of the
Guaranteed Obligations set forth in the Loan Documents
in respect to which such payment hereunder is made.
19. Headings. Section headings in this Guaranty are
for convenience of reference only, and shall not govern
the interpretation of any of the provisions of this
Guaranty.
20. Entire Agreement. This Guaranty embodies the
entire agreement and understanding between the
Guarantors, the Agent and the Lenders and supersedes
all prior agreements and understandings between the
Guarantors, the Agent and the Lenders relating to the
subject matter hereof.
21. Severability of Provisions. Any provision in this
Guaranty 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 this Guaranty are
declared to be severable.
22. CHOICE OF LAW. THIS GUARANTY SHALL BE CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW
OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
23. CONSENT TO JURISDICTION. EACH GUARANTOR 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 THIS GUARANTY AND EACH GUARANTOR
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
IT 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 GUARANTOR IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY ANY GUARANTOR 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 THIS
GUARANTY SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
24. WAIVER OF JURY TRIAL. EACH GUARANTOR, 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 THIS GUARANTY OR THE
RELATIONSHIP ESTABLISHED HEREUNDER. THE TERMS AND
PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL
INDUCEMENT FOR THE LENDERS MAKING AVAILABLE THE CREDIT.
25. Taxes. All payments required to be made by any of
the Guarantors hereunder shall be made without setoff
or counterclaim and free and clear of and without
deduction or withholding for or on account of, any
present or future taxes, levies, imposts, duties or
other charges of whatsoever nature imposed by any
government or any political or taxing authority
thereof.
26. Stay of Acceleration. If acceleration of the time
for payment of any amount payable by the Borrower under
the Credit Agreement, any Note or any other Loan
Document is stayed upon the insolvency, bankruptcy or
reorganization of a Borrower, all such amounts
otherwise subject to acceleration under the terms of
the Credit Agreement, any Note or any other Loan
Document shall nonetheless be payable by each of the
Guarantors hereunder forthwith on demand by the Agent
made at the request of the Required Lenders.
27. Counterparts. This Guaranty may be executed in
any number of counterparts, all of which taken together
shall constitute one agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, Each Guarantor has executed and
delivered this Guaranty as of the date first written
above.
HEATEC, INC. TELSMITH, INC.
By: /w/ Richard W. Bethea, Jr. By: /s/ Richard W. Bethea, Jr.
Its: Secretary Its: Secretary
ROADTEC, INC. ASTEC TRANSPORTATION, INC.
By: /w/ Richard W. Bethea, Jr. By: /s/ Richard W. Bethea, Jr.
Its: Secretary Its: Secretary
TRENCOR, INC. PRODUCTION ENGINEERED PRODUCTS, INC.
By: /w/ Richard W. Bethea, Jr. By: /s/ Richard W. Bethea, Jr.
Its: Secretary Its: Secretary
ASTEC, INC. CEI ENTERPRISES, INC.
By: /s/ Richard W. Bethea, Jr. By: /s/ Richard W. Bethea, Jr.
Its: Secretary Its: Secretary
ASTEC FINANCIAL SERVICES, INC. ASTEC INVESTMENTS, INC.
By: /s/ Albert E. Guth By: /s/ Richard W. Bethea, Jr.
Its: President Its: Secretary
EXHIBIT 10.104
Asset Purchase Agreement dated October 16, 1997 between Portec, Inc. and
Astec Industries, Inc.
ASSET PURCHASE AGREEMENT
BETWEEN
PORTEC, INC.
AND
ASTEC INDUSTRIES, INC.
Dated as of October 16, 1997
TABLE OF CONTENTS
Page
ARTICLE 1.PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES 1
1.1 Purchase and Sale of Assets ........................1
1.2 Excluded Assets ....................................2
1.3 Assumption of Liabilities ..........................3
1.4 Excluded Liabilities ...............................3
1.5 Purchase Price .....................................3
1.6 Allocation of Purchase Price .......................3
1.7 Purchase Price Adjustment ..........................4
ARTICLE 2. .........................................THE CLOSING 5
2.1 Time and Place of Closing ..........................5
2.2 Deliveries by Buyer ................................5
2.3 Deliveries by Seller ...............................5
2.4 Deliveries by Seller and Buyer .....................6
ARTICLE 3. ............REPRESENTATIONS AND WARRANTIES OF SELLER 6
3.1 Corporate Organization and Qualification ...........6
3.2 Corporate Authority ................................6
3.3 No Violation .......................................6
3.4 Governmental Consents ..............................7
3.5 Financial Statements ...............................7
3.6 Absence of Undisclosed Liabilities .................7
3.7 Inventories ........................................7
3.8 Taxes ..............................................8
3.9 Properties .........................................8
3.10 Significant Contracts ..............................8
3.11 No Defaults ........................................9
3.12 Compliance with Laws ...............................9
3.13 Litigation ........................................10
3.14 Employee Benefits .................................10
3.15 Environmental Protection ..........................10
3.16 Labor Matters .....................................11
3.17 Intellectual Property .............................11
3.18 Absence of Material Changes .......................11
3.19 Brokers and Finders' Fee ..........................13
3.20 Complete Rights ...................................13
ARTICLE 4. .............REPRESENTATIONS AND WARRANTIES OF BUYER 13
4.1 Organization and Qualification ....................13
4.2 Corporate Authority ...............................13
4.3 No Violation ......................................13
4.4 Governmental Consents .............................14
4.5 Litigation ........................................14
4.6 Commitment for Funds ..............................14
4.7 Finders' Fee ......................................14
ARTICLE 5. .....................AGREEMENTS PRIOR TO THE CLOSING 14
5.1 Actions Pending Closing ...........................14
5.2 Access and Rights of Inspection ...................15
5.3 Confidentiality ...................................15
5.4 HSR Act ...........................................15
5.5 Fulfillment of Conditions .........................16
5.6 Notice ............................................16
ARTICLE 6. ..........................................CONDITIONS 16
6.1 Conditions to the Obligations of Buyer ............16
6.2 Conditions to the Obligations of Seller ...........17
ARTICLE 7. ...............................ADDITIONAL AGREEMENTS 17
7.1 Further Assurance; Nonassignable Contracts ........17
7.2 Employees and Employee Benefits ...................18
7.3 Collection of Receivables .........................21
7.4 Bulk Sales Laws ...................................21
7.5 Cooperation .......................................21
7.6 Tax Matters .......................................22
7.7 Confidential Information ..........................22
ARTICLE 8. ............................TERMINATION OF AGREEMENT 22
8.1 Termination .......................................22
8.2 Effect of Termination .............................23
ARTICLE 9. .......................................MISCELLANEOUS 23
9.1 Fees and Expenses .................................23
9.2 Special Taxes .....................................23
9.3 Amendment .........................................23
9.4 Waiver ............................................23
9.5 Correspondence ....................................23
9.6 Governing Law .....................................23
9.7 Notices ...........................................23
9.8 Non-survival of Representations, Warranties,
Covenants and Agreements ....................................24
9.9 Entire Agreement ..................................24
9.10 Assignability .....................................25
9.11 Publicity and Disclosures .........................25
9.12 Headings ..........................................25
9.13 Counterparts ......................................25
LIST OF EXHIBITS
Exhibit
Exhibit A Agreement for Assumption of Liabilities
Exhibit B Assignment and Bill of Sale
Exhibit C Covenant Not to Compete
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement"), dated
October 16, 1997, is entered into by and between Astec
Industries, Inc., a Tennessee corporation ("Buyer"), and
Portec, Inc., a Delaware corporation ("Seller").
WHEREAS, Seller, through its Construction Equipment
Division (the "Division"), manufactures, sells and distributes
equipment used in the construction industry and the
environmental remediation industry; and
WHEREAS, Buyer desires to purchase, and Seller desires to
sell, those assets and properties of Seller that constitute a
significant portion of the assets of the Division, for the
consideration specified herein and subject to the assumption
by Buyer of certain liabilities and obligations of and
relating to the Division;
NOW, THEREFORE, in consideration of the mutual covenants
and agreements set forth in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, each intending to
be legally bound, hereto agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS; ASSUMPTION OF
LIABILITIES
1.1 Purchase and Sale of Assets
Subject to the
provisions of this Agreement, Seller agrees to sell, transfer,
convey and assign to Buyer or a designated subsidiary of
Buyer, and Buyer agrees to purchase, accept and acquire
directly or through a designated subsidiary from Seller for
the consideration specified herein, at the Closing (as
hereinafter defined) all of Seller's right, title and interest
in and to the assets and properties used by it exclusively in
connection with the business of the Division and owned or
leased by it immediately prior to the time of the Closing, of
every kind, nature and description, real, personal or mixed,
tangible or intangible, wherever located, except for the
Excluded Assets described in Section 1.2 (collectively, the
"Subject Assets"). Without in any way limiting the generality
of the foregoing, the Subject Assets shall include all of the
assets and properties of Seller reflected on the Division's
Balance Sheet dated as of August 31, 1997 (the "August 31,
1997 Balance Sheet"), plus all assets and properties relating
to the business of the Division that may have been acquired in
the ordinary course of business by Seller subsequent to the
date of the August 31, 1997 Balance Sheet, less all assets and
properties relating to the business of the Division that may
have been disposed of in the ordinary course of business
subsequent to the date of the August 31, 1997 Balance Sheet,
and shall include all of the following types of assets and
properties held or used by Seller in the conduct of the
business of the Division and owned or leased by it immediately
prior to the time of the Closing:
(a) All notes and accounts receivable, trade accounts,
contract receivables, employee advances and other debts owing
to Seller in connection with the Division;
(b) All machinery and equipment, vehicles, tools, office
furniture, supplies, and all other tangible personal property
owned or leased by Seller and used exclusively in connection
with the Division at Seller's Yankton, South Dakota facility
(the "Tangible Personal Property"), including, without
limitation, the Tangible Personal Property set forth on
Schedule 1.1(b);
(c) All real property set forth on Schedule 1.1(c),
together with the buildings, structures and other improvements
thereon and other interests therein owned by Seller and used
in connection with the Division (the "Real Estate");
(d) All inventories, including raw materials, work-in-
process and finished goods, and supplies owned by Seller and
relating to the Division (the "Inventories");
(e) All prepaid claims, prepaid taxes and other prepaid
expense items and deferred charges, credits, advance payments,
security and other deposits of Seller relating exclusively to
the Division;
(f) To the extent transferable, all of Seller's rights
and interests under all contracts, agreements, leases,
mortgages, licenses, unfilled purchase orders and unfilled
sales orders relating exclusively to the Division, including
but not limited to the Significant Contracts (as hereinafter
defined) set forth on Schedule 3.10;
(g) To the extent transferable, all consents,
registrations, approvals, permits, licenses, orders or
authorizations issued to Seller by any governmental or
regulatory authority of the United States, the several states
or any foreign jurisdiction and relating exclusively to the
Division ("Permits");
(h) All trademarks, trade names, brand names, logos,
service marks, copyrights, designs, inventions, patents,
patent applications, patent rights, licenses, sublicenses,
franchises, formulas, processes, product specifications,
research records, trade secrets, technology, know-how and
other proprietary rights and intellectual property owned by
Seller or in which Seller has rights and used by Seller
exclusively in connection with the Division, excluding all
trademarks, trade names, brand names, logos, service marks and
other intellectual property which use the name "Portec"
(collectively, the "Intellectual Property");
(i) All the books and records of Seller, including items
stored on magnetic tape or on microfiche, relating exclusively
to the Division, and necessary for the operation of the
Division in the ordinary course, including, without
limitation, customer lists and records, sales information,
advertising and marketing materials, supplier records, cost
and pricing information, production data, employment and
personnel records and other records; provided, however, that
Buyer shall give Seller access to such records as Seller may
reasonably require from time to time following the Closing
Date; and
(j) All the goodwill of Seller relating to the Division
except as set forth in Section 1.2.
1.2 Excluded Assets
The Subject Assets shall not
include, and Seller shall not be obligated to sell and Buyer
shall not be obligated to purchase, any right, title or
interest of Seller in or to the following assets or properties
of and or relating to the Division (collectively, the
"Excluded Assets"):
(a) Subject to the License Agreement described in
Section 2.4(a), all right, title and interest
in and to any trademark, trade names, brand
names, logos, service marks or other
intellectual property which use the name
"Portec", and all derivatives thereof and all
goodwill generated thereby or associated
therewith;
(b) All cash and cash equivalents on hand or in
bank accounts; and
(c) All Seller Refunds (as hereinafter defined)
with respect to Income Taxes (as hereinafter
defined) as set forth in Section 7.6.
1.3 Assumption of Liabilities
Buyer agrees that, from
and after the Closing, except for the liabilities and
obligations of Seller specifically provided for in Section 1.4
as being retained by Seller, Seller shall not have any
liability or responsibility for any liability or obligation of
or arising out of or relating to the Division, or the
ownership or operation by Seller of the Division, of whatever
kind or nature, whether contingent or absolute, whether
arising prior to or on or after, and whether determined or
indeterminable on, the Closing Date, and whether or not
specifically referred to in this Agreement (such liabilities
and obligations, except for the Excluded Liabilities (as
hereinafter defined), being collectively referred to as the
"Assumed Liabilities"), including but not limited to the
Assumed Liabilities set forth on Schedule 1.3. Accordingly,
Buyer agrees that, effective upon the Closing, Buyer shall
assume and be responsible for any liability, loss, damage,
claim (including third party claims), cost or expense
(including reasonable attorneys' fees and disbursements)
incurred or suffered by Seller arising out of any of the
Assumed Liabilities.
1.4 Excluded Liabilities
Buyer shall not assume, pay
or discharge any of the obligations or liabilities of Seller
set forth on Schedule 1.4 (the _Excluded Liabilities_).
Seller shall be responsible for the payment, performance and
discharge of all of the obligations and liabilities set forth
on Schedule 1.4 and shall be responsible for any liability,
loss, damage, claim (including third party claims), cost or
expense (including reasonable attorneys' fees and
disbursements) incurred or suffered by Buyer arising out of
any of the Excluded Liabilities.
1.5 Purchase Price
In full consideration of the sale,
transfer, conveyance and assignment of the Subject Assets to
Buyer, Buyer will assume the Assumed Liabilities as of the
Closing and pay to Seller in cash, a purchase price (the
"Purchase Price") in the amount of $25,500,000, subject to
adjustment as set forth in Section 1.7.
1.6 Allocation of Purchase Price
The purchase price will be allocated among the Subject Assets
in the manner set forth in an allocation schedule mutually
agreed to by Buyer and Seller within ninety (90) days after
the Closing Date. Buyer and Seller each hereby agrees that it
will not take any position that varies from or is inconsistent
with such allocation in any filing made by such party for
federal, state or local income tax purposes.
1.7 Purchase Price Adjustment.
(a) Within 10 days after the Closing Date, Seller shall
prepare and deliver to Buyer a closing balance sheet of the
Division as of the close of business on the Closing Date (the
"Closing Balance Sheet"). The Closing Balance Sheet shall
fairly present the items listed thereon as of the Closing Date
on a basis consistent with the accounting principles,
practices, procedures and policies that were used in preparing
the August 31, 1997 Balance Sheet, except that the Closing
Balance Sheet shall reflect (i) a proper accrual under FAS
106, (ii) a corporate accrual for salaried vacation and
holidays relating to Employees (as hereinafter defined), and
(iii) the results of a physical inventory to be taken by
Seller at October 31, 1997 consistent with its past practices,
with Buyer and its representatives entitled to observe such
physical inventory and review all ledgers and supporting
information for the financial statements, and have full access
to and the cooperation of Seller's accounting personnel.
Buyer shall have a period of 10 days after delivery of the
Closing Balance Sheet to review it and make any objections it
may have in writing to Seller. If no written objections are
made by Buyer within such ten-day period, then the Closing
Balance Sheet shall be final and binding on the parties
hereto. If Buyer delivers written objections to Seller within
such ten-day period, then the parties shall have an additional
five business days within which to resolve any disputed
matters. If they are unable to do so, the specific matters in
dispute shall be submitted to a Big Six independent accounting
firm (other than Ernst & Young L.L.P. and Price Waterhouse
L.L.P.) as may be approved by Seller and Buyer, which firm
shall render its opinion as to such matters as expeditiously
as possible and in any event within 10 days of submission.
Based on such opinion, such independent accounting firm will
then send to Seller and Buyer its determination on the
specified matters in dispute, which determination shall be
final and binding on the parties hereto. The fees and
expenses of such independent accounting firm shall be borne
one-half by Seller and one-half by Buyer.
(b) In the event "Total Proprietary Interest," as shown
on the Closing Balance Sheet, is less than $23,414,502, the
Purchase Price shall be reduced dollar-for-dollar by the
amount by which $23,414,502 exceeds "Total Proprietary
Interest," and Seller shall promptly pay the amount of such
difference to Buyer, together with interest thereon from the
Closing Date to the date of such payment at a rate per annum
equal to 8%. In the event "Total Proprietary Interest"
exceeds $23,414,502, the Purchase Price shall be increased
dollar-for-dollar by the amount by which $23,414,502 is less
than "Total Proprietary Interest," and Buyer shall promptly
pay the amount of such difference to Seller, together with
interest thereon from the Closing Date to the date of such
payment at a rate per annum equal to 8%.
(c) Seller agrees to reduce the Purchase Price in an
amount equal to (i) the average of the accumulated benefit
obligation and the projected benefit obligation, in each case
determined for a continuing plan and as defined for financial
statement disclosure purposes under Statement of Financial
Accounting Standards No. 87 as of the Closing Date using
actuarial assumptions to be mutually agreed upon by Seller and
Buyer, less (ii) the assets to be transferred as contemplated
in Section 7.2, and less (iii) $150,000; provided, however,
that there shall be no such reduction in the Purchase Price if
the amount computed in the preceding clauses (i), (ii) and
(iii) is less than zero.
ARTICLE 2. THE CLOSING.
2.1 Time and Place of Closing
The closing of the
purchase and sale provided for in this Agreement (the
"Closing") shall be held at 9:00 A.M., local time, on the
first business day following the date on which the last of the
conditions set forth in Article 6 shall be fulfilled or waived
in accordance with this Agreement, at the offices of Schiff
Hardin & Waite, 7200 Sears Tower, Chicago, Illinois 60606, or
at such other place, date or time as may be fixed by mutual
agreement of the parties (the "Closing Date").
2.2 Deliveries by Buyer
At the Closing, Buyer shall
deliver or cause to be delivered to Seller:
(a) The Purchase Price in immediately available funds by
wire transfer to an account of Seller, subject to the
establishment of an escrow under Section 2.4(b).
(b) An Agreement for Assumption of Liabilities
substantially in the form attached hereto as Exhibit A.
(c) The officer's certificate referred to in
Section 6.2.
(d) Such other instruments of assumption and transfer,
certificates and documents, in form and substance satisfactory
to counsel for Seller, as Seller may reasonably request.
2.3 Deliveries by Seller
At the Closing, Seller shall
deliver or cause to be delivered to Buyer:
(a) An Assignment and Bill of Sale, substantially in the
form attached hereto as Exhibit B.
(b) The officer's certificate referred to in
Section 6.1.
(c) A legal opinion of Seller's counsel in form and
substance reasonably satisfactory to Buyer.
(d) Such other assignments, deeds, conveyances and other
instruments of transfer, certificates and documents including
but not limited to title insurance policies, in form and
substance reasonably satisfactory to counsel for Buyer, as
Buyer may reasonably request to effect the sale to Buyer of
the Subject Assets and to convey good title to the same as
contemplated by this Agreement.
(e) A Covenant Not to Compete substantially in the form
attached hereto as Exhibit C.
2.4 Deliveries by Seller and Buyer
At the Closing,
Seller and Buyer shall deliver:
(a) A License Agreement which Buyer and Seller agree to
execute as of the Closing Date, in form and substance
reasonably satisfactory to Buyer and Seller, by which Seller
will grant Buyer a perpetual, royalty-free license to use
certain trademarks, trade names, brand names, logos, service
marks and other intellectual property which use the name
"Portec" in connection with the business of the Division, as
identified in the License Agreement.
(b) An Escrow Agreement which Buyer and Seller agree to
execute as of the Closing Date, in form and substance
reasonably satisfactory to Buyer and Seller, by which Seller
will establish an escrow in an amount not to exceed
$1,000,000, to be funded by a letter of credit or such other
arrangement as determined by Seller, subject to Buyer's
reasonable approval, for the purpose of securing Seller's
obligation under Section 1.7(c).
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Buyer that the
following statements are true and correct as of the date
hereof:
3.1 Corporate Organization and Qualification
Seller is
a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and is in
good standing as a foreign corporation in each jurisdiction
where the properties owned, leased or operated or the business
conducted by the Division requires such qualification and
where failure so to qualify or be in good standing would have
a material adverse effect on the business or financial
condition of the Division (a "Material Adverse Effect").
Seller has the corporate power and authority to carry on its
business substantially as it is now being conducted. Seller
has delivered to Buyer a complete and correct copy of its
certificate of incorporation and by-laws, in each case as
amended to date, and such certificate of incorporation and by-
laws are in full force and effect as of the date hereof.
3.2 Corporate Authority
The execution, delivery and
performance of this Agreement has been duly authorized by the
Board of Directors of Seller in conformity with the
requirements of Seller's certificate of incorporation and by-
laws and applicable law. Seller warrants that shareholder
approval is not required as a prerequisite to Seller's having
the authority to enter into and consummate this Agreement.
Seller has the requisite corporate power and authority, and
has taken all corporate action necessary, to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by Seller and is a valid and binding
agreement of Seller, enforceable against Seller in accordance
with its terms, subject to applicable laws relating to
bankruptcy, insolvency, fraudulent transfer, moratorium or
other similar laws affecting creditors' rights generally and
to general principles of equity.
3.3 No Violation
Subject to compliance with the HSR
Act (as defined in Section 3.4), the execution and delivery of
this Agreement by Seller do not, and the consummation of the
transactions contemplated hereby by Seller will not,
constitute or result in (a) a breach or violation of the
certificate of incorporation or by-laws of Seller, (b) a
breach or violation of, or a default (with or without the
giving of notice or the passage of time) under, or the
creation of a lien, pledge, security interest or other
encumbrance on assets pursuant to, any provision of any
agreement reflecting obligations of Seller for borrowed money,
or (c) a violation of any law, rule, ordinance or regulation,
or judgment, ruling, order, writ, injunction, or decree, or
governmental or nongovernmental permit or license, applicable
to Seller or the Subject Assets, other than breaches,
violations, defaults or encumbrances which would not have a
Material Adverse Effect.
3.4 Governmental Consents
Other than as required under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Act"), no notices, reports or other filings are required
to be made by Seller with, and no consents, registrations,
approvals, permits, licenses, orders or authorizations are
required to be obtained by Seller from, any governmental or
regulatory authorities of the United States, the several
states or any foreign jurisdiction in connection with the
execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated by this
Agreement.
3.5 Financial Statements
Seller has delivered to Buyer
the balance sheets of the Division as of August 31, 1997 (a
copy of which is set forth in Schedule 3.5), December 31, 1996
and December 31, 1995 and statements of income of the Division
for the periods then ended (the "Financial Statements"). The
Financial Statements are not separately audited but, in the
case of the December 31 statements, have been prepared in
connection with the preparation of Seller's audited financial
statements and, in all cases, in accordance with generally
accepted accounting principles applied consistently during the
periods covered thereby except as set forth therein. Together
with the notes thereto, the Financial Statements present
fairly the financial condition of the Division at the dates of
said statements and the results of its operations for the
periods covered thereby.
3.6 Absence of Undisclosed Liabilities
Seller has no
material liabilities (whether accrued, absolute, contingent or
otherwise) with respect to the Division that exist or arise
out of any transaction or state of facts existing on the date
hereof that would be required by generally accepted accounting
principles to be reflected on a balance sheet prepared as of
the date hereof other than (a) liabilities as and to the
extent reflected or reserved against in the August 31, 1997
Balance Sheet or the Financial Statements (or disclosed in a
footnote thereto), (b) liabilities incurred in the ordinary
course of business since the date of the August 31, 1997
Balance Sheet, (c) liabilities arising under Significant
Contracts listed in Schedule 3.10 or other contracts entered
into in the ordinary course of business but not required to be
listed in Schedule 3.10 or (d) liabilities which individually
or in the aggregate do not have a Material Adverse Effect.
3.7 Inventories. Except as set forth on Schedule 3.7,
(i) Inventories reflected in the Financial Statements have
been valued at the lower of cost (first in, first out method)
or market in accordance with generally accepted accounting
principles applied on a consistent basis and (ii)
substantially all of the Inventories (except for items
previously written off but remaining in Seller's manufacturing
facilities) are of good quality and saleable or usable for
their intended purposes, conform to applicable specifications,
and do not exceed Seller's normal requirements.
3.8 Taxes. All tax returns, declarations and other
reports required to be filed by Seller with respect to the
Division have been timely filed or a request for extension has
been made, and all taxes shown as due thereon, together with
any applicable interest and penalties, have been paid or
reserved for in the accounting records of the Division except
for taxes that are being contested in good faith and except
for unpaid taxes that would not have a Material Adverse
Effect.
3.9 Properties.
(a) Real Property. Schedule 1.1(c) sets forth a
complete and accurate list of the Real Estate. Seller has
good title, free and clear of all security interests,
mortgages, liens, pledges, encumbrances, easements,
restrictions and other title defects to all of the Real
Estate, except (i) as specifically identified in
Schedule 1.1(c) or reflected in the August 31, 1997 Balance
Sheet, (ii) liens for taxes or assessments not yet due or
being contested in good faith, (iii) easements for public
utilities and (iv) liens and imperfections of title which do
not render title unmarketable or substantially interfere with
the use and enjoyment of the property in the manner now being
used by Seller (collectively, the "Permitted Liens").
(b) Personal Property. Schedule 1.1(b) sets forth a
list of substantially all of the Tangible Personal Property
owned by Seller included in the Subject Assets. To Seller's
knowledge, except for assets that are not in the aggregate
necessary or material to the operation of the business of the
Division, all items of Tangible Personal Property included in
the Subject Assets are in workable condition, normal wear and
tear excepted. Seller has good title, free and clear of all
security interests, mortgages, liens, pledges, encumbrances or
other charges, to the Tangible Personal Property included in
the Subject Assets, except for (i) liens which do not
substantially interfere with the use and enjoyment of the
property in the manner now being used by Seller, (ii) liens
for taxes or assessments not yet due or being contested in
good faith, (iii) liens which individually or in the aggregate
do not have a Material Adverse Effect, and (iv) property as to
which Seller has a valid leasehold interest.
3.10 Significant Contracts. Schedule 3.10 sets forth a
complete and accurate list of all contracts and commitments of
a material nature under which Seller is obligated on the date
hereof and relating to the Division (the "Significant
Contracts"), including the following:
(a) Each order to or contract with a supplier for the
future purchase of materials, supplies or services which
involves the expenditure by Seller of more than $10,000 or
which will not be fully performed within six months after the
date hereof;
(b) Each contract for the sale of products by Seller
under which the undelivered balance of such products has a
selling price in excess of $10,000 or under which the date for
completing delivery or performance is more than six months
after the date hereof;
(c) Any contract authorizing others to manufacture, sell
or distribute any of the products of Seller;
(d) Any contract under which Seller has granted or is
obligated to grant rights to others to use any trademark,
patent, invention, secret process or know-how of Seller;
(e) Any contract under which Seller manufactures, sells,
markets or distributes products or services for others or is
granted rights by others under any trademark, patent,
invention, secret process or know-how;
(f) All consulting arrangements, and contracts for
professional, advisory, and other services, including
contracts under which Seller performs services for others;
(g) All leases of real estate or personal property with
annual rentals of greater than $10,000 or a remaining term in
excess of one year, except for leases which can be canceled by
the Division within 60 days without liability;
(h) All contracts relating to the employment,
engagement, compensation or termination of officers or
employees of the Division and all pension, retirement, profit
sharing, stock option, stock purchase, stock appreciation,
insurance or similar plans or arrangements for the benefit of
any officers or employees of the Division, including all
benefit plans described in Section 3.14;
(i) All loans, loan commitments, letters of credit or
other financial accommodations, arrangements or evidences of
indebtedness, including modifications or amendments thereof,
extended to or for the benefit of Seller;
(j) Each other material contract to which Seller is a
party or under which it is obligated, whether or not made in
the usual or ordinary course of business, and which either
contemplates the expenditure by Seller of more than $10,000 or
calls for the performance by Seller of obligations which will
not be fully performed within six months after the date
hereof;
(k) All contracts containing covenants of Seller with
respect to the business of the Division not to compete in any
line of business or with any person in any geographical area;
and
(l) Each other contract made other than in the ordinary
course of business of the Division to which Seller is a party
or under which Seller is obligated.
3.11 No Defaults. Seller has fulfilled or taken all
action reasonably necessary to date to enable it to fulfill
when due, all material obligations under all of the
Significant Contracts, and there have not occurred any
defaults or other events which with the lapse of time or
election of any other party, will become defaults under such
Significant Contracts.
3.12 Compliance with Laws. To the knowledge of Seller,
the Division conducts business in compliance in all material
respects with all applicable laws, regulations and
requirements of each jurisdiction in which the business of the
Division is carried on, except where the failure to comply
therewith, individually or in the aggregate, does not have a
Material Adverse Effect. Except as set forth in
Schedule 3.12, Seller has all Permits necessary for the
operation of the Division as presently conducted, except where
the absence thereof, individually or in the aggregate, does
not have a Material Adverse Effect.
3.13 Litigation. Except as set forth on Schedule 3.13,
there is no claim, action, suit or proceeding pending or, to
the knowledge of Seller, threatened against Seller which,
individually or in the aggregate, or in the future, insofar as
can reasonably be foreseen, will have, a Material Adverse
Effect or which would prevent, delay or hinder the
consummation of the transactions contemplated by this
Agreement.
3.14 Employee Benefits. (a) For purposes of this
Agreement, the following capitalized terms have the meanings
set forth below:
(i) "Employee" means any individual who, on the Closing
Date, is employed by Seller in the Division in any active or
inactive status, and whose current employment in the Division
has not been terminated and, if applicable, any beneficiary
thereof.
(ii) "Former Employee" means any individual employed or
formerly employed in the Division by Seller and whose
employment has been terminated prior to the Closing Date and
if applicable, any beneficiary thereof.
(iii) "Division Benefit Arrangement" means any
employment, severance or similar contract, arrangement or
policy, or any plan or arrangement providing for severance
benefits, insurance coverage (including any self-insured
arrangements), worker's compensation, disability benefits,
supplemental unemployment benefits, vacation or holiday
benefits, pension or retirement benefits, deferred
compensation, profit sharing, bonuses, stock options, stock
appreciation rights, fringe benefits or other forms of
compensation or any post-retirement or post-employment
benefits that (i) is not a Division Employee Plan, (ii) is
entered into or maintained, as the case may be, by Seller or
any of its affiliates, and (iii) covers any Employee or Former
Employee.
(iv) "Division Employee Plan" means any employee pension
benefit plan, as defined in Section 3(3) of ERISA, that (i) is
subject to any provision of ERISA, (ii) is administered,
maintained or contributed to by Seller and (iii) covers any
Employee or Former Employee.
(b) Schedule 3.14 identifies each Division Employee Plan
and each Division Benefit Arrangement. Each such Division
Employee Plan and Division Benefit Arrangement has been
maintained in compliance, in all material respects, with its
terms and with the requirements prescribed by any applicable
statutes and regulations. There are no actions, suits,
arbitrations or other proceedings pending (other than routine
claims for benefits) with respect to any Division Employee
Plan or Division Benefit Arrangement.
3.15 Environmental Protection. (a) Except as set forth
in Schedule 3.15, to the knowledge of Seller, the Division has
obtained all required Permits with respect to the Division
under any Environmental Laws, and the Division is in material
compliance with all terms and conditions of all required
Permits. Seller makes no representation or warranty as to
the compliance of the business of the Division with
Environmental Laws after the Closing, as to the nature, extent
or cost of any cleanup or other remedial action that may be
required in connection with any notifications and violations,
if any, disclosed in Schedule 3.15, or as to the availability
to Buyer of Permits under Environmental Laws having the same
terms and conditions as those held by Seller in connection
with the Division.
(b) With respect to certain real estate in Minnesota on
which Seller currently holds two mortgage notes (which are
included in the Subject Assets), Seller represents that all
known environmental clean-up obligations have been fulfilled
and that there are no known additional clean-up obligations
pertaining to that real estate.
(c) As used in this Agreement, the term "Environmental
Laws" means all federal, state and local laws and regulations,
court and administrative orders, permits and approvals
relating to environmental protection and pollution control,
including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, ("CERCLA"), the
Resource Conversation and Recovery Act ("RCRA"), the Clean Air
Act, the Clean Water Act, the Toxic Substances Control Act,
the Emergency Planning and Community Right-to-Know Act of
1986, and the Safe Drinking Water Act.
3.16 Labor Matters. The Division is in compliance in all
material respects with all applicable laws relating to the
employment of labor, including those relating to wages, hours,
the withholding and payment of taxes and contributions, safety
and civil rights. The Division has not at any time in the
last five years had any walkout, labor strike, dispute,
slowdown or stoppage and, to the knowledge of Seller, no such
walkout, labor strike, dispute, slowdown or stoppage is
threatened. There are no collective bargaining agreements in
effect covering any employees of the Division.
3.17 Intellectual Property. Schedule 3.17 sets forth a
complete and correct list of the Intellectual Property.
Except as set forth in Schedule 3.17, Seller owns the entire
right, title and interest in and to the same and has not
entered into any license or similar agreements authorizing its
use by others. No director, officer, shareholder or employee
of Seller owns, directly or indirectly in whole or in part,
any patent, trademark, trade name, service mark, copyright or
application therefor which is being used in or is necessary to
the conduct of the business of the Division. Neither the
validity of any such item nor the use thereof by Seller is the
subject of any litigation, nor has Seller received notice that
any such litigation is threatened. To the knowledge of
Seller, the conduct of the business of the Division as
currently operated does not conflict with the valid patent,
trademark or copyright rights of others in any way that
materially and adversely affects or, insofar as reasonably can
be foreseen, will materially and adversely affect the
Division, and Seller has not received any written notification
that any such conflict has been asserted by any third party.
3.18 Absence of Material Changes. Since August 31, 1997,
the Division has been operated only in the ordinary course of
business and Seller has not and prior to the Closing Date
shall not have:
(a) Except as contemplated by this Agreement,
transferred, assigned, conveyed, or liquidated any of the
Subject Assets or its interest in the Division, except in the
ordinary course of its business;
(b) Suffered any change in its business, operations, or
financial condition which may have a Material Adverse Effect,
or become aware of any event which may result in any such
Material Adverse Effect;
(c) Suffered any material destruction, damage, or loss
relating to the Subject Assets or the Division whether or not
covered by insurance;
(d) Suffered, permitted, or incurred the imposition of
any lien, charge, encumbrance (including any mortgage, deed of
trust, conveyance to secure debt, or security interest) or
claim upon any of the Subject Assets or the Division except in
the ordinary course of business, except for any current year
lien with respect to personal or real property taxes not yet
due and payable and except for materialmen's and workmen's
liens securing obligations for which Seller is not in default;
(e) Committed, suffered, permitted or incurred any
default in any liability or obligation which, in the
aggregate, have had or will have a Material Adverse Effect;
(f) Made or agreed to any change in the terms of any
contract or instrument to which it is a party which is likely
to have a Material Adverse Effect;
(g) Waived, cancelled, sold, or otherwise disposed of,
for less than its face amount, any claim or right relating to
the Subject Assets or the Division which it has against
others, except for routine settlements or resolutions of
disputed customer or supplier accounts, none of which
individually or in the aggregate is material to the Division;
(h) Paid, agreed to pay, or incurred any obligation for
any payment, contribution or other amount to, or with respect
to, any benefit plan, or paid a bonus to, or granted an
increase in the compensation of, any of Seller's officers,
agents, or employees who are employed in the Division, or made
any increase in the pension, retirement, or other benefits of
Seller's officers, agents, field representatives, or other
employees of the Division, except for normal accruals under
benefit plans and normal compensation adjustments in
accordance with past practices of the Division;
(i) Incurred any other material liability or obligation,
or entered into any material transaction on behalf of the
Division, other than in the ordinary course of business;
(j) Received any written notice, or have actual
knowledge, that any supplier or customer of the Division has
taken, or contemplates taking, any steps which could result in
the material diminution in the value of the Division as a
going concern;
(k) Incurred any strike or work stoppage which had, or
will have, a Material Adverse Effect;
(l) Made any purchase commitments, except for purchase
commitments in the ordinary course of business and consistent
with the historical purchase commitment practices of the
Division; or
(m) Except as otherwise set forth in Schedule 3.13,
there is no suit, action, proceeding, claim, or investigation
pending or, to the knowledge of Seller, threatened against, or
affecting, the Subject Assets or the Division.
3.19 Brokers and Finders' Fee. Seller has not employed
any broker or finder or incurred any liability for brokerage
fees, commissions or finders' fees in connection with the
transactions contemplated herein, except for Wasserstein
Perella & Co., the fees and expenses of which will be paid by
Seller.
3.20 Complete Rights. The Subject Assets include all
assets and properties, and all rights, used for the conduct of
the business of the Division and are sufficient to permit
Buyer to conduct the business of the Division as heretofore
conducted by Seller, in each case other than the Excluded
Assets.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller that the
following statements are true and correct as of the date
hereof:
4.1 Organization and Qualification. Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Tennessee. Buyer has
the corporate power and authority to carry on its business
substantially as it is now being conducted. Buyer has
delivered to Seller a complete and correct copy of Buyer's
articles of incorporation and by-laws, in each case as amended
to date, and such articles of incorporation and by-laws are in
full force and effect as of the date hereof.
4.2 Corporate Authority. The execution, delivery and
performance of this Agreement has been duly authorized by the
Board of Directors of Buyer in conformity with the
requirements of Buyer's articles of incorporation and by-laws
and applicable law. Buyer has the requisite corporate power
and authority, and has taken all corporate action necessary,
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Buyer and is a
valid and binding agreement of Buyer, enforceable against
Buyer in accordance with its terms, subject to applicable laws
relating to bankruptcy, insolvency, fraudulent transfer,
moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity.
4.3 No Violation. Subject to obtaining any required
consents referred to in Section 4.4, the execution and
delivery of this Agreement by Buyer do not, and the
consummation of the transactions contemplated hereby by Buyer
will not, constitute or result in (a) a breach or violation of
the articles of incorporation or by-laws of Buyer or (b) a
breach or violation of, or a default (with or without the
giving of notice or the passage of time) under, or the
creation of a lien, pledge, security interest or other
encumbrance on assets pursuant to, any provision of any agree-
ment affecting obligations of Buyer for borrowed money, or (c)
a violation of any law, rule, ordinance or regulation or
judgment, decree, order, award or governmental or
nongovernmental permit or license applicable to Buyer, other
than breaches, violations, defaults or encumbrances which
would not prevent, delay or hinder the consummation of the
transactions contemplated by this Agreement.
4.4 Governmental Consents. Other than as required under
the HSR Act, no notices, reports or other filings are required
to be made by Buyer with, and no consents, registrations,
approvals, permits, licenses, orders or authorizations are
required to be obtained by Buyer from, any governmental or
regulatory authorities of the United States, the several
states or any foreign jurisdiction in connection with the
execution and delivery of this Agreement by Buyer and the
consummation of the transactions contemplated by this
Agreement.
4.5 Litigation. There is no claim, action, suit or
proceeding pending or, to the knowledge of Buyer, threatened
against Buyer which would or may prevent, delay or hinder the
consummation of the transactions contemplated by this
Agreement.
4.6 Commitment for Funds. Buyer has financial resources
or financing commitments from investors or financial
institutions, sufficient to enable Buyer to pay the Purchase
Price at the Closing.
4.7 Finders' Fee. Buyer has not employed any broker or
finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the
transactions contemplated herein.
ARTICLE 5. AGREEMENTS PRIOR TO THE CLOSING.
The parties hereto covenant and agree as follows:
5.1 Actions Pending Closing. Except as otherwise
contemplated by this Agreement and as Buyer may otherwise
consent, pending the Closing:
(a) Seller shall conduct and carry on the business of
the Division in the ordinary course consistent with past
practice;
(b) Seller shall use reasonable efforts to preserve the
Subject Assets and the Division's relationships with em-
ployees, customers, suppliers and others having business
relationships with the Division;
(c) Seller shall not sell, lease, mortgage, pledge or
otherwise acquire or dispose of any material amount of assets
or properties used in connection with the Division except in
the ordinary course of business;
(d) Except as may be required by the Significant
Contracts listed on Schedule 3.10 and except for increases or
changes in the ordinary course of business consistent with
past practice, Seller shall not increase or otherwise change
the rate or nature of the compensation (including, without
limitation, wages, salaries, bonuses and other benefits) paid
or payable to any employee of the Division;
(e) Seller shall not enter into, or become obligated
under, any contract, agreement, commitment, arrangement or
plan with respect to the Division except in the ordinary
course of business or as contemplated by this Agreement;
(f) Except for changes occurring through performance in
the ordinary course of business, Seller shall not change,
amend, terminate or otherwise modify any of the Significant
Contracts listed in Schedule 3.10; and
(g) Seller shall use reasonable efforts to maintain in
full force and effect policies of insurance of the same type,
character and coverage as the policies of insurance relating
to the Division in effect on the date of this Agreement and
shall give Buyer prompt written notice of any and all changes
that may occur between the date hereof and the Closing Date
with respect to the insurance coverages thereunder, provided
that Seller shall not be obligated to maintain any insurance
with respect to the Subject Assets or the Division after the
Closing.
5.2 Access and Rights of Inspection. Buyer and its
counsel, accountants and other representatives shall have
reasonable access, during normal business hours and so as not
to interfere with the business operations of Seller, to all
properties, contracts, books and records used in or relating
to the Division. Seller will furnish Buyer copies of such
documents relating to the Division as Buyer may reasonably
request from time to time prior to the Closing.
5.3 Confidentiality. All data and information received
by Buyer in connection with this transaction shall be held in
strict confidence by Buyer, and, unless and until the
transactions contemplated by this Agreement shall have been
consummated, Buyer shall not use such data or information or
disclose the same to others (other than counsel, accountants
and other representatives of Buyer engaged in connection with
this transaction, who shall be subject to the provisions of
this Section 5.3), except with the written permission of
Seller; provided, however, that the foregoing restrictions
shall not apply to any such information (a) that is or becomes
in the public domain by publication or otherwise through no
action of Buyer or any of its officers, agents,
representatives or employees, (b) that was known to Buyer at
the time of disclosure thereof, (c) that is rightfully
obtained by Buyer from a third party that has the legal right
to disclose such information, or (d) that Buyer is required by
any legal process or proceeding to disclose. In the event
that this Agreement is terminated, Buyer shall return to
Seller, at Seller's request, all data and information received
by Buyer, including copies thereof, and Buyer shall continue
to maintain the confidentiality of all such information.
5.4 HSR Act. Promptly after the execution of this
Agreement, Buyer and Seller shall file their respective
notification forms under the HSR Act with respect to the
purchase and sale of the Subject Assets and shall thereafter
make any other required submissions under the HSR Act in
connection therewith.
5.5 Fulfillment of Conditions. Each party hereto shall
use its reasonable best efforts to take or cause to be taken
all actions reasonably necessary or appropriate to cause the
conditions set forth in Article 6 to be satisfied at or prior
to Closing.
5.6 Notice. Buyer and Seller shall each promptly notify
the other of any material occurrence, event or other change
which would cause the representations and warranties made
herein by either party to be untrue, incomplete or incorrect
or if either party receives notice or reason to believe that
the agreements to be performed hereunder prior to the Closing
shall not be fully performed.
ARTICLE 6. CONDITIONS.
6.1 Conditions to the Obligations of Buyer. The
obligations of Buyer to consummate the transactions
contemplated by this Agreement are subject to the fulfillment,
prior to or at the Closing, of the following conditions
precedent:
(a) Representations and Warranties True; Covenants
Performed. Each of the representations and warranties of
Seller set forth in this Agreement shall be true and correct
in all material respects as of the Closing Date as if repeated
as of the Closing Date. All actions to be taken or performed
hereunder by Seller or its agents at or prior to the Closing
Date shall have been fully performed in all material respects.
(b) Certificate. Buyer shall have received a
certificate dated the Closing Date signed by the President or
any Vice President of Seller stating that:
(i) the representations and warranties of Seller
made herein are true and correct in all material respects
as of the Closing Date; and
(ii) Seller has performed in all material respects
all agreements required to be performed by it at or prior
to the Closing Date.
(c) Consents. Seller shall have made any and all
filings and registrations, and received any and all material
consents, approvals, waivers, permits and authorizations,
required to be made or obtained by it in connection with the
transactions contemplated by this Agreement (including under
the HSR Act), and all such consents, approvals, waivers,
permits and authorizations shall be in full force and effect.
(d) Consents to Assignments. Written consents and
releases of liens, in form and substance satisfactory to
counsel for Buyer, to the assignment of such of the contracts
and other assets included in the Subject Assets and to release
all liens thereon, as counsel for Buyer shall deem reasonably
appropriate, shall have been received.
(e) Litigation. No suit or other action shall have been
instituted by any third party before any court or threatened
seeking to restrain, prohibit or obtain substantial damages in
connection with the transactions contemplated by this
Agreement.
(f) Estimated Accrual. Within 30 days prior to the
Closing Date, Seller shall deliver to Buyer an estimated
accrual under FAS 106 as of December 31, 1997.
6.2 Conditions to the Obligations of Seller. The
obligations of Seller to consummate the transactions
contemplated by this Agreement are subject to the fulfillment,
prior to or at the Closing, of the following conditions
precedent:
(a) Representations and Warranties True; Covenants
Performed. Each of the representations and warranties of
Buyer set forth in this Agreement shall be true and correct in
all material respects as of the Closing Date as if repeated as
of the Closing Date. All agreements to be performed hereunder
by Buyer at or prior to the Closing Date shall have been fully
performed in all material respects.
(b) Certificate. Seller shall have received a
certificate dated the Closing Date signed by the President or
any Vice President of Buyer stating that:
(i) the representations and warranties of Buyer
made herein are true and correct in all material respects
as of the Closing Date; and
(ii) Buyer has performed in all material respects
all agreements required to be performed by it at or prior
to the Closing Date.
(c) Consents. Buyer shall have made any and all filings
and registrations, and received any and all material consents,
approvals, waivers, permits and authorizations, required to be
made or obtained by it in connection with the transactions
contemplated by this Agreement (including under the HSR Act),
and all such consents, approvals, waivers, permits and
authorizations shall be in full force and effect.
(d) Litigation. No suit or other action shall have been
instituted by any third party before any court or threatened
seeking to restrain, prohibit or obtain substantial damages in
connection with the transactions contemplated by this
Agreement.
ARTICLE 7. ADDITIONAL AGREEMENTS.
7.1 Further Assurance;Nonassignable Contracts. From
time to time after the Closing, at the request of Buyer and
without further consideration, Seller shall execute and
deliver such further instruments of transfer and assignment
(in addition to those delivered under Section 2.3) and take
such other action as Buyer may reasonably request to more
effectively transfer and assign to, and vest in or license to,
Buyer each of the Subject Assets. From time to time after the
Closing, at the request of Seller and without compensation,
Buyer shall execute and deliver such further instruments of
assumption (in addition to those delivered under Section 2.2)
and take such other action as Seller may reasonably request
to more effectively evidence and assure Buyer's assumption of
the Assumed Liabilities. In the event that the assignment of
any lease, contract or other written instrument included in
the Subject Assets shall require the consent of other parties
thereto, this Agreement shall not constitute a contract for
the assignment thereof to the extent that an attempted
assignment would constitute a breach thereof; however, Seller
shall use all reasonable efforts before the Closing, if
possible, and after the Closing, as needed, to obtain any
necessary consents or waivers to assure Buyer of the benefits
of any such lease, contract, or instrument and shall hold for
the benefit of Buyer, to the extent consented to by Buyer, any
lease, contract or instrument that may not be assigned to
Buyer.
7.2 Employees and Employee Benefits. (a) Buyer agrees
to offer employment effective upon the Closing to all
employees of Seller employed by Seller in connection with the
Division immediately prior to the Closing upon terms and
conditions of employment substantially equivalent to those
provided by Seller immediately prior to the Closing. Buyer
further agrees not to take any action, from the date hereof
through 60 days after the Closing that could be construed as a
"plant closing" or a "mass layoff," as those terms are defined
in the Worker Adjustment and Retraining Notification Act,
29 U.S.C. SS 2101-2109 (the "WARN Act"). In the event of an
employment action by Buyer upon or following the Closing for
which notice is required under the WARN Act, Buyer agrees to
indemnify and hold Seller harmless with respect to any
liabilities, assessments, penalties, costs and/or attorneys'
fees incurred by Seller as a result of any failure, or alleged
failure, to provide notice as may be required under said Act.
In the event that Buyer terminates the employment of any
former employee of Seller employed by Buyer after the Closing,
Buyer shall have sole responsibility for providing any
applicable unemployment compensation and severance benefits.
This Section 7.2 is not intended to be a guarantee of
employment to any person, and the employees of the Division
shall not be entitled to enforce this Section as third party
beneficiaries.
(b) Retirement Plan. Certain Employees and Former
Employees participate in the Portec, Inc. Employees'
Retirement Program, a qualified defined benefit pension plan
(the "Retirement Plan"). Seller shall cause the appropriate
assets and liabilities of the Retirement Plan attributable to
such Employees and Former Employees to be transferred from the
Retirement Plan to a qualified defined benefit pension plan to
be established by Buyer or any of its affiliates ("Buyer's
Retirement Plan"), as more fully described in this
Section 7.2. Buyer's Retirement Plan shall comply with
applicable requirements of the Internal Revenue Code of 1986,
as amended (the "Code"), and regulations issued thereunder.
Buyer shall apply for a favorable determination from the
Internal Revenue Service ("IRS") stating that the Buyer's
Retirement Plan meets such requirements. Buyer shall take all
actions necessary to secure such favorable determination,
including any revisions to Buyer's Retirement Plan required by
the IRS as a condition to the issuance of such favorable
determination. Buyer shall provide Seller with a copy of such
favorable determination immediately upon receipt thereof.
Buyer represents and warrants that Buyer's Retirement Plan
will be maintained in compliance in all material respects with
its terms, and with the requirements prescribed in any
applicable statutes, orders, rules and regulations, including,
but not limited to, ERISA and the Code. Buyer's Retirement
Plan will provide that (i) such Employees' and Former
Employees' accrued benefits under the Retirement Plan as of
the Closing Date will be transferred to and credited under
Buyer's Retirement Plan, and (ii) such Employees' and Former
Employees' periods of vesting service and eligibility service
under the Retirement Plan as of the Closing Date will be
credited for purposes of determining vesting and eligibility
under Buyer's Retirement Plan; provided however, that credited
service under the Retirement Plan prior to the Closing Date
will not be credited for purposes of determining benefit
accruals on and after the Closing Date under Buyer's
Retirement Plan. Buyer's Retirement Plan shall, as of the
Closing Date, provide, with respect to service with Seller and
its affiliates before the Closing Date, benefits, rights and
features that are identical in all material respects to those
provided by the Retirement Plan to such Employees and Former
Employees as of the Closing Date. Buyer's Retirement Plan
shall, as of the Closing Date provide, with respect to service
with Buyer and its affiliates after the Closing Date, such
Employees and Former Employees who participate in the
Retirement Plan with either (i) benefits that are identical in
all material respects to those provided by the Retirement Plan
to the Employees and Former Employees as of the Closing Date,
or (ii) benefits on the same terms as those applicable to
similarly situated employees of Buyer and its affiliates who
participate in Buyer's Retirement Plan. Subject to the
preceding provisions of this paragraph, Buyer shall retain the
right to terminate or amend Buyer's Retirement Plan at any
time after the Closing Date as it pertains to the Employees
and Former Employees, in Buyer's sole discretion.
Assets of the Retirement Plan shall be allocated as of
the Closing Date in two portions (1) those to be retained in
the Retirement Plan, and (2) those attributable to such
Employees and Former Employees and to be transferred to the
Buyer's Retirement Plan. Such allocation shall be performed
in accordance with the provisions of Section 414(l) of the
Code and the regulations issued thereunder. The Retirement
Plan's actuaries will make all necessary calculations for
determining such allocation of assets of the Retirement Plan,
in accordance with the actuarial assumptions used by the
Pension Benefit Guaranty Corporation ("PBGC") for purposes of
valuing annuities of trustee plans, as set forth in section
4044.52(a)(1-4) of current PBGC regulations issued under
section 4044 of ERISA. In addition, the Retirement Plan's
actuaries will provide Seller (at Seller's expense) with an
actuarial statement drawn up in accordance with Internal
Revenue Service regulations issued under Section 414(l) of
the Code, to be filed with Internal Revenue Service Form 5310-
A, and the underlying information necessary to prepare the
statement. Upon receiving this information from the
Retirement Plan's actuaries, Seller shall immediately deliver
to Buyer for its review a copy of the actuarial statement and
such underlying information. Buyer shall have 14 days to
notify Seller in writing of any objections regarding such
determination of the allocation of Retirement Plan assets. If
Buyer does not timely notify Seller of any objections, the
calculations shall be final and binding on all parties. If
Buyer timely notifies Seller of any objections resulting from
Buyer's review of the statement by the Retirement Plan's
actuaries, which Buyer and Seller cannot resolve within 30
days of the date Buyer notifies Seller of such objections,
Seller and Buyer shall appoint an actuarial firm satisfactory
to both parties (the cost of which shall be shared equally by
Seller and Buyer) to resolve such objections, which resolution
shall be final and binding on all parties. As soon as
practicable following the Closing Date, but not prior to the
date on which (i) Buyer and Seller reach agreement on the
amount to be transferred, (ii) Buyer has provided all
documentation required by the trustee of the Retirement Plan
and (iii) the aforementioned favorable IRS determination is
received with respect to Buyer's Retirement Plan, Seller shall
cause assets of the Retirement Plan attributable to such
Employees and Former Employees, as determined above, plus
interest at the actual rate of return on the investment of the
Retirement Plan assets from the first day of the month
coinciding with or next following the Closing Date to the last
day of the month preceding the asset transfer date, and
interest at the actual rate of return for the month preceding
the asset transfer date from the last day of the month
preceding the asset transfer date to the asset transfer date.
Until the assets of the Retirement Plan are transferred to
Buyer's Retirement Plan, Seller will continue to process
distributions required to be made to Employees and Former
Employees under the Retirement Plan on and after the Closing
Date in accordance with its terms and procedures; furthermore,
the Retirement Plan asset amount to be transferred to the
Buyer's Retirement Plan described in the preceding sentence
shall be adjusted to account for all such distributions
following the Closing Date and prior to the date of transfer.
(c) Savings Plan.
(i) Certain Employees and Former Employees participate
in the Portec, Inc. Savings and Investment Plan ("Savings
Plan"), a qualified 401(k) defined contribution plan. Seller
shall cause the assets and liabilities of the Savings Plan
attributable to such Employees and Former Employees to be
transferred from the Savings Plan to a qualified 401(k) plan
maintained by Buyer or any of its affiliates which complies
with applicable requirements of the Code and regulations
issued thereunder, and has received a favorable determination
from the Internal Revenue Service stating that the plan meets
such requirements ("Buyer's Savings Plan"). Buyer represents
and warrants that Buyer's Savings Plan has been maintained in
compliance in all material respects with its terms and with
the requirements prescribed in any applicable statutes,
orders, rules and regulations, including but not limited to
ERISA and the Code. Buyer's Savings Plan shall provide that
such Employees' and Former Employees' periods of service
credited under the Savings Plan as of the Closing Date will be
transferred to and credited for all purposes under Buyer's
Savings Plan. With respect to all amounts transferred to
Buyer's Savings Plan, and investments earnings credited
thereto, Buyer's Savings Plan shall at the Closing Date
provide loans, withdrawals and distributions on terms that are
similar in all material respects to those provided by the
Savings Plan to the Employees and Former Employees as of the
Closing Date. With respect to service after the Closing Date,
Buyer's Savings Plan shall at the Closing Date provide
coverage to said Employees and Former Employees on the same
terms as those applicable to similarly situated employees of
Buyer who participate in Buyer's Saving Plan. Subject to the
preceding provisions of this paragraph, Buyer shall retain the
right to terminate or amend Buyer's Savings Plan at any time
after the Closing Date as it pertains to the Employees and
Former Employees, in Buyer's sole discretion.
(ii) The assets and liabilities of the Savings Plan to be
conveyed to Buyer's Savings Plan shall be the total of all
account balances of said Employees and Former Employees under
the Savings Plan calculated as of the valuation date next
following the Closing Date (the "Savings Plan Transfer Date").
Such account balances shall reflect all contributions earned
under the Savings Plan by said Employees and Former Employees
as of the Closing Date. Such assets and liabilities of the
Savings Plan, plus or minus estimated investment returns from
the Savings Plan Transfer Date to the date such assets and
liabilities are actually conveyed, shall be conveyed in cash
to Buyer's Savings Plan as soon as practicable following the
Savings Plan Transfer Date, but no later than the last day of
the month following the month in which the Closing Date
occurs. The estimated investment returns shall be based on
procedures to be mutually agreed upon by Seller and Buyer.
Until the assets of the Savings Plan are transferred to
Buyer's Savings Plan, Seller will continue to process
distributions, withdrawals and loan repayments required to be
made to or by Employees and Former Employees under the Savings
Plan on and after the Closing Date in accordance with its
terms and procedures.
(d) Welfare Benefit Plans. Certain Employees and Former
Employees and their dependents are covered by welfare benefit
plans maintained by Seller or its affiliates providing
medical, dental, life insurance, long term disability, short
term disability, accidental death and dismemberment and
severance benefits ("Seller's Welfare Benefit Plans"). Such
Employees and Former Employees and their dependents shall be
entitled to benefits under Seller's Welfare Benefit Plans with
respect to claims made thereunder on or before the Closing
Date. Effective as of the Closing Date, Buyer shall provide
welfare benefits to Employees and Former Employees and their
dependents under welfare benefit plans maintained by Buyer
("Buyer's Welfare Benefit Plans"). Buyer's Welfare Benefit
Plans shall provide Employees and Former Employees and their
dependents with welfare benefits that are substantially
similar to those, from time to time, provided to similarly
situated employees and former employees of Buyer and its
affiliates and their dependents. Buyer shall waive any pre-
existing condition exclusions for conditions existing on the
Closing Date, and actively-at-work requirements for periods
ending on the Closing Date contained in Buyer's Welfare
Benefit Plans as they apply to Employees and Former Employees
and their dependents. Any expenses incurred on or before the
Closing Date by an Employee or Former Employee, or his
dependent, under Seller's Welfare Benefit Plans, shall be
taken into account for purposes of satisfying applicable
deductible, co-insurance and maximum out-of-pocket provisions
under Buyer's Welfare Benefit Plans.
(e) Service. Each of Buyer's employee benefit plans
shall recognize service of Employees with Seller and its
affiliates, and their respective predecessors, prior to the
Closing Date, for all purposes for which such service was
recognized under any Division Employee Plan; provided,
however, an Employee's service with Seller shall not be
recognized for the purpose of determining any benefit accruals
under any defined benefit plan of Buyer.
7.3 Collection of Receivables. After the Closing, Buyer
shall have the right and authority to collect all receivables
and other items transferred and assigned to it by Seller
hereunder and to deliver to Seller for immediate endorsement
any checks payable to Seller that are received on account of
such receivables or other items, and Seller agrees that it
will promptly transfer or deliver to Buyer from time to time
any cash or other property that Seller may receive with
respect to any claims, contracts, licenses, leases, commit-
ments, sales orders, purchase orders, receivables of any
character or any other items included in the Subject Assets
required to be transferred by it to Buyer pursuant to the
provisions hereof. Payments received from customers of the
Division having unpaid invoices as of the Closing shall be
applied to such invoices in the order they were issued, unless
otherwise specified by the customer.
7.4 Bulk Sales Laws. Buyer and Seller agree to waive
compliance by Seller with the obligations imposed on vendors
under any applicable bulk sales laws applicable to the
transactions contemplated by this Agreement.
7.5 Cooperation. After the Closing, each of Buyer and
Seller, at its own cost, shall make available to the other
(and to the other's representatives), and shall give the other
(and the other's representatives) access to, all personnel and
all facilities included in the Subject Assets reasonably
required by the other in connection with contesting any claim
or obligation retained by Seller as an Excluded Liability or
contesting any claim or obligation transferred to Buyer as an
Assumed Liability.
7.6 Tax Matters.
(a) Seller shall be responsible for (i) all federal,
state, local and foreign income taxes and franchise taxes
which are based on net income, and any interest or penalties
thereon ("Income Taxes"), of the Division with respect to tax
periods or portions of periods ending before the Closing Date
and (ii) except to the extent provided in Section 7.6.
(b) Seller will include in 1997 income tax returns the
results of operations of the Division from January 1, 1997
through the close of business on the day prior to the Closing
Date, and Seller shall bear any income tax liability
associated therewith. Buyer and Seller agree to furnish or
cause to be furnished to each other such other assistance as
may be reasonably requested by the other in connection with
income tax matters, including, but not limited to, any audit
or any other proceeding relating to the determination of any
tax liabilities.
(c) Any refunds or credits of Income Taxes (including
any interest thereon) received by or credited to the Seller
related to the Division attributable to periods or portions of
periods ending prior to the Closing Date (including any
interest thereof) received by or credited to Seller ("Seller's
Refunds"), shall be for the benefit of Seller, and Seller
shall have the sole right, at its expense, to pursue any
Seller's Refunds (including filing amended returns and
applying for analogous relief) and Buyer shall pay over to
Seller any Seller's Refunds immediately upon receipt thereof.
7.7 Confidential Information. Following the Closing,
Seller shall hold in strict confidence, and not use for the
benefit of Seller all confidential information relating
exclusively to the Division, including, but not limited to
trade secrets, customer lists, operational methods, marketing
plans or strategies, product development techniques or plans,
equipment design, methods of manufacture, technical processes,
designs and design projects, inventions and research projects
and other business affairs relating to the Division; provided,
however, that the foregoing restrictions shall not apply to
any such information (a) that is or becomes in the public
domain by publication or otherwise through no action of Seller
or any of its officers, agents, representatives or employees,
(b) that is rightfully obtained by Seller from a third party
that has the legal right to disclosure of such information, or
(c) that Seller is required by any legal process or proceeding
to disclose.
ARTICLE 8. TERMINATION OF AGREEMENT.
8.1 Termination. At any time prior to the Closing, this
Agreement may be terminated (a) by mutual consent of the
parties, (b) by either party if there has been a material
misrepresentation, breach of warranty or breach of covenant by
the other party in its representations, warranties and
covenants set forth herein that cannot be cured in all
material respects on or prior to the anticipated Closing Date,
(c) by Buyer if the conditions stated in Section 6.1 have not
been satisfied at or prior to the Closing Date, (d) by Seller
if the conditions stated in Section 6.2 have not been
satisfied at or prior to the Closing Date, or (e) by Buyer or
Seller if the Closing has not occurred by December 31, 1997,
provided that the delay is not caused by the willful action of
the terminating party.
8.2 Effect of Termination. If this Agreement shall be
terminated pursuant to Section 8.1, all obligations of the
parties hereunder (except the obligations set forth in
Sections 5.3, 8.2 and 9.1) shall terminate. If such
termination shall result from the willful failure of a party
to perform a condition or covenant of this Agreement or from a
willful breach by either party to this Agreement, such party
shall be liable for any and all costs and expenses (including
but not limited to reasonable attorneys' fees) incurred by the
other party.
ARTICLE 9. MISCELLANEOUS.
9.1 Fees and Expenses. Except as provided in Section
9.2, each of the parties will bear its own expenses in
connection with the negotiation and the consummation of the
transactions contemplated by this Agreement.
9.2 Special Taxes. The transfer, sales and other taxes,
if any, required to be paid in connection with the sale,
transfer, conveyance, and assignment of any of the Subject
Assets pursuant hereto shall be borne equally by Buyer and
Seller.
9.3 Amendment. This Agreement may be modified, amended
and supplemented only by mutual written agreement of the
parties hereto at any time prior to the Closing.
9.4 Waiver. Any party may waive any condition intended
to be for its benefit, provided each such waiver shall be in
writing signed by the waiving party or parties.
9.5 Correspondence. Seller authorizes and empowers
Buyer after the Closing: (i) to open all mail and other com-
munications addressed to the Division which are received by
Buyer and (ii) to deal with the contents of such communica-
tions in a proper manner. Seller will promptly deliver to
Buyer the original of any mail or other communication received
by Seller pertaining to the operation of the Division after
the Closing Date or the Subject Assets and any monies, checks
or other instruments of payment to which Buyer is entitled.
Buyer will promptly deliver to Seller the original of any mail
or other communication received by Buyer pertaining to the
operation of the Division prior to the Closing Date.
9.6 Governing Law. This Agreement shall be construed
under and governed by the laws of the State of Illinois,
without giving effect to the principles of conflicts of laws
thereof.
9.7 Notices. All notices, requests, demands and other
communications in connection with this Agreement shall be made
in writing addressed as follows:
To Seller:
Portec, Inc.
One Hundred Field Drive, #120
Lake Forest, IL 60045
Attention: Michael T. Yonker, President and CEO
Copy to:
Schiff Hardin & Waite
7200 Sears Tower
Chicago, IL 60606
Attention: Robert J. Regan
To Buyer:
Astec Industries, Inc.
4101 Jerome Avenue
P.O. Box 72787
Chattanooga, TN 37407
Attention: Richard W. Bethea, Jr.
Copy to:
Telsmith, Inc.
10910 N. Industrial Drive
Mequon, Wisconsin 53092
Attention: Robert G. Stafford
Each notice, request, demand and other communication shall be
effective and deemed to have been received (i) if given by
mail, the earlier of actual receipt or 72 hours after such
communication is deposited in the mails with registered first
class postage prepaid, addressed as aforesaid, (ii) if given
by an overnight courier service of national recognition, the
business day following the business day of deposit with such
service, together with a proper air bill affixed, addressed as
aforesaid and shipping charges prepaid or prearranged, or
(iii) if given by any other means, when delivered to the
aforesaid address. Either party may change the address to
which notices are to be delivered to it by giving written
notice of such other address to the other party.
9.8 Non-survival of Representations, Warranties,
Covenants and Agreements. None of the representations,
warranties, covenants and agreements of this Agreement or any
instrument delivered pursuant to this Agreement shall survive
the Closing Date except for the agreements contained in
Article 1, Section 5.3, Article 7 and Article 9. The sole
remedy of either party in connection with any breach or any
inaccuracy of any representation or warranty contained in
Articles 3 and 4 hereof shall be to terminate this Agreement
without further liability or obligation prior to the Closing.
9.9 Entire Agreement. This Agreement, including the
Exhibits and Schedules hereto, constitutes the entire
agreement of the parties with respect to the subject matter
hereof and supersedes all prior promises, representations,
understandings, warranties and agreements, whether written or
oral, with reference to the subject matter hereof, except for
the Confidentiality Agreement between the parties dated July
15, 1997, which shall remain in full force and effect. The
invalidity or unenforceability of any provision herein shall
not affect the enforceability of any other provision hereof.
Unless otherwise defined in the Exhibits or Schedules, all
capitalized terms in the Exhibits and Schedules are defined as
set forth in the Agreement.
9.10 Assignability. This Agreement shall be binding
upon, and shall inure to the benefit of the parties hereto and
their respective successors. This Agreement may not be
assigned by Buyer or Seller without the prior written consent
of the other party.
9.11 Publicity and Disclosures. Each party hereto shall
furnish to the other advance copies of any press releases that
it proposes to make concerning the transactions contemplated
hereby and shall not disclose the terms of this Agreement
without the prior consent of the other party, except for
disclosures required under federal or state securities laws.
9.12 Headings. The headings of the Articles and Sections
of this Agreement have been inserted for the convenience of
reference only and shall not be deemed to explain, limit or
amplify or affect the interpretation of any of the provisions
of this Agreement.
9.13 Counterparts. This Agreement may be executed in any
number of counterparts, each such counterpart being deemed to
be an original instrument, and all such counterparts shall
together constitute the same agreement.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed as of the date set forth above by
their duly authorized representatives.
PORTEC, INC.
By:/s/ Michael Yonker
Name:Michael T. Yonker
Title:President and CEO
ASTEC INDUSTRIES, INC.
By:/s/ Richard W. Bethea, Jr.
Name:Richard W. Bethea, Jr.
Title: Secretary
EXHIBIT C
COVENANT NOT TO COMPETE
THIS COVENANT NOT TO COMPETE (this "Covenant") is made
and entered into this ___ day of _________, 1997, by and
between Portec, Inc., a Delaware corporation ("Portec"), and
Astec Industries, Inc., a Tennessee corporation ("Astec").
W I T N E S S E T H:
Portec has sold to Astec on this date a significant
portion of the assets of its Construction Equipment Division
(the "Division"), pursuant to the Asset Purchase Agreement
dated October 16, 1997 by and between Portec and Astec (the
"Purchase Agreement");
NOW, THEREFORE, in consideration of the premises, the
mutual promises and covenants of the parties hereto set forth
herein, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Portec and
Astec, intending to be legally bound, agree as follows:
1. Noncompetition. Portec covenants and agrees that,
for a period of five (5) years from the date of this Covenant
(the "Term"), or until there has been a Change in Control (as
defined below in Section 4), it will not, directly or
indirectly Compete with Astec, or any successor in interest of
Astec or its subsidiaries anywhere in the world; provided,
however, that upon a Change of Control Buyer shall have the
exclusive right to use the name "Portec" in connection with
the Business.
2. Definition of "Compete". For the purposes of this
Covenant, during the Term hereof, the term "Compete" or
"Competing" shall mean: (i) engaging in the business of
manufacturing, distributing, and selling products or product
lines currently offered by the Division (the "Business"); or
(ii) soliciting or attempting to take away any employee of the
Business either on behalf of Portec or on behalf of any other
Person.
3. Direct or Indirect Competition. For the purposes of
this Covenant, and except as otherwise specified in Section 2
hereof, the word "directly or indirectly" as they modify the
word "Compete" or "Competing" shall mean (i) acting as an
agent, representative or consultant of any Person that is
Competing with the Business (but only to the extent such
agency, representation or consultancy relate to the Competing
activities of such other Person); and (ii) communicating to
any such Competing Person the names or addresses of or any
other information concerning any past or present clients or
customers of the Business.
4. Change in Control. For purposes of this Covenant,
the term "Change in Control" shall be deemed to occur if (i)
there occurs any transaction or series of transactions that
has the result that shareholders of Portec immediately before
such transaction cease to own at least fifty-one percent (51%)
of the voting stock of Portec or any entity that results from
the participation of Portec in a merger, reorganization,
consolidation, liquidation or any other form of corporate
transaction; (ii) the shareholders of Portec approve a plan of
merger, consolidation, reorganization, liquidation or
dissolution in which Portec does not survive (unless the
approved merger, consolidation, reorganization, liquidation or
dissolution is subsequently abandoned); (iii) Portec disposes
of all or substantially all of its assets; or (iv) a majority
or more of the directors nominated by the Board of Directors
of Portec to serve as directors, each having agreed to serve
in such capacity, fail to be elected in a contested election
of directors.
5. Equitable Relief. The parties acknowledge that a
breach by either of them of any of the provisions of this
Covenant cannot reasonably or adequately be compensated in
damages in an action at law and may cause Astec irreparable
injury and damage. Accordingly, each party agrees that the
other shall be entitled, in addition to any other remedies
that it may have under this Covenant or otherwise, to
injunctive and other equitable relief to prevent or curtail
any breach of this Covenant; provided, however, that (i) no
such relief shall extend beyond the third anniversary of this
Covenant; and (ii) no specification in this Covenant of a
specific legal or equitable remedy shall be construed as a
waiver or prohibition against he pursuing of other legal or
equitable remedies in the event of such a breach.
6. Severability. In the event that any provision of
this Covenant or any word, phrase, clause, sentence or other
portion thereof (including, without limitation, the
geographical and temporal restrictions contained herein)
should be held to be unenforceable or invalid for any reason,
such provision or portion thereof shall be modified or deleted
in such a manner so as to make this Covenant as modified legal
and enforceable to the fullest extent permitted under
applicable laws.
7. Successors and Assigns. The covenants, terms and
provision set forth herein shall inure to the benefit of and
be enforceable by Astec, its successor, assigns and successors
in interest.
8. Integrated Agreement and Consideration. This
Covenant constitutes the entire agreement between the parties
hereto with regard to the subject matter hereof, and there are
no agreements, understandings, restrictions, warranties or
representations relating to such subject matter among the
parties other than those set forth herein, in the Purchase
Agreement or in other documents contemplated thereby. The
parties hereby acknowledge that receipt of the consideration
described in the Purchase Agreement by Portec and the
acquisition by Astec of the Assets of the Business pursuant to
the Purchase Agreement are good and valuable consideration
received for the covenants and undertakings as described in
this Covenant, and such covenants and undertakings are
ancillary to the sale of the Assets and the Business.
9. Counterparts. This Covenant may be executed in two
or more counterparts, each of which will take effect as an
original and all of which shall evidence one and the same
agreement.
10. Governing Law. The terms of this Agreement shall be
governed by and construed in accordance with the laws of the
State of Tennessee.
IN WITNESS WHEREOF, the undersigned have executed this
Covenant on the date first written above.
PORTEC, INC.
By: /s/ Michael T. Yonker
Name: Michael T. Yonker
Title: Chief Executive Officer
and President
ASTEC INDUSTRIES, INC.
By: /s/ Richard W. Bethea, Jr.
Name: Richard W. Bethea, Jr.
Title: Vice President,
Secretary and Corporate Cousel
Exhibit 10.105
Amendment to Asset Purchase Agreement dated December 2, 1997 by and between
Astec Industries, Inc. and Portec, Inc.
EXHIBIT 10.105
AMENDMENT TO ASSET PURCHASE AGREEMENT
This Amendment (the "Amendment"), dated December 2, 1997, is
entered into by and between Astec Industries, Inc., a Tennessee
corporation ("Buyer"), and Portec, Inc., a Delaware corporation
("Seller").
This Amendment amends that certain Asset Purchase Agreement
(the "Agreement"), dated October 16, 1997 between the parties,
pursuant to which Seller agreed to sell, and Buyer agreed to
purchase, certain assets and properties of Seller's Construction
Equipment Division (the "Division"). Unless otherwise expressly
indicated herein, defined terms used herein shall have the
meanings assigned to such terms in the Agreement.
In consideration of the mutual covenants and agreements set
forth in this Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Agreement is
hereby amended as follows:
1. Section 1.5 of the Agreement, "Purchase Price" shall be
amended in its entirety to read:
"1.5 Purchase Price
In full
consideration of the sale, transfer,
conveyance and assignment of the Subject
Assets to Buyer, Buyer will assume the
Assumed Liabilities as of the Closing and pay
to Seller in cash, a purchase price (the
"Purchase Price") in the amount of
$25,000,000, subject to adjustment as set
forth in Section 1.7."
2. Section 1.3 of the Agreement, Exhibit A and Schedule
1.3 shall be amended to include the following as "Assumed
Liabilities":
"All obligations or liabilities arising out
of or relating to Seller's relationship,
contractual or otherwise, with L. B. Smith,
Inc. with respect to any Innovator
inventory."
3. Section 1.4 of the Agreement, Exhibit A and Schedule
1.4 shall be amended to include the following as "Excluded
Liabilities":
"All obligations and liabilities of Seller
arising out of or relating to (a) Seller's
relationship, contractual or otherwise, with
Evergreen Parts & Equipment, Inc. and (b) the
following litigation: John and Dee-Dee Munoz
vs Portec, Inc., successor of Pioneer
Manufaturing and Hewitt-Robins (Cause No. C-
V-97-450 (5th Judicial District, Cheaves, New
Mexico))."
4. Section 1.1, "Purchase and Sale of Assets," Section
1.5, "Purchase Price," Section 2.2, "Deliveries by Buyer," and
Section 2.3, "Deliveries by Seller" shall be amended to reflect
that pursuant to Section 9.10 of the Agreement, Buyer has
assigned, with the consent of Seller, Buyer's purchase rights
with respect to certain machinery, equipment and other assets of
the Division to NBD Equipment Finance, Inc. ("NBD").
Accordingly, NBD shall pay $4,702,350 of the Purchase Price to
Seller and Seller shall deliver a separate Assignment and Bill of
Sale to NBD with respect to such assets, and Buyer shall pay
$20,297,650 of the Purchase Price to Seller.
Except as otherwise set forth in this Agreement, the
provisions of the Agreement shall continue in full force and
effect.
IN WITNESS WHEREOF, the parties have caused this Amendment
to be executed as of the date set forth above by their duly
authorized representatives.
PORTEC, INC.
By: /s/ Michael T. Yonker
Name: Michael T. Yonker
Title: Chief Executive Officer
and President
ASTEC INDUSTRIES, INC.
By: /s/ Richard W. Bethea
Name: Richard W. Bethea, Jr.
Title: Vice President, Secretary
and Corporate Counsel
Exhibit 10.106
Revolving Line of Credit Note dated December 2, 1997 between Kolberg-Pioneer,
Inc. and Astec Holdings, Inc.
EXHIBIT 10.106
REVOLVING LINE OF CREDIT NOTE
$30,000,000.00
Chattanooga, Tennessee
December 2, 1997
FOR VALUE RECEIVED, the undersigned, Kolberg-Pioneer,
Inc., a Tennessee corporation with its principal offices at 4101
Jerome Avenue, Chattanooga, Tennessee 37407 (the "Maker"), promises
to pay on demand to the order of Astec Holdings, Inc., a Tennessee
corporation with its principal offices at 4101 Jerome Avenue,
Chattanooga, Tennessee 37407 ("Payee") (Payee and any subsequent
holder of this Note are referred to herein as "Holder"), the
principal sum of Thirty Million Dollars ($30,000,000.00), or such
lesser amount as shall be advanced hereunder, together with interest
on the unpaid principal balance at the rate provided, however, that
in no event shall the rate of interest payable in respect of any
indebtedness evidenced hereby exceed the maximum rate of interest
allowed to be charged by applicable law (the "Maximum Rate").
Interest is to be payable in the same manner and at the
same rate that interest is to be paid by Astec Industries, Inc. from
time to time under the terms of that Second Amended and Restated
Credit Agreement executed between Astec Industries, Inc., Astec
Financial Services, Inc. and The First National Bank of Chicago and
the Lenders named therein, dated as of November 24, 1997.
Prior to demand for payment by the Payee, the Maker may
borrow, repay and re-borrow up to the principal amount of this Note
pursuant to the terms and provisions of the Loan Agreement of even
date herewith between Maker and Payee (the "Loan Agreement") so long
as there is no default hereunder or under the Loan Agreement and the
principal amount outstanding at any time hereunder shall not exceed
Thirty Million Dollars ($30,000,000.00). It is contemplated that by
reason of repayments on this Note that there may be times when no
principal, interest or other amounts are owing hereunder;
notwithstanding such occurrences, this Note shall be in full force
and effect as to advances made pursuant to this Note subsequent to
each such occurrence.
If payment hereunder becomes due and payable on any day
other than a day on which Holder is open for business, the due date
thereof shall be extended to the next succeeding day on which Holder
is open for business, and interest shall be payable thereon during
such extension at the rate specified in this Note. Checks, drafts or
similar items of payment received by the Holder shall not constitute
payment for purposes of computing interest under this Note until
such checks, drafts or similar items of payment are finally paid in
federal funds.
Any advance by Holder to Maker which is not evidenced by
another instrument between the parties shall be conclusively
presumed to have been made hereunder. In the event the principal
balance outstanding hereunder at any time, for any reason, exceeds
the maximum amount which may be advanced hereunder, Maker agrees to
pay to Holder on demand the principal balance outstanding in excess
of such maximum amount, and such excess principal amount shall in
all respects be deemed to be included among the advances made
pursuant to the terms of this Note and shall bear interest at the
rate set forth in this Note.
All payments made shall be first applied to accrued and
unpaid interest, next to any other sum due hereunder, and the
remainder credited to principal. All payments shall be made at the
office of Payee at 4101 Jerome Avenue, Chattanooga, Tennessee 37407,
or at such other place as the Holder may, from time to time,
designate in writing.
This Note is the Note referred to in that certain Line of
Credit Loan Agreement dated of even date herewith between Maker and
Payee the "Loan Agreement" and the documents securing the
obligations hereunder include without limitation that certain
Mortgage and Security Agreement between Maker and Payee dated even
date herewith. Upon the occurrence of an Event of Default as defined
in said Loan Agreement, or upon the failure to timely make any
payment of principal, interest or other sum when due hereunder, the
repayment of the entire principal sum, any accrued interest and any
other sum payable in connection herewith or under the Loan Agreement
shall, at the option of Holder, accelerate and at once and without
notice the unpaid principal amount, accrued interest and such other
sums shall become immediately due and payable. Upon any such
acceleration, or in the event that all amounts due hereunder or
under the Loan Agreement are not paid at maturity, to the extent
permitted by applicable law the aggregate of the unpaid principal
amount, accrued interest, and all other sums payable in connection
herewith or under the Loan Agreement shall thereafter continue to
bear interest, until paid, at the rate set forth above. The failure
to exercise this option shall not constitute a waiver of the right
to exercise such option in the event of any subsequent Event of
Default or failure to pay or the continuation of the existing Event
of Default or failure to pay.
Maker, for itself and its successors and assigns and all
endorsers, sureties and guarantors, if any, hereby waives
presentment for payment, demand, protest, notice of non-payment or
dishonor, and of protest and any and all other notices and demands
whatsoever, and agrees to remain bound to Holder until the interest
and principal evidenced by this Note and any other sum payable in
connection herewith are paid in full notwithstanding any extension
or extensions of time for payment which may be granted, even though
the period of the extension may be indefinite, and notwithstanding
any inaction by, or failure to assert any legal or other right
available to, Holder. Maker, for itself and its successors and
assigns, and all endorsers, sureties and guarantors, if any, agrees
further that this Note and the obligations evidenced hereby may be
extended from time to time by Holder, and further assents to any
substitution, exchange or release of collateral or endorsers,
sureties or guarantors, or any other action or inaction by Holder
all without in any way modifying, altering, releasing, affecting or
limiting the liability of Maker or such endorsers, sureties and
guarantors.
If this Note is placed in the hands of an attorney for
collection or for enforcement or protection of any security securing
the obligations evidenced hereby, or in the event Holder incurs any
costs incident to the collection of any obligation evidenced hereby
or the enforcement or protection of such security, Maker agrees to
immediately pay to Holder on demand all such costs including,
without limitation, reasonable attorneys' fees and all court costs.
Wherever possible, each provision of this Note shall be
interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Note shall be
prohibited by or invalid under such law, such provision shall be
ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the
remaining provisions of this Note.
Nothing in this Note shall permit Holder to collect
interest at a rate higher than the Maximum Rate. If from any
circumstances whatsoever, fulfillment of any obligation of this Note
or of any other instrument evidencing or securing the indebtedness
evidenced hereby, at the time performance of such obligation shall
be due, shall violate the lawful limit of any applicable usury
statute or any other applicable law with regard to obligations of
like character and amount, then the obligation to be fulfilled shall
be reduced to such lawful limit, so that in no event shall there
occur, under this Note or under any other instrument evidencing or
securing the indebtedness evidenced hereby, any violation of such
lawful limit, but such obligation shall be fulfilled to the lawful
limit. If any sum is collected in excess of the Maximum Rate, such
excess shall be applied to reduce the principal debt.
This Note has been executed and delivered in and shall be
governed by and construed in accordance with the laws of the State
of Tennessee, except to the extent that certain rights and
privileges may be granted the Holder from time to time under
applicable federal laws, in which event federal law shall control.
Time is of the essence of this Note.
MAKER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT SITTING IN TENNESSEE OVER ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE. MAKER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. MAKER
HEREBY AGREES THAT A FINAL JUDGMENT IN ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT, AFTER ALL APPROPRIATE APPEALS,
SHALL BE CONCLUSIVE AND BINDING UPON IT.
MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR THE
TRANSACTIONS CONTEMPLATED HEREIN. FURTHER, MAKER HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF HOLDER OR ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT HOLDER WOULD NOT, IN THE
EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO
JURY TRIAL PROVISION. MAKER ACKNOWLEDGES THAT HOLDER HAS BEEN
INDUCED TO MAKE THE LOANS EVIDENCED BY THIS NOTE BY, INTER ALIA,
THE PROVISIONS OF THIS PARAGRAPH.
IN WITNESS WHEREOF, Maker executed this Note the day and
year first above written.
MAKER:
KOLBERG-PIONEER, INC.
By: /s/ Richard W. Bethea, Jr.
Name: Richard W. Bethea, Jr.
Title: Secretary
Exhibit 10.107
Guaranty Joinder Agreement dated December, 1997 between Kolberg-Pioneer and
Astec Holdings, Inc. in favor of the First National Bank of Chicago.
EXHIBIT 10.107
GUARANTY JOINDER AGREEMENT
THIS GUARANTY JOINDER AGREEMENT (this "Agreement") is made
as of this day of December, 1997, by KOLBERG-PIONEER, INC., a
Tennessee corporation ("KPI") and ASTEC HOLDINGS, INC., a Tennessee
corporation ("AHI"), in favor of THE FIRST NATIONAL BANK OF
CHICAGO, as Agent for the ratable benefit of the Lenders (as
defined in the Credit Agreement referred to below), and the
Lenders.
RECITALS
A. Pursuant to a Second Amended and Restated Credit
Agreement dated as of November 24, 1997 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement")
executed by Astec Industries, Inc., a Tennessee corporation
("Astec") and Astec Financial Services, Inc., a Tennessee
corporation ("AFS," and collectively with Astec, "Borrowers"), the
Lenders have agreed to extend credit in the form of a revolving
credit facility to the Borrowers in an aggregate principal amount
of $70,000,000 (collectively, the "Credit"), subject to the terms
and conditions and for the purposes set forth in the Credit
Agreement. Capitalized terms not defined herein are defined in the
Credit Agreement.
B. In connection with the Credit Agreement, all of the
then existing Subsidiaries of Astec (including AFS) executed and
delivered a certain Second Amended and Restated Guaranty dated as
of November 24, 1997, the final form of which is attached hereto as
Exhibit A ("Guaranty").
C. Each of KPI and AHI are recently-formed, wholly-owned
direct or indirect subsidiaries of Astec and in connection with the
Portec Acquisition have and will continue to receive direct and
substantial benefit and support from Astec as a result of the
Lenders making available the Credit.
D. The Credit Agreement requires that each of AHI and KPI
become Guarantors and Credit Parties (as such terms are defined in
the Credit Agreement) under the Guaranty and AHI and KPI desire to
execute and deliver this Agreement to become Guarantors under the
Guaranty.
AGREEMENT
In consideration of the recitals and the mutual promises,
warranties and agreements contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Joinder. Each of AHI and KPI (each such entity
sometimes hereafter referred to as a Guarantor) hereby agrees to be
added and joined to the Guaranty as a Guarantor thereunder as if an
original Guarantor thereunder. Each of AHI and KPI, as primary
obligor, and not as surety only, hereby absolutely, irrevocably,
jointly and severally, unconditionally and continually guarantees
to the Lenders all of the Guaranteed Obligations. Each of AHI and
KPI hereby make all of the other representations, covenants and
agreements made by each Guarantor under the Guaranty.
2. Representations. Each of AHI and KPI hereof jointly
and severally makes the following additional representations and
warranties to the Lenders, which shall survive the execution and
delivery of this Agreement.
(a) Each of AHI and KPI 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 without limitation 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 in each jurisdiction in which its business is
conducted and where such qualification is necessary.
(b) Each of AHI and KPI has the corporate power and
authority and legal right to execute and deliver this Agreement and
to perform its obligations hereunder. The execution and delivery by
each of AHI and KPI of this Agreement and the performance of its
obligations hereunder have been duly authorized by proper corporate
proceedings, and this Agreement constitutes the legal, valid and
binding obligation of each of AHI and KPI enforceable against it in
accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.
(c) Neither the execution and delivery by each of AHI and
KPI of this Agreement, nor compliance with the provisions hereof
will violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on each of AHI and KPI or its
articles of incorporation or by-laws or the provisions of any
indenture, instrument or agreement to which it is a party or is
subject, or by which it, or its Property, is bound, or conflict
with or constitute a default thereunder.
(d) Each of AHI and KPI is not insolvent and the
execution and delivery of this Agreement will not render it
insolvent.
3. Amendment. No modification, waiver, amendment,
discharge or change of this Agreement shall be valid unless the
same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge or
change is sought.
4. Successors and Assigns. The duties and obligations of
each of AHI and KPI under this Agreement shall be
binding upon their heirs, legal representatives,
executors, administrators, successors and assigns.
Neither AHI nor KPI may assign or delegate any of its
duties or obligations under this Agreement without
first obtaining the express prior written consent
of the Agent.
5. Notices. Except as otherwise expressly provided
herein, any notice, demand request or other communication which any
party hereto may be required or may desire to give under this
Agreement shall be in writing and shall be given in the manner set
forth in the Credit Agreement, and if to the Agent or any Lender,
addressed as set forth in the Credit Agreement, and if to AHI or
KPI addressed c/o Astec Industries, Inc. at the address set forth
for Astec in the Credit Agreement.
6. Place of Payment. Unless otherwise directed by the
Agent or the Lenders, payment hereunder shall in each case be made
at the place of payment of the Guaranteed Obligations set forth in
the Loan Documents in respect to which such payment hereunder is
made.
7. Severability of Provisions. Any provision in this
Agreement 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 this Agreement are declared to be
severable.
8. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS.
9. CONSENT TO JURISDICTION. EACH OF AHI AND KPI 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 THIS AGREEMENT
AND EACH OF AHI AND KPI 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 IT 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 AHI OR KPI IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY AHI OR
KPI 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 THIS AGREEMENT
SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
10. WAIVER OF JURY TRIAL. EACH OF AHI AND KPI HEREBY
EXPRESSLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES 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 THIS AGREEMENT OR
THE RELATIONSHIP ESTABLISHED HEREUNDER. THE TERMS AND PROVISIONS OF
THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT FOR THE LENDERS
MAKING AVAILABLE THE CREDIT.
11. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first written
above.
KOLBERG-PIONEER, INC. ASTEC HOLDINGS, INC.
By: /s/ Richard W. Bethea, Jr. By: /s/ F. McKamy Hall
Its: Secretary Its: Vice President