Second Amended and Restated Loan
Agreement
HSBC Bank USA, National
Association, As Administrative Agent
This Amendment
No. 4 dated as of June 26, 2009 (“Amendment”)
to the Second Amended and Restated Loan Agreement dated as of
October 25, 2006, as amended by Amendment No. 1,
Amendment No. 2 and Amendment No. 3 thereto dated as of
March 30, 2007, as of July 27, 2007 and as of
March 14, 2008, respectively (collectively, the
“Agreement”) is entered into by and among MOOG
INC. , a New York business corporation
(“Borrower”), certain lenders which are currently
parties to the Agreement (“Lenders”), and HSBC BANK
USA , NATIONAL ASSOCIATION , a bank organized under the
laws of the United States of America, as administrative agent for
the Lenders (“Administrative Agent”).
A. Borrower
has requested, and Administrative Agent and the Lenders have agreed
to make certain modifications to the Agreement, including but not
limited to, revising the definitions of Alternate Base Rate and
Consolidated EBITDA, modifying the matrix used to determine the
Applicable Margin and the Applicable Commitment Fee Rate, changing
certain of the Financial Covenants and establishing a new financial
covenant, changing the current restrictions on subordinate
Indebtedness, designating foreign exchange contracts that will
benefit from the Collateral and the Guaranty, and making certain
other clarifying modifications, all as set forth in this
Amendment.
B. The
Borrower and each of the Guarantors will benefit from the
modifications set forth herein.
C. The
Administrative Agent and the Lenders are agreeable to the foregoing
to the extent set forth in this Amendment and subject to each of
the terms and conditions stated herein.
NOW,
THEREFORE , in consideration of the foregoing and the mutual
covenants set forth herein, and of the loans or other extensions of
credit heretofore, now or hereafter made by
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the Lenders,
to, or for the benefit of the Borrower and its Subsidiaries, the
parties hereto agree as follows:
1.
Definitions . Except to the extent otherwise specified
herein, capitalized terms used in this Amendment shall have the
same meanings specified in the Agreement.
2.
Modifications to the Agreement .
(a) The
matrix set forth in the existing definition of “
Applicable Commitment Fee Rate ” set forth in
Section 1.1 is deleted and the following new matrix is added
in its place:
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Level
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Leverage Ratio
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Commitment Fee
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Greater than 3.50 to 1.0
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50 bps
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> 3.25 to 1.0 but ≤ 3.50 to
1.0
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35 bps
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> 2.75 to 1.0 but ≤ 3.25 to
1.0
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35 bps
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> 2.25 to 1.0 but ≤ 2.75 to
1.0
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30 bps
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> 1.75 to 1.0 but ≤ 2.25 to
1.0
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25 bps
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> 1.25 to 1.0 but ≤ 1.75 to
1.0
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20 bps
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≤ 1.25 to 1.0
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20 bps
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(b) The
matrix set forth in the existing definition of “
Applicable Margin ” set forth in Section 1.1 is
deleted and the following new matrix is added in its
place:
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Level
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Leverage Ratio
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ABR Option
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Libor Rate Option
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Greater than 3.50 to 1.0
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200 bps
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300 bps
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> 3.25 to 1.0 but ≤ 3.50 to
1.0
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150 bps
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250 bps
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> 2.75 to 1.0 but ≤ 3.25 to
1.0
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125 bps
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225 bps
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> 2.25 to 1.0 but ≤ 2.75 to
1.0
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100 bps
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200 bps
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> 1.75 to 1.0 but ≤ 2.25 to
1.0
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75 bps
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175 bps
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> 1.25 to 1.0 but ≤ 1.75 to
1.0
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50 bps
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150 bps
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≤ 1.25 to 1.0
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0%
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100 bps
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(c) The
existing definitions of “ ABR ” or “
Alternate Base Rate ”, “ Consolidated
EBITDA ” “ Designated Hedge Agreement
” and “ Hedge Agreement ” set forth in
Section 1.1 are deleted and the following new definitions are
added in their place:
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“ ABR ” or
“ Alternate Base Rate ” — for any
day, a rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the greatest of (i) the Prime Rate,
(ii) the Federal Funds Effective Rate from time to time in
effect plus 0.5%, or (iii) the 30-Day Libor Rate on such day
(or if such day is not a Business Day, the immediately preceding
Business Day) plus 1.00%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Federal Funds Effective Rate or
the 30-Day Libor Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the 30-Day Libor Rate, respectively.
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“ Consolidated
EBITDA ” — for any period, an amount equal to
(i) the sum of the amounts for such period of
(A) Consolidated Net Income, (B) Consolidated Interest
Expense, (C) provisions for taxes based on income,
(D) total depreciation expense, (E) total amortization
expense, (F) other non-cash items reducing Consolidated Net
Income and (G) non-cash stock related expenses minus
(ii) other non-cash items increasing Consolidated Net Income
for such period plus (iii) any restructuring charges incurred
in calendar year 2009 not to exceed $17,000,000, to the extent
deducted in computing Consolidated Net Income. Notwithstanding
anything to the contrary in this definition, for purposes of
computing the Leverage Ratio, Net Senior Debt Ratio and the
Interest Coverage Ratio hereunder, or in connection with any
pro-forma calculation required by this Agreement, the term
“Consolidated EBITDA” shall be computed, on a
consistent basis, to reflect purchases and acquisitions by
Permitted Acquisition or otherwise made by Borrower and the
Subsidiaries during the relevant period as if they occurred at the
beginning of such period, and Borrower, during the twelve
(12) month period following the date of any such acquisition
may include in the calculation hereof the necessary portion of the
adjusted historical results of the entities acquired in
acquisitions that were achieved prior to the applicable date of the
acquisition for such time period as is necessary for Borrower to
have figures on a trailing four fiscal quarter basis from the date
of determination with respect to such acquired entities.
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“ Designated Hedge
Agreement ” — any Hedge Agreement to which
Borrower or any of its Subsidiaries is a party and as to which a
Lender is a counterparty, so that such Lender, to the extent of
such Lender’s credit exposure under such Hedge
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Agreement, will be entitled to share
in the benefits of any Guaranty and the Security Documents to the
extent any such Guaranty and Security Documents include obligations
under Designated Hedge Agreements in the obligations secured or
guarantied thereby.
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“ Hedge
Agreement ” — an interest rate swap, cap or
collar agreement, or any arrangement similar to any of the
foregoing between Borrower and any Lender relating to any
Indebtedness under this Agreement, each as providing for the
transfer or mitigation of interest rate risk either generally or
under specific contingencies, or any foreign currency exchange
agreement or similar arrangement between Borrower or any of its
Subsidiaries and any Lender, each as providing for the transfer or
mitigation of foreign currency risk either generally or under
specific contingencies.
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(d) In
Section 1.1 entitled “ Definitions ”, the
following new definitions are added in the appropriate alphabetical
locations:
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“ 30-Day LIBOR
Rate ” — the reserve adjusted rate of interest
per annum determined by the Administrative Agent to be applicable
to a 30-day interest period appearing on Reuters Screen LIBOR01
Page or such other substitute page that displays such rate or
another alternate source selected by the Administrative Agent to
determine such rate in an amount approximately equal to the amount
of the applicable ABR Loan.
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“ Amendment
No. 4 ” — the Amendment No. 4 dated
as of June 26, 2009 by and among Borrower, the Administrative
Agent and the Lenders, amending this Agreement.
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“ Consolidated Net
Senior Debt ” — as of any date of
determination, Indebtedness (other than Subordinated Indebtedness)
of the Borrower and all Subsidiaries (determined on a Consolidated
Basis without duplication in accordance with GAAP) less
aggregate net cash balances of Borrower and all
Subsidiaries.
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“ Net Senior Debt
Ratio ” — as of any date of determination, the
ratio of (i) Consolidated Net Senior Debt as of the last day
of the fiscal quarter of Borrower ending on the date of
determination, to (ii) Consolidated EBITDA for the four
consecutive fiscal quarters then ended.
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“ Subordinated
Indebtedness ” — at a particular date, without
duplication, any Indebtedness for which the Borrower or
any
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Subsidiary is directly and primarily
liable that is expressly subordinated in right of payment to the
payment of all Indebtedness of the Borrower incurred under and in
compliance with the terms of the Credit Agreement and the Loan
Documents on a basis substantially equivalent to the subordination
under the Current Indentures (as defined in section 7.1(f)
hereof).
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(e) Section 5.2(c)
entitled “ Reporting Requirements ” is revised
to replace the existing period at the end thereof with a comma, and
to add “and 6.5” at the end of such
subsection.
(f) Section 6.3
entitled “ Leverage Ratio ” is deleted and the
following is added in its place:
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“6.3 Leverage Ratio
. Assure that as of the end of each fiscal quarter of Borrower
ending after the date of Amendment No. 4, the Leverage Ratio
does not exceed 4.0 to 1.0.”
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(g) A
new Section 6.5 entitled “ Net Senior Debt Ratio
” is added as follows:
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“6.5 Net Senior Debt
Ratio . Assure that as of the end of each fiscal quarter of
Borrower ending after the date of Amendment No. 4, the Net
Senior Debt Ratio does not exceed 2.75 to 1.0.”
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(h) The
existing Section 7.1(e) entitled “ Other
Indebtedness ” is deleted and replaced with the
following:
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“(e) Other
Indebtedness . Other secured or unsecured Indebtedness of
the Borrower and its Subsidiaries to the extent not permitted by
any of the foregoing clauses and clause (f) below, provided
that (i) no Default or Event of Default shall then exist or
immediately after incurring any of such Indebtedness will exist,
(ii) the Borrower and any Subsidiary shall be in compliance
with the financial covenants set forth in Sections 6.1, 6.2,
6.3 and 6.5 both immediately before and after giving pro forma
effect to the incurrence of such Indebtedness, and (iii) the
aggregate principal amount of all such other Indebtedness
outstanding at any time shall not exceed $100,000,000; and provided
further, that the aggregate principal amount of all such other
Indebtedness outstanding at any time which is secured Indebtedness
shall not exceed $75,000,000.”
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(i) In
Section 7.1 entitled “ Indebtedness ”, a
new Subsection (f) is added as follows:
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“(f) Additional
Subordinated Indebtedness . Unsecured Subordinated
Indebtedness (in addition to the Indebtedness under the
Subordinated Indenture and the Second Subordinated
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Indenture (collectively, the
“Current Indentures”)) on terms and conditions not
materially more restrictive than under the Current Indentures or
otherwise acceptable to the Administrative Agent and provided that
(i) no Default or Event of Default is then in existence or
would be caused by the issuance of such additional Subordinated
Indebtedness, (ii) no principal payments
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