Document:

exv10w1

 

Exhibit
10.1

GENCORP INC.

as Issuer

THE GUARANTORS PARTY HERETO

as Guarantors

and

THE BANK OF NEW YORK TRUST COMPANY, N.A.

as Trustee

 

Second Supplemental Indenture

Dated
as of June 27, 2006

To Indenture Dated as of August 11, 2003,

as Amended by the First Supplemental Indenture
 Dated as of October 29, 2004

91/2% Senior Subordinated Notes due 2013

 

 

 

          SECOND
SUPPLEMENTAL INDENTURE, dated as of June 27, 2006 (the “Second Supplemental
Indenture”), between GENCORP INC., an Ohio corporation (the “Issuer”), the guarantors party hereto
(the “Guarantors”) and THE BANK OF NEW YORK TRUST COMPANY, N.A., as trustee (the “Trustee”).

RECITALS

          WHEREAS, the Issuer, the guarantors party thereto and the Trustee have heretofore executed and
delivered an Indenture, dated as of August 11, 2003, as amended by the First Supplemental Indenture
dated as of October 29, 2004 (the “Indenture”), pursuant to which the Issuer issued $150,000,000
principal amount of its 91/2% Senior Subordinated Notes due 2013 (the “Notes”), $97,500,000 of which
remain issued and outstanding under the Indenture;

          WHEREAS, this Second Supplemental Indenture is being executed pursuant to a Consent
Solicitation Statement of the Issuer, dated June 8, 2006 (the “Statement”), and the related Letter
of Consent;

          WHEREAS, Section 9.2 of the Indenture provides that the Issuer, the guarantors and
the Trustee may enter into indentures supplemental to the Indenture for the purpose of changing or
modifying in any manner the rights of the Holders of Notes with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding, subject to certain
exceptions specified in Section 9.2 of the Indenture;

          WHEREAS, the parties hereto are entering into this Second Supplemental Indenture to
amend Section 4.9 of the Indenture (the “Amendment”);

          WHEREAS, the execution and delivery of this Second Supplemental Indenture and the
adoption of the Amendment by the Issuer, the Guarantors and the Trustee has been authorized by the
consent of the Holders of at least a majority in aggregate principal amount of the Notes
outstanding as of the date hereof; and

          WHEREAS, the execution and delivery of this Second Supplemental Indenture by the
Issuer have been authorized by resolutions of the Board of Directors of the Issuer, the execution
and delivery of this Second Supplemental Indenture by the Guarantors have been authorized by the
board of directors, manager or members of each Guarantor, and, subject to the conditions set forth
in the Statement, all acts, conditions and requirements necessary to make this Second Supplemental
Indenture a valid and binding agreement in accordance with its terms and for the purposes herein
set forth have been done and taken, and the execution and delivery of this Second Supplemental
Indenture have been in all respects duly authorized.

          NOW, THEREFORE, in consideration of the above premises, each party hereto agrees, for
the benefit of the other party and for the equal and ratable benefit of the Holders of the Notes,
as follows:

Section 1.      Definitions.

          For all purposes of this Second Supplemental Indenture, except as otherwise expressly provided
or unless the context otherwise requires, the terms used herein shall have the respective meanings
assigned to them in the Indenture.

 

 

Section 2.      Amendment of the Indenture.

          Section 4.9(c) of the Indenture is hereby amended and restated to read in its entirety as
follows:

          "(c) For purposes of determining compliance with this covenant, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness or is
entitled to be incurred pursuant to the first paragraph of this covenant, in each case, as of the
date of incurrence thereof, the Company shall, in its sole discretion, classify (or later
reclassify in whole or in part, in its sole discretion) such item of Indebtedness in any manner
that complies with this covenant and such Indebtedness shall be treated as having been incurred
pursuant to such clauses or the first paragraph hereof, as the case may be, designated by the
Company; provided, however, that any incurrence of Indebtedness under the Credit Agreement as
Permitted Indebtedness must be incurred pursuant to clause (i) of the definition of Permitted
Indebtedness. For the avoidance of doubt, the Company may also incur Indebtedness under the Credit
Agreement pursuant to the second sentence of Section 4.9(a). Accrual of interest, the accretion of
accreted value and the payment of interest in the form of additional Indebtedness will not be
deemed to be an incurrence of Indebtedness for purposes of this covenant.”

Section 3.      Operation of Second Supplemental Indenture.

          This Second Supplemental Indenture shall take effect on the date and time that the Trustee
receives a certification of results from Global Bondholder Services Corp., the Issuer’s tabulation
agent, indicating receipt of the consent of the Holders of at least a majority in aggregate
principal amount of the Notes and shall amend the provisions of the Indenture with respect to the
Notes.

Section 4.      Concerning the Trustee.

          The Trustee accepts the trusts of the Indenture, as supplemented by this Second Supplemental
Indenture, and agrees to perform the same, but only upon the terms and conditions set forth in the
Indenture, as supplemented by this Second Supplemental Indenture, to which the parties hereto and
the Holders from time to time of the Notes agree and, except as expressly set forth in the
Indenture, as supplemented by this Second Supplemental Indenture, shall incur no liability or
responsibility in respect thereof. Without limiting the generality of the foregoing, the Trustee
assumes no responsibility for the correctness of the recitals herein contained, which shall be
taken as the statements of the Issuer. The Trustee makes no representation and shall have no
responsibility as to the validity or sufficiency of this Second Supplemental Indenture.

Section 5.      Miscellaneous.

                    (a)      Except as hereby expressly amended, the Indenture is in all respects ratified and
confirmed and all the terms, provisions and conditions thereof shall be and remain in full force
and effect.

                    (b)      All agreements of the Issuer in this Second Supplemental Indenture shall bind the Issuer’s
successors. All agreements of the Trustee in this Second Supplemental Indenture shall bind its
successors.

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                    (c)      THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.

                    (d)      If and to the extent that any provision of this Second Supplemental Indenture limits,
qualifies or conflicts with another provision that is required to be included in this Second
Supplemental Indenture or in the Indenture by the Trust Indenture Act, the required provision shall
control.

                    (e)      The titles and headings of the sections of this Second Supplemental Indenture have been
inserted for convenience of reference only, and are not to be considered a part hereof and shall in
no way modify or restrict any of the terms or provisions hereof.

                    (f)      This Second Supplemental Indenture may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall represent one and the same
agreement.

                    (g)      In case any provision of this Second Supplemental Indenture shall be determined to be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions hereof or of the Indenture shall not in any way be affected or impaired thereby.

-3-

 

          IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed, as of the date
first written above.

	 	 	 	 	 
	 	Issuer

GENCORP INC.

 	 
	 	By:  	/s/ Mark A. Whitney
 	 
	 	 	Name:  	Mark A. Whitney 	 
	 	 	Title:  	Vice President, Law 	 
	 
	 	Guarantors

AEROJET-GENERAL CORPORATION

 	 
	 	By:  	/s/ Mark A. Whitney
 	 
	 	 	Name:  	Mark A. Whitney 	 
	 	 	Title:  	Vice President 	 
	 
	 	AEROJET ORDNANCE TENNESSEE, INC.

 	 
	 	By:  	/s/ Brian E. Sweeney
 	 
	 	 	Name:  	Brian E. Sweeney 	 
	 	 	Title:  	Vice President 	 
	 
	 	GENCORP PROPERTY INC.

 	 
	 	By:  	/s/ Mark A. Whitney
 	 
	 	 	Name:  	Mark A. Whitney 	 
	 	 	Title:  	Vice President 	 
	 
	 	AEROJET INVESTMENTS LTD.

 	 
	 	By:  	/s/ Brian E. Sweeney
 	 
	 	 	Name:  	Brian E. Sweeney 	 
	 	 	Title:  	Secretary 	 
	 

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	 	RKO GENERAL, INC.

 	 
	 	By:  	/s/ Mark A. Whitney
 	 
	 	 	Name:  	Mark A. Whitney 	 
	 	 	Title:  	Vice President 	 
	 
	 	Trustee

THE BANK OF NEW YORK TRUST

COMPANY, N.A.

 	 
	 	By:  	/s/ Sandee Parks
 	 
	 	 	Name:  	Sandee Parks 	 
	 	 	Title:  	Vice President 	 
	 

-5-exv10w2

 

Exhibit 10.2

THIRD AMENDMENT TO CREDIT AGREEMENT 

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the “Amendment”), dated as of June 27, 2006,
is to that certain Credit Agreement dated as of December 6, 2004 (as previously amended and
modified, the “Credit Agreement”), by and among GENCORP INC., an Ohio corporation (the
“Borrower”), the subsidiaries of the Borrower from time to time party thereto (the
“Guarantors”), the lenders from time to time party thereto (the “Lenders”), and
WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (the
“Administrative Agent”). Capitalized terms used herein but not otherwise defined shall
have the meanings ascribed thereto in the Credit Agreement.

W I T N E S S E T H

     WHEREAS, the Lenders have established credit facilities for the benefit of the Borrower
pursuant to the terms of the Credit Agreement;

     WHEREAS, the Borrower has requested certain amendments to the Credit Agreement; and

     WHEREAS, the Required Lenders and all of the Lenders holding an additional and/or new
Credit-Linked Commitment are willing to amend the Credit Agreement subject to the terms and
conditions hereof.

     NOW, THEREFORE, IN CONSIDERATION of the agreements herein contained, the parties hereby agree
as follows:

SECTION 1

AMENDMENT

     1.1  New Definitions. The following definitions are hereby added to Section 1.1 of the
Credit Agreement in the appropriate alphabetical order:

     “Credit-Linked Committed Amount” shall mean the Term Loan Committed Amount
plus the Credit-Linked LOC Committed Amount.

     “Incremental Credit-Linked LOC Subfacility” shall have the meaning set forth in
Section 2.22.

     “Lender Commitment Letter” shall mean, with respect to any Credit-Linked
Lender, the letter (or other correspondence) to such Credit-Linked Lender from the
Administrative Agent notifying such Credit-Linked Lender of its Credit-Linked LOC
Commitment, Credit-Linked Commitment Percentage and/or Term Loan Commitment Percentage.

 

 

     “Support Account” shall mean that certain account held at a domestic office by
the Administrative Agent or any one of the Lenders (as so designated by the Borrower)
containing cash and Cash Equivalents of not less than $19,752,000, which account shall
collateralize the obligations of the Borrower under the 2007 Convertible Notes on terms
acceptable to the Administrative Agent; provided that in no event shall such account
be deemed subject to a Lien in favor of the holders of the 2007 Convertible Notes or the
trustee with respect thereto.

     “Third Amendment Effective Date” shall mean June 27, 2006.

     1.2  Amendments to Section 1.1. The following defined terms located in Section 1.1 of
the Credit Agreement are hereby amended and restated in their entireties to read as follows:

     “Asset Disposition” shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any ownership interest
in a Joint Venture) of the Borrower or any Subsidiary, whether by sale, lease, transfer or
otherwise. The term “Asset Disposition” shall not include (i) the sale, lease or transfer
of assets permitted by subsections 6.4(a)(i) through (viii), 6.4(a)(xi) and 6.4(a)(xiv), or
(ii) any Equity Issuance.

     “Credit-Linked Commitment Percentage” shall mean, for each Credit-Linked
Lender, the percentage identified as its Credit-Linked Commitment Percentage in its Lender
Commitment Letter or in the Register, as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 9.6(c).

     “Credit-Linked Letters of Credit” shall mean (a) any letter of credit issued by
the Credit-Linked Issuing Lender from and after the Third Amendment Effective Date pursuant
to Section 2.5(a), and (b) any Existing Letter of Credit, in each case as such letter of
credit may be amended, modified, extended, renewed or replaced from time to time.

     “Credit-Linked LOC Commitment” shall mean the commitment of the Credit-Linked
Issuing Lender to issue Credit-Linked Letters of Credit and with respect to each
Credit-Linked Lender, the commitment of such Credit-Linked Lender to purchase its
Credit-Linked Participation in the Credit-Linked Letters of Credit up to such Credit-Linked
Lender’s Credit-Linked Commitment Percentage of the Credit-Linked LOC Committed Amount as
specified in its Lender Commitment Letter or in the Register, as such amount may be reduced
from time to time in accordance with the provisions hereof.

     “Credit-Linked Deposit” shall mean, with respect to any Credit-Linked Lender,
such Credit-Linked Lender’s funded Credit-Linked Participation in the Credit-Linked LOC
Committed Amount and all Credit-Linked Letters of Credit issued thereunder, which funded
Credit-Linked Participation shall be in an amount equal to such Credit-Linked Lender’s
Credit-Linked LOC Commitment and shall be deposited into the Credit-Linked Account on the
Third Amendment Effective Date (or on the date such Person becomes a

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Credit-Linked Lender) in accordance with the terms of Section 2.6(a). The funded
Credit-Linked Participations made on the Closing Date, as decreased from time to time prior
to the Third Amendment Effective Date, shall be repaid with deposits held by the
Administrative Agent as collateral for the Credit-Linked Letters of Credit outstanding on
the Third Amendment Effective Date and the funded Credit-Linked Participations made on the
Third Amendment Effective Date shall, on and after such date, be deemed the “Credit-Linked
Participations” hereunder.

     “Term Loan” shall mean any term loan made by a Credit-Linked Lender from and
after the Third Amendment Effective Date pursuant to Section 2.4(a) or any term loan into
which a Credit-Linked Purchase is converted pursuant to Section 2.5(d)(ii). The term loan
made on the Closing Date, as increased from time to time prior to the Third Amendment
Effective Date, shall be repaid with the proceeds of the AFC Sale and the term loan made on
the Third Amendment Effective Date shall, on and after such date, be deemed the “Term Loan”
hereunder.

     “Term Loan Commitment Percentage” shall mean, for any Lender, the percentage
identified as its Term Loan Commitment Percentage in its Lender Commitment Letter or in the
Register, as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6.

     1.3  Amendment to Accelerated Maturity Date. The definition of “Accelerated Maturity
Date” in Section 1.1 of the Credit Agreement is hereby amended by deleting the parenthetical in
clause (b)(ii) of such definition.

     1.4  Amendment to Consolidated EBITDAP. Clauses (vi) and (vii) of the definition of
“Consolidated EBITDAP” in Section 1.1 of the Credit Agreement are hereby amended and restated in
their entirety to read as follows:

     (vi) non-recurring fees and expenses paid in connection with the Transactions during
such period as well as any write-off taken during such period for any unamortized fees and
expenses associated with prior financings now affected by the Transactions and associated
with refinancings and other transactions contemplated by amendments to this Agreement and
the other Credit Documents,

     (vii) charges associated with legal judgments rendering the Borrower contributorily
liable under CERCLA in the case of GenCorp Inc. vs. Olin Corporation in an amount not to
exceed $30,000,000 and charges associated with legal settlements in the Allen, et al vs.
Aerojet-General Corporation, et al and Smith vs. Aerojet-General Corporation, et al in an
aggregate amount not to exceed $25,000,000,

     1.5  Amendment to Funded Debt. The proviso located at the end of the definition of
“Funded Debt” in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:

3

 

     “provided, however, that Funded Debt shall not include (i) Indebtedness
among the Credit Parties, (ii) Indebtedness permitted under Section 6.1(i) and (iii)
Indebtedness to the extent it is collateralized by the Support Account.”

     1.6  Amendments to Section 2.4. Section 2.4(a) and Section 2.4(b) are hereby amended
and restated in their entireties to read as follows:

     Section 2.4  Credit-Linked Facility—Term Loan Subfacility.

     (a) Term Loan. Subject to the terms and conditions hereof and in reliance upon
the representations and warranties set forth herein, each Credit-Linked Lender severally
agrees to make available to the Administrative Agent on the Third Amendment Effective Date
such Credit-Linked Lender’s Credit-Linked Commitment Percentage of Term Loans in Dollars in
the aggregate principal amount of SEVENTY-FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
($74,500,000) (as such amount may be increased by any Credit-Linked Purchase that is
converted to Term Loans pursuant to Section 2.5(d)(ii), the “Term Loan Committed
Amount”) for the purposes hereinafter set forth; provided, however, (i)
with regard to each Credit-Linked Lender individually, the sum of such Credit-Linked
Lender’s Credit-Linked Commitment Percentage of the aggregate principal amount of the
outstanding Term Loans plus outstanding Credit-Linked LOC Obligations shall not at
any time exceed such Credit-Linked Lender’s Credit-Linked Commitment and (ii) with regard to
the Credit-Linked Lenders collectively, the sum of the aggregate principal amount of the
outstanding Term Loans plus outstanding Credit-Linked LOC Obligations shall not at
any time exceed the Credit-Linked Committed Amount then in effect. Upon receipt by the
Administrative Agent of the proceeds of the Term Loan made on the Third Amendment Effective
Date, $19,752,000 of such proceeds will be deposited into the Support Account and the
remainder of such proceeds will then be made available to the Borrower by the Administrative
Agent by crediting the account of the Borrower on the books of the office of the
Administrative Agent specified in Section 9.2, or at such other office as the Administrative
Agent may designate in writing, with the aggregate of such proceeds made available to the
Administrative Agent by the Credit-Linked Lenders and in like funds as received by the
Administrative Agent (or by crediting such other account(s) as directed by the Borrower).
Each Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a
combination thereof, as the Borrower may request. Amounts repaid or prepaid on any Term
Loan may not be reborrowed. LIBOR Rate Loans shall be made by each Credit-Linked Lender at
its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

     (b) Repayment of Term Loans. The principal amount of the Term Loans shall be
repaid in eighteen (18) consecutive calendar quarterly installments as follows, unless
accelerated sooner pursuant to Section 7.2:

	 	 	 	 	 	 	 	 
	 	Principal Amortization Payment Dates

	 	 	Term Loan Principal Amortization Payment
	 
	 	August 31, 2006

	 	 	$	386,250	 	 
	 

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	 	November 30, 2006

	 	 	$	386,250	 	 
	 	February 28, 2007

	 	 	$	386,250	 	 
	 	May 31, 2007

	 	 	$	386,250	 	 
	 	August 31, 2007

	 	 	$	386,250	 	 
	 	November 30, 2007

	 	 	$	386,250	 	 
	 	February 28, 2008

	 	 	$	386,250	 	 
	 	May 31, 2008

	 	 	$	386,250	 	 
	 	August 31, 2008

	 	 	$	386,250	 	 
	 	November 30, 2008

	 	 	$	386,250	 	 
	 	February 28, 2009

	 	 	$	386,250	 	 
	 	May 31, 2009

	 	 	$	386,250	 	 
	 	August 31, 2009

	 	 	$	386,250	 	 
	 	November 30, 2009

	 	 	$	386,250	 	 
	 	February 28, 2010

	 	 	$	386,250	 	 
	 	May 31, 2010

	 	 	$	386,250	 	 
	 	August 31, 2010

	 	 	$	386,250	 	 
	 	Credit-Linked Maturity Date

	 	 	Remaining principal amount of Term
Loans
	 
	 

     The outstanding principal amount of the Term Loans and all accrued but unpaid interest
and other amounts payable with respect to the Term Loans shall be repaid on the
Credit-Linked Maturity Date.

     1.7  Amendment to Section 2.5. Sections 2.5(a) and 2.5(c) are hereby amended and
restated in their entireties to read as follows:

Section 2.5  Credit-Linked Facility — Letter of Credit Subfacility.

     (a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Credit-Linked Issuing Lender
may reasonably require, during the Credit-Linked Commitment Period the Credit-Linked Issuing
Lender shall issue, and the Credit-Linked Lenders shall participate in, standby
Credit-Linked Letters of Credit for the account of the Borrower from time to time upon
request in a form acceptable to the Credit-Linked Issuing Lender; provided,
however, that (i) the aggregate amount of Credit-Linked LOC Obligations shall not at
any time exceed the lesser of (A) EIGHTY MILLION DOLLARS ($80,000,000) (as reduced from time
to time in accordance with the terms of Section 2.5(d)(ii) or Section 2.8(a), the
“Credit-Linked LOC Committed Amount”) and (B) the principal amount of the
Credit-Linked Deposit, (ii) with regard to each Credit-Linked Lender individually, (A) the
sum of such Credit-Linked Lender’s Credit-Linked Commitment Percentage of the outstanding
Credit-Linked LOC Obligations shall not exceed such Credit-Linked Lender’s Credit-Linked
Deposit and (B) the sum of such Credit-Linked Lender’s Credit-Linked Commitment Percentage
of the aggregate principal amount of the outstanding Term Loans plus outstanding
Credit-Linked LOC Obligations shall not at any time exceed such Credit-Linked Lender’s
Credit-Linked Commitment, (iii) with regard to the Credit-Linked Lenders collectively, the
sum of the aggregate principal amount of

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outstanding Term Loans plus outstanding Credit-Linked LOC Obligations shall not at
any time exceed the Credit-Linked Committed Amount then in effect, (iv) no Credit-Linked
Letter of Credit may be issued without the Administrative Agent confirming in writing to any
Credit-Linked Issuing Lender (other than the Administrative Agent in its capacity as a
Credit-Linked Issuing Lender) that, after giving effect to the issuance of such
Credit-Linked Letter of Credit, the requirement set forth in clause (iii) above shall be
satisfied, (v) all Credit-Linked Letters of Credit shall be denominated in Dollars and (vi)
Credit-Linked Letters of Credit shall be issued for any lawful corporate purposes, including
in connection with workers’ compensation and other insurance programs. Except as otherwise
expressly agreed upon by all the Credit-Linked Lenders, no Credit-Linked Letter of Credit
shall have an original expiry date more than twelve (12) months from the date of issuance;
provided, however, the expiry dates of Credit-Linked Letters of Credit may
be extended annually or periodically from time to time at the request of the Borrower or by
operation of the terms of the applicable Letter of Credit to a date not more than twelve
(12) months from the date of extension; provided, further, that (x) no
Credit-Linked Letter of Credit, as originally issued or as extended, shall have an expiry
date extending beyond the date that is ten (10) days prior to the Credit-Linked Maturity
Date and (y) if an Event of Default exists at the time such Credit-Linked Letter of Credit
is to be extended, the Credit-Linked Issuing Lender may or, at the direction of
Credit-Linked Lenders holding more than 50% of the Credit-Linked Commitments, the
Credit-Linked Issuing Lender shall refuse to extend such Credit-Linked Letter of Credit, in
which case such Credit-Linked Letter of Credit shall terminate at the end of the current
term thereof. Each Credit-Linked Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry date of each Credit-Linked Letter of Credit shall be a
Business Day. Any Credit-Linked Letters of Credit issued hereunder shall be in a minimum
original face amount of $100,000 or such lesser amount as approved by the Credit-Linked
Issuing Lender.

********************

     (c) Participations. Each Credit-Linked Lender, upon issuance of any
Credit-Linked Letter of Credit (or upon a Person becoming a Credit-Linked Lender hereunder)
and, in the case of each Existing Letter of Credit, on the Third Amendment Effective Date,
shall be deemed to have irrevocably purchased, without recourse to the Credit-Linked Issuing
Lender, and the Credit-Linked Issuing Lender shall be deemed to have irrevocably granted
without recourse to the Credit-Linked Issuing Lender, a risk participation (a
“Credit-Linked Participation”) from the Credit-Linked Issuing Lender in such
Credit-Linked Letter of Credit and the obligations arising thereunder and any collateral
relating thereto, in each case in an amount equal to its Credit-Linked Commitment Percentage
of the maximum amounts available to be drawn under such Credit-Linked Letter of Credit and
shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Credit-Linked Issuing Lender therefor and discharge
when due, its Credit-Linked Commitment Percentage of the obligations arising under such
Credit-Linked Letter of Credit. Without limiting the scope and nature of each Credit-Linked
Lender’s participation in any Credit-Linked Letter of Credit, to the extent that the
Credit-Linked Issuing Lender has not been

6

 

reimbursed as required hereunder or under any LOC Document, each such Credit-Linked Lender
shall fund its Credit-Linked Participation Interest therein by paying to the Credit-Linked
Issuing Lender, from funds deposited by such Credit-Linked Lender into the Credit-Linked
Deposit, its Credit-Linked Commitment Percentage of such unreimbursed drawing in same day
funds on the day of notification by the Credit-Linked Issuing Lender of an unreimbursed
drawing pursuant to and in accordance with the provisions of subsection (d) hereof. The
obligation of each Credit-Linked Lender to so pay the Credit-Linked Issuing Lender shall be
absolute and unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event.

     1.8  Amendment to Section 2.6. Section 2.6(a) is hereby amended and restated in its
entirety to read as follows:

     Section 2.6  Credit-Linked Deposits.

     (a) Funding of Credit-Linked Deposits. Subject to the terms and conditions set
forth herein and in consideration of each Credit-Linked Lender’s Credit-Linked
Participation, each Credit-Linked Lender severally agrees to fund such Lender’s
Credit-Linked Deposit to the Administrative Agent in Dollars on the Third Amendment
Effective Date in an amount equal to its Credit-Linked Commitment for deposit by the
Administrative Agent in the Credit-Linked Account. Each Credit-Linked Lender’s
Credit-Linked Deposit represents such Lender’s funded Credit-Linked Participation.

     1.9  Amendment to Section 2.9. Section 2.9(b)(v) is hereby amended and restated in its
entirety to read as follows:

     (v) Issuances of Equity/Support Account.

     (A) Promptly, upon receipt by any Credit Party or any of its Subsidiaries of proceeds
from any Equity Issuance, the Borrower shall prepay the Loans in an aggregate amount equal
to 50% of the Net Cash Proceeds of such Equity Issuance (such prepayment to be applied as
set forth in clause (viii) below).

     (B) Promptly, to the extent the 2007 Convertible Notes are converted into Capital Stock
of the Borrower upon maturity or otherwise, the Borrower shall prepay the Loans in an
aggregate amount equal to 100% of the amount held in the Support Account corresponding to
the converted amount of the 2007 Convertible Notes (such prepayment to be applied as set
forth in clause (viii) below); provided that no prepayment shall be required under
this clause (B) until the converted amount of the 2007 Convertible Notes equals or exceeds
$1,000,000 and thereafter no prepayment shall be required under this clause (B) except in
increments of $1,000,000.

     1.10  Amendment to Section 2.22. A new Section 2.22 is hereby added to the Credit
Agreement to read as follows:

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     Section 2.22  Incremental Credit-Linked Letter of Credit Subfacility.

     Subject to the terms and conditions set forth herein, the Borrower shall have the
right, on a one-time basis on or prior to the date that is one year prior to the
Credit-Linked Maturity Date, to incur additional Indebtedness under this Credit Agreement in
the form of an increase to the Credit-Linked LOC Committed Amount (the “Incremental
Credit-Linked LOC Subfacility”) by the amount of $20,000,000. The Incremental
Credit-Linked LOC Subfacility shall have the same terms (including interest rate and
maturity date) as the existing Credit-Linked Letters of Credit and shall be otherwise
acceptable to the Administrative Agent. The Incremental Credit-Linked LOC Subfacility will
be subject to customary closing conditions and documentation reasonably requested by the
Administrative Agent. The Administrative Agent is authorized to enter into, on behalf of
the Lenders, any amendment to this Credit Agreement or any other Credit Document as may be
necessary to incorporate the terms of the Incremental Credit-Linked LOC Subfacility therein.

     1.11  Amendments to Section 3.11. Section 3.11 is hereby amended and restated in its
entirety to read as follows:

     Section 3.11  Use of Proceeds.

     The proceeds of the Extensions of Credit will be used (i) to refinance certain existing
Indebtedness of the Borrower, (ii) to pay any fees and expenses associated with this Credit
Agreement and other financings of the Borrower on the Third Amendment Effective Date, (iii)
to fund the Support Account, (iv) to finance Permitted Acquisitions and (v) for working
capital and other general corporate purposes of the Borrower and its Subsidiaries.

     1.12  Amendment to Section 5.9(a). Section 5.9(a) is hereby amended and restated in
its entirety to read as follows:

     (a) Leverage Ratio. At all times, the Leverage Ratio during the following
periods shall be less than or equal to:

	 	 	 	 	 	 
	 
	 	Period	 	 	Maximum Ratio	 
	 	Closing Date through May 31, 2005

	 	 	8.25 to 1.0	 
	 	June 1, 2005 through November 30, 2005

	 	 	7.50 to 1.0	 
	 	December 1, 2005 through May 31, 2006

	 	 	8.00 to 1.0	 
	 	June 1, 2006 through August 31, 2006

	 	 	8.25 to 1.0	 
	 	September 1, 2006 through February 28, 2007

	 	 	8.50 to 1.0	 
	 	March 1, 2007 through May 31, 2007

	 	 	8.00 to 1.0	 
	 	June 1, 2007 through August 31, 2007

	 	 	7.50 to 1.0	 
	 	September 1, 2007 through November 30, 2007

	 	 	7.00 to 1.0	 
	 	December 1, 2007 and thereafter

	 	 	5.50 to 1.0	 
	 

8

 

     1.13  Amendment to Section 6.4(a). Section 6.4(a) is hereby amended by adding a
subsection (xiv) thereto to read as follows:

     (xiv) the sale of any promissory note received in connection with a loan made by a
Credit Party pursuant to clause (m) of the definition of Permitted Investments;
provided that 100% of the consideration (which consideration may be less than the
aggregate outstanding principal amount of such promissory note) received from such sale
shall be in the form of cash and Cash Equivalents;

     1.14  Amendment to Section 9.6(c)(iii). Section 9.6(c)(iii) is hereby amended and
restated in its entirety to read as follows:

     (iii) $3,000,000 in the case of an assignment of any Credit-Linked LOC Commitment and
corresponding Credit-Linked Deposit (or, if less, the entire amount of such Lender’s
Credit-Linked LOC Commitment and corresponding Credit-Linked Deposit), pursuant to a
Commitment Transfer Supplement executed by such Purchasing Lender, such transferor Lender
and, to the extent required by this Section 9.6, the Administrative Agent and the Borrower),
and delivered to the Administrative Agent for its acceptance and recording in the Register;

     1.15  Amendment to Schedules. Schedule 1.1(e) of the Credit Agreement is hereby
amended and restated in its entirety to read as Schedule 1.1(e) attached hereto as Exhibit
A.

SECTION 2

CONDITIONS TO EFFECTIVENESS

     2.1  Conditions to Effectiveness. This Amendment shall be and become effective as of
the date first above written upon satisfaction of the following conditions (in form and substance
reasonably acceptable to the Administrative Agent) prior to the Amendment or simultaneously
therewith:

     (a) Executed Amendment. Receipt by the Administrative Agent of a copy of this
Amendment duly executed by each of the Credit Parties and the Administrative Agent, on
behalf of the Required Lenders and any Lender with a new or additional Credit-Linked
Commitment.

     (b) Executed Consents. Receipt by the Administrative Agent of (i) executed
consents from the Required Lenders and any Lender with a new or additional Credit-Linked
Commitment (each a “Lender Consent”) authorizing the Administrative Agent to enter
into this Amendment on their behalf and (ii) an executed consent from the requisite holders
of the 2013 Senior Subordinated Notes to incur the additional indebtedness under the
Credit-Linked Facility.

     (c) Authority Documents. The Administrative Agent shall have received the
following:

9

 

        (i) Articles of Incorporation; Partnership Agreement. Copies of the
articles of incorporation, partnership agreement or other charter documents of each
Credit Party certified to be true and complete as of a recent date by the
appropriate governmental authority of the state of its organization or formation.

        (ii) Resolutions. Copies of resolutions of the board of directors of
each Credit Party approving and adopting the Amendment and authorizing execution and
delivery thereof, certified by an officer of such Credit Party as of the Third
Amendment Effective Date to be true and correct and in force and effect as of such
date.

        (iii) Bylaws. A copy of the bylaws or other operating agreement of
each Credit Party certified by an officer of such Credit Party as of the Third
Amendment Effective Date to be true and correct and in force and effect as of such
date.

        (iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to the each Credit Party certified as of a
recent date by the appropriate governmental authorities of the state of
incorporation and each other state in which the failure of such Credit Party to be
qualified to do business could reasonably be expected to have a Material Adverse
Effect and (ii) to the extent readily available, a certificate indicating payment of
all corporate and other franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.

        (v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and correct as of the
Third Amendment Effective Date.

     (d) Legal Opinions of Counsel. The Administrative Agent shall have received an
opinion or opinions of counsel for the Credit Parties, dated as of the Third Amendment
Effective Date and addressed to the Administrative Agent and the Lenders, in form and
substance acceptable to the Administrative Agent.

     (e) Existing Mortgage Collateral. The Administrative Agent shall have
received, in form and substance satisfactory to the Administrative Agent:

        (i) fully executed and notarized amendments to Mortgage Instruments encumbering
the Mortgaged Properties with respect to each of the Mortgaged Properties;

        (ii) appropriate endorsements to the Mortgage Policies with respect to each of
the Mortgaged Properties; and

10

 

        (iii) an opinion of counsel to the Credit Parties for each jurisdiction in
which the Mortgaged Properties are located.

     (f) Financial Condition Certificate. The Administrative Agent shall have
received a certificate or certificates executed by a Responsible Officer of the Borrower as
of the Third Amendment Effective Date stating that (i) no action, suit, investigation,
injunction, order, claim or proceeding is pending, ongoing or, to the knowledge of any
Credit Party, threatened in any court or before any other Governmental Authority that
purports to affect any Credit Party or any transaction contemplated by the Credit Documents,
which action, suit, investigation, injunction, order, claim or proceeding could reasonably
be expected to have a Material Adverse Effect and (ii) immediately after giving effect to
this Amendment and all the transactions contemplated to occur on this date, (A) no Default
or Event of Default exists, (B) all representations and warranties contained herein and in
the other Credit Documents (i) that contain a materiality qualification shall be true and
correct and (ii) that do not contain a materiality qualification shall be true and correct
in all material respects, except, in each case, to the extent specifically made with regard
to a particular date in which case such representations and warranties shall be true and
correct as of such date, and (C) the Credit Parties are in pro forma projected compliance
with each of the financial covenants set forth in Section 5.9 (as amended hereby) for the
fiscal quarter ending August 31, 2006.

     (g) Support Account. The Administrative Agent or such other Lender designated
by the Borrower shall have received proceeds from the Term Loan in an amount of not less
than $19,752,000 to fund the Support Account.

     (h) Repayment of Term Loans. The aggregate principal amount of the Term Loans
outstanding immediately prior to the Third Amendment Effective Date shall be repaid in full
on the Third Amendment Effective Date prior to or simultaneously with the closing of this
Amendment.

     (i) Refunding of Credit-Linked Participations. The aggregate principal amount
of the funded Credit-Linked Participations outstanding immediately prior to the Third
Amendment Effective Date shall be refunded in full to the Credit-Linked Lenders on the Third
Amendment Effective Date prior to or simultaneously with the closing of this Amendment.

     (j) Consent Solicitation. The Borrower shall have received consent from the
requisite holders of the 2013 Senior Subordinated Notes to incur the Indebtedness pursuant
to this Amendment.

     (k) Fees and Expenses. The Borrower shall have paid in full (i) all fees set
forth in that certain Engagement Letter dated June 6, 2006 and (ii) all reasonable
out-of-pocket fees and expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment, including without limitation, the
reasonable fees and expenses of Moore & Van Allen PLLC.

11

 

     (l) Miscellaneous. All other documents and legal matters in connection with
the transactions contemplated by this Amendment shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel.

SECTION 3

MISCELLANEOUS

     3.1  Representations and Warranties. Each of the Credit Parties represents and
warrants as follows as of the date hereof, after giving effect to this Amendment:

     (a) It has taken all necessary action to authorize the execution, delivery and
performance of this Amendment.

     (b) This Amendment has been duly executed and delivered by such Person and constitutes
such Person’s valid and legally binding obligations, enforceable in accordance with its
terms, except as such enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors’ rights generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in equity).

     (c) No consent, approval, authorization or order of, or filing, registration or
qualification with, any Governmental Authority or third party is required in connection with
the execution, delivery or performance by such Person of this Amendment.

     (d) The representations and warranties set forth in Article III of the Credit Amendment
(as amended by this Amendment) are true and correct as of the date hereof (except for those
which expressly relate to an earlier date).

     (e) After giving effect to this Amendment, no event has occurred and is continuing
which constitutes a Default or an Event of Default.

     (f) The Security Documents continue to create a valid security interest in, and Lien
upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders,
which security interests and Liens are perfected in accordance with the terms of the
Security Documents and prior to all Liens other than Permitted Liens.

     (g) The Credit Party Obligations are not reduced or modified by this Amendment and are
not subject to any offsets, defenses or counterclaims.

     3.2  Instrument Pursuant to Credit Agreement. This Amendment is a Credit Document
executed pursuant to the Credit Agreement and shall be construed, administered and applied in
accordance with the terms and provisions of the Credit Agreement.

     3.3  Reaffirmation of Credit Party Obligations. Each Credit Party hereby ratifies the
Credit Agreement and acknowledges and reaffirms (a) that it is bound by all terms of the

12

 

Credit Agreement applicable to it and (b) that it is responsible for the observance and full
performance of its respective Credit Party Obligations.

     3.4  Survival. Except as expressly modified and amended in this Amendment, all of the
terms and provisions and conditions of each of the Credit Documents shall remain unchanged.

     3.5  Expenses. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery of this Amendment,
including without limitation the reasonable expenses of the Administrative Agent’s legal counsel.

     3.6  Further Assurances. The Credit Parties agree to promptly take such action, upon
the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.

     3.7  Entirety. This Amendment and the other Credit Documents embody the entire
agreement among the parties hereto and supersede all prior agreements and understandings, oral or
written, if any, relating to the subject matter hereof.

     3.8  Counterparts. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which shall constitute one
and the same instrument. Delivery of executed counterparts of this Amendment by telecopy or other
electronic means shall be effective as an original and shall constitute a representation that an
original shall be delivered.

     3.9  No Actions, Claims, Etc. As of the date hereof, each of the Credit Parties hereby
acknowledges and confirms that it has no knowledge of any actions, causes of action, claims,
demands, damages and liabilities of whatever kind or nature, in law or in equity, against the
Administrative Agent, the Lenders, or the Administrative Agent’s or the Lenders’ respective
officers, employees, representatives, agents, counsel or directors arising from any action by such
Persons, or failure of such Persons to act under this Credit Agreement on or prior to the date
hereof.

     3.10  Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW).

     3.11  Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of the Credit Parties, the Administrative Agent, the Lenders and their respective
successors and assigns.

     3.12  General Release. In consideration of the Administrative Agent entering into this
Amendment, each Credit Party hereby releases the Administrative Agent, the Lenders, and the
Administrative Agent’s and the Lenders’ respective officers, employees, representatives, agents,

13

 

counsel and directors from any and all actions, causes of action, claims, demands, damages and
liabilities of whatever kind or nature, in law or in equity, now known or unknown, suspected or
unsuspected to the extent that any of the foregoing arises from any action or failure to act under
the Credit Agreement on or prior to the date hereof, except, with respect to any such person being
released hereby, any actions, causes of action, claims, demands, damages and liabilities arising
out of such person’s gross negligence, bad faith or willful misconduct.

     3.13  Waiver of Jurisdiction; Service of Process; Waiver of Jury Trial. The
jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 9.13 and
9.16 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

[Signature Pages Follow]

14

 

GENCORP INC.

THIRD AMENDMENT TO CREDIT AGREEMENT

     The parties hereto have duly executed this Amendment as of the date first above
written.

	 	 	 	 	 
	BORROWER: 	GENCORP INC.,

an Ohio corporation

 	 
	 	By:  	/s/ Yasmin R. Seyal
 	 
	 	 	Name:  	Yasmin R. Seyal 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	GUARANTORS: 	AEROJET-GENERAL CORPORATION,

an Ohio corporation

 	 
	 	By:  	
/s/ Mark A. Whitney
 	 
	 	 	Name:  	Mark A. Whitney 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	AEROJET ORDNANCE TENNESSEE, INC.,

a Tennessee corporation

 	 
	 	By:  	/s/ Brian E. Sweeney
 	 
	 	 	Name:  	Brian E. Sweeney 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 

GENCORP INC.

THIRD AMENDMENT TO CREDIT AGREEMENT

	 	 	 	 	 
	ADMINISTRATIVE AGENT: 	WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent on behalf of the Lenders

 	 
	 	By:  	/s/ William F. Fox
 	 
	 	 	Name:  	William F. Fox 	 
	 	 	Title:  	Director 	 
	 

 

 

EXHIBIT A

Schedule 1.1(e)

EXISTING LETTERS OF CREDIT

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