Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - GRAHAM CORP | l41251exv99w2.htm |
| EX-99.1 - EX-99.1 - GRAHAM CORP | l41251exv99w1.htm |
United States
Securities and Exchange Commission
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Section 13 or 15(d) of the Securities Exchange Act of 1934
December 3, 2010
(Date of Report)
(Date of Report)
GRAHAM CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware (State of incorporation) |
1-8462 (Commission File Number) |
16-1194720 (IRS Employer Identification No.) |
| 20 Florence Avenue, Batavia, New York (Address of principal executive offices) |
14020 (Zip Code) |
(585) 343-2216
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation
of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On December 3, 2010 Graham Corporation (the “Company”) entered into a Loan Agreement (the “New
Loan Agreement”) with Bank of America, N.A. (the “Bank”). The New Loan Agreement provides the
Company with a $25,000,000 revolving credit facility, expandable at the Company’s option at any
time to up to $50,000,000. The New Loan Agreement does not provide for
any sublimits on either the issuance of letters of credit or bank guarantees by the Company or its
subsidiaries. The New Loan Agreement has a three year term, with two automatic one year extensions.
The Company entered into the New Loan Agreement in order to support its anticipated working capital
and letter of credit requirements as well as its strategic growth objectives.
At the Company’s option, amounts outstanding under the New Loan Agreement will bear interest
at either (i) a rate equal to the Bank’s Prime Rate (as defined in the New Loan Agreement); or (ii)
a rate equal to LIBOR plus a margin. The margin will be based upon the Company’s Funded Debt to
EBITDA, each as defined in the New Loan Agreement, and may range from 2.00% to 1.00%. Amounts
available for borrowing under the New Loan Agreement are subject to an unused commitment fee of
between 0.375% to 0.200%, depending on the above ratio. Interest payments under the New Loan
Agreement are due monthly, with the principal balance due upon maturity.
The New Loan Agreement replaces in its entirety that certain Loan Agreement dated December 5,
2007 with the Bank (the “Prior Facility”), as amended. Letters of credit and bank guarantees
outstanding under the Prior Facility in the aggregate amount of $15,078,758.50 as of the date of
this Current Report on Form 8-K have been transferred by the Bank to the New Loan Agreement. The
Company did not have any amounts outstanding under the Prior Facility as of the date of this
Current Report on Form 8-K.
Under the New Loan Agreement, the Company covenants to maintain a maximum Funded Debt to
EBITDA Ratio (as defined in the New Loan Agreement) of 3.5 to 1 and a Minimum EBIT to Interest
Ratio (as defined in the New Loan Agreement) of 4.0 to 1. The New Loan Agreement also provides that
the Company is permitted to pay dividends without limitation if it maintains a Maximum Funded Debt
to EBITDA Ratio (as defined in the New Loan Agreement) equal to or less than 2.0 to 1 and permits
the Company to pay dividends in an amount equal to 25% of net income if it maintains a Maximum
Funded Debt to EBITDA Ratio (as defined in the New Loan Agreement) of greater than 2.0 to 1. In
addition, the New Loan Agreement contains such representations, warranties, covenants, terms and
conditions as are customary to similar agreements.
The Company has granted the Bank a security interest in all the Company’s tangible and
intangible property and has also agreed to pledge to the Bank the Company’s equity interest in its
subsidiaries. The New Loan Agreement also requires the Company’s subsidiaries to act as guarantors
of amounts outstanding under the New Loan Agreement.
A copy of the New Loan Agreement is attached to this Current Report on Form 8-K as Exhibit
99.1. A copy of the Trademark Security Agreement Amendment 1 between the Company
and the Bank, which was entered into in connection with the New Loan Agreement in order to
provide the Bank with a security interest in all of the Company’s trademarks, is attached to this
Current Report on Form 8-K as Exhibit 99.2. The above summary of the terms of the New Loan
Agreement and Trademark Security Agreement Amendment 1 are qualified in their entirety by reference
to the actual text of such agreements, which are incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
The disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated into
this Item 1.02 by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated into
this Item 2.03 by reference.
Item 9.01 Financial Statements and Exhibits.
| Exhibit | Description | |
99.1
|
Loan Agreement between Graham Corporation and Bank of America, N.A., dated as of December 3, 2010. | |
99.2
|
Trademark Security Agreement Amendment 1 between Graham Corporation and Bank of America, N.A., dated as of December 3, 2010. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: December 6, 2010 | GRAHAM CORPORATION |
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| /s/ Jeffrey Glajch | ||||
| Jeffrey Glajch | ||||
| Vice President — Finance & Administration and Chief Financial Officer |
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