FIRST AMENDMENT TO REVOLVING CREDIT
AGREEMENT AND WAIVER
THIS FIRST AMENDMENT AND WAIVER
(this “Amendment”), dated as of January 23, 2009,
amends and modifies a certain Revolving Credit Agreement, dated as
of July 12, 2007 (the “Credit Agreement”), among GRACO
INC. (the “Borrower”), the Banks named therein, and
U.S. BANK NATIONAL ASSOCIATION, as Agent for the Banks (the
“Agent”). Terms not otherwise expressly defined herein
shall have the meanings set forth in the Credit
Agreement.
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FOR VALUE RECEIVED, the Borrower,
the Banks and the Agent agree as follows.
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ARTICLE I - AMENDMENTS TO THE CREDIT
AGREEMENT
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The Credit Agreement is amended as
follows.
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1.1 Definition . A definition of “Funding
Threshold” is added to Section 1.1, and shall read as
follows:
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“‘ Funding
Threshold ” means the following for the following dates
(a) $40,000,000 on December 31, 2009, (b) $30,000,000 on December
31, 2010, and (c) $20,000,000 December 31 of each year
thereafter.”
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1.2 ERISA Representation . Section 7.9 is amended to read as
follows:
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“Section 7.9
ERISA . Each Plan complies in all material respects
with all applicable requirements of ERISA and the Code and with all
applicable rulings and regulations issued under the provisions of
ERISA and the Code setting forth those requirements. No Reportable
Event, other than a Reportable Event for which the reporting
requirements have been waived by regulations of the PBGC, has
occurred and is continuing with respect to any Plan. All of the
minimum funding standards applicable to such Plans have been
satisfied and there exists no event or condition which would permit
the institution of proceedings to terminate any Plan under Section
4042 of ERISA (except for immaterial failures).”
For convenience of reference, the
final sentence reading as follows has been deleted:
“The current value of the
Plans’ benefits guaranteed under Title IV or ERISA does not
exceed the current value of the Plans’ assets allocable to
such benefits by more than $10,000,000.”
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1.3 ERISA Covenant . Section 9.3 is amended to read as
follows:
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“Section 9.3
Plans . Permit any condition to exist in connection
with any Plan which might constitute grounds for the PBGC to
institute proceedings to have such Plan terminated or a trustee
appointed to administer such Plan, permit any Plan to terminate
under any circumstances which would cause the lien provided for in
Section 4068 of ERISA to attach to any property, revenue or asset
of the Company or any Subsidiary or permit the value of any
Plan’s benefits guaranteed under the Plan to exceed the value
of the Plan’s assets allocable to benefits, calculated
consistent with Section 430 of the Code, to exceed the applicable
Funding Threshold as of the dates set forth in the definition
thereof.”
1.4 Construction . All references in the Credit Agreement to
“this Agreement”, “herein” and similar
references shall be deemed to refer to the Credit Agreement as
amended by this Amendment.
ARTICLE II - WAIVER
The Borrower has informed the Agent
and the Banks that as of December 31, 2008, the Borrower was not in
compliance with Section 9.3. The Agent and the Banks are aware,
that notwithstanding such non-compliance, the Borrower has borrowed
Loans under the Credit Agreement, and borrowing while not in
compliance with Section 9.3 constitutes non-compliance with Section
6.2 of the Credit Agreement (such non-compliance with Sections 9.3
and 6.2 is called the “Existing Defaults”). The
Borrower has requested that the Banks waive the Existing Defaults.
Effective as provided below, the Banks waive the Existing Defaults,
and waive any Default or Event of Default arising from the Existing
Defaults. Except as expressly provided herein, all provisions of
the Credit Agreement remain in full force and effect and this
waiver shall not apply to any other or subsequent failure to comply
with such Sections or any other provision of the Credit
Agreement.
ARTICLE III - REPRESENTATIONS AND
WARRANTIES
To induce the Banks and the Agent to
enter into this Amendment and to make and maintain the Loansunder
the Credit Agreement as amended hereby, the Borrower hereby
warrants and represents to the Banks and the Agent that it is duly
authorized to execute and deliver this Amendment, and to perform
its obligations under the Credit Agreement as amended hereby, and
that this Amendment constitutes the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its
terms.
ARTICLE IV - CONDITIONS PRECEDENT
This Amendmen
