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LOAN AND SECURITY AGREEMENT
Dated as of May 25, 1999
Among
American Aircarriers Support,
Incorporated
and
CERTAIN SUBSIDIARIES NAMED HEREIN
(collectively, the Borrowers)
and
THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME
(the Lenders)
and
NATIONSBANK, N.A.
(the Agent)
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TABLE OF CONTENTS(1)
Page
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ARTICLE 1.........................................................................................................1
DEFINITIONS.......................................................................................................1
SECTION 1.1. DEFINITIONS......................................................................................1
SECTION 1.2. GENERAL.........................................................................................33
ARTICLE 2........................................................................................................34
THE FACILITIES...................................................................................................34
SECTION 2A. REVOLVING CREDIT LOAN FACILITY......................................................................34
SECTION 2A.1. REVOLVING CREDIT LOANS.........................................................................34
SECTION 2A.2. MANNER OF BORROWING REVOLVING CREDIT LOANS.....................................................34
SECTION 2A.3. REPAYMENT OF REVOLVING CREDIT LOANS............................................................36
SECTION 2A.4. REVOLVING CREDIT NOTES.........................................................................37
SECTION 2A.5. EXTENSION OF REVOLVING CREDIT FACILITY.........................................................37
SECTION 2B. CAPITAL EXPENDITURE LOAN FACILITY...................................................................37
SECTION 2B.1. CAPITAL EXPENDITURE LOANS......................................................................37
SECTION 2B.2. MANNER OF BORROWING CAPITAL EXPENDITURE LOANS..................................................38
SECTION 2B.3. REPAYMENT OF CAPITAL EXPENDITURE LOANS.........................................................38
SECTION 2B.4. CAPITAL EXPENDITURE NOTES......................................................................39
SECTION 2B.5. PREPAYMENT OF CAPITAL EXPENDITURE LOANS........................................................39
ARTICLE 3........................................................................................................40
LETTER OF CREDIT FACILITY........................................................................................40
SECTION 3.1. AGREEMENT TO ISSUE..............................................................................40
SECTION 3.2. AMOUNTS.........................................................................................40
SECTION 3.3. CONDITIONS......................................................................................40
SECTION 3.4. ISSUANCE OF LETTERS OF CREDIT...................................................................40
SECTION 3.5. DUTIES OF NATIONSBANK...........................................................................41
SECTION 3.6. PAYMENT OF REIMBURSEMENT OBLIGATIONS............................................................41
SECTION 3.7. PARTICIPATIONS..................................................................................42
SECTION 3.8. INDEMNIFICATION, EXONERATION....................................................................43
SECTION 3.9. SUPPORTING LETTER OF CREDIT; CASH COLLATERAL....................................................45
ARTICLE 4........................................................................................................45
GENERAL LOAN PROVISIONS..........................................................................................45
SECTION 4.1. INTEREST........................................................................................45
SECTION 4.2. CERTAIN FEES....................................................................................46
SECTION 4.3. MANNER OF PAYMENT...............................................................................48
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1 This Table of Contents is included for reference purposes only and does
not constitute part of the Loan and Security Agreement.
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SECTION 4.4. GENERAL.........................................................................................48
SECTION 4.5. LOAN ACCOUNTS; STATEMENTS OF ACCOUNT............................................................48
SECTION 4.6. TERMINATION OF AGREEMENT........................................................................49
SECTION 4.7. MAKING OF LOANS.................................................................................50
SECTION 4.8. SETTLEMENT AMONG LENDERS........................................................................52
SECTION 4.9. MANDATORY PREPAYMENTS...........................................................................56
SECTION 4.10. PAYMENTS NOT AT END OF INTEREST PERIOD; FAILURE TO BORROW......................................57
SECTION 4.11. ASSUMPTIONS CONCERNING FUNDING OF LIBOR RATE LOANS.............................................57
SECTION 4.12. NOTICE OF CONVERSION OR CONTINUATION...........................................................57
SECTION 4.13. CONVERSION OR CONTINUATION.....................................................................58
SECTION 4.14. DURATION OF INTEREST PERIODS; MAXIMUM NUMBER OF LIBOR RATE LOANS; MINIMUM INCREMENTS...........58
SECTION 4.15. CHANGED CIRCUMSTANCES..........................................................................58
SECTION 4.16. CASH COLLATERAL ACCOUNT........................................................................60
SECTION 4.17. BORROWERS' REPRESENTATIVE......................................................................61
SECTION 4.18. JOINT AND SEVERAL LIABILITY....................................................................61
SECTION 4.19. OBLIGATIONS ABSOLUTE...........................................................................62
SECTION 4.20. WAIVER OF SURETYSHIP DEFENSES..................................................................62
SECTION 4.21. WITHHOLDING TAXES..............................................................................63
ARTICLE 5........................................................................................................63
CONDITIONS PRECEDENT.............................................................................................63
SECTION 5.1. CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT.............................................63
SECTION 5.2. CONDITIONS PRECEDENT TO CAPITAL EXPENDITURE LOANS...............................................67
SECTION 5.3. ALL LOANS; LETTERS OF CREDIT....................................................................67
SECTION 5.4. CONDITIONS AS COVENANTS.........................................................................67
ARTICLE 6........................................................................................................68
REPRESENTATIONS AND WARRANTIES OF BORROWER.......................................................................68
SECTION 6.1. REPRESENTATIONS AND WARRANTIES..................................................................68
SECTION 6.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.................................................78
ARTICLE 7........................................................................................................78
SECURITY INTEREST................................................................................................78
SECTION 7.1. SECURITY INTEREST...............................................................................78
SECTION 7.2. CONTINUED PRIORITY OF SECURITY INTEREST.........................................................79
ARTICLE 8........................................................................................................80
COLLATERAL COVENANTS.............................................................................................80
SECTION 8.1. COLLECTION OF RECEIVABLES.......................................................................80
SECTION 8.2. VERIFICATION AND NOTIFICATION...................................................................81
SECTION 8.3. DISPUTES, RETURNS AND ADJUSTMENTS...............................................................82
SECTION 8.4. INVOICES AND LEASE AGREEMENTS...................................................................82
SECTION 8.5. DELIVERY OF INSTRUMENTS, CHATTEL PAPER AND MORTGAGE SUPPLEMENTS.................................83
SECTION 8.6. SALES AND LEASES OF INVENTORY...................................................................83
SECTION 8.7. OWNERSHIP AND DEFENSE OF TITLE..................................................................83
SECTION 8.8. INSURANCE.......................................................................................83
SECTION 8.9. LOCATION OF OFFICES AND COLLATERAL..............................................................84
SECTION 8.10. RECORDS RELATING TO COLLATERAL.................................................................85
SECTION 8.11. INSPECTION.....................................................................................85
SECTION 8.12. INFORMATION AND REPORTS........................................................................85
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SECTION 8.13. POWER OF ATTORNEY..............................................................................87
SECTION 8.14. ADDITIONAL REAL ESTATE AND LEASES..............................................................88
SECTION 8.15. ASSIGNMENT OF CLAIMS ACT.......................................................................88
ARTICLE 9........................................................................................................88
AFFIRMATIVE COVENANTS............................................................................................88
SECTION 9.1. PRESERVATION OF CORPORATE EXISTENCE AND SIMILAR MATTERS.........................................88
SECTION 9.2. COMPLIANCE WITH APPLICABLE LAW..................................................................89
SECTION 9.3. MAINTENANCE OF PROPERTY.........................................................................89
SECTION 9.4. CONDUCT OF BUSINESS.............................................................................89
SECTION 9.5. INSURANCE.......................................................................................89
SECTION 9.6. PAYMENT OF TAXES AND CLAIMS.....................................................................89
SECTION 9.7. ACCOUNTING METHODS AND FINANCIAL RECORDS........................................................89
SECTION 9.8. USE OF PROCEEDS.................................................................................90
SECTION 9.9. HAZARDOUS WASTE AND SUBSTANCES; ENVIRONMENTAL REQUIREMENTS......................................90
SECTION 9.10. YEAR 2000 COMPLIANCE...........................................................................91
SECTION 9.11. ADDITIONAL BORROWERS...........................................................................91
SECTION 9.12. SUBSIDIARY GUARANTORS..........................................................................91
SECTION 9.13. SYNDICATION....................................................................................92
SECTION 9.14. BULK PURCHASE OF PARTS INVENTORY AND ENGINES...................................................92
SECTION 9.15. FORMATION OF SPECIAL PURPOSE SUBSIDIARIES......................................................92
SECTION 9.16. CONSOLIDATED SUBSIDIARIES......................................................................93
ARTICLE 10.......................................................................................................93
INFORMATION......................................................................................................93
SECTION 10.1. FINANCIAL STATEMENTS...........................................................................93
SECTION 10.2. ACCOUNTANTS' CERTIFICATE.......................................................................94
SECTION 10.3. OFFICER'S CERTIFICATE..........................................................................94
SECTION 10.4. COPIES OF OTHER REPORTS........................................................................94
SECTION 10.5. NOTICE OF LITIGATION AND OTHER MATTERS.........................................................95
SECTION 10.6. ERISA..........................................................................................95
SECTION 10.7. ACCURACY OF INFORMATION........................................................................96
SECTION 10.8. REVISIONS OR UPDATES TO SCHEDULES..............................................................96
SECTION 10.9. SUBORDINATED INDEBTEDNESS CERTIFICATE..........................................................96
SECTION 10.10. FORMATION OF SPECIAL PURPOSE SUBSIDIARY.......................................................96
SECTION 10.11. PERMITTED ACQUISITIONS........................................................................97
ARTICLE 11.......................................................................................................97
NEGATIVE COVENANTS...............................................................................................97
SECTION 11.1. FINANCIAL RATIOS...............................................................................97
SECTION 11.2. INDEBTEDNESS FOR MONEY BORROWED................................................................98
SECTION 11.3. GUARANTIES.....................................................................................98
SECTION 11.4. INVESTMENTS....................................................................................98
SECTION 11.5. CAPITAL EXPENDITURES...........................................................................98
SECTION 11.6. RESTRICTED DIVIDEND PAYMENTS AND PURCHASES, ETC................................................98
SECTION 11.7. MERGER, CONSOLIDATION AND SALE OF ASSETS.......................................................99
SECTION 11.8. TRANSACTIONS WITH AFFILIATES...................................................................99
SECTION 11.9. LIENS..........................................................................................99
SECTION 11.10. CAPITALIZED LEASE OBLIGATIONS.................................................................99
SECTION 11.11. REAL ESTATE LEASES............................................................................99
SECTION 11.12. PLANS.........................................................................................99
SECTION 11.13. [INTENTIONALLY OMITTED].......................................................................99
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SECTION 11.14. AMENDMENTS OF OTHER AGREEMENTS................................................................99
SECTION 11.15. FISCAL YEAR...................................................................................99
SECTION 11.16. INSURANCE; PROHIBITED COUNTRIES...............................................................99
SECTION 11.17. MINIMUM AVAILABILITY.........................................................................100
ARTICLE 12......................................................................................................100
DEFAULT.........................................................................................................100
SECTION 12.1. EVENTS OF DEFAULT.............................................................................100
SECTION 12.2. REMEDIES......................................................................................103
SECTION 12.3. APPLICATION OF PROCEEDS.......................................................................105
SECTION 12.4. POWER OF ATTORNEY.............................................................................105
SECTION 12.5. MISCELLANEOUS PROVISIONS CONCERNING REMEDIES..................................................106
ARTICLE 13......................................................................................................107
ASSIGNMENTS.....................................................................................................107
SECTION 13.1. SUCCESSORS AND ASSIGNS; PARTICIPATIONS........................................................107
SECTION 13.2. REPRESENTATION OF LENDERS.....................................................................110
ARTICLE 14......................................................................................................110
AGENT...........................................................................................................110
SECTION 14.1. APPOINTMENT OF AGENT..........................................................................110
SECTION 14.2. DELEGATION OF DUTIES..........................................................................110
SECTION 14.3. EXCULPATORY PROVISIONS........................................................................111
SECTION 14.4. RELIANCE BY AGENT.............................................................................111
SECTION 14.5. NOTICE OF DEFAULT.............................................................................111
SECTION 14.6. NON-RELIANCE ON AGENT AND OTHER LENDERS.......................................................111
SECTION 14.7. INDEMNIFICATION...............................................................................112
SECTION 14.8. AGENT IN ITS INDIVIDUAL CAPACITY..............................................................112
SECTION 14.9. SUCCESSOR AGENT...............................................................................113
SECTION 14.10. NOTICES FROM AGENT TO LENDERS................................................................113
ARTICLE 15......................................................................................................113
MISCELLANEOUS...................................................................................................113
SECTION 15.1. NOTICES.......................................................................................113
SECTION 15.2. EXPENSES......................................................................................112
SECTION 15.3. STAMP AND OTHER TAXES.........................................................................113
SECTION 15.4. SETOFF........................................................................................113
SECTION 15.5. LITIGATION....................................................................................114
SECTION 15.6. WAIVER OF RIGHTS..............................................................................114
SECTION 15.7. CONSENT TO ADVERTISING AND PUBLICITY..........................................................115
SECTION 15.8. REVERSAL OF PAYMENTS..........................................................................115
SECTION 15.9. INJUNCTIVE RELIEF.............................................................................115
SECTION 15.10. ACCOUNTING MATTERS...........................................................................115
SECTION 15.11. AMENDMENTS...................................................................................116
SECTION 15.12. ASSIGNMENT...................................................................................117
SECTION 15.13. PERFORMANCE OF BORROWERS'DUTIES..............................................................117
SECTION 15.14. INDEMNIFICATION..............................................................................118
SECTION 15.15. ALL POWERS COUPLED WITH INTEREST.............................................................118
SECTION 15.16. SURVIVAL.....................................................................................118
SECTION 15.17. TITLES AND CAPTIONS..........................................................................119
SECTION 15.18. SEVERABILITY OF PROVISIONS...................................................................119
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SECTION 15.19. GOVERNING LAW................................................................................119
SECTION 15.20. COUNTERPARTS.................................................................................119
SECTION 15.21. REPRODUCTION OF DOCUMENTS....................................................................119
SECTION 15.22. TERM OF AGREEMENT............................................................................119
SECTION 15.23. PRO-RATA PARTICIPATION.......................................................................119
SECTION 15.24. FINAL AGREEMENT..............................................................................120
SECTION 15.25. WAIVER OF CONSEQUENTIAL DAMAGES, ETC.........................................................120
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ANNEXES, EXHIBITS AND SCHEDULES
ANNEX I PERFORMANCE PRICING MATRIX
ANNEX II COMMITMENTS
EXHIBIT A-1 FORM OF REVOLVING CREDIT NOTE
EXHIBIT A-2 FORM OF CAPITAL EXPENDITURE NOTE
EXHIBIT B FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C FORM OF OPINION OF COUNSEL FOR BORROWERS
EXHIBIT D FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E FORM OF SETTLEMENT REPORT
EXHIBIT F FORM OF JOINDER AGREEMENT
Schedule 6.1(a) Organization
Schedule 6.1(b) Capitalization
Schedule 6.1(c) Subsidiaries; Ownership of Stock
Schedule 6.1(e) Compliance with Laws
Schedule 6.1(f) Principal Business
Schedule 6.1(g) Governmental Approvals
Schedule 6.1(h) Title to Properties
Schedule 6.1(i) Liens
Schedule 6.1(j) Indebtedness and Guaranties
Schedule 6.1(k) Litigation
Schedule 6.1(l) Tax Matters
Schedule 6.1(p) ERISA
Schedule 6.1(t) Location of Offices and Receivables
Schedule 6.1(u) Location of Inventory
Schedule 6.1(v) Equipment
Schedule 6.1(w) Real Estate
Schedule 6.1(x) Corporate and Fictitious Names
Schedule 6.1(aa) Employee Relations
Schedule 6.1(bb) Proprietary Rights
Schedule 6.1(cc) Trade Names
Schedule 6.1(dd) Bank Accounts
Schedule 9.8 Use of Xxxxxxxx
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LOAN AND SECURITY AGREEMENT
Dated as of May 25, 1999
American Aircarriers Support, Incorporated, a Delaware corporation
("AAS"), AAS ENGINE SERVICES, INC., a Florida corporation, AAS Landing Gear
Services, Inc., a Florida corporation, AAS Complete ControlS, Inc., an Arizona
corporation, and AAS-Amjet, Inc., a Florida corporation (each a "Borrower" and
collectively, the "Borrowers"), the financial institutions party to this
Agreement from time to time (the "Lenders"), and NATIONSBANK, N.A., a national
banking association, as agent for the Lenders (the "Agent"), agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. For the purposes of this Agreement:
"Account Debtor" means a Person who is obligated on a
Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit or
Investment, means the acquiring or acquisition of such Business Unit or
Investment by purchase, exchange, issuance of stock or other securities, or by
merger, reorganization or any other method.
"Affiliate" means, with respect to a Person, (a) any partner,
officer, shareholder (if holding more than 10% of the outstanding shares of
capital stock of such Person), director, employee or managing agent of such
Person, (b) any other Person (other than a Subsidiary) that, (i) directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such given Person, (ii) directly or indirectly
beneficially owns or holds 10% or more of any class of voting stock or
partnership or other voting interest of such Person or any Subsidiary of such
Person, or (iii) 10% or more of the voting stock or partnership or other voting
interest of which is directly or indirectly beneficially owned or held by such
Person or a Subsidiary of such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities or partnership or other voting interest, by contract or otherwise.
"Agency Account" means an account of a Borrower maintained by
it with a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among a
Borrower, the Agent and a Clearing Bank, in form and substance satisfactory to
the Agent, concerning the collection of payments which represent the proceeds of
Receivables or of any other Collateral.
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"Agent" means NationsBank, N.A., a national banking
association, and any successor agent appointed pursuant to Section 14.9 hereof.
"Agent's Office" means the office of the Agent specified in or
determined in accordance with the provisions of Section 15.1.
"Agreement" means and includes this Agreement, including all
Schedules, Exhibits and other attachments hereto, and all amendments,
modifications and supplements hereto and thereto.
"Agreement Date" means the date as of which this Agreement is
dated.
"Applicable Law" means all applicable provisions of
constitutions, statutes, rules, regulations and orders of all governmental
bodies and of all orders and decrees of all courts and arbitrators, including,
without limitation, Environmental Laws.
"Applicable Margin" means, (a) as to Prime Rate Revolving
Credit Loans, 0%, (b) as to Prime Rate Capital Expenditure Loans, 0%, (c) as to
LIBOR Rate Revolving Credit Loans, 2.25%, and (d) as to LIBOR Rate Capital
Expenditure Loans, 2.25%, in each case as adjusted in accordance with the
pricing matrix set forth on Annex I attached hereto based upon the ratio of
Consolidated Funded Indebtedness of the Borrowers and their Consolidated
Subsidiaries as of the date of determination to Consolidated EBITDA of the
Borrowers and their Consolidated Subsidiaries for the immediately preceding four
fiscal quarter period. Adjustments to the Applicable Margin shall be effective
as of (i) the first day of the calendar month after the Agent's receipt of the
Borrowers' audited financial statements as of each fiscal year end in
conformance with Section 10.1(a), together with the accountant's certificate
described in Section 10.2 setting forth the calculations necessary to determine
the ratio referred to above, and (ii) the first day of the calendar month after
the Agent's receipt of the Borrowers' financial statements as of the last day of
each subsequent fiscal quarter in conformance with Section 10.1(b), together
with the officer's certificate described in Section 10.3 setting forth the
calculations necessary to determine the ratio referred to above, with the first
such adjustment taking place on the first day of the calendar month following
the Agent's receipt of the financial information required for the quarter ending
September 30, 1999; provided, however, all Capital Expenditure Loans shall bear
interest at the Applicable Margin for Revolving Credit Loans until May 25, 2000.
Beginning May 26, 2000, the consolidated Capital Expenditure Loans shall bear
interest at the Applicable Margin for Capital Expenditure Loans. In the event
Borrowers fail to timely provide the financial statements and certificates
referred to above, and without prejudice to any additional rights under Article
12, the maximum Applicable Margin shall apply to all LIBOR Rate Loans and Prime
Rate Loans until the first day of the calendar month after the Agent's receipt
of such financial statements and certificates.
"Asset Disposition" means the disposition of any asset of any
Borrower or any of its Subsidiaries, other than sales and leases of Inventory in
the ordinary course of business, sales of Equipment financed with the proceeds
of Capital Expenditure Loans and sales of assets by any Special Purpose
Subsidiary.
"Assignment and Acceptance" means an assignment and acceptance
in the form attached hereto as Exhibit D assigning all or a portion of a
Lender's interests, rights and obligations under this Agreement pursuant to
Section 13.1.
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"Availability" means at any time (a) the Borrowing Base at
such time minus (b) the aggregate principal amount of Revolving Credit Loans
outstanding at such time.
"Banking Relationship" means obligations of any Borrower
relating to or arising out of (a) checking and operating account relationships
between such Borrower and any Lender (or any Affiliate of a Lender) and (b)
Hedge Agreements with any Lender (or any Affiliate of a Lender).
"Based" means, with respect to any Account Debtor, that such
Account Debtor's principal place of business, chief executive office, or
principal operations are located in such geographic location.
"Benefit Plan" means an "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) in respect of
which a Borrower or any Related Company is, or within the immediately preceding
six years was, an "employer" as defined in Section 3(5) of ERISA, including such
plans as may be established after the Agreement Date.
"Borrowing" means a borrowing of Revolving Credit Loans or
Capital Expenditure Loans bearing interest at the same rate, made by all Lenders
on the same date and, in the case of LIBOR Rate Loans, having a single Interest
Period, and the continuation or conversion of an existing Loan or Loans in whole
or in part.
"Borrower" means any of AAS, AAS Engine Services, Inc., AAS
Landing Gear Services, Inc., AAS Complete Controls, Inc. and AAS-Amjet, Inc.,
and each other Subsidiary of AAS, AAS Engine Services, Inc., AAS Landing Gear
Services, Inc., AAS Complete Controls, Inc. and AAS-Amjet, Inc. that becomes a
Borrower pursuant to Section 9.11, and "Borrowers" means all of such entities
collectively.
"Borrowing Base" means at any time an amount equal to the
lesser of:
(a) the Revolving Credit Facility minus the sum of
(i) the Letter of Credit Reserve, plus
(ii) such other reserves as the Agent in its
reasonable judgment may establish from time to time in
accordance with customary asset-based lending practices, and
(b) an amount equal to
(i) 80% of the face value of the Eligible Domestic
Receivables due and owing to the Borrowers at such time, plus
(ii) the lesser of
(A) 75% of the face value of the Eligible
Foreign Receivables due and owing to the Borrowers at such
time, and
(B) $5,000,000;
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provided, however, the amount available under clause (b)(ii)
shall in no event exceed 50% of the total amount under clause
(b) above, plus
(iii) 60% of the Orderly Liquidation Value of the
Eligible Parts Inventory of the Borrowers at such time, plus
(iv) 75% of the Orderly Liquidation Value of the
Eligible Inventoried Engine Inventory of the Borrowers at such
time, plus
(v) 75% of the Orderly Liquidation Value of Eligible
Domestic Leased Engine Inventory of the Borrowers at such
time, provided that the Orderly Liquidation Value of any item
of Eligible Domestic Leased Engine Inventory included in the
Borrowing Base shall be limited to the Lease Present Value of
the Lease Agreement to which such Inventory is subject, plus
(vi) the lesser of
(A) 75% of the Orderly Liquidation Value of
Eligible Foreign Leased Engine Inventory of the Borrowers at
such time, provided that the Orderly Liquidation Value of any
item of Eligible Foreign Leased Engine Inventory included in
the Borrowing Base shall be limited to the Lease Present Value
of the Lease Agreement to which such Inventory is subject, and
(B) $5,000,000;
provided, however, in any event, the dollar amount included in
the Borrowing Base under clauses (v) and (vi) above shall at
no time exceed in the aggregate $25,000,000 minus all Special
Purpose Subsidiary Indebtedness outstanding at such time,
minus
(vii) the sum of
(A) the Letter of Credit Reserve, plus
(B) such other reserves as the Agent in its
reasonable judgment may establish from time to time
in accordance with customary asset-based lending
practices.
The Borrowing Base shall be adjusted upon the sale of (i) any
Eligible Parts Inventory (if the net book value of the Parts
Inventory sold exceeds $250,000 per transaction), and (ii) any
Eligible Engine Inventory, by removing the net book value of
the Parts Inventory from the Borrowing Base and removing the
Orderly Liquidation Value of the Engine Inventory from the
Borrowing Base at the earlier to occur of (i) the time the
Agent delivers to the Borrowers the instrument releasing such
Inventory from the Security Interest, or (ii) the time the
Borrowers transfer title to such item of Inventory. The
Borrowers shall deliver to the Agent a revised Borrowing Base
Certificate within 5 Business Days of the earlier to occur of
(i) or (ii), above.
Notwithstanding the fact that an Orderly Liquidation Value
appraisal for such Inventory has not yet been completed and
received by the Agent in accordance with Section
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8.12(f), upon the Borrowers' request and, with respect to Bulk
Purchases, at the discretion of the Agent, and provided all
other conditions to eligibility have been met, the Borrowing
Base shall be adjusted following the acquisition by any
Borrower of Engine Inventory or Parts Inventory (if such
acquisition was in connection with a Bulk Purchase) in
connection with (i) the purchase of such Inventory in the
ordinary course of business, (ii) a Permitted Acquisition, or
(iii) an Acquisition expressly permitted by the Required
Lenders. The Borrowers shall provide the Agent with such
information regarding any such Inventory to enable the Agent
to determine whether such Inventory is eligible for inclusion
in the Borrowing Base. Such adjustment to the Borrowing Base
shall be effected by the Borrowers providing to the Agent an
updated Borrowing Base Certificate specifying the Eligible
Parts Inventory and the Eligible Engine Inventory acquired by
the Borrowers pursuant to such Bulk Purchase and including in
the Borrowing Base either (i) 60% of the Borrowers' cost (as
evidenced by the invoice therefor) for such Eligible Parts
Inventory, or (ii) 70% of the Borrowers' cost (as evidenced by
the invoice therefor) for such Eligible Engine Inventory.
In addition, at the Agent's discretion, if an Orderly
Liquidation Value appraisal for such Inventory has been
completed and received by the Agent in accordance with Section
8.12(f), upon the Borrowers' request and provided all
conditions to eligibility have been met, the Borrowing Base
shall be adjusted to reflect intra-month acquisitions of
Eligible Parts Inventory and Eligible Engine Inventory
acquired in connection with Bulk Purchases. Such adjustment to
the Borrowing Base shall be effected by the Borrowers
providing to the Agent an updated Borrowing Base Certificate
specifying the Eligible Parts Inventory and the Eligible
Engine Inventory acquired by the Borrowers pursuant to such
Bulk Purchase. The Borrowing Base shall also be adjusted on a
monthly basis, based on the Orderly Liquidation Value
appraisals delivered under Section 8.12(f). Notwithstanding
anything to the contrary contained herein, Inventory acquired
in connection with a Bulk Purchase shall be eligible for
inclusion in the Borrowing Base (subject to the conditions set
forth in this paragraph and in the preceding paragraph) only
at the Agent's discretion, for all Bulk Purchases with
purchase prices of not more than $4,000,000 per Bulk Purchase,
and only with the consent of the Required Lenders, for all
Bulk Purchases with purchase prices of $4,000,000 or greater
per Bulk Purchase.
Notwithstanding the foregoing, no Receivables acquired in
connection with a Permitted Acquisition shall be eligible for
inclusion in the Borrowing Base until such time as a field
examination has been completed by the Agent or its designee
with respect to the Receivables acquired.
Upon the request of the Borrowers, the Lenders will in their
discretion consider including in the Borrowing Base certain
Parts Inventory and aircraft leased by a Borrower to an
Account Debtor. Establishment of advance rates and eligibility
definitions for such leased Collateral, as well as the
decision regarding whether to include such leased Collateral
in the Borrowing Base at all, shall be made by the Lenders in
their discretion. Any Parts Inventory or aircraft leased by a
Borrower to an Account Debtor and determined by the Lenders to
be eligible for inclusion in the Borrowing Base shall
nonetheless be subject to the limit set forth in the proviso
following clause (vi) above.
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"Borrowing Base Certificate" means a certificate in the form
attached hereto as Exhibit B.
"Bulk Purchase" means a purchase of Parts Inventory or Engine
Inventory by a Borrower or by various Borrowers in connection with a single
transaction or a related series of transactions with a purchase price in excess
of $1,000,000.
"Business Day" means (a) any day other than a Saturday, Sunday
or other day on which banks in Atlanta, Georgia or Charlotte, North Carolina are
authorized or required to close and (b) in respect of any determination with
respect to a LIBOR Rate Loan, any day referred to in clause (a) that is also a
day on which tradings are conducted in the London interbank eurodollar market.
"Business Unit" means the assets constituting all or part of
the business, or a division or operating unit thereof, of any Person.
"Capital Expenditure Loan Facility" means the principal amount
of $10,000,000 or such lesser or greater amount as shall be agreed upon from
time to time in writing by the Agent, the Lenders and the Borrowers.
"Capital Expenditure Loans" means loans made to the Borrowers
pursuant to Section 2B.
"Capital Expenditure Note" means each Capital Expenditure Note
made by the Borrowers payable to the order of a Lender evidencing the joint and
several obligation of the Borrowers to pay the aggregate unpaid principal amount
of the Capital Expenditure Loans made to them by such Lender (and any promissory
note or notes that may be issued from time to time in substitution, renewal,
extension, replacement or exchange therefor whether payable to such Lender or to
a different Lender in connection with a Person becoming a Lender after the
Effective Date or otherwise), substantially in the form of Exhibit A-2 hereto,
with all blanks properly completed, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended or
refinanced.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of capital assets
and Equipment (excluding Inventory and excluding expenditures in connection with
Permitted Acquisitions) which are not, in accordance with GAAP, treated as
expense items for such Person in the year made or incurred or as a prepaid
expense applicable to a future year or years.
"Capitalized Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented
by obligations under a Capitalized Lease, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Collateral" means collateral consisting of cash or Cash
Equivalents on which the Agent, for the benefit of the Secured Parties, has a
first priority Lien.
"Cash Collateral Account" means a special interest-bearing
deposit account consisting of cash maintained at the principal office of the
Agent and under the sole dominion and control of the
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Agent, for the benefit of the Lenders, established pursuant to the provisions of
Section 4.16(a) for the purposes set forth therein.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof; (b) commercial paper maturing no more than one year from the date
issued and, at the time of acquisition thereof, having a rating of at least A-1
from Standard & Poor's Corporation or at least P-1 from Xxxxx'x Investors
Service, Inc.; (c) certificates of deposit or bankers' acceptances issued in
Dollar denominations and maturing within one year from the date of issuance
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $100,000,000 and, unless issued by
the Agent or a Lender, not subject to set-off or offset rights in favor of such
bank arising from any banking relationship with such bank; and (d) repurchase
agreements in form and substance and for amounts satisfactory to the Agent.
"Chattel Paper" means all chattel paper as such term is
defined in the Uniform Commercial Code, including, without limitation, the
original of each Lease Agreement.
"Clearing Bank" means NationsBank and any other banking
institution with which an Agency Account has been established pursuant to an
Agency Account Agreement.
"Collateral" means and includes, collectively, all of the
collateral referred to in each of the Security Documents and all of each
Borrower's right, title and interest in and to each of the following, wherever
located and whether now or hereafter existing or now owned or hereafter acquired
or arising:
(a) all Receivables,
(b) all Inventory,
(c) all Equipment,
(d) all Contract Rights,
(e) all General Intangibles,
(f) all Real Estate,
(g) all goods and other property, whether or not delivered,
(i) the sale or lease of which gives or purports to
give rise to any Receivable, including, but not limited to,
all merchandise returned or rejected by or repossessed from
customers, or
(ii) securing any Receivable,
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15
including, without limitation, all rights as an unpaid vendor or lienor
(including, without limitation, stoppage in transit, replevin and
reclamation) with respect to such goods and other property,
(h) all mortgages, deeds to secure debt and deeds of trust on
real or personal property, guaranties, leases, security agreements, and
other agreements and property which secure or relate to any Receivable
or other Collateral, or are acquired for the purpose of securing and
enforcing any item thereof,
(i) all documents of title, policies and certificates of
insurance, securities, chattel paper and other documents and
instruments evidencing or pertaining to any and all items of
Collateral,
(j) all files, correspondence, computer programs, tapes, discs
and related data processing software which contain information
identifying or pertaining to any of the Receivables or any Account
Debtor, or showing the amounts thereof or payments thereon or otherwise
necessary or helpful in the realization thereon or the collection
thereof,
(k) any demand, time, savings, passbook, money market or like
depository account, and all certificates of deposit, maintained with a
bank, savings and loan association, credit union or like organization,
other than an account evidenced by a certificate of deposit that is an
instrument under the UCC,
(l) all certificated and uncertificated securities, all
security entitlements, all securities accounts, all commodity contracts
and all commodity accounts,
(m) (i) any investment account maintained by or on behalf of a
Borrower with the Agent or any Lender or any Affiliate of the Agent or
any Lender, (ii) any agreement governing such account, (iii) all cash,
money, notes, securities, instruments, goods, accounts, documents,
chattel paper, general intangibles and other property now or hereafter
held by the Agent or any Lender or any Affiliate of the Agent or any
Lender on behalf of a Borrower in connection with such investment
account or deposited by a Borrower or on a Borrower's behalf to such
investment account or otherwise credited thereto for a Borrower's
benefit, or distributable to a Borrower from such investment account,
together with all contracts for the sale or purchase of the foregoing,
(iv) all of each Borrower's right, title and interest with respect to
the deposit, investment, allocation, disposition, distribution or
withdrawal of the foregoing, (v) all of each Borrower's right, title
and interest with respect to the making of amendments, modifications or
additions of or to the terms and conditions under which the investment
account or investments maintained therein is to be maintained by a
Borrower, the Agent, any Lender or any Affiliate of the Agent or any
Lender on a Borrower's behalf, and (vi) all of each Borrower's books,
records and receipts pertaining to or confirming any of the foregoing,
(n) all cash deposited with the Agent or any Lender or any
Affiliate of the Agent or any Lender or which the Agent, for the
benefit of the Secured Parties, or any Lender or such Affiliate is
entitled to retain or otherwise possess as collateral pursuant to the
provisions of this Agreement or any of the Security Documents or any
agreement relating to any Letters of Credit, and
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(o) any and all products and proceeds of the foregoing
(including, but not limited to, any claim to any item referred to in
this definition, and any claim against any third party for loss of,
damage to or destruction of any or all of, the Collateral or for
proceeds payable under, or unearned premiums with respect to, policies
of insurance) in whatever form, including, but not limited to, cash,
negotiable instruments and other instruments for the payment of money,
chattel paper, security agreements and other documents.
"Commitment" means, as to each Lender, the amount set forth
opposite such Lender's name on Annex II hereof, representing such Lender's
obligation, upon and subject to the terms and conditions of this Agreement
(including the applicable provisions of Section 13.1), to make Revolving Credit
Loans and Capital Expenditure Loans and to purchase participations in Letters of
Credit or, from and after the date hereof, in the Register (as defined in
Section 13.1) representing such Lender's obligation to make Revolving Credit
Loans and Capital Expenditure Loans and to purchase participations in Letters of
Credit.
"Commitment Percentage" means, as to any Lender, the
percentage of the Total Commitment obtained by dividing such Lender's Commitment
by the Total Commitment.
"Consolidated", when used with reference to EBITDA, Fixed
Charges, Funded Indebtedness, Indebtedness, Interest Expense, Liabilities, Net
Income, Net Worth, Tangible Net Worth or any of the other financial terms used
herein, shall mean the sum of the EBITDA, Fixed Charges, Funded Indebtedness,
Indebtedness, Interest Expense, Liabilities, Net Incomes, Net Worths, Tangible
Net Worth, and other financial terms used herein, as the case may be, of the
Borrowers and their Consolidated Subsidiaries, as consolidated after the
elimination of intercompany items and, in the case of Net Income and Net Worth,
after appropriate adjustments for any minority interests in any Subsidiaries,
and, when used with reference to such accounts of any other Person, shall mean
the sum of such accounts of such Person and its consolidated Subsidiaries as so
modified.
"Consolidated Subsidiaries" means, as to the Borrowers, the
Subsidiaries of the Borrowers whose accounts are at the time in question, in
accordance with GAAP, consolidated with those of the Borrowers.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of any such substance or waste.
"Contract Rights" means any rights under contracts not yet
earned by performance and not evidenced by an instrument or chattel paper.
"Control Group" means Xxxx X. Xxxxx.
"Copyrights" means and includes, in each case whether now
existing or hereafter arising, all of each Borrower's right, title and interest
in and to (a) all copyrights, rights and interests in copyrights, works
protectable by copyright, copyright registrations and copyright applications;
(b) all renewals of any of the foregoing; (c) all income, royalties, damages and
payments now or hereafter due and/or payable under any of the foregoing,
including, without limitation, damages or payments for past or future
infringements of any of the foregoing; (d) the right to xxx for past, present
and future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.
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"Default" means any of the events specified in Section 12.1
which with the passage of time or giving of notice or both would constitute an
Event of Default.
"Default Margin" means 3%.
"Disbursement Account" means one or more accounts maintained
by and in the name of a Borrower with a Disbursing Bank for the purposes of
disbursing Revolving Credit Loan proceeds and amounts deposited thereto.
"Disbursing Bank" means any commercial bank with which a
Disbursement Account is maintained after the Effective Date.
"Dollar" and "$" mean freely transferable United States
dollars.
"EBITDA" means Net Income before provision for interest
expense, income tax expense, depreciation expense and amortization expense.
"ERISA" means the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"Effective Date" means the later of: (a) the Agreement Date,
and (b) the first date on which all of the conditions set forth in Article 5
shall have been fulfilled.
"Effective Interest Rate" means the rate of interest per annum
on the Revolving Credit Loans and Capital Expenditure Loans in effect from time
to time pursuant to the provisions of Sections 4.1(a) and (b).
"Eligible Assignee" means (i) a commercial bank, commercial
finance company or other asset-based lender, having total assets in excess of
$1,000,000,000; (ii) any Lender listed on the signature pages of this Agreement;
(iii) any Affiliate of a Lender; and (iv) if an Event of Default exists, any
Person reasonably acceptable to the Agent; provided in each case that the
representation contained in Section 13.2 hereof shall be applicable with respect
to such institution or Lender.
"Eligible Domestic Leased Engine Inventory" means Engine
Inventory which the Agent, in its absolute discretion, determines to meet all of
the following requirements: (a) such Inventory meets the definition of Eligible
Inventory, (b) such Inventory is subject to an Eligible Lease Agreement with an
Account Debtor Based in the United States, (c) the Agent has received
certificates executed by independent aircraft insurance brokers as to the
Borrowers' (or, if subject to a Lease Agreement, the Account Debtor's)
compliance as to such Inventory with the insurance provisions of Section 8.8 and
with the insurance provisions of the Engine Mortgage, (d) the Agent has received
evidence satisfactory to the Agent in its absolute discretion that the Mortgage
Supplement for such Inventory has been duly filed with the FAA, together with
such legal opinions with respect to the FAA filing as the Agent desires in its
reasonable discretion, (e) such Inventory is subject to the Security Interest,
which is perfected as to such Inventory, and is subject to no other Lien
whatsoever other than a Permitted Lien, and (f) the original term of the Lease
Agreement to which such Inventory is subject is not more than 120 months.
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"Eligible Domestic Receivable" means a Receivable that
consists of the unpaid portion of the obligation stated on an invoice issued to
an Account Debtor with respect to Inventory sold and shipped or services
performed for such Account Debtor, or the actual amount then due and payable
under a Lease Agreement for Engine Inventory leased to such Account Debtor in
the ordinary course of business, in each case net of any security deposits,
maintenance reserves, credits, potential offsets or rebates owed by any Borrower
to the Account Debtor and net of any commissions payable by any Borrower to
third parties, and that the Agent, in its absolute discretion, determines to
meet all of the following requirements: (a) such Receivable meets the definition
of Eligible Receivable, (b) such Receivable is owing by an Account Debtor Based
in the United States, (c) if such Receivable is a Lease Receivable, such
Receivable shall comply with each of the following criteria: (i) the Mortgage
Supplement for the Engine Inventory subject to the Lease Agreement is in due
form for filing with the FAA, has been duly filed with the FAA, and the Agent
has received such legal opinions with respect to the FAA filing as the Agent
desires in its reasonable discretion, (ii) the Engine Inventory subject to the
Lease Agreement giving rise to such Receivable is owned by a Borrower and is
subject to the Security Interest, which is perfected as to such Inventory, and
is subject to no other Lien whatsoever other than a Permitted Lien, and (iii)
such Receivable arises from an Eligible Lease Agreement.
"Eligible Engine Inventory" means, collectively, all Eligible
Inventoried Engine Inventory, Eligible Domestic Leased Engine Inventory and
Eligible Foreign Leased Engine Inventory.
"Eligible Foreign Leased Engine Inventory" means Engine
Inventory which the Agent, in its absolute discretion, determines to meet all of
the following requirements: (a) such Inventory meets the definition of Eligible
Inventory, (b) such Inventory is subject to an Eligible Lease Agreement with an
Account Debtor Based outside of the United States, (c) the Agent has received
certificates executed by independent aircraft insurance brokers as to the
Borrowers' (or, if subject to a Lease Agreement, the Account Debtor's)
compliance as to such Inventory with the insurance provisions of Section 8.8 and
with the insurance provisions of the Engine Mortgage, (d) the Agent has received
evidence satisfactory to the Agent in its absolute discretion that the Mortgage
Supplement for such Inventory has been duly filed with the FAA, together with
such legal opinions with respect to the FAA filing as the Agent desires in its
reasonable discretion, (e) to the extent commercially reasonable in the absolute
discretion of the Agent, such Inventory is subject to the Security Interest,
which is perfected as to such Inventory, (f) such Inventory is subject to no
Lien whatsoever other than a Permitted Lien, (g) the Agent is satisfied in its
discretion with the concentration of the aggregate Orderly Liquidation Values of
all Inventory leased to all Account Debtors Based in the particular country in
which the Account Debtor leasing such Inventory is Based, (h) the Agent is
satisfied in its discretion with the Account Debtor to whom such Inventory is
being leased, including, without limitation, the creditworthiness of such
Account Debtor and the country in which the Account Debtor is Based, and (i) the
original term of the Lease Agreement to which such Inventory is subject is not
more than 120 months.
"Eligible Foreign Receivable" means a Receivable that consists
of the unpaid portion of the obligation stated on an invoice issued to an
Account Debtor with respect to Inventory sold and shipped or services performed
for such Account Debtor, or the actual amount then due and payable under a Lease
Agreement for Engine Inventory leased to such Account Debtor in the ordinary
course of business, in each case net of any security deposits, maintenance
reserves, credits, potential offsets or rebates owed by any Borrower to the
Account Debtor and net of any commissions payable by any Borrower to third
parties, and that the Agent, in its absolute discretion, determines to meet all
of the following requirements: (a) such Receivable meets the definition of
Eligible Receivable, (b) such Receivable is owing by an Account Debtor Based
outside of the United States, (c) the Account Debtor
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with respect to such Receivable is acceptable to the Agent in its discretion,
and the country in which such Account Debtor is Based is acceptable to the Agent
in its discretion, and (d) if such Receivable is a Lease Receivable, such
Receivable shall comply with each of the following criteria: (i) the Mortgage
Supplement for the Engine Inventory subject to the Lease Agreement is in due
form for recordation by the FAA, has been duly filed for recordation by the FAA,
and the Agent has received such legal opinions with respect to the FAA filing as
the Agent desires in its reasonable discretion, (ii) the Engine Inventory
subject to the Lease Agreement giving rise to such Receivable is owned by a
Borrower and to the extent commercially reasonable in the absolute discretion of
the Agent, such Inventory is subject to the Security Interest, which is
perfected as to such Inventory, and is subject to no other Lien whatsoever other
than a Permitted Lien, and (iii) such Receivable arises from an Eligible Lease
Agreement.
"Eligible Inventoried Engine Inventory" means Engine Inventory
not subject to a Lease Agreement which the Agent, in its absolute discretion,
determines to meet all of the following requirements: (a) such Inventory meets
the definition of Eligible Inventory, (b) such Inventory is located at one of
the locations listed on Schedule 6.1(u), or, if not located at one of the
locations listed on Schedule 6.1(u), is in transit between such locations, (c)
the Agent has received certificates executed by independent aircraft insurance
brokers as to the Borrowers' compliance with the insurance provisions of Section
8.8 as to such Inventory, (d) the Agent has received evidence satisfactory to
the Agent in its sole discretion that the Mortgage Supplement for such Inventory
has been duly filed with the FAA, together with such legal opinions with respect
to the FAA filing as the Agent desires in its reasonable discretion, (e) such
Engine is airworthy in accordance with FAA standards, and (f) such Inventory is
subject to the Security Interest, which is perfected as to such Inventory, and
is subject to no other Lien whatsoever other than a Permitted Lien.
"Eligible Inventory" means Inventory which the Agent, in its
absolute discretion, determines to meet all of the following requirements:
(a) such Inventory consists of finished goods or raw materials
and not work-in-process,
(b) such Inventory is not an airworthy aircraft in accordance
with FAA standards,
(c) such Inventory is in good condition and meets in all
material respects all standards imposed by any governmental agency, or
department or division thereof, having regulatory authority over such
goods, their use, lease or sale,
(d) such Inventory is currently either usable, leaseable or
salable, at prices approximating at least cost, in the normal course of
the applicable Borrower's business,
(e) such Inventory is not obsolete,
(f) such Inventory is owned by a Borrower,
(g) no Borrower is in breach of any representation or
warranty, covenant or other agreement contained in the Loan Documents
with respect to such Inventory,
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(h) if such Inventory is located in a warehouse or other
facility leased by a Borrower, the lessor has delivered to the Agent,
on behalf of the Lenders, a waiver and consent in form and substance
satisfactory to the Agent,
(i) except for as specifically permitted in the definition of
"Borrowing Base" with respect to Inventory acquired in connection with
an Acquisition, the appraisal requirements set forth in Section 8.12(f)
have been complied with as to such Inventory,
(j) such Inventory is in compliance with all applicable FAA
standards, and Borrowers maintain all documentation necessary to
establish traceability of such Inventory,
(k) if such Inventory is subject to a Lease Agreement, the
Orderly Liquidation Value of all Inventory leased to any one Account
Debtor by all of the Borrowers in the aggregate does not exceed
$7,500,000, and
(l) such Inventory is not determined by the Agent, on behalf
of the Lenders, in its reasonable discretion to be ineligible for any
other reason.
"Eligible Lease Agreement" means a Lease Agreement with
respect to which each of the following is true, as determined by the Agent in
its absolute discretion: (a) if a chattel paper original of the Lease Agreement
exists, the Agent has received such chattel paper original, certified as such by
the Borrower, (b) the Borrower has received the funds required under the Lease
Agreement to be deposited as of such date by the Account Debtor for maintenance
reserves and security deposits, (c) no default or event of default exists under
the Lease Agreement, (d) the Lease Agreement is substantially in the form of the
lease agreements delivered to the Agent prior to the Agreement Date, or in such
other form as shall be reasonably approved by Agent, (e) the Lease Agreement has
been duly authorized, executed and delivered by the Account Debtor and the
Borrower, (f) the Engine Inventory subject to the Lease Agreement is owned by a
Borrower, and the Borrower has taken all steps commercially customary in the
jurisdiction where the Inventory is being used to protect its interest in such
Engine Inventory, (g) if the Account Debtor obligated under the Lease Agreement
has had a letter of credit issued for the benefit of the Borrower securing any
payments due under the Lease Agreement, such letter of credit has been duly
assigned to the Agent for the benefit of the Secured Parties, (h) the Lease
Agreement provides for return of the Inventory (or a satisfactory substitute
therefor) subject to the Lease Agreement upon termination of the Lease
Agreement, (i) the Lease Agreement contains provisions permitting the Borrower
to repossess the Inventory upon the occurrence of a default or event of default,
(j) the Borrower has provided the Agent with its Lease Analysis of the Lease
Agreement at least 5 Business Days prior to the inclusion in the Borrowing Base
of any Receivable or Inventory with respect thereto, and the Lease Analysis is
satisfactory to the Agent in its discretion, and (k) the Lease Agreement does
not prohibit collateral assignment without the Account Debtor's consent, and the
Account Debtor has received from the Borrowers a Notice of Assignment with
respect to such Lease Agreement, which, at the Agent's reasonable request, will
be acknowledged by the Account Debtor and returned to the Agent.
"Eligible Parts Inventory" means Parts Inventory which the
Agent, in its absolute discretion, determines to meet all of the following
requirements: (a) such Inventory meets the definition of Eligible Inventory, (b)
such Inventory is located at one of the locations listed on Schedule 6.1(u), (c)
such Inventory is not subject to a Lease Agreement, (d) the Agent has received
certificates executed by independent aircraft insurance brokers as to the
Borrower's compliance with the insurance provisions of Section 8.8 as to such
Inventory, (e) such Inventory is subject to the Security Interest, which is
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perfected as to such Inventory, and is subject to no other Lien whatsoever other
than a Permitted Lien, (f) if such Inventory is in the process of being torn
down into its component parts or repaired by a third party, the Borrowers have
provided the Agent with a letter from such third party, which letter shall
acknowledge the Security Interest and be otherwise in form and substance
satisfactory to the Agent, and (g) such Inventory is not rejected Inventory.
"Eligible Receivable" means a Receivable that consists of the
unpaid portion of the obligation stated on the invoice issued to an Account
Debtor with respect to Inventory sold and shipped to or services performed for
such Account Debtor, or the actual amount then due and payable under a Lease
Agreement for Engine Inventory leased to such Account Debtor in the ordinary
course of business, net of any credits, potential offsets or rebates owed by any
Borrower to the Account Debtor and net of any commissions payable by any
Borrower to third parties, and that the Agent, in its absolute discretion,
determines to meet all of the following requirements:
(a) such Receivable is owned by a Borrower and represents a
complete bona fide transaction which requires no further act under any
circumstances on the part of such Borrower to make such Receivable
payable by the Account Debtor,
(b) for Receivables other than Lease Receivables, the due date
for such Receivable shall not be more than 30 days from the date of the
original invoice for the goods the sale of which gave rise to such
Receivable,
(c) for Lease Receivables, the due dates for each scheduled
payment under the Lease Agreement shall be every 30 days,
(d) for Receivables other than Lease Receivables, no more than
90 days have elapsed from the date of the original invoice,
(e) for Lease Receivables, such Receivable shall not be past
due, unless the applicable cure period for payment of such Receivable
shall not have expired,
(f) for Receivables other than Lease Receivables, the goods
the sale of which gave rise to such Receivable were shipped or
delivered to the Account Debtor on an absolute sale basis and not on a
xxxx and hold sale basis, a consignment sale basis, a guaranteed sale
basis, a sale or return basis, or on the basis of any other similar
understanding and no material part of such goods has been returned or
rejected,
(g) if such Receivable is evidenced by Chattel Paper or an
instrument, such Chattel Paper or instrument has been collaterally
assigned to the Agent, for the benefit of itself as agent and the
Secured Parties, pursuant to an assignment in form and substance
satisfactory to the Agent and the original of such Chattel Paper or
instrument has been delivered to the Agent,
(h) the Account Debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceedings of
any kind or of any other proceeding or action, threatened (to any
Borrower's knowledge) or pending, which might, in the Agent's
reasonable judgment, have a materially adverse effect on such Account
Debtor, and is not, in the reasonable discretion of the Agent, deemed
ineligible for credit or other reasons,
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(i) such Receivable is not owing by an Account Debtor having
50% or more in face value of its then-existing accounts owing to the
Borrowers which do not meet the requirements of clauses (b), (c), (d)
and (e), above,
(j) such Receivable is not owing by an Account Debtor whose
then-existing Receivables owing to the Borrowers exceed in face amount
20% of the sum of all Eligible Domestic Receivables plus all Eligible
Foreign Receivables,
(k) if such Receivable arises from the performance of
services, such services have been fully rendered and do not relate to
any warranty claim or obligation,
(l) such Receivable is a valid, legally enforceable obligation
of the Account Debtor with respect thereto and is not subject to any
present or contingent (and no facts exist which are the basis for any
future) offset, deduction or counterclaim, dispute or other defense on
the part of such Account Debtor,
(m) such Receivable is subject to the Security Interest, which
is perfected as to such Receivable, and is subject to no other Lien
whatsoever,
(n) such Receivable is evidenced by an invoice or other
documentation in form reasonably acceptable to the Agent, and has been
billed to the Account Debtor,
(o) if such Receivable is subject to the Assignment of Claims
Act of 1940, as amended from time to time, or any Applicable Law now or
hereafter existing similar in effect thereto, if Agent so requires, all
procedures shall have been complied with such that such Receivable
shall have been duly and validly assigned to the Agent, for the benefit
of the Secured Parties,
(p) such Receivable is not subject to any prohibition against
its assignment or requiring notice of or consent to such assignment,
unless all such required notices have been given, all such required
consents have been received and all other procedures have been complied
with such that such Receivable shall have been duly and validly
assigned to the Agent, for the benefit of the Secured Parties,
(q) the goods giving rise to such Receivable were not, at the
time of the sale or lease thereof (and, in the case of Lease
Receivables, such goods are not), subject to any Lien, except the
Security Interest and Permitted Liens,
(r) no Borrower is in breach of any representation or warranty
with respect to the goods the sale or lease of which gave rise to such
Receivable nor in breach of any representation or warranty, covenant or
other agreement contained in the Loan Documents with respect to such
Receivable,
(s) such Receivable does not arise out of any transaction with
any Subsidiary or Affiliate of any Borrower,
(t) no bond or other undertaking by a guarantor or surety has
been obtained, supporting such Receivable and the Account Debtor's
obligations in respect thereof, other than any Guaranty given by a
parent company of such Account Debtor,
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(u) such Receivable does not arise out of finance or similar
charges by any Borrower or other fees for the time value of money, and
(v) the Account Debtor with respect to such Receivable is not
located in any state or jurisdiction denying creditors access to its
courts in the absence of qualification to transact business in such
state or jurisdiction or the filing of a Notice of Business Activities
Report or other similar filing, unless the applicable Borrower has
either qualified as a foreign corporation authorized to transact
business in such state or jurisdiction or has filed a Notice of
Business Activities Report or similar filing with the applicable state
or jurisdiction agency for the then current year.
"Engine Inventory" means Inventory owned by a Borrower
consisting of whole aircraft engines which have not been broken down into their
component parts.
"Engine Mortgage" means, collectively, each Engine Mortgage
and Security Agreement pursuant to which each Borrower grants a Security
Interest in all of its Engine Inventory to the Agent for the benefit of the
Secured Parties.
"Environmental Laws" means all federal, state, local and
foreign laws now or hereafter in effect relating to pollution or protection of
the environment, including laws relating to emissions, discharges, Releases or
threatened Releases of pollutants, Contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport, or handling of pollutants, Contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and any and
all regulations, notices or demand letters issued, entered, promulgated or
approved thereunder; such laws and regulations include but are not limited to
the Resource Conservation and Recovery Act, 42 U.S.C. ss. 9601 et seq., as
amended; the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq., as amended; the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq., as amended; the Clean Air Act, 46 U.S.C. ss. 7401 et
seq., as amended; and all federal, state, local and foreign lien and
environmental cleanup programs.
"Environmental Lien" means a Lien in favor of any governmental
entity for (a) any liability under Environmental Laws or (b) damages arising
from, or costs incurred by such governmental entity in response to, a Release or
threatened Release of Contaminant into the environment.
"Equipment" means and includes all machinery, apparatus,
equipment, motor vehicles, tractors, trailers, rolling stock, fittings, fixtures
and other tangible personal property (other than Inventory) of every kind and
description used in the Borrowers' business operations or owned by a Borrower or
in which a Borrower has an interest, and all parts, accessories and special
tools and all increases and accessions thereto and substitutions and
replacements therefor.
"Event of Default" means any of the events specified in
Section 12.1, provided that any requirement for notice or lapse of time or any
other condition has been satisfied, and any cure periods therefor have expired.
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"FAA" means the United States Federal Aviation Administration,
and any instrumentality of the United States succeeding to this function.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve system arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of Atlanta, or, if such rate
is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by NationsBank from three
federal funds brokers of recognized standing selected by NationsBank.
"Fee Letter" has the meaning given to such term in Section
4.2(a).
"Financial Officer" means the Chief Financial Officer,
Treasurer or Controller of AAS.
"Financing Statements" means any and all Uniform Commercial
Code financing statements (or other similar documents), in form and substance
satisfactory to the Agent, executed and delivered by the Borrowers to the Agent,
naming the Agent, for the benefit of the Secured Parties, as secured party and
the Borrowers as debtor, in connection with this Agreement.
"Fixed Charges" means, for any period, (a) Interest Expense,
plus (b) payments of principal actually made with respect to Indebtedness for
Money Borrowed (other than payments under the Revolving Credit Loans), including
payments with respect to Capitalized Leases.
"Funded Indebtedness" means (a) all Indebtedness under this
Agreement and (b) all other Indebtedness for Money Borrowed, including all
Subordinated Indebtedness.
"GAAP" means generally accepted accounting principles as in
effect in the United States as consistently applied and maintained throughout
the period indicated and, when used with reference to the Borrowers or any
Subsidiary of the Borrowers, consistent with the prior financial practice of the
Borrowers, as reflected on the financial statements referred to in Section
6.1(o); provided, however, that, in the event that changes shall be mandated by
the Financial Accounting Standards Board or any similar accounting authority of
comparable standing, or shall be recommended by the Borrowers' independent
public accountants, such changes shall be included in GAAP as applicable to the
Borrowers only from and after such date as the Borrowers, the Required Lenders
and the Agent shall have amended this Agreement to the extent necessary to
reflect any such changes in the financial covenants set forth in Article 11.
"General Intangibles" means all of the Borrowers' now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of the Borrowers of every kind and
nature (other than Receivables), including, without limitation, all Proprietary
Rights, corporate or other business records, inventions, designs, blueprints,
plans, specifications, goodwill, computer software, customer lists,
registrations, licenses, franchises, tax refund claims, reversions or any rights
thereto and any other amounts payable to any Borrower from any Plan or other
employee benefit plan, rights and claims against carriers and shippers, rights
to indemnification, all assignable warranty claims under any purchase agreements
to which any Borrower is a party, business interruption insurance and proceeds
thereof, property, casualty or any similar type of insurance and any proceeds
thereof, proceeds of insurance covering the lives of key employees on
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which any Borrower is beneficiary and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Borrower to secure
payment by an Account Debtor of any of the Receivables.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all governmental bodies, whether federal, state, local or foreign
national or provincial and all agencies thereof.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any
obligation of another Person shall mean and include (a) a guaranty (other than
by endorsement of negotiable instruments for collection in the ordinary course
of business), directly or indirectly, in any manner, of any part or all of such
obligation of such other Person, and (b) an agreement, direct or indirect,
contingent or otherwise, and whether or not constituting a guaranty, the
practical effect of which is to assure the payment or performance (or payment of
damages in the event of nonperformance) of any part or all of such obligation of
such other Person whether by (i) the purchase of securities or obligations, (ii)
the purchase, sale or lease (as lessee or lessor) of property or the purchase or
sale of services primarily for the purpose of enabling the guarantor with
respect to such obligation to make any payment or performance (or payment of
damages in the event of nonperformance) of or on account of any part or all of
such obligation, or to assure the owner of such obligation against loss, (iii)
the supplying of funds to or in any other manner investing in the guarantor with
respect to such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit, or (v) the supplying of funds to or
investing in a Person on account of all or any part of such Person's obligation
under a Guaranty of any obligation or indemnifying or holding harmless, in any
way, such Person against any part or all of such obligation.
"Hedge Agreement" shall mean an interest rate swap, cap or
collar agreement, interest rate future or option contract, currency swap
agreement, currency future or option contract, and other similar agreements.
"Indebtedness" of any Person means, without duplication, all
Liabilities of such Person, and to the extent not otherwise included in
Liabilities, the following: (a) all obligations for Money Borrowed or for the
deferred purchase price of property or services, (b) all obligations (including,
during the noncancellable term of any lease in the nature of a title retention
agreement, all future payment obligations under such lease discounted to their
present value in accordance with GAAP) secured by any Lien to which any property
or asset owned or held by such Person is subject, whether or not the obligation
secured thereby shall have been assumed by such Person, (c) all obligations of
other Persons which such Person has Guaranteed, including, but not limited to,
all obligations of such Person consisting of recourse liability with respect to
accounts receivable sold or otherwise disposed of by such Person, (d) all
obligations of such Person in respect of Hedge Agreements, and (e) in the case
of the Borrowers (without duplication) all obligations under the Revolving
Credit Loans and the Capital Expenditure Loans.
"Indemnification Agreement" means the Indemnification
Agreement, dated as of the Effective Date, between the Borrowers and the Agent,
for the ratable benefit of the Secured Parties, pursuant to which the Borrowers
jointly and severally agree to indemnify the Agent and the Secured Parties for
certain matters related to Florida documentary stamp taxes, as amended, modified
or supplemented from time to time.
"Initial Loans" means the Revolving Credit Loans made to the
Borrowers on the Effective Date pursuant to the Initial Notice of Borrowing.
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"Initial Notice of Borrowing" means the Notice of Borrowing
given by AAS with respect to the Initial Loans which shall also specify the
method of disbursement.
"Interbank Offered Rate" means, with respect to any LIBOR Rate
Loan for the Interest Period applicable thereto, the per annum rate of interest
determined by the Agent (each such determination to be conclusive and binding
absent manifest error) as of two Business Days prior to the first day of such
Interest Period as the effective rate at which deposits in immediately available
funds in Dollars are being offered or quoted to major banks in the London
interbank market for deposits for a term comparable to such Interest Period and
in the amount of such LIBOR Rate Loan, which rate shall be determined from the
display designated as Page 3750 of Dow Services, Inc. In the event Page 3750
shall be unavailable for any reason or the Agent in good faith elects to no
longer use such service for determining such rate under this Agreement, such
rate may be determined by the Agent from any other interest rate reporting
service of recognized standing that the Agent shall select.
"Interest Expense" means interest on Indebtedness during the
period for which computation is being made, excluding (a) the amortization of
fees and costs incurred with respect to the closing of loans which have been
capitalized as transaction costs, and (b) interest paid in kind.
"Interest Payment Date" means the first day of each calendar
month commencing on July 1, 1999 and continuing thereafter until the Secured
Obligations have been irrevocably paid in full.
"Interest Period" means with respect to each LIBOR Rate Loan,
the period commencing on the date of the making or continuation of or conversion
to such LIBOR Rate Loan and ending one, two, three, four, or six months
thereafter, as the Borrowers may elect in the applicable Notice of Borrowing or
Notice of Conversion or Continuation; provided, that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall, subject to the provisions of clause (iii)
below, be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) below, end on the last Business
Day of a calendar month;
(iii) any Interest Period that would otherwise end after the
Termination Date shall end on the Termination Date;
(iv) no Interest Period applicable to a LIBOR Rate Capital
Expenditure Loan may end after the next scheduled principal repayment
date unless the aggregate principal amount of Prime Rate Capital
Expenditure Loans and LIBOR Rate Capital Expenditure Loans having
Interest Periods ending prior to such repayment date is at least equal
to the amount of the principal repayment due hereunder on such date;
and
(v) notwithstanding clause (iii) above, no Interest Period
shall have a duration of less than one month and if any applicable
Interest Period would be for a shorter period, such Interest Period
shall not be available hereunder.
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"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time.
"Inventory" means all inventory as such term is defined in the
Uniform Commercial Code, regardless of whether such inventory is classified as
inventory or equipment on any Borrower's books, and shall include, without
limitation, (a) all goods intended for sale or lease by the Borrowers, or for
display or demonstration, (b) all work in process, (c) all raw materials and
other materials and supplies of every nature and description used or which might
be used in connection with the manufacture, packing, shipping, advertising,
selling, leasing or furnishing of such goods or otherwise used or consumed in
the Borrowers' business, (d) all Engine Inventory and Parts Inventory, and (e)
all documents evidencing and general intangibles relating to any of the
foregoing.
"Investment" means, with respect to any Person: (a) the
acquisition or ownership by such Person of any share of capital stock, evidence
of Indebtedness or other security issued by any other Person, (b) any loan,
advance or extension of credit to, or contribution to the capital of, any other
Person, excluding advances to employees in the ordinary course of business for
business expenses, (c) any Guaranty of the obligations of any other Person, (d)
any other investment (other than the Acquisition of a Business Unit) in any
other Person, including, without limitation, formation or ownership of interests
in joint ventures, and (e) any commitment or option to make any of the
investments listed in clauses (a) through (d) above.
"IRS" means the Internal Revenue Service.
"Lease Agreement" means a lease agreement between a Borrower,
as owner and lessor of Engine Inventory, and the Account Debtor leasing such
Engine Inventory.
"Lease Analysis" means the analysis of each Lease Agreement
prepared by a Borrower in accordance with its usual practices, setting forth,
among other things, the Lease Present Value of the Lease Agreement.
"Lease Present Value" means the present value, as determined
by the Borrowers pursuant to their Lease Analysis, of (a) the residual value of
an item of Inventory subject to a Lease Agreement, plus (b) all scheduled rental
payments provided for under the Lease Agreement.
"Lease Receivable" means a Receivable arising from a Lease
Agreement and consisting of the then-current lease payment due under the Lease
Agreement.
"Lender" means at any time any financial institution party to
this agreement at such time, including any such Person becoming a party hereto
pursuant to the provisions of Article 13, and its successors and assigns, and
"Lenders" means at any time all of the financial institutions party to this
Agreement at such time, including any such Persons becoming parties hereto
pursuant to the provisions of Article 13, and their successors and assigns.
"Letter of Credit" means any letter of credit issued by
NationsBank for the account of the Borrowers pursuant to Article 3.
"Letter of Credit Amount" means, with respect to any Letter of
Credit, the aggregate maximum amount at any time available for drawing under
such Letter of Credit.
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"Letter of Credit Facility" means the amount of $2,500,000.
"Letter of Credit Obligations" means, at any time, the sum of
(a) the Reimbursement Obligations of the Borrowers at such time, to the extent
such Reimbursement Obligations have not been converted to Revolving Credit
Loans, plus (b) the aggregate Letter of Credit Amount of Letters of Credit
outstanding at such time, plus (c) the aggregate Letter of Credit Amount of
Letters of Credit the issuance of which has been authorized by the Agent and
NationsBank pursuant to Section 3.4(b) but that have not yet been issued, in
each case as determined by the Agent.
"Letter of Credit Reserve" means, at any time, the aggregate
Letter of Credit Obligations at such time, other than Letter of Credit
Obligations that are fully secured by Cash Collateral.
"Liabilities" of any Person means all items (except for items
of capital stock, additional paid-in capital or retained earnings, or of general
contingency or deferred tax reserves) which in accordance with GAAP would be
included in determining total liabilities as shown on the liability side of a
balance sheet of such Person as at the date as of which Liabilities are to be
determined.
"LIBOR Rate" means, with respect to any LIBOR Rate Loan for
the Interest Period applicable thereto, a simple per annum interest rate
determined pursuant to the following formula:
LIBOR Rate = Interbank Offered Rate
--------------------------------
1 - LIBOR Reserve Percentage
The LIBOR Rate shall be adjusted automatically as of the effective date of any
change in the LIBOR Reserve Percentage.
"LIBOR Rate Capital Expenditure Loan" means a LIBOR Rate Loan
outstanding under the Capital Expenditure Loan Facility.
"LIBOR Rate Loan" means any Loan bearing interest at a rate
determined by reference to the LIBOR Rate, including any such Loans continued as
or converted into a LIBOR Rate Loan on the same day by the Lenders for the same
Interest Period.
"LIBOR Rate Revolving Credit Loan" means a LIBOR Rate Loan
outstanding under the Revolving Credit Facility.
"LIBOR Reserve Percentage" means that percentage (expressed as
a decimal) which is in effect from time to time under Regulation D of the Board
of Governors of the Federal Reserve System, as such regulation may be amended
from time to time, or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency or LIBOR
liabilities as that term is defined in Regulation D (or against any other
category of liabilities that includes deposits by reference to which the
interest rate of LIBOR Rate Loans is determined), whether or not any Lender has
any Eurocurrency liabilities subject to such reserve requirement at that time.
LIBOR Rate Loans shall be deemed to constitute Eurocurrency liabilities and as
such shall be deemed subject to reserve requirements without benefits of credits
for proration, exceptions or offsets that may be available from time to time to
any Lender.
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"Lien" as applied to the property of any Person means: (a) any
mortgage, deed to secure debt, deed of trust, lien, pledge, charge, lease
constituting a Capitalized Lease Obligation, conditional sale or other title
retention agreement, or other security interest, security title or encumbrance
of any kind in respect of any property of such Person, or upon the income or
profits therefrom, (b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise identified for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to the payment of the general, unsecured
creditors of such Person, (c) any Indebtedness which is unpaid more than 30 days
after the same shall have become due and payable (subject to applicable cure
periods) and which if unpaid might by law (including, but not limited to,
bankruptcy and insolvency laws), or otherwise, be given any priority whatsoever
over the claims of general unsecured creditors of such Person, and (d) the
filing of, or any agreement to give, any financing statement under the Uniform
Commercial Code or its equivalent in any jurisdiction, excluding informational
financing statements relating to property leased by the Borrower.
"Loan" means any Revolving Credit Loan or Capital Expenditure
Loan, as well as all such loans collectively, as the context requires.
"Loan Account" and "Loan Accounts" shall have the meanings
ascribed thereto in Section 4.5.
"Loan Documents" means collectively this Agreement, the Notes,
the Security Documents, and each other instrument, agreement or document
executed by any Obligor in connection with this Agreement whether prior to, on
or after the Effective Date and each other instrument, agreement or document
referred to herein or contemplated hereby.
"Lockbox" means each post office box specified in a Lockbox
Agreement.
"Lockbox Agreement" means each agreement between a Borrower
and a Clearing Bank concerning the establishment of a Lockbox for the collection
of Receivables.
"Margin Stock" means margin stock as defined in Section
221.1(h) of Regulation U, as the same may be amended or supplemented from time
to time.
"Materially Adverse Effect" means any act, omission,
situation, circumstance, event or undertaking which would, singly or in any
combination with one or more other acts, omissions, situations, circumstances,
events or undertakings have, or reasonably be expected by the Agent to have, a
materially adverse effect upon (a) the business, assets, properties,
liabilities, condition (financial or otherwise), results of operations or
business prospects of the Borrowers and their Subsidiaries taken as a whole, (b)
the value of the Collateral, (c) the Security Interest or the priority of the
Security Interest, (d) the respective ability of any Obligor or any of their
Subsidiaries to perform any obligations under this Agreement or any other Loan
Document to which it is a party, or (e) the legality, validity, binding effect,
enforceability or admissibility into evidence of any Loan Document or the
ability of the Agent or any Lender to enforce any rights or remedies under or in
connection with any Loan Document.
"Minimum Commitment" means $5,000,000.
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"Money Borrowed" means, as applied to Indebtedness, (a)
Indebtedness for money borrowed, (b) Indebtedness, whether or not in any such
case the same was for money borrowed, (i) represented by notes payable, and
drafts accepted, that represent extensions of credit, (ii) constituting
obligations evidenced by bonds, debentures, notes or similar instruments, or
(iii) upon which interest charges are customarily paid or that was issued or
assumed as full or partial payment for property (other than trade credit that is
incurred in the ordinary course of business), (c) Indebtedness that constitutes
a Capitalized Lease Obligation, (d) Indebtedness under Hedge Agreements, and (e)
Indebtedness that is such by virtue of clause (c) of the definition thereof, but
only to the extent that the obligations Guaranteed are obligations that would
constitute Indebtedness for Money Borrowed.
"Mortgage Supplement" means a supplement to the Engine
Mortgage pursuant to which each Borrower grants the Security Interest in Engine
Inventory and Lease Agreements acquired by a Borrower or entered into by a
Borrower on the Effective Date and from time to time after the Effective Date.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which a Borrower or a Related Company is
required to contribute or has contributed within the immediately preceding six
years.
"NationsBank" means NationsBank, N.A., and its successors and
assigns.
"Net Income" means, as applied to any Person, the net income
(or net loss) of such Person for the period in question after giving effect to
deduction of or provision for all operating expenses, all taxes and reserves
(including reserves for deferred taxes) and all other proper deductions, all
determined in accordance with GAAP, provided that there shall be excluded: (a)
the net income (or net loss) resulting from any Investment by any Person or a
Subsidiary of such Person in a minority interest in another Person, except, in
the case of net income, to the extent that any such income has actually been
received by such Person or such Subsidiary in the form of cash dividends or
similar distributions, (b) any restoration of any contingency reserve, except to
the extent that provision for such reserve was made out of income during such
period, (c) any net gains or losses on the sale or other disposition, not in the
ordinary course of business, of Investments, Business Units and other capital
assets, provided that there shall also be excluded any related charges for taxes
thereon, (d) any net gain arising from the collection of the proceeds of any
insurance policy, (e) any write-up of any asset, and (f) any other extraordinary
item.
"Net Outstandings" of any Lender means, at any time, the sum
of (a) all amounts paid by such Lender (other than pursuant to Section 14.7) to
the Agent in respect of Revolving Credit Loans or otherwise under this
Agreement, minus (b) all amounts paid by the Agent to such Lender which are
received by the Agent and which, pursuant to this Agreement, are paid over to
such Lender for application in reduction of the outstanding principal balance of
the Revolving Credit Loans.
"Net Proceeds" means proceeds received by any Borrower in cash
from any Asset Disposition (including, without limitation, payments under notes
or other debt securities received in connection with any Asset Disposition), net
of: (a) the transaction costs of such sale, lease, transfer or other
disposition; (b) any tax liability arising from such transaction; and (c)
amounts applied to repayment of Indebtedness (other than the Secured
Obligations) secured by a Lien on the asset or property disposed.
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"Net Worth" means, with respect to any Person, such Person's
total shareholder's equity (including capital stock, additional paid-in capital
and retained earnings, after deducting treasury stock) which would appear as
such on a balance sheet of such Person prepared in accordance with GAAP.
"Non-Ratable Loan" means a Revolving Credit Loan made by
NationsBank in accordance with the provisions of Section 4.8(b).
"Note" means any of the Revolving Credit Notes or Capital
Expenditure Notes and "Notes" means more than one such Note.
"Notice of Assignment" means a notice of assignment and
estoppel certificate in form and substance satisfactory to the Agent in its
absolute discretion pursuant to which, among other things, the Borrowers and the
Agent provide notice to and seek acknowledgement from the Account Debtor under a
Lease Agreement that such Lease Agreement has been collaterally assigned to the
Agent for the benefit of the Secured Parties.
"Notice of Borrowing" means a written notice, or telephonic
notice followed by a confirming same-day written notice, requesting a Borrowing
of either a Revolving Credit Loan or a Capital Expenditure Loan, which is given
by telex or facsimile transmission in accordance with the applicable provisions
of Sections 2A and 2B and which specifies (i) the amount of the requested
Borrowing, (ii) the date of the requested Borrowing, (iii) if the requested
Borrowing is of a LIBOR Rate Revolving Credit Loan, the duration of the
applicable Interest Period, and (iv) if the requested Borrowing is of a Capital
Expenditure Loan, the item(s) of Equipment to be subject to such Capital
Expenditure Loan (such specification to include the invoice and purchase order
applicable to such item(s) of Equipment), the location at which such Equipment
is (or is to be) located, and the fair market value and invoice cost of such
item(s) of Equipment (net of sales taxes, freight and delivery charges, and
set-up charges); provided that if any written confirmation differs in any
respect from the action taken by the Agent or the Lenders, the records of the
Agent shall control absent manifest error; provided further that the Borrowers'
failure to provide written confirmation of any telephonic notice shall not
invalidate any such telephonic notice.
"Notice of Conversion or Continuation" has the meaning
specified in Section 4.12.
"Obligor" means any Borrower, any Subsidiary Guarantor, any
Special Purpose Subsidiary, and any other Person liable with respect to the
Secured Obligations, whether as maker, endorser, guarantor, pledgor or
otherwise, and whether such liability is direct, indirect, primary or secondary,
and "Obligors" means all of such Persons collectively.
"Orderly Liquidation Value" means the orderly liquidation
value of Inventory, as reflected by appraisals conducted pursuant to Section
8.12(f).
"Operating Lease" means any lease (other than a lease
constituting a Capitalized Lease Obligation) of real or personal property.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor agency.
"Parts Inventory" means airframe parts, aircraft purchased for
disassembly, or engine parts or components held for sale by a Borrower.
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"Patents" means and includes, in each case whether now
existing or hereafter arising, all of the Borrowers' right, title and interest
in and to (a) any and all patents and patent applications, (b) inventions and
improvements described and claimed therein, (c) reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof, (d)
income, royalties, damages, claims and payments now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages
and payments for past and future infringements thereof, (e) rights to xxx for
past, present and future infringements thereof, and (f) all rights corresponding
to any of the foregoing throughout the world.
"Permitted Acquisitions" means Acquisitions of Persons or
Business Units in lines of business related to aviation provided (a) no Default
or Event of Default exists before or after giving effect to such Acquisition,
(b) the Borrowers are in compliance with the covenants set forth in Sections
11.1, 11.2, 11.10 and 11.11 on a pro forma basis after giving effect to such
Acquisition, (c) simultaneously with the consummation of such Acquisition, the
Borrowers deliver to the Agent a certificate of the Financial Officer (i)
setting forth the calculations required to establish the Borrowers' pro forma
compliance with the requirements of Sections 11.1, 11.2, 11.10 and 11.11 as of
the date of the consummation of such Acquisition, and (ii) stating that no
Default or Event of Default exists before or after giving effect to such
Acquisition, (d) the purchase price (including assumed liabilities) for such
Acquisition must not exceed $3,000,000, (e) the purchase price (including
assumed liabilities) for all such Acquisitions consummated during any fiscal
year must not exceed $15,000,000, (f) any financing extended by the Seller in
connection with the Acquisition shall be unsecured and shall be subordinated to
the Secured Obligations on terms and conditions acceptable to the Agent, and (g)
all of the requirements of Section 10.11 with respect to such Acquisition have
been complied with.
"Permitted Investments" means Investments of the Borrowers in:
(a) negotiable certificates of deposit and time deposits issued by NationsBank
or by any United States bank or trust company having capital, surplus and
undivided profits in excess of $100,000,000, (b) any direct obligation of the
United States of America or any agency or instrumentality thereof which has a
remaining maturity at the time of purchase of not more than one year and
repurchase agreements relating to the same, (c) sales of Inventory on credit in
the ordinary course of business, (d) shares of capital stock, evidence of
Indebtedness or other security acquired by the Borrowers in consideration for or
as evidence of past-due or restructured Receivables in an aggregate face amount
of such Receivables at any time not to exceed $1,000,000, (e) Guaranties
permitted pursuant to Section 11.3, (f) other Investments not in excess of
$1,000,000 in the aggregate in any fiscal year of the Borrowers, (g) Investments
by the Borrowers in Permitted Acquisitions, (h) Special Purpose Subsidiary
Investments, and (i) formation of Special Purpose Subsidiaries by any Borrower.
"Permitted Liens" means: (a) Liens securing taxes, assessments
and other governmental charges or levies (excluding any Lien imposed pursuant to
any of the provisions of ERISA or arising under the Federal Tax Lien Act of
1966) or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business, but (i) in all cases only if payment shall not at the time
be required to be made in accordance with Section 9.6, and (ii) in the case of
warehousemen or landlords, only if such liens are junior to the Security
Interest in any of the Collateral, (b) Liens consisting of deposits or pledges
made in the ordinary course of business in connection with, or to secure payment
of, obligations under workers' compensation, unemployment insurance or similar
legislation or under payment or performance bonds, (c) Liens on the Real Estate
constituting encumbrances in the nature of zoning restrictions, easements, and
rights or restrictions of record on the use of real property, which do not
materially detract from the
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value of such property or impair the use thereof in the business of the
Borrowers or their Subsidiaries, (d) Purchase Money Liens, (e) Liens shown on
Schedule 6.1(i), and (f) Liens of the Agent, for the benefit of the Secured
Parties, arising under this Agreement and the other Loan Documents.
"Permitted Purchase Money Indebtedness" means Purchase Money
Indebtedness of the Borrowers incurred after the Agreement Date for the purpose
of acquiring an asset or assets other than Inventory (a) which is secured by a
Purchase Money Lien, (b) the aggregate principal amount of which does not exceed
an amount equal to the lesser of (i) the cost (including the principal amount of
such Indebtedness, whether or not assumed) of the property (other than
Inventory) subject to such Lien, and (ii) the fair value of such property (other
than Inventory) at the time of its acquisition, and (c) which, when aggregated
with the principal amount of all other such Indebtedness and Capitalized Lease
Obligations of the Borrowers at the time outstanding, does not exceed $250,000.
For the purposes of this definition, the principal amount of any Purchase Money
Indebtedness consisting of Capitalized Leases shall be computed as a Capitalized
Lease Obligation.
"Person" means an individual, limited liability company,
corporation, partnership, association, trust or unincorporated organization,
joint venture or other entity or a government or any agency or political
subdivision thereof.
"Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which a Borrower or any Related Company is, or
within the immediately preceding six years was, an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreement" means the Stock Pledge Agreement, dated as
of the Effective Date, between AAS and the Agent, for the ratable benefit of the
Secured Parties, pursuant to which AAS pledges to the Agent, for the benefit of
the Secured Parties, all of the capital stock of each domestic Subsidiary of AAS
and 65% of the voting stock and 100% of the non-voting stock of each foreign
Subsidiary of AAS, as amended, modified or supplemented from time to time.
"Prime Rate" means on any day the interest rate per annum
equal to the rate of interest publicly announced by the Agent at its head office
in Atlanta, Georgia as its "prime" rate, as in effect on the last Business Day
of the calendar month immediately preceding the month in which such day falls.
The Agent lends at rates above and below the Prime Rate.
"Prime Rate Capital Expenditure Loan" means a Prime Rate Loan
outstanding under the Capital Expenditure Loan Facility.
"Prime Rate Loan" means any Prime Rate Revolving Credit Loan
or Prime Rate Capital Expenditure Loan, and "Prime Rate Loans" means more than
one such Loan.
"Prime Rate Revolving Credit Loan" means each Borrowing of
Prime Rate Loans under the Revolving Credit Facility on the same day, a
specified principal amount of Prime Rate Loans outstanding under the Revolving
Credit Facility, and any Non-Ratable Loan.
"Prohibited Country" means Afghanistan, Angola, Burundi,
Cambodia, Congo, Cuba, Ethiopia, Haiti, Iraq, Lebanon, Liberia, Libya,
Mozambique, Rwanda, Somalia, any part of the former Soviet Union other than
Russia, Sudan, or any part of the former republic of Yugoslavia, or any other
country with whom the United States does not then have full diplomatic relations
or with respect to which an FAA "no fly" ruling is in effect.
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"Projections" means the forecasted (a) balance sheets, (b)
income statements and (c) cash flow statements of the Borrowers and their
Consolidated Subsidiaries for the Borrowers' 1999 through 2003 fiscal years,
prepared on an annual basis with quarterly detail, together with appropriate
supporting details and a statement of underlying assumptions.
"Proportionate Share" or "Ratable", as applied to a Lender,
means such Lender's share of an amount in Dollars or other property at the time
of determination equal to (i) the Commitment Percentage of such Lender, or (ii)
if the Commitments are terminated, the percentage of the total principal amount
of Loans (plus Letter of Credit Obligations) outstanding at such time obtained
by dividing the principal amount of the Loans (plus Letter of Credit
Obligations) then owing to such Lender by the total principal amount of all
Loans (plus Letter of Credit Obligations) then owing to all Lenders.
"Proprietary Rights" means all of the Borrowers' now owned and
hereafter arising or acquired: Patents, Copyrights, Trademarks, including,
without limitation, those Proprietary Rights set forth on Schedule 6.1(bb)
hereto, and all other rights under any of the foregoing, all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of any
of the foregoing, and all rights to xxx for past, present and future
infringement of any of the foregoing.
"Purchase Money Indebtedness" means (a) Indebtedness created
to secure the payment of all or any part of the purchase price of any property
other than Inventory, (b) any Indebtedness incurred at the time of the
acquisition of any property other than Inventory for the purpose of financing
all or any part of the purchase price thereof, and (c) any renewals, extensions
or refinancings thereof, but not any increases in the principal amounts thereof
outstanding at the time of any such renewal, extension or refinancing.
"Purchase Money Lien" means any Lien securing Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the
property (other than Inventory) the purchase price of which was financed through
the incurrence of the Permitted Purchase Money Indebtedness secured by such
Lien.
"Real Estate" means all of the Borrowers' now or hereafter
owned or leased estates in real property, including, without limitation, all
fees, leaseholds and future interests, together with all of the Borrowers' now
or hereafter owned or leased interests in the improvements and emblements
thereon, the fixtures attached thereto and the easements appurtenant thereto,
including, without limitation the real property described on Schedule 6.1(w).
"Receivables" means and includes, as to each Borrower, (a) any
and all rights to the payment of money or other forms of consideration of any
kind (whether classified under the Uniform Commercial Code as accounts, contract
rights, chattel paper, general intangibles, or otherwise) including, but not
limited to, accounts receivable, letters of credit and the right to receive
payment thereunder, chattel paper and the right to receive payment thereunder
(including the right to receive payment under any Lease Agreement), tax refunds,
insurance proceeds, Contract Rights, notes, drafts, instruments, documents,
acceptances, and all other debts, obligations and liabilities in whatever form
from any Person, (b) all guarantees, security and Liens for payment thereof, (c)
all goods, whether now owned or hereafter acquired, and whether sold, delivered,
undelivered, in transit or returned, which may be represented by, or the sale or
lease of which may have given rise to, any such right to payment or other debt,
obligation or liability, and (d) all proceeds of any of the foregoing.
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"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System (or any successor).
"Reimbursement Agreement" means, with respect to a Letter of
Credit, such form of application therefor and form of reimbursement agreement
therefor (whether in a single document or several documents) as NationsBank may
employ in the ordinary course of business for its own account, with such
modifications thereto as may be agreed upon by NationsBank and the Borrowers,
provided that such application and agreement and any modifications thereto are
not inconsistent with the terms of this Agreement.
"Reimbursement Obligations" means the reimbursement or
repayment obligations of the Borrowers to NationsBank with respect to Letters of
Credit pursuant to Section 3.6 or pursuant to a Reimbursement Agreement with
respect to amounts that have been drawn under Letters of Credit.
"Related Company" means any (i) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as any Borrower; (ii) partnership or other
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with any Borrower; or
(iii) member of the same affiliated service group (within the meaning of Section
414(m) of the Internal Revenue Code) as any Borrower, any corporation described
in clause (i) above or any partnership, trade or business described in clause
(ii) above.
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water or
groundwater.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment; or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"Reportable Event" has the meaning set forth in Section
4043(b) of ERISA, but shall not include a Reportable Event as to which the
provision for 30 days notice to the PBGC is waived under applicable regulations.
"Required Lenders" means, at any time, any combination of two
or more Lenders whose Commitment Percentages at such time aggregate in excess of
50%; provided, however, that if any Lender shall have failed to fund its
Proportionate Share of any Loan in accordance with the terms of this Agreement,
then, for so long as such failure continues, the term "Required Lenders" shall
mean two or more Lenders (excluding such Lender whose failure to fund its
Proportionate Share of any Loan has not been cured) whose Commitment Percentages
(computed after excluding the defaulting Lender's Commitment from the Total
Commitment) at such time aggregate in excess of 50%; provided further, however,
that if the Commitments have been terminated, the term "Required Lenders" shall
mean two or more Lenders (excluding each Lender whose failure to fund its
Proportionate Share of any Loan has not been cured) holding Loans (plus Letter
of Credit Obligations) representing in excess of 50% of the aggregate principal
amount of Loans and Letter of Credit Obligations (excluding the Loans and Letter
of Credit Obligations owing to the defaulting Lender) outstanding at such time.
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"Restricted Dividend Payment" means any dividend, distribution
or payment on or with respect to (a) any shares of a Person's capital stock
(other than dividends payable solely in shares of its capital stock) or (b) any
partnership or other ownership interest in a Person, excluding, however, any
such dividend, distribution or payment to any Borrower by any Subsidiary of such
Borrower.
"Restricted Payment" means (a) any redemption or prepayment or
other retirement, prior to the stated maturity thereof or prior to the due date
of any regularly scheduled installment or amortization payment with respect
thereto, of any Indebtedness for Money Borrowed, (b) any redemption, retirement
or payment with respect to the Subordinated Indebtedness other than in
accordance with any subordination agreement or provisions applicable thereto,
(c) the payment by any Person of the principal amount of or interest on any
Indebtedness (other than trade debt) owing to a shareholder, partner or equity
holder of such Person or to any Affiliate of any such shareholder, partner or
equity holder, and (d) the payment of any management, consulting or similar fee
by any Person to any Affiliate of such Person.
"Restricted Purchase" means any payment on account of the
purchase, redemption or other acquisition or retirement by a Person of any (a)
shares of such Person's capital stock (except shares acquired on the conversion
thereof into other shares of capital stock of such Person), (b) partnership
interest in such Person, if such Person is a partnership, or (c) membership
interest in such Person, if such Person is a limited liability company.
"Revolving Credit Facility" means the principal amount of
$100,000,000 or such lesser or greater amount as shall be agreed upon from time
to time in writing by the Agent, the Lenders and the Borrowers.
"Revolving Credit Loans" means loans made to the Borrowers
pursuant to Section 2A.1.
"Revolving Credit Note" means each Revolving Credit Note made
by the Borrowers payable to the order of a Lender evidencing the joint and
several obligation of the Borrowers to pay the aggregate unpaid principal amount
of the Revolving Credit Loans made to them by such Lender (and any promissory
note or notes that may be issued from time to time in substitution, renewal,
extension, replacement or exchange therefor whether payable to such Lender or to
a different Lender in connection with a Person becoming a Lender after the
Effective Date or otherwise) substantially in the form of Exhibit A-1 hereto,
with all blanks properly completed, either as originally executed or as the same
may from time to time be supplemented, modified, amended, renewed, extended or
refinanced.
"Schedule of Equipment" means a schedule delivered by the
Borrowers to the Agent pursuant to the provisions of Section 8.12(c).
"Schedule of Inventory" means a schedule delivered by the
Borrowers to the Agent pursuant to the provisions of Section 8.12(b).
"Schedule of Receivables" means a schedule delivered by the
Borrowers to the Agent pursuant to the provisions of Section 8.12(a).
"Secured Obligations" means, in each case whether now in
existence or hereafter arising,
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(a) the principal of, and interest and premium, if any, on,
the Loans, and any fees payable in connection with the Loans,
(b) the Reimbursement Obligations and all other obligations of
the Borrowers to the Agent or any Lender arising in connection with the
issuance of Letters of Credit,
(c) all indebtedness, liabilities, obligations, covenants and
duties of the Borrowers to the Agent or to the Lenders (or any
Affiliate of any Lender) of every kind, nature and description arising
under or in respect of this Agreement, the Notes or any of the other
Loan Documents or the Banking Relationship, whether direct or indirect,
absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note,
and whether or not for the payment of money, including without
limitation, fees required to be paid pursuant to Article 4 and expenses
required to be paid or reimbursed pursuant to Section 15.2.
"Secured Parties" means, collectively, the Agent, the Lenders,
and each Affiliate of each of the foregoing.
"SEC" means the Securities and Exchange Commission or any
successor commission.
"Security Documents" means each of the following:
(a) the Engine Mortgage,
(b) the Mortgage Supplements,
(c) the Financing Statements,
(d) the Pledge Agreement, and
(e) each other writing executed and delivered by any Obligor
securing any of the Secured Obligations.
"Security Interest" means the Liens of the Agent, for the
benefit of the Secured Parties, on and in the Collateral effected hereby or by
any of the Security Documents or pursuant to the terms hereof or thereof.
"Settlement Date" means each Business Day after the Effective
Date selected by the Agent in its sole discretion subject to and in accordance
with the provisions of Section 4.8(b) as of which a Settlement Report is
delivered by the Agent and on which settlement is to be made among the Lenders
in accordance with the provisions of Section 4.8.
"Settlement Report" means each report, substantially in the
form attached hereto as Exhibit E, prepared by the Agent and delivered to each
Lender and setting forth, among other things, as of the Settlement Date
indicated thereon and as of the next preceding Settlement Date, the aggregate
principal balance of all Revolving Credit Loans outstanding, each Lender's
Commitment Percentage thereof, each Lender's Net Outstandings and all
Non-Ratable Loans made, and all payments of
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principal, interest and fees received by the Agent from the Borrowers during the
period beginning on such next preceding Settlement Date and ending on such
Settlement Date.
"Special Purpose Subsidiary" means a Wholly-Owned domestic
Subsidiary of any Borrower or Subsidiary Guarantor, formed pursuant to and
subject to the terms and conditions of Section 9.15, for the purpose of
obtaining favorable financing terms from a lender for the purchase or
maintenance of a Special Purpose Subsidiary Asset.
"Special Purpose Subsidiary Asset" means an item of Inventory,
along with the lease agreement relating to such asset.
"Special Purpose Subsidiary Guaranty" means a Guaranty from
the Parent of a Special Purpose Subsidiary in favor of a lender, provided the
Guaranty complies with each of the following requirements: (a) such Guaranty is
a Guaranty of collection and not of performance, enforceable against the Parent
only after the lender has exercised all remedies available against the Special
Purpose Subsidiary Asset and the Special Purpose Subsidiary, (b) such Guaranty
is unsecured, and (c) such Guaranty is a guaranty of only the Special Purpose
Subsidiary Indebtedness permitted under Section 11.2.
"Special Purpose Subsidiary Indebtedness" means Purchase Money
Indebtedness and Capitalized Lease Obligations incurred by a Special Purpose
Subsidiary from a lender for the purpose of financing a Special Purpose
Subsidiary Asset, which Indebtedness or Capitalized Lease Obligations shall be
secured only by the Special Purpose Subsidiary Asset.
"Special Purpose Subsidiary Investment" means the Investment
of a Borrower or a Subsidiary Guarantor in a Special Purpose Subsidiary,
provided each of the following is true: (a) the Borrower or Subsidiary Guarantor
making such Investment has executed and delivered a stock pledge agreement and
blank stock power, as specified by and in form and substance satisfactory to the
Agent, pursuant to which all of the capital stock of the Special Purpose
Subsidiary is pledged to the Agent for the benefit of the Secured Creditors, and
such other documents as Agent may request, (b) the amount of the aggregate
Investment of all Borrowers in any single Special Purpose Subsidiary shall not
exceed 25% of the amount financed of the Special Purpose Subsidiary Asset owned
or to be owned by such Special Purpose Subsidiary, and (c) the amount of the
aggregate Investment of all Borrowers and Subsidiary Guarantors in all Special
Purpose Subsidiaries shall not exceed $2,500,000.
"Subordinated Indebtedness" means any Indebtedness for Money
Borrowed of the Borrowers which is subordinated to the Secured Obligations on
terms and conditions acceptable to the Agent and the Lenders in their sole
discretion.
"Subsidiary"
(a) when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of
the stock of any class or classes or 50% or more of other ownership
interests is owned of record or beneficially by such other Person, or
by one or more Subsidiaries of such other Person, or by such other
Person and one or more Subsidiaries of such Person,
(i) if the holders of such stock, or other ownership
interests, (A) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority
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of the directors (or other individuals performing similar
functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency, or
(B) are entitled, as such holders, to vote for the election of
a majority of the directors (or individuals performing similar
functions) of such Person, whether or not the right so to vote
exists by reason of the happening of a contingency, or
(ii) in the case of such other ownership interests,
if such ownership interests constitute a majority voting
interest, and
(b) when used with respect to a Plan, ERISA or a provision of
the Internal Revenue Code pertaining to employee benefit plans, also
means any corporation, trade or business (whether or not incorporated)
which is under common control with any Borrower and is treated as a
single employer with such Borrower under Section 414(b) or (c) of the
Internal Revenue Code and the regulations thereunder.
"Subsidiary Guarantor" has the meaning specified in Section
9.12.
"Subsidiary Guaranty" has the meaning specified in Section
9.12.
"Supporting Letter of Credit" has the meaning specified in
Section 3.9.
"Tangible Net Worth" means, as applied to the Borrowers, the
Net Worth of the Borrowers and their Consolidated Subsidiaries at the time in
question, after excluding therefrom all amounts due from Affiliates (to the
extent not already excluded) and the amount of all intangible items reflected
therein, including, without limitation, all unamortized debt discount and
expense, unamortized research and development expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names, copyrights,
unamortized excess cost of investment in non-Consolidated Subsidiaries over
equity at dates of acquisition, and all similar items which should properly be
treated as intangibles in accordance with GAAP.
"Termination Date" means (a) May 25, 2004 or such later date
as to which the same may be extended pursuant to the provisions of Section 2.5,
(b) such earlier date as the Secured Obligations shall have been accelerated
pursuant to the provisions of Section 12.2, or (c) such earlier date as all
Secured Obligations shall have been irrevocably paid in full and the Revolving
Credit Facility and Capital Expenditure Loan Facility shall have been
terminated.
"Termination Event" means (a) a Reportable Event, or (b) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (c) the institution
of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or
the appointment of a trustee to administer any Plan.
"Total Commitment" means the sum of the Commitments.
"Trademarks" means and includes in each case whether now
existing or hereafter arising, all of the Borrowers' right, title and interest
in and to (a) trademarks (including service marks), trade names and trade styles
and the registrations and applications for registration thereof and the goodwill
of the business symbolized by the trademarks, (b) licenses of the foregoing,
whether as licensee or licensor, (c) renewals thereof, (d) income, royalties,
damages and payments now or hereafter due and/or payable with respect thereto,
including, without limitation, damages, claims and
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payments for past and future infringements thereof, (e) rights to xxx for past,
present and future infringements thereof, including the right to settle suits
involving claims and demands for royalties owing, and (f) all rights
corresponding to any of the foregoing throughout the world.
"Type" when used in respect of any Loan or Borrowing, shall
refer to the rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined.
"Unfunded Capital Expenditures" means Capital Expenditures
which are paid for by a Person other than with the proceeds of Indebtedness for
Money Borrowed (other than the Revolving Credit Loans) incurred to finance such
Capital Expenditures and other than those represented by Capitalized Lease
Obligations.
"Unfunded Vested Accrued Benefits" means with respect to any
Plan at any time, the amount (if any) by which (a) the present value of all
vested nonforfeitable benefits under such Plan exceeds (b) the fair market value
of all Plan assets allocable to such benefits, all determined as of the then
most recent valuation date for such Plan.
"Uniform Commercial Code" or "UCC" means the Uniform
Commercial Code as in effect from time to time in the State of Georgia.
"Wholly-Owned Subsidiary", when used to determine the
relationship of a Subsidiary to a Person, means a Subsidiary all of the issued
and outstanding shares (other than directors' qualifying shares) of the capital
stock of which shall at the time be owned by such Person or one or more of such
Person's Wholly-Owned Subsidiaries or by such Person and one or more of such
Person's Wholly-Owned Subsidiaries.
SECTION 1.2. General. All terms of an accounting nature not
specifically defined herein shall have the meaning ascribed thereto by GAAP. The
terms accounts, chattel paper, contract rights, documents, equipment,
instruments, general intangibles and inventory, as and when used in this
Agreement or the Security Documents, shall have the meanings given those terms
in the Uniform Commercial Code. Unless otherwise specified, a reference in this
Agreement to a particular section or subsection is a reference to that section
or subsection of this Agreement, and the words "hereof," "herein," "hereunder"
and words of similar import, when used in this Agreement, refer to this
Agreement as a whole and not to any particular provision, section or subsection
of this Agreement. Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and plural,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, the feminine and the neuter. Words denoting individuals include
corporations and vice versa. References to any legislation or statute or code,
or to any provisions of any legislation or statute or code, shall include any
modification or reenactment of, or any legislative, statutory or code provision
substituted for, such legislation, statute or code or provision thereof.
References to any document or agreement (including this Agreement) shall include
references to such document or agreement as amended, novated, supplemented,
modified or replaced from time to time, so long as and to the extent that such
amendment, novation, supplement, modification or replacement is either not
prohibited by the terms of this Agreement or is consented to by the Required
Lenders and the Agent. References to any Person include its successor or
permitted substitutes and assigns.
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ARTICLE 2
THE FACILITIES
SECTION 2A. REVOLVING CREDIT LOAN FACILITY.
SECTION 2A.1. Revolving Credit Loans. Upon the terms and
subject to the conditions of, and in reliance upon the representations and
warranties made under, this Agreement, each Lender agrees, severally, but not
jointly, to make Revolving Credit Loans to the Borrowers from time to time from
the Effective Date to but not including the Termination Date, as requested or
deemed requested by the Borrowers in accordance with the terms of Section 2A.2,
in amounts equal to such Lender's Commitment Percentage of each such Loan
requested or deemed requested hereunder up to an aggregate amount at any one
time outstanding equal to such Lender's Commitment Percentage of the Borrowing
Base; provided, however, that (a) the aggregate principal amount of all
outstanding Revolving Credit Loans (after giving effect to the Loans requested)
shall not exceed the Borrowing Base, and (b) the aggregate principal amount of
all Revolving Credit Loans (after giving effect to the Loans requested) plus the
Letter of Credit Reserve plus the aggregate principal amount of all outstanding
Capital Expenditure Loans shall not exceed $100,000,000. It is expressly
understood and agreed that the Lenders may and at present intend to use the
Borrowing Base as a maximum ceiling on Revolving Credit Loans to the Borrowers;
provided, however, that it is agreed that should the Revolving Credit Loans
exceed the ceiling so determined or any other limitation set forth in this
Agreement, such Revolving Credit Loans shall nevertheless constitute Secured
Obligations and, as such, shall be entitled to all benefits thereof and security
therefor. The principal amount of any Revolving Credit Loan which is repaid
pursuant to Section 2A.3(c) may be reborrowed by the Borrowers, subject to the
terms and conditions of this Agreement, in accordance with the terms of this
Section 2A.1. The Agent's and each Lender's books and records reflecting the
date and the amount of each Revolving Credit Loan and each repayment of
principal thereof shall constitute prima facie evidence of the accuracy of the
information contained therein, subject to the provisions of Section 4.8.
SECTION 2A.2. Manner of Borrowing Revolving Credit Loans.
Borrowings under the Revolving Credit Facility shall be made as follows:
(a) Requests for Borrowing.
(i) Prime Rate Revolving Credit Loans. A request for
the Borrowing of a Prime Rate Revolving Credit Loan shall be
made, or shall be deemed to be made, in the following manner:
(A) with respect to the initial Borrowing to
be made on the Effective Date, the Borrowers shall
give the Agent an Initial Notice of Borrowing at
least two Business Days prior to the proposed date of
the Borrowing, and, as to subsequent Prime Rate
Revolving Credit Loans, the Borrowers shall give the
Agent a Notice of Borrowing before 11:00 a.m.
(Atlanta time) on the proposed Borrowing date, all of
which notices shall be irrevocable,
(B) whenever a check or other item is
presented to a Disbursing Bank for payment against a
Disbursement Account in an amount greater than the
then available balance in such account, such
Disbursing Bank shall, and is
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hereby irrevocably authorized by the Borrowers to,
give the Agent notice thereof, which notice shall be
deemed to be an irrevocable request for a Prime Rate
Revolving Credit Loan on the date of such notice in
an amount equal to the excess of such check or other
item over such available balance,
(C) unless payment is otherwise made by the
Borrowers, the becoming due of any amount required to
be paid under this Agreement or any of the Notes as
interest shall be deemed to be an irrevocable request
for a Prime Rate Revolving Credit Loan on the due
date in the amount required to pay such interest,
(D) unless payment is otherwise made by the
Borrowers, the becoming due of any other Secured
Obligation shall be deemed to be an irrevocable
request for a Prime Rate Revolving Credit Loan on the
due date in the amount then so due, and such request
shall be irrevocable, and
(E) the receipt by the Agent of notification
from NationsBank to the effect that a drawing has
been made under a Letter of Credit and that the
Borrowers have failed to reimburse NationsBank
therefor in accordance with the terms of the Letter
of Credit, the Reimbursement Agreement and Article 3,
shall be deemed to be an irrevocable request for a
Prime Rate Revolving Credit Loan on the date such
notification is received in the amount of such
drawing which is so unreimbursed.
(ii) LIBOR Rate Revolving Credit Loans. The Borrowers
may request a LIBOR Rate Loan under the Revolving Credit
Facility by giving the Agent a Notice of Borrowing (which
notice shall be irrevocable) not later than 11:00 a.m.
(Atlanta time) on the date three Business Days before the day
on which the requested LIBOR Rate Revolving Credit Loan is to
be made; provided the Borrowers shall not be permitted to
request, and the Lenders shall not be required to make, LIBOR
Rate Revolving Credit Loans at any time during the existence
of an Event of Default.
(iii) Notification of Lenders. In the case of each
LIBOR Rate Revolving Credit Loan and, unless the Agent has
elected periodic settlements pursuant to Section 4.8, in the
case of each Prime Rate Revolving Credit Loan, the Agent shall
promptly notify the Lenders of any Notice of Borrowing given
or deemed given pursuant to this Section 2A.2(a) by 12:00 noon
(Atlanta time) on the proposed Borrowing date (in the case of
Prime Rate Revolving Credit Loans) or by 3:00 p.m. (Atlanta
time) three Business Days before the proposed Borrowing date
(in the case of LIBOR Rate Revolving Credit Loans). Not later
than 1:30 p.m. on the proposed Borrowing date, each Lender
will make available to the Agent, for the account of the
Borrowers, at the Agent's Office in funds immediately
available to the Agent, an amount equal to such Lender's
Commitment Percentage of such Prime Rate Revolving Credit Loan
or LIBOR Rate Revolving Credit Loan, as the case may be.
(b) Disbursement of Loans. Each Borrower hereby irrevocably
authorizes the Agent to disburse the proceeds of each Borrowing
requested, or deemed to be requested, pursuant to this Section 2A.2 as
follows:
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(i) the proceeds of each Borrowing requested under
Section 2A.2(a)(i)(A) (other than the Borrowing of the Initial
Loans), 2A.2(a)(i)(B) or 2A.2(a)(ii) shall be disbursed by the
Agent in Dollars in immediately available funds by wire
transfer to a Disbursement Account or, in the absence of a
Disbursement Account, by wire transfer to such other account
as may be agreed upon by the Borrowers and the Agent from time
to time, and the proceeds of the Initial Loans under Section
2A.2(a)(i)(A) shall be disbursed in accordance with the
Initial Notice of Borrowing;
(ii) the proceeds of each Borrowing deemed requested
under Section 2A.2(a)(i)(C) or (D) shall be disbursed by the
Agent by way of direct payment of the relevant interest or
Secured Obligation; and
(iii) the proceeds of each Borrowing deemed requested
under Section 2A.2(a)(i)(E) shall be disbursed by the Agent
directly to NationsBank on behalf of the Borrower.
SECTION 2A.3. Repayment of Revolving Credit Loans. The
Revolving Credit Loans will be repaid as follows:
(a) Whether or not any Default or Event of Default has
occurred, the outstanding principal amount of all the Revolving Credit
Loans is due and payable, and shall be repaid by the Borrowers in full,
not later than the Termination Date;
(b) If at any time the aggregate outstanding unpaid principal
amount of the Revolving Credit Loans exceeds the Borrowing Base in
effect at such time, the Borrowers shall repay the Revolving Credit
Loans in an amount sufficient to reduce the aggregate unpaid principal
amount of such Revolving Credit Loans by an amount equal to such
excess, together with accrued and unpaid interest on the amount so
repaid to the date of repayment;
(c) Each Borrower hereby instructs the Agent to repay the
Revolving Credit Loans outstanding on any day in an amount equal to the
amount, if any, received by the Agent on such day pursuant to Section
8.1(b); provided that payments received in excess of outstanding
Revolving Credit Loans or payments received on account of LIBOR Rate
Loans which would otherwise result in prepayment of such Loans prior to
the end of the Interest Period applicable thereto may, upon the
instruction of the Borrowers to the Agent not later than 1:00 p.m.
(Atlanta time) on any Business Day, be applied to the Cash Collateral
Account; and
(d) Each LIBOR Rate Loan is due and payable on the last day of
the Interest Period applicable thereto, except to the extent converted
or continued in accordance with Sections 4.12 and 4.13.
Repayments pursuant to Section 2A.3(b) or (c) shall be applied first to the
Prime Rate Revolving Credit Loans and then, subject to the provisions of Section
2A.3(c), to LIBOR Rate Revolving Credit Loans.
SECTION 2A.4. Revolving Credit Notes. Each Lender's Revolving
Credit Loans and the joint and several obligation of the Borrowers to repay such
Revolving Credit Loans shall also be evidenced by a Revolving Credit Note
payable to the order of such Lender. Each Revolving Credit Note shall be dated
the Effective Date (or the later "effective date" under any Assignment and
Acceptance) and be duly and validly executed and delivered by the Borrowers.
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SECTION 2A.5. Extension of Revolving Credit Facility. Upon the
request of the Borrowers, the Lenders may, in their sole discretion, effective
as of any anniversary of the Effective Date, agree to extend the Revolving
Credit Facility for a period of time beyond the then effective Termination Date.
Each such extension shall be effected by the Borrowers' and Lenders' execution
and delivery of a written agreement evidencing such extension.
SECTION 2B. Capital Expenditure Loan Facility.
SECTION 2B.1. Capital Expenditure Loans. Upon the terms and
subject to the conditions of, and in reliance upon the representations and
warranties made under, this Agreement, each Lender agrees, severally, but not
jointly, to make Capital Expenditure Loans to the Borrowers from time to time
from the Effective Date to May 25, 2000, as requested by the Borrowers in
accordance with the terms of Section 2B.2, in amounts equal to such Lender's
Commitment Percentage of each such Capital Expenditure Loan requested; provided,
however, that (a) (i) the aggregate principal amount of all Capital Expenditure
Loans (after giving effect to the Loans requested) made hereunder shall not
exceed the Capital Expenditure Loan Facility, and (ii) the aggregate principal
amount of all Capital Expenditure Loans (after giving effect to the Loans
requested) plus the aggregate principal amount of all outstanding Revolving
Credit Loans plus the Letter of Credit Reserve shall not exceed $100,000,000,
(b) each Capital Expenditure Loan shall be in a minimum principal amount of
$500,000, (c) no more than one Capital Expenditure Loan shall be requested in
any calendar month, (d) each Capital Expenditure Loan shall be in a principal
amount not to exceed 80% (or such lesser percentage as the Agent may in its
reasonable judgment determine from time to time) of the invoice cost (net of
sales taxes, freight and delivery charges, and set-up charges) of item(s) of
Equipment to be financed with the proceeds of such Capital Expenditure Loan, and
(e) no Capital Expenditure Loan will be made against any item of Equipment which
does not constitute Eligible Equipment. As used herein, "Eligible Equipment"
means new Equipment purchased by the Borrowers after the Effective Date which
meets the following requirements: (i) such Equipment is owned by and has been
delivered to a Borrower and is subject to the perfected Security Interest and no
other Lien whatsoever other than junior Permitted Liens, (ii) such Equipment is
in good condition, complies with the applicable purchase order and has been
accepted by a Borrower, (iii) if such Equipment is (or is to be) located at a
facility leased by a Borrower, the lessor has delivered to the Agent, on behalf
of the Lenders, a waiver and consent in form and substance satisfactory to the
Agent, and (iv) such Equipment is not determined by the Agent, on behalf of the
Lenders, in its reasonable judgment, to be ineligible for any other reason. The
Agent's and each Lender's books and records reflecting the date and the amount
of each Capital Expenditure Loan and each repayment of principal thereof shall
constitute prima facie evidence of the accuracy of the information contained
therein, subject to the provisions of Section 4.5.
SECTION 2B.2. Manner of Borrowing Capital Expenditure Loans.
Borrowings of the Capital Expenditure Loans shall be made as follows:
(a) Requests for Borrowing.
(i) Prime Rate Capital Expenditure Loans. The
Borrowers may request a Prime Rate Capital Expenditure Loan by
giving the Agent a Notice of Borrowing (which notice shall be
irrevocable) not later than 11:00 a.m. (Atlanta time) on the
date three Business Days before the day on which the requested
Prime Rate Capital Expenditure Loan is to be made.
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(ii) LIBOR Rate Capital Expenditure Loans. The
Borrowers may request a LIBOR Rate Capital Expenditure Loan by
giving the Agent a Notice of Borrowing (which notice shall be
irrevocable) not later than 11:00 a.m. (Atlanta time) on the
date three Business Days before the day on which the requested
LIBOR Rate Capital Expenditure Loan is to be made; provided
the Borrowers shall not be permitted to request, and the
Lenders shall not be required to make, LIBOR Rate Capital
Expenditure Loans at any time during the existence of an Event
of Default.
(iii) Notification of Lenders. The Agent shall notify
the Lenders of any Notice of Borrowing given or deemed given
pursuant to this Section 2B.2(a) by 12:00 noon (Atlanta time)
on the proposed Borrowing date (in the case of Prime Rate
Capital Expenditure Loans) or by 3:00 p.m. (Atlanta time)
three Business Days before the proposed Borrowing date (in the
case of LIBOR Rate Capital Expenditure Loans). Not later than
1:30 p.m. on the proposed Borrowing date, each Lender will
make available to the Agent, for the account of the Borrowers,
at the Agent's Office in funds immediately available to the
Agent, an amount equal to such Lender's Commitment Percentage
of such Prime Rate Capital Expenditure Loan or LIBOR Rate
Capital Expenditure Credit Loan, as the case may be.
(b) Disbursement of Loans. Each Borrower hereby irrevocably
authorizes the Agent to disburse the proceeds of each Borrowing
requested pursuant to this Section 2B.2 by wire transfer by the Agent
in Dollars in immediately available funds to a Disbursement Account or,
in the absence of a Disbursement Account, by wire transfer to such
other account as may be agreed upon by the Borrowers and the Agent from
time to time.
SECTION 2B.3. Repayment of Capital Expenditure Loans. The
Capital Expenditure Loans will be repaid as follows:
(a) Except as described in clause (b) below, there shall be no
scheduled payments of principal on any Capital Expenditure Loan prior
to May 25, 2000, and all Capital Expenditure Loans shall bear interest
until such date at the rates applicable to Revolving Credit Loans;
(b) Each LIBOR Rate Capital Expenditure Loan is due and
payable on the last day of the Interest Period applicable thereto,
except to the extent converted or continued in accordance with Sections
4.11 and 4.12; and
(c) On May 25, 2000, the outstanding principal balance of all
Capital Expenditure Loans shall be consolidated, and such consolidated
balance shall be due and payable, and shall be repaid in full by the
Borrowers, in consecutive installments of principal on the first day of
each fiscal quarter, based on a five (5) year level amortization,
beginning on July 1, 2000, together with a final installment of the
unpaid balance on the Termination Date. Beginning May 25, 2000, the
Capital Expenditure Loans shall bear interest at the rates applicable
to Capital Expenditure Loans.
SECTION 2B.4. Capital Expenditure Notes. Each Lender's Capital
Expenditure Loans and the joint and several obligation of the Borrowers to repay
such Capital Expenditure Loans shall also be evidenced by a Capital Expenditure
Note payable to the order of such Lender. Each Capital Expenditure Note shall be
dated the Effective Date (or the later "effective date" under any Assignment and
Acceptance) and be duly and validly executed and delivered by the Borrowers.
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SECTION 2B.5. Prepayment of Capital Expenditure Loans.
(a) Voluntary Prepayment. The Borrowers shall have the right
at any time and from time to time, upon at least five Business Days'
prior written notice to the Agent, to prepay any of the Capital
Expenditure Loans in whole or in part on any Business Day. Each partial
prepayment of a Capital Expenditure Loan shall be in a principal amount
equal to $100,000 or any integral multiple thereof and shall be applied
to the principal installments of the Capital Expenditure Loans in the
inverse order of their maturities. On the prepayment date, the
Borrowers shall pay interest on the amount prepaid, accrued to the
prepayment date, as well as all other amounts due hereunder with
respect to such prepayment, including all amounts due under Section
4.10. Any notice of prepayment given by the Borrowers hereunder shall
be irrevocable, and the amount to be prepaid (including accrued
interest and any prepayment fees) shall be due and payable on the date
designated in the notice.
(b) Mandatory Prepayment. Upon the sale, transfer or other
disposition of any item of Equipment financed with the proceeds of a
Capital Expenditure Loan, the Borrowers shall be obligated to prepay
the portion of the Capital Expenditure Loan made against such item of
Equipment, together with accrued and unpaid interest thereon, as well
as all other amounts due hereunder with respect to such prepayment,
including all amounts due under Section 4.10. The Borrowers shall also
be obligated to prepay all Capital Expenditure Loans in full, together
with accrued and unpaid interest thereon, as well as all other amounts
due hereunder with respect to such prepayment, including all amounts
due under Section 4.10, upon any termination of this Agreement pursuant
to Section 4.6 or otherwise or upon any acceleration of all Capital
Expenditure Loans pursuant to Article 12.
ARTICLE 3
LETTER OF CREDIT FACILITY
SECTION 3.1. Agreement to Issue. Upon the terms and subject to
the conditions of, and in reliance upon the representations and warranties made
under, this Agreement, NationsBank agrees to issue for the account of the
Borrowers one or more Letters of Credit in accordance with this Article 3, from
time to time during the period commencing on the Effective Date and ending on
the Termination Date.
SECTION 3.2. Amounts. NationsBank shall not have any
obligation to issue any Letter of Credit at any time:
(a) if, after giving effect to the issuance of the requested
Letter of Credit, (i) the aggregate Letter of Credit Obligations of the
Borrowers would exceed the Letter of Credit Facility then in effect or
(ii) the aggregate principal amount of the Revolving Credit Loans
outstanding would exceed the Borrowing Base (after reduction for the
Letter of Credit Reserve in respect of such Letter of Credit); or
(b) which has a term longer than one calendar year or an
expiration date after the last Business Day that is more than 15 days
prior to the Termination Date.
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SECTION 3.3. Conditions. The obligation of NationsBank to
issue any Letter of Credit is subject to the satisfaction of the conditions
precedent contained in Article 5. In addition, the obligation of NationsBank to
issue any Letter of Credit is subject to the satisfaction of the following
additional conditions precedent in a manner satisfactory to the Agent and
NationsBank:
(a) the Borrowers shall have delivered to NationsBank and the
Agent at such times and in such manner as NationsBank or the Agent may
prescribe an application in form and substance satisfactory to
NationsBank and the Agent for the issuance of the Letter of Credit, a
Reimbursement Agreement and such other documents as may be required
pursuant to the terms thereof, and the form and terms of the proposed
Letter of Credit shall be satisfactory to NationsBank and the Agent;
and
(b) as of the date of issuance, no order of any court,
arbitrator or governmental authority having jurisdiction or authority
over NationsBank shall purport by its terms to enjoin or restrain banks
generally from issuing letters of credit of the type and in the amount
of the proposed Letter of Credit, and no law, rule or regulation
applicable to banks generally and no request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over banks generally shall prohibit, or request that
NationsBank refrain from, the issuance of letters of credit generally
or the issuance of such Letter of Credit.
SECTION 3.4. Issuance of Letters of Credit.
(a) Request for Issuance. The Borrowers shall give NationsBank
and the Agent written notice of the Borrowers' request for the issuance
of a Letter of Credit no later than six Business Days prior to the
proposed date of issuance of the Letter of Credit. Such notice shall be
irrevocable and shall specify the original face amount of the Letter of
Credit requested, the effective date (which date shall be a Business
Day) of issuance of such requested Letter of Credit, whether such
Letter of Credit may be drawn in a single or in multiple draws, the
date on which such requested Letter of Credit is to expire (which date
shall be a Business Day earlier than the Business Day 15 days prior to
the Termination Date), the purpose for which such Letter of Credit is
to be issued and the beneficiary of the requested Letter of Credit. The
Borrowers shall attach to such notice the form of the Letter of Credit
that the Borrowers request to be issued.
(b) Responsibilities of the Agent; Issuance. The Agent shall
determine, as of the Business Day immediately preceding the requested
effective date of issuance of the Letter of Credit set forth in the
notice from the Borrowers pursuant to Section 3.4(a), the amount of the
unused Letter of Credit Facility and the Borrowing Base. If (i) the
form of the Letter of Credit delivered by the Borrowers to the Agent is
acceptable to NationsBank and the Agent in their sole discretion, (ii)
the Agent has not received notice of a Default or an Event of Default
from the Required Lenders specifically stating that the Required
Lenders do not intend to fund their ratable portion of the Loans, (iii)
the undrawn face amount of the requested Letter of Credit is less than
or equal to the lesser of (A) the unused Letter of Credit Facility and
(B) the unused Borrowing Base, and (iv) the Agent has received a
certificate from the Borrowers stating that the applicable conditions
set forth in Article 5 have been satisfied, then NationsBank will cause
the Letter of Credit to be issued.
(c) Notice of Issuance. Promptly after the issuance of any
Letter of Credit, NationsBank shall give the Agent written or facsimile
notice, or telephonic notice confirmed
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promptly thereafter in writing, of the issuance of such Letter of
Credit, and the Agent shall give each Lender written or facsimile
notice, or telephonic notice confirmed promptly thereafter in writing,
of the issuance of such Letter of Credit.
(d) No Extension or Amendment. No Letter of Credit shall be
extended or amended unless the requirements of this Section 3.4 are met
as though a new Letter of Credit were being requested and issued.
SECTION 3.5. Duties of NationsBank. Any action taken or
omitted to be taken by NationsBank under or in connection with any Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not result in any liability of NationsBank to any Lender or
relieve any Lender of its obligations hereunder to NationsBank. In determining
whether to pay under any Letter of Credit, NationsBank shall have no obligation
to any Lender other than to confirm that any documents required to be delivered
under such Letter of Credit in connection with such drawing have been presented
and appear on their face to comply with the requirements of such Letter of
Credit.
SECTION 3.6. Payment of Reimbursement Obligations.
(a) Payment to Issuer. Notwithstanding any provisions to the
contrary in any Reimbursement Agreement, the Borrowers jointly and
severally agree to reimburse NationsBank for any drawings (whether
partial or full) under each Letter of Credit issued by NationsBank and
agree to pay to NationsBank the amount of all other Reimbursement
Obligations and other amounts payable to NationsBank under or in
connection with such Letter of Credit immediately when due,
irrespective of any claim, set-off, defense or other right which any
Borrower may have at any time against NationsBank or any other Person.
(b) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of any Borrower with respect to any Letter of
Credit (or any Reimbursement Obligation relating thereto) received by
NationsBank, or by the Agent and distributed by the Agent to the
Lenders on account of their respective participations therein, is
thereafter set aside, avoided or recovered from NationsBank or the
Agent in connection with any receivership, liquidation or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the
Agent, for the account of the Agent or NationsBank, their respective
Commitment Percentages of such amount set aside, avoided or recovered
together with interest at the rate required to be paid by the Agent
upon the amount required to be repaid by it.
SECTION 3.7. Participations.
(a) Purchase of Participations. Immediately upon issuance by
NationsBank of any Letter of Credit, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received without
recourse or warranty an undivided interest and participation in such
Letter of Credit, equal to such Lender's Commitment Percentage of the
face amount thereof (including, without limitation, all obligations of
the Borrowers with respect thereto, other than amounts owing to
NationsBank under Section 4.2(d), and any security therefor or guaranty
pertaining thereto).
(b) Sharing of Letter of Credit Payments. In the event that
NationsBank makes a payment under any Letter of Credit and NationsBank
shall not have been repaid such amount pursuant to Section 3.6, then
NationsBank shall be deemed to have made a Non-Ratable Loan
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in the amount of such payment, and notwithstanding the occurrence or
continuance of a Default or Event of Default at the time of such
payment, such Non-Ratable Loan shall be subject to the provisions of
Section 4.8 and the absolute obligations of the Lenders to pay for
their respective participation interests therein.
(c) Sharing of Reimbursement Obligation Payments. Whenever
NationsBank receives a payment from or on behalf of the Borrowers on
account of a Reimbursement Obligation as to which the Agent has
previously received for the account of NationsBank payment from a
Lender pursuant to this Section 3.7, NationsBank shall promptly pay to
the Agent, for the benefit of such Lender, such Lender's Commitment
Percentage of the amount of such payment from the Borrowers in Dollars.
Each such payment shall be made by NationsBank on the Business Day on
which NationsBank receives immediately available funds pursuant to the
immediately preceding sentence, if received prior to 11:00 a.m.
(Atlanta time) on such Business Day and otherwise on the next
succeeding Business Day.
(d) Documentation. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit,
Reimbursement Agreement or application for any Letter of Credit and
such other documentation as may reasonably be requested by such Lender.
(e) Obligations Irrevocable. The obligations of each Lender to
make payments to the Agent with respect to any Letter of Credit and
their participations therein pursuant to the provisions of Section 4.8
hereof or otherwise and the obligations of the Borrowers to make
payments to NationsBank or to the Agent, for the account of Lenders,
shall be irrevocable, shall not be subject to any qualification or
exception whatsoever (except with respect to the Agent's gross
negligence or willful misconduct) and shall be made in accordance with
the terms and conditions of this Agreement (assuming, in the case of
the obligations of the Lenders to make such payments, that the Letter
of Credit has been issued in accordance with Section 3.4), 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, set-off, defense or
other right which any Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of
any Letter of Credit (or any Person for whom any such
transferee may be acting), any Lender, NationsBank or any
other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions
between any Borrower or any other Person and the beneficiary
named in any Letter of Credit);
(iii) Any draft, certificate or any other document
presented under any Letter of Credit upon which payment has
been made in good faith and according to its terms proving to
be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect;
(iv) The surrender or impairment of any Collateral or
any other security for the Secured Obligations or the
performance or observance of any of the terms of any of the
Loan Documents;
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(v) The occurrence of any Default or Event of
Default; or
(vi) The Agent's failure to deliver to any Lender the
notice provided for in Section 3.4(c).
SECTION 3.8. Indemnification, Exoneration.
(a) Indemnification. In addition to amounts payable as
elsewhere provided in this Article 3, the Borrowers jointly and
severally agree to protect, indemnify, pay and save the Lenders and the
Agent harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) which any Lender or the Agent may incur or
be subject to as a consequence, directly or indirectly, of
(i) the issuance of any Letter of Credit, other than
as a result of its gross negligence or willful misconduct, as
determined by a court of competent jurisdiction, or
(ii) the failure of NationsBank to honor a drawing
under any 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 (all such acts or omissions
being hereinafter referred to collectively as "Government
Acts").
(b) Assumption of Risk by the Borrowers. As among the
Borrowers, the Lenders and the Agent, the Borrowers assume all risks of
the acts and omissions of, or misuse of any of the Letters of Credit
by, the respective beneficiaries thereof. In furtherance and not in
limitation of the foregoing, subject to the provisions of the
applications for the issuance of Letters of Credit, the Lenders and the
Agent shall not be responsible for:
(i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any
Person in connection with the application for and issuance of
and presentation of drafts with respect to any of the Letters
of Credit, even if it should 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
any 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) the failure of the beneficiary of any Letter of
Credit to comply duly with conditions required in order to
draw upon such Letter of Credit (provided that the Borrowers
reserve all of their rights and remedies against NationsBank
as issuer of the Letters of Credit for improper payment made
by NationsBank);
(iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher;
(v) errors in interpretation of technical terms;
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(vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such
Letter of Credit; or
(viii) any consequences arising from causes beyond
the control of the Lenders or the Agent, including, without
limitation, any Government Acts.
None of the foregoing shall affect, impair or prevent the vesting of
any of the Agent's rights or powers under this Section 3.8.
(c) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action
taken or omitted by the Agent, NationsBank or any Lender under or in
connection with any of the Letters of Credit or any related
certificates, if taken or omitted in good faith, shall not result in
any liability of any Lender or the Agent to the Borrowers or relieve
the Borrowers of any of their obligations hereunder to any such Person.
SECTION 3.9. Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of Section 3.2(b), any Letter of Credit is
outstanding on the Termination Date, then on or prior to such Termination Date,
or in any case upon the occurrence of an Event of Default, the Borrowers shall,
promptly on demand by the Agent, deposit with the Agent, for the ratable benefit
of the Lenders, with respect to each Letter of Credit then outstanding, as the
Agent shall specify, either (a) a standby letter of credit (a "Supporting Letter
of Credit") in form and substance satisfactory to the Agent, issued by an issuer
reasonably satisfactory to the Agent in an amount equal to the greatest amount
for which each such letter of credit may be drawn, under which Supporting Letter
of Credit the Agent is entitled to draw amounts necessary to reimburse the Agent
and the Lenders for payments made by the Agent and the Lenders under each such
letter of credit or under any reimbursement or guaranty agreement with respect
thereto, or (b) Cash Collateral in an amount necessary to reimburse the Agent
and the Lenders for payments made by the Agent and the Lenders under each such
letter of credit or under any reimbursement or guaranty agreement with respect
thereto. Such Supporting Letter of Credit or Cash Collateral shall be held by
the Agent for the benefit of the Lenders, as security for, and to provide for
the payment of, the Reimbursement Obligations. In addition, the Agent may at any
time after the Termination Date apply any or all of such Cash Collateral to the
payment of any or all of the Secured Obligations then due and payable. At the
Borrowers' request, but subject to the Agent's reasonable approval, the Agent
shall invest any Cash Collateral consisting of cash or any proceeds of Cash
Collateral consisting of cash in Cash Equivalents, and any commissions, expenses
and penalties incurred by the Agent in connection with any investment and
redemption of such Cash Collateral shall be Secured Obligations hereunder
secured by the Collateral, shall bear interest at the rates provided herein for
the Loans and shall be charged to the Borrowers' Loan Accounts, or, at the
Agent's option, shall be paid out of the proceeds of any earnings received by
the Agent from the investment of such Cash Collateral as provided herein or out
of such cash itself. The Agent makes no representation or warranty as to, and
shall not be responsible for, the rate of return, if any, earned on any Cash
Collateral. Any earnings on Cash Collateral shall be held as additional Cash
Collateral on the terms set forth in this Section 3.9.
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ARTICLE 4
GENERAL LOAN PROVISIONS
SECTION 4.1. Interest.
(a) Prime Rate Loans. Subject to the provisions of Section
4.1(d), the Borrowers will pay interest on the unpaid principal amount
of each Prime Rate Loan, for each day from the day such Loan is made
until such Loan is paid (whether at maturity, by reason of
acceleration, or otherwise) or is converted to a Loan of a different
Type, at a rate per annum equal to the sum of (i) the Applicable Margin
and (ii) the Prime Rate, payable monthly in arrears as it accrues on
each Interest Payment Date.
(b) LIBOR Rate Loans. Subject to the provisions of Section
4.1(d), the Borrowers will pay interest on the unpaid principal amount
of each LIBOR Rate Loan for the applicable Interest Period at a rate
per annum equal to the sum of (i) the Applicable Margin and (ii) the
LIBOR Rate, payable in arrears as it accrues on each Interest Payment
Date, and when such LIBOR Rate Loan is due (whether at maturity, by
reason of acceleration or otherwise).
(c) Other Secured Obligations. The Borrowers will, to the
extent permitted by Applicable Law, pay interest on the unpaid
principal amount of any Secured Obligation that is due and payable,
other than the Loans, in accordance with Sections 4.1(a) or (d), as
applicable, as if such Secured Obligation were a Prime Rate Revolving
Credit Loan.
(d) Default Rate. If there shall occur and be continuing an
Event of Default, at the election of the Required Lenders, the unpaid
principal amount of the Loans and other Secured Obligations shall no
longer bear interest in accordance with the terms of Section 4.1(a),
(b) or (c), but shall bear interest for each day from the date of such
Event of Default until such Event of Default shall have been cured or
waived at a rate per annum equal to the sum of (i) the Default Margin
and (ii) the rate otherwise applicable to such Loan or other Secured
Obligation, payable on demand. The interest rate provided for in the
preceding sentence shall, to the extent permitted by Applicable Law,
apply to and accrue on the amount of any judgment entered with respect
to any Secured Obligation and shall continue to accrue at such rate
during any proceeding described in Section 12.1(g) or (h).
(e) Calculation of Interest. The interest rates provided for
in Sections 4.1(a), (b), (c) and (d) shall be computed on the basis of
a year of 360 days and the actual number of days elapsed.
(f) Maximum Rate. It is not intended by the Lenders, and
nothing contained in this Agreement or the Notes shall be deemed, to
establish or require the payment of a rate of interest in excess of the
maximum rate permitted by Applicable Law (the "Maximum Rate"). If, in
any month, the Effective Interest Rate, absent such limitation, would
have exceeded the Maximum Rate, then the Effective Interest Rate for
that month shall be the Maximum Rate, and, if in future months, the
Effective Interest Rate would otherwise be less than the Maximum Rate,
then the Effective Interest Rate shall remain at the Maximum Rate until
such time as the amount of interest paid hereunder equals the amount of
interest which would have been paid if the same had not been limited by
the Maximum Rate. In the event, upon payment in full of the Secured
Obligations, the total amount of interest paid or accrued under the
terms of this
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Agreement is less than the total amount of interest which would have
been paid or accrued if the Effective Interest Rate had at all times
been in effect, then the Borrowers shall, to the extent permitted by
Applicable Law, pay to the Agent for the account of the Lenders an
amount equal to the excess, if any, of (i) the lesser of (A) the amount
of interest which would have been charged if the Maximum Rate had, at
all times, been in effect and (B) the amount of interest which would
have accrued had the Effective Interest Rate, at all times, been in
effect and (ii) the amount of interest actually paid or accrued under
this Agreement. In the event the Lenders receive, collect or apply as
interest any sum in excess of the Maximum Rate, such excess amount
shall be applied to the reduction of the principal balance of the
Secured Obligations, and if no such principal is then outstanding, such
excess or part thereof remaining shall be paid to the Borrowers.
SECTION 4.2. Certain Fees.
(a) Closing Fees. As additional consideration for the
extensions of credit provided for hereunder, in addition to any
interest due under this Agreement, on the Effective Date, the Borrowers
shall pay to the Agent (for its own account except as otherwise agreed
in writing between the Agent and the Lenders) a closing fee as set
forth in that certain letter agreement, dated as of May 25, 1999,
between the Borrowers and the Agent (the "Fee Letter"). The closing fee
provided for in the Fee Letter shall compensate the Agent for the
internal costs associated with the origination, structuring,
processing, approving and closing of the transactions contemplated by
this Agreement, but not including any out-of-pocket expenses for which
the Borrowers have agreed to reimburse the Agent and the other Lenders,
including, without limitation, the Agent's reasonable out-of-pocket
expenses incurred in connection with its due diligence examination of
the Borrowers and the closing of the transactions contemplated by this
Agreement. Such closing fee shall be fully earned on the Effective Date
and shall not be subject to refund or rebate.
(b) Agent Fee; Field Exam Fee. For administration and other
services performed by the Agent in connection with its continuing
administration of this Agreement, the Borrowers shall pay to the Agent,
for its own account, and not for the account of the Lenders, annual
Agent and field examination fees as set forth in the Fee Letter,
payable on the Effective Date and each anniversary thereof so long as
any Loan or Letter of Credit that is not collateralized by cash or by a
Supporting Letter of Credit acceptable to the Agent remains outstanding
or the Revolving Credit Facility shall not have been terminated. The
fees payable pursuant to the Fee Letter and this Section 4.2(b) shall
be fully earned by the Agent on the date payment thereof is due and
shall not be subject to refund or rebate. Payment of such fees shall
not limit the Borrowers' obligations to reimburse the Agent for its
out-of-pocket expenses as set forth in Section 15.2.
(c) Unused Line Fee. In connection with and as consideration
for the holding available for the use of the Borrowers hereunder the
full amount of the Revolving Credit Facility and the Capital
Expenditure Facility, the Borrowers will pay a fee to the Agent, for
the ratable benefit of the Lenders, for each day from the Effective
Date until the Termination Date, in an amount equal to 3/8% per annum
of the unused portion of the Revolving Credit Facility and the Capital
Expenditure Facility for such day. Such fee shall be payable monthly in
arrears on each Interest Payment Date and shall be fully earned when
due and payable and shall not be subject to refund or rebate. Such fee
is not, and shall not be deemed to be, interest or a charge
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for the use of money. Such fee shall be calculated based on a year of
360 days and the actual number of days elapsed.
(d) Letter of Credit Fees.
(i) The Borrowers agree to pay to the Agent, for the
ratable benefit of the Lenders, Letter of Credit fees equal to
the LIBOR Rate Margin then applicable to Revolving Credit
Loans (as set forth in the definition of "Applicable Margin"),
based on the average daily aggregate Letter of Credit Amount
of all Letters of Credit from time to time outstanding during
the term of this Agreement. Such fees shall be payable to the
Agent for the ratable benefit of the Lenders in accordance
with their respective Commitment Percentages monthly in
arrears and shall be calculated based on a year of 360 days
and the actual number of days elapsed.
(ii) The Borrowers agree to pay to the Agent, for the
account of the Agent, and not for the account of the Lenders,
the standard fees and charges of the Agent for issuing,
administering, amending, renewing, paying and canceling
Letters of Credit, as and when assessed, as well as all fees
payable pursuant to the Fee Letter.
(e) Collection Fee. During the period from and including the
Effective Date to and including the Termination Date, the Borrowers
will pay to the Agent for its own account, and not for the account of
the Lenders, a collection fee as set forth in the Fee Letter.
(f) General. All fees shall be fully earned by the identified
recipient thereof when due and payable and, except as otherwise set
forth herein or required by Applicable Law, shall not be subject to
refund or rebate. All fees provided for in this Section 4.2 are for
compensation for services and are not, and shall not be deemed to be,
interest or a charge for the use of money.
SECTION 4.3. Manner of Payment.
(a) Except as otherwise expressly provided in Section 8.1(b),
each payment (including prepayments) by the Borrowers on account of the
principal of or interest on the Loans or of any other amounts payable
to the Lenders under this Agreement or any Note shall be made not later
than 12:00 noon (Atlanta time) on the date specified for payment under
this Agreement to the Agent, for the account of the Lenders, at the
Agent's Office, in Dollars, in immediately available funds and shall be
made without any setoff, counterclaim or deduction whatsoever. Any
payment received after such time but before 1:00 p.m. (Atlanta time) on
such day shall be deemed a payment on such date for the purposes of
Section 12.1, but for all other purposes shall be deemed to have been
made on the next succeeding Business Day.
(b) The Borrowers hereby irrevocably authorize each Lender and
each Affiliate of such Lender and each participant herein to charge any
account of the Borrowers maintained with such Lender or such Affiliate
or participant with such amounts as may be necessary from time to time
to pay any Secured Obligations (whether or not owed to such Lender,
Affiliate or participant) which are not paid when due, subject to any
applicable cure period.
(c) Each Lender hereby severally (but not jointly) represents
that, under applicable law and treaties in effect on the date of this
Agreement, no United States federal taxes will be
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required to be withheld by the Agent or the Borrowers with respect to
any payments to be made to such Lender in respect of this Agreement.
Each Lender that itself is not incorporated under the laws of the
United States or a state thereof agrees severally (but not jointly)
that, prior to the Effective Date and the date that any such form
expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form delivered by it to the
Borrowers and the Agent, it will deliver to the Borrowers and the Agent
two duly completed copies of either United States Internal Revenue
Service Form W-8, 1001 or 4224, or successor applicable form,
certifying in each case that such Lender is entitled to receive all
payments under this Agreement and the Notes payable to it without
deduction or withholding of any United States federal income taxes
SECTION 4.4. General. If any payment under this Agreement or
any Note shall be specified to be made upon a day which is not a Business Day,
it shall be made on the next succeeding day which is a Business Day and such
extension of time shall in such case be included in computing interest, if any,
in accordance with such payment.
SECTION 4.5. Loan Accounts; Statements of Account.
(a) Each Lender shall open and maintain on its books a loan
account in the Borrowers' name (each, a "Loan Account" and
collectively, the "Loan Accounts"). Each such Loan Account shall show
as debits thereto each Loan made under this Agreement by such Lender to
the Borrowers and as credits thereto all payments received by such
Lender and applied to principal of such Loan, so that the balance of
the loan account at all times reflects the principal amount due such
Lender from the Borrowers.
(b) The Agent shall maintain on its books a control account
for the Borrowers in which shall be recorded (i) the amount of each
disbursement made hereunder, (ii) the amount of any principal or
interest due or to become due from the Borrowers hereunder, and (iii)
the amount of any sum received by the Agent hereunder from the
Borrowers and each Lender's ratable share therein.
(c) The entries made in the accounts pursuant to subsections
(a) and (b) shall be prima facie evidence, in the absence of manifest
error, of the existence and amounts of the obligations of the Borrowers
therein recorded and in case of discrepancy between such accounts, in
the absence of manifest error, the accounts maintained pursuant to
subsection (b) shall be controlling.
(d) The Agent will account separately to AAS monthly with a
statement of Loans, charges and payments made to and by the Borrowers
pursuant to this Agreement, and such accounts rendered by the Agent
shall be deemed final, binding and conclusive, save for manifest error,
unless the Agent is notified by the Borrowers in writing to the
contrary within 30 days of the date the account to AAS was so rendered.
Such notice by the Borrowers shall be deemed an objection to only those
items specifically objected to therein. Failure of the Agent to render
such account shall in no way affect the rights of the Agent or of the
Lenders hereunder.
SECTION 4.6. Termination of Agreement. The Borrowers shall
have the right, at any time, to terminate this Agreement upon not less than 60
days prior written notice to the Agent of their intention to terminate this
Agreement, which notice shall specify the effective date of such termination.
Upon receipt of such notice, the Agent shall promptly notify each Lender
thereof. On the date
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specified in such notice, such termination shall be effected, provided, that the
Borrowers shall, on or prior to such date, pay to the Agent, for the account of
the Lenders, in same day funds, an amount equal to all Secured Obligations then
outstanding, including, without limitation, all (i) accrued interest thereon,
(ii) all accrued fees provided for hereunder, including all fees payable under
the Fee Letter, (iii) any amounts payable to the Lenders pursuant to this
Article 4 or Sections 15.2, 15.3, 15.14 and 15.23, and (iv) all amounts due and
payable under the Fee Letter. In addition thereto, the Borrowers shall deliver
to the Agent (y) an indemnity or Cash Collateral in form and substance
acceptable to the Agent with respect to any checks or other instruments received
by the Agent and credited to the Borrowers in calculating the payoff amount, and
(z) in respect of each outstanding Letter of Credit, either the Supporting
Letter of Credit or the Cash Collateral as provided in Section 3.9. Following a
notice of termination as provided for in this Section 4.6 and upon payment in
full of the amounts specified in this Section 4.6, this Agreement shall be
terminated and the Agent, the Lenders and the Borrowers shall have no further
obligations to any other party hereto except for the indemnification obligations
pursuant to Sections 14.7 and 15.14 hereof.
SECTION 4.7. Making of Loans.
(a) Nature of Obligations of Lenders to Make Loans. The
obligations of the Lenders under this Agreement to make the Loans are
several and are not joint or joint and several.
(b) Assumption by Agent. Subject to the provisions of Section
4.8 and notwithstanding the occurrence or continuance of a Default or
Event of Default or other failure of any condition to the making of
Loans hereunder subsequent to the Loans to be made on the Effective
Date, unless the Agent shall have received notice from the Required
Lenders in accordance with the provisions of Section 4.7(c) prior to a
proposed borrowing date that the Lenders will not make available to the
Agent such Lenders' ratable portion of the amount to be borrowed on
such date, the Agent may assume that the Lenders will make such portion
available to the Agent in accordance with Section 2.2(a), and the Agent
may, in reliance upon such assumption, make available to the Borrowers
on such date a corresponding amount. If and to the extent any Lender
shall not make such ratable portion available to the Agent, such Lender
and the Borrowers severally agree to repay to the Agent forthwith on
demand such corresponding amount, together with interest thereon for
each day from the date such amount is made available to the Borrowers
until the date such amount is repaid to the Agent at the Effective
Interest Rate or, if lower, subject to Section 4.1(e), the Maximum
Rate. If such Lender shall repay to the Agent such corresponding
amount, the amount so repaid shall constitute such Lender's Commitment
Percentage of the Loan made on such borrowing date for purposes of this
Agreement. The failure of any Lender to make its Commitment Percentage
of any Loan available shall not (without regard to whether the
Borrowers shall have returned the amount thereof to the Agent in
accordance with this Section 4.7) relieve it or any other Lender of its
obligation, if any, hereunder to make its Commitment Percentage of such
Loan available on such borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make its Commitment
Percentage of such Loan available on the borrowing date.
(c) Delegation of Authority to Agent. Without limiting the
generality of Section 14.1, each Lender expressly authorizes the Agent
to determine on behalf of such Lender (i) the creation or elimination
of any reserves (other than the Letter of Credit Reserve) against the
Revolving Credit Facility and the Borrowing Base, (ii) whether or not
Inventory or Receivables shall be deemed to constitute Eligible
Domestic Receivables, Eligible Engine Inventory,
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Eligible Foreign Receivables, Eligible Inventory, Eligible Parts
Inventory or Eligible Receivables, and whether a Lease Agreement is an
Eligible Lease Agreement, (iii) any reduction or increase of advance
rates applicable to the Borrowing Base (or applicable to Capital
Expenditure Loans), so long as such advance rates do not at any time
exceed the rates set forth in the Borrowing Base definition (or, in the
case of Capital Expenditure Loans, the advance rate set forth in
Section 2B.1), and (iv) whether or not Equipment shall be deemed to
constitute Eligible Equipment under Section 2B.1. Such authorization
may be withdrawn by the Required Lenders by giving the Agent written
notice of such withdrawal signed by the Required Lenders; provided,
however, that unless otherwise agreed by the Agent such withdrawal of
authorization shall not become effective until the thirtieth Business
Day after receipt of such notice by the Agent. Thereafter, the Required
Lenders shall jointly instruct the Agent in writing regarding such
matters with such frequency as the Required Lenders shall jointly
determine. Unless and until the Agent shall have received written
notice from the Required Lenders as to the existence of a Default, an
Event of Default or some other circumstance which would relieve the
Lenders of their respective obligations to make Loans hereunder, which
notice shall be in writing and shall be signed by the Required Lenders
and shall expressly state that the Required Lenders do not intend to
make available to the Agent such Lenders' ratable share of Loans made
after the effective date of such notice, the Agent shall be entitled to
continue to make the assumptions described in Section 4.7(b). After
receipt of the notice described in the preceding sentence, which shall
become effective on the third Business Day after receipt of such notice
by the Agent unless otherwise agreed by the Agent, the Agent shall be
entitled to make the assumptions described in Section 4.7(b) as to any
Loans as to which it has not received a written notice to the contrary
prior to 11:00 a.m. (Atlanta time) on the Business Day next preceding
the day on which the Loan is to be made. The Agent shall not be
required to make any Loan as to which it shall have received notice by
a Lender of such Lender's intention not to make its ratable portion of
such Loan available to the Agent. Any withdrawal of authorization under
this Section 4.7(c) shall not affect the validity of any Loans made
prior to the effectiveness thereof.
(d) Overadvances.
(i) Notwithstanding anything to the contrary
contained elsewhere in this Section 4.7 or this Agreement or
the other Loan Documents, and whether or not a Default or
Event of Default exists at the time, unless otherwise notified
by the Required Lenders in accordance with Section 4.7(c), the
Agent may in its discretion require all Lenders to honor
requests or deemed requests by the Borrowers for Revolving
Credit Loans at a time that an Overadvance exists or which
would result in an Overadvance and each Lender shall be
obligated to continue to make its Proportionate Share of
Revolving Credit Loans, up to a maximum amount outstanding
equal to its Commitment to make Revolving Credit Loans, so
long as (A) such Overadvance is not known by the Agent to
exceed the amount of minimum Availability then required under
Section 11.17, (B) such Overadvance is not outstanding for
more than 30 consecutive Business Days, and (C) no more than
two previous Overadvances have been permitted hereunder during
such fiscal year. "Overadvance" shall mean, as of any date of
determination, the amount, if any, by which (A) the
outstanding principal balance of Revolving Credit Loans
exceeds (B) the amount determined under clause (b) of the
definition of "Borrowing Base" Borrowing Base minus the
minimum Availability required at such time pursuant to Section
11.17.
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(ii) Further, the Agent is hereby authorized by the
Borrowers and the Lenders, from time to time in the Agent's
sole discretion, (A) after the occurrence of a Default or an
Event of Default, or (B) at any time that any of the other
applicable conditions precedent set forth in Article 5 have
not been satisfied, to make Revolving Credit Loans to the
Borrowers on behalf of the Lenders which the Agent, in its
reasonable business judgment, deems necessary or desirable (1)
to preserve or protect the Collateral, or any portion thereof,
(2) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Secured Obligations, or (3)
to pay any other amount chargeable to the Obligors pursuant to
the terms of this Agreement, including costs, fees and
expenses as described in Section 16.2 (any of the advances
described in this Section 4.7(d)(ii) being hereinafter
referred to as "Agent Advances"); provided that the Required
Lenders may at any time revoke the Agent's authorization
contained in this Section 4.7(d)(ii) to make Agent Advances,
any such revocation to be in writing and to become effective
on the third Business Day after the Agent's receipt thereof.
All Agent Advances shall be repayable by the Borrowers on
demand and secured by the Collateral, shall constitute
Revolving Credit Loans and Secured Obligations hereunder, and
shall bear interest at the rate applicable to Prime Rate
Revolving Credit Loans from time to time. The Agent shall
notify each Lender in writing of each such Agent Advance. All
Agent Advances shall constitute Non-Ratable Loans, as defined
in Section 4.8(c), and shall be subject to the provisions
thereof.
(e) Replacement of Certain Lenders. If a Lender (the "Affected
Lender") shall have failed to fund its Proportionate Share of any Loan
requested (or deemed requested) by the Borrowers which such Lender is
obligated to fund under the terms of this Agreement and which failure
has not been cured, then, in any such case and in addition to any other
rights and remedies that the Agent, any other Lender or the Borrowers
may have against such Affected Lender, the Agent may make written
demand on such Affected Lender (with a copy to the Borrowers) for the
Affected Lender to assign, and such Affected Lender shall assign
pursuant to one or more duly executed Assignment and Acceptances within
5 Business Days after the date of such demand, to one or more Lenders
willing to accept such assignment or assignments, or to one or more
Eligible Assignees designated by the Agent, all of such Affected
Lender's rights and obligations under this Agreement (including its
Commitments and all Loans owing to it) in accordance with Article 13.
The Agent is hereby irrevocably authorized to execute one or more
Assignment and Acceptances as attorney-in-fact for any Affected Lender
which fails or refuses to execute and deliver the same within 5
Business Days after the date of such demand. The Affected Lender shall
be entitled to receive, in cash and concurrently with the execution and
delivery of each such Assignment and Acceptance, all amounts owed to
the Affected Lender hereunder or under any other Loan Document,
including the aggregate outstanding principal amount of the Loans owed
to such Lender, together with accrued interest thereon through the date
of such assignment. Upon the replacement of any Affected Lender
pursuant to this Section 4.7(e), such Affected Lender shall cease to
have any participation in, entitlement to, or other right to share in
the Security Interest or any other Lien of the Agent in any Collateral,
such Affected Lender shall have no further obligation to make Loans or
purchase participations in Letters of Credit, and such Affected Lender
shall have no further liability to the Agent, any Lender or any other
Person under any of the Loan Documents (except as provided in Section
14.7 and elsewhere in this Agreement as to events or transactions which
occur prior to the replacement of such Affected Lender).
SECTION 4.8. Settlement Among Lenders.
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(a) Capital Expenditure Loans. The Agent shall pay to each
Lender on each Interest Payment Date and on each date on which
principal is due or paid, as the case may be, its ratable share, based
on the principal amount of the Capital Expenditure Loans owing to such
Lender, of all payments received by the Agent hereunder in immediately
available funds in respect of the principal of, or interest on, the
Capital Expenditure Loans, net of any amounts payable by such Lender to
the Agent, by wire transfer of same day funds.
(b) Revolving Credit Loans. It is agreed that each Lender's
Net Outstandings are intended by the Lenders to be equal at all times
to such Lender's Commitment Percentage of the aggregate principal
amount of all Revolving Credit Loans outstanding. Notwithstanding such
agreement, the several and not joint obligation of each Lender to fund
Revolving Credit Loans made in accordance with the terms of this
Agreement ratably in accordance with such Lender's Commitment
Percentage and each Lender's right to receive its ratable share of
principal payments on Revolving Credit Loans in accordance with its
Commitment Percentage, the Lenders agree that in order to facilitate
the administration of this Agreement and the Loan Documents that
settlement among them may take place on a periodic basis in accordance
with the provisions of this Section 4.8.
(c) Settlement Procedures as to Revolving Credit Loans. To the
extent and in the manner hereinafter provided in this Section 4.8,
settlement among the Lenders as to Revolving Credit Loans may occur
periodically on Settlement Dates determined from time to time by the
Agent, which may occur before or after the occurrence or during the
continuance of a Default or Event of Default and whether or not all of
the conditions set forth in Section 5.2 have been met. On each
Settlement Date payments shall be made by or to NationsBank and the
other Lenders in the manner provided in this Section 4.8 in accordance
with the Settlement Report delivered by the Agent pursuant to the
provisions of this Section 4.8 in respect of such Settlement Date so
that as of each Settlement Date, and after giving effect to the
transactions to take place on such Settlement Date, each Lender's Net
Outstandings shall equal such Lender's Commitment Percentage of the
Revolving Credit Loans outstanding.
(i) Selection of Settlement Dates. If the Agent
elects, in its discretion, but subject to the consent of
NationsBank, to settle accounts among the Lenders with respect
to principal amounts of Revolving Credit Loans less frequently
than each Business Day, then the Agent shall designate
periodic Settlement Dates which may occur on any Business Day
after the Effective Date; provided, however, that the Agent
shall designate as a Settlement Date any Business Day which is
an Interest Payment Date; and provided further, that a
Settlement Date shall occur at least once during each
seven-day period. The Agent shall designate a Settlement Date
by delivering to each Lender a Settlement Report not later
than 12:00 noon (Atlanta time) on the proposed Settlement
Date, which Settlement Report will be in the form of Exhibit E
hereto and shall be with respect to the period beginning on
the next preceding Settlement Date and ending on such
designated Settlement Date.
(ii) Non-Ratable Loans and Payments. Between
Settlement Dates, the Agent shall request and NationsBank may
(but shall not be obligated to) advance to the Borrowers out
of NationsBank's own funds, the entire principal amount of any
Revolving Credit Loan requested or deemed requested pursuant
to Section 2.2(a) (any such Revolving Credit Loan being
referred to as a "Non-Ratable Loan"). The making of each
Non-Ratable Loan by NationsBank shall be deemed to be a
purchase by
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NationsBank of a 100% participation in each other Lender's
Commitment Percentage of the amount of such Non-Ratable Loan.
All payments of principal, interest and any other amount with
respect to such Non-Ratable Loan shall be payable to and
received by the Agent for the account of NationsBank. Upon
demand by NationsBank, with notice thereof to the Agent, each
other Lender shall pay to NationsBank, as the repurchase of
such participation, an amount equal to 100% of such Lender's
Commitment Percentage of the principal amount of such
Non-Ratable Loan. Any payments received by the Agent between
Settlement Dates which in accordance with the terms of this
Agreement are to be applied to the reduction of the
outstanding principal balance of Revolving Credit Loans shall
be paid over to and retained by NationsBank for such
application, and such payment to and retention by NationsBank
shall be deemed, to the extent of each other Lender's
Commitment Percentage of such payment, to be a purchase by
each such other Lender of a participation in the Revolving
Credit Loans (including the repurchase of participations in
Non-Ratable Loans) held by NationsBank. Upon demand by another
Lender, with notice thereof to the Agent, NationsBank shall
pay to the Agent, for the account of such other Lender, as a
repurchase of such participation, an amount equal to such
other Lender's Commitment Percentage of any such amounts
(after application thereof to the repurchase of any
participations of NationsBank in such other Lender's
Commitment Percentage of any Non-Ratable Loans) paid only to
NationsBank by the Agent.
(iii) Net Decrease in Outstandings. If on any
Settlement Date the increase, if any, in the dollar amount of
any Lender's Net Outstandings which is required to comply with
the first sentence of Section 4.8(b) is less than such
Lender's Commitment Percentage of amounts received by the
Agent but paid only to NationsBank since the next preceding
Settlement Date, such Lender and the Agent, in their
respective records, shall apply such Lender's Commitment
Percentage of such amounts to the increase in such Lender's
Net Outstandings, and NationsBank shall pay to the Agent, for
the account of such Lender, the excess allocable to such
Lender.
(iv) Net Increase in Outstandings. If on any
Settlement Date the increase, if any, in the dollar amount of
any Lender's Net Outstandings which is required to comply with
the first sentence of Section 4.8(b) exceeds such Lender's
Commitment Percentage of amounts received by the Agent but
paid only to NationsBank since the next preceding Settlement
Date, such Lender and the Agent, in their respective records,
shall apply such Lender's Commitment Percentage of such
amounts to the increase in such Lender's Net Outstandings, and
such Lender shall pay to the Agent, for the account of
NationsBank, any excess.
(v) No Change in Outstandings. If a Settlement Report
indicates that no Revolving Credit Loans have been made during
the period since the next preceding Settlement Date, then such
Lender's Commitment Percentage of any amounts received by the
Agent but paid only to NationsBank shall be paid by
NationsBank to the Agent, for the account of such Lender. If a
Settlement Report indicates that the increase in the dollar
amount of a Lender's Net Outstandings which is required to
comply with the first sentence of Section 4.8(c) is exactly
equal to such Lender's Commitment Percentage of amounts
received by the Agent but paid only to NationsBank since the
next preceding Settlement Date, such Lender and the Agent, in
their respective records, shall apply
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such Lender's Commitment Percentage of such amounts to the
increase in such Lender's Net Outstandings.
(vi) Return of Payments. If any amounts received by
NationsBank in respect of the Secured Obligations are later
required to be returned or repaid by NationsBank to the
Borrowers or their respective representatives or successors in
interest, whether by court order, settlement or otherwise, in
excess of the NationsBank's Commitment Percentage of all such
amounts required to be returned by all Lenders, each other
Lender shall, upon demand by NationsBank with notice to the
Agent, pay to the Agent for the account of NationsBank, an
amount equal to the excess of such Lender's Commitment
Percentage of all such amounts required to be returned by all
Lenders over the amount, if any, returned directly by such
Lender.
(vii) Payments to Agent, Lenders.
(A) Payment by any Lender to the Agent shall
be made not later than 1:00 p.m. (Atlanta time) on
the Business Day such payment is due, provided that
if such payment is due on demand by another Lender,
such demand is made on the paying Lender not later
than 10:00 a.m. (Atlanta time) on such Business Day.
Payment by the Agent to any Lender shall be made by
wire transfer, promptly following the Agent's receipt
of funds for the account of such Lender and in the
type of funds received by the Agent, provided that if
the Agent receives such funds at or prior to 1:00
p.m. (Atlanta time), the Agent shall pay such funds
to such Lender by 2:00 p.m. (Atlanta time) on such
Business Day. If a demand for payment is made after
the applicable time set forth above, the payment due
shall be made by 2:00 p.m. (Atlanta time) on the
first Business Day following the date of such demand.
(B) If a Lender shall, at any time, fail to
make any payment to the Agent required hereunder, the
Agent may, but shall not be required to, retain
payments that would otherwise be made to such Lender
hereunder and apply such payments to such Lender's
defaulted obligations hereunder, at such time, and in
such order, as the Agent may elect in its sole
discretion.
(C) With respect to the payment of any funds
under this Section 4.8(c), whether from the Agent to
a Lender or from a Lender to the Agent, the party
failing to make full payment when due pursuant to the
terms hereof shall, upon demand by the other party,
pay such amount together with interest on such amount
at the Federal Funds Effective Rate.
(d) Settlement of Other Secured Obligations. All other amounts
received by the Agent on account of, or applied by the Agent to the
payment of, any Secured Obligation owed to the Lenders (including,
without limitation, fees payable to the Lenders pursuant to Sections
4.2(c) and (d) and proceeds from the sale of, or other realization
upon, all or any part of the Collateral following an Event of Default)
that are received by the Agent on or prior to 1:00 p.m. (Atlanta time)
on a Business Day will be paid by the Agent to each Lender on the same
Business Day, and any such amounts that are received by the Agent after
1:00 p.m. (Atlanta time) will be paid by the Agent to each Lender on
the following Business Day. Unless otherwise stated herein, the Agent
shall distribute fees payable to the Lenders pursuant to
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Sections 4.2(c) and (d) ratably to the Lenders based on each Lender's
Commitment Percentage and shall distribute proceeds from the sale of,
or other realization upon, all or any part of the Collateral following
an Event of Default ratably to the Lenders based on the amount of the
Secured Obligations then owing to each Lender.
(e) Allocation of Payments from Borrowers. All monies to be
applied to the Secured Obligations, whether such monies represent
voluntary payments by the Borrowers or are received pursuant to demand
for payment or realized from any disposition of Collateral, shall be
allocated among the Agent and such of the Lenders and other holders of
the Secured Obligations as are entitled thereto (and, with respect to
monies allocated to the Lenders, on a Ratable basis unless otherwise
provided in this Section 4.8(e): (i) first, to NationsBank to pay
principal and accrued interest on any portion of any Non-Ratable Loan
which NationsBank may have advanced on behalf of any Lender (other than
itself) and for which NationsBank has not been reimbursed by such
Lender or the Borrowers; (ii) second, to the Agent to pay the amount of
expenses that have not been reimbursed to the Agent by the Borrowers or
the Lenders, together with interest accrued thereon; (iii) third, to
the Agent to pay any indemnified amount that has not been paid to the
Agent by the Borrowers or the Lenders, together with interest accrued
thereon; (iv) fourth, to the Agent to pay any fees due and payable to
the Agent under this Agreement; (v) fifth, to the Lenders for any
indemnified amount that they have paid to the Agent and for any
expenses that they have reimbursed to the Agent; (vi) sixth, to the
Lenders in payment of the unpaid principal and accrued interest in
respect of the Loans and any other Secured Obligations then outstanding
and held by any Lender to be shared among Lenders on a Ratable basis,
or on such other basis as may be agreed upon in writing by all of the
Lenders (which agreement or agreements may be entered into without
notice to or the consent or approval of the Borrowers), and (vii)
seventh, to Affiliates of the Lenders, to the extent such Affiliates
are holders of Secured Obligations, on a pro rata basis. The
allocations set forth in this Section 4.8(e) are solely to determine
the rights and priorities of the Agent and the Secured Parties as among
themselves and may be changed by the Agent and the Secured Parties
without notice or the consent of approval of the Borrowers or any other
Person. Whenever allocation is made pursuant to this Section 4.8(e) to
the holder of Secured Obligations in which another Lender acquires a
participation, the monies received by such holder shall be shared as
between such holder and such participants on a Ratable basis.
SECTION 4.9. Mandatory Prepayments.
(a) Prepayments from Asset Dispositions. Immediately upon
receipt by any Borrower of the Net Proceeds of any Asset Disposition,
the Borrowers shall apply such Net Proceeds in prepayment of the Loans
as provided in Section 4.9(c). Concurrently with the making of any such
payment, the Borrowers shall deliver to the Agent a certificate of the
Financial Officer demonstrating the calculations of the amount required
to be paid.
(b) Prepayments from Equity Offerings or Debt Issuance. In the
event that, at any time after the Effective Date, any Borrower issues
capital stock or other securities or receives an additional capital
contribution in respect of existing capital stock or other securities
(excluding any such issuance to, or receipt from, another Borrower or a
Consolidated Subsidiary of a Borrower), or issues any Subordinated
Indebtedness, no later than the third Business Day following the date
of receipt of the proceeds from such issuance, the Borrowers shall
apply such proceeds, net of underwriting discounts and commissions and
other reasonable
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costs, fees and expenses associated therewith, in prepayment of the
Loans as provided in Section 4.9(c).
(c) Application of Proceeds of Prepayments. All prepayments
pursuant to this Section 4.9 shall be applied first to the outstanding
principal of the Capital Expenditure Loans to the extent thereof,
second to the outstanding Revolving Credit Loans to the extent thereof,
provided that payments shall be first applied to Prime Rate Loans to
the extent thereof and then to LIBOR Rate Loans and any payments
received which would otherwise result in the prepayment of LIBOR Rate
Loans prior to the end of the Interest Period applicable thereto may,
upon the request of the Borrowers, in the absence of an Event of
Default, be applied to the Cash Collateral Account, with any excess to
be deposited with the Agent to be held as Cash Collateral for the
Secured Obligations and applied by the Agent from time to time to
outstanding Revolving Credit Loans promptly upon the making of such
Revolving Credit Loans or, after the Termination Date, to any of the
Secured Obligations in such manner as the Agent shall determine in its
sole discretion. All prepayments of the Capital Expenditure Loans shall
be applied to the principal installments payable thereon in inverse
order of maturity.
SECTION 4.10. Payments Not at End of Interest Period; Failure
to Borrow. If for any reason any payment of principal with respect to any LIBOR
Rate Loan is made on any day prior to the last day of the Interest Period
applicable to such LIBOR Rate Loan or, after having given a Notice of Borrowing
with respect to any LIBOR Rate Revolving Credit Loan or a Notice of Conversion
or Continuation with respect to any Loan to be continued as or converted into a
LIBOR Rate Loan, such Loan is not made or is not continued as or converted into
a LIBOR Rate Loan due to the Borrowers' failure to borrow or to fulfill the
applicable conditions set forth in Article 5, the Borrowers shall pay to each
Lender upon the request of the Agent or such Lender, in addition to any amounts
that may be due under the Fee Letter, an amount sufficient to compensate the
Agent and each Lender for any and all losses or expenses which the Agent and
each Lender have sustained or incurred as a consequence thereof. The Borrowers
shall pay such amount upon presentation by the Agent (or as to any Lender, by
such Lender) of a statement setting forth the amount and the Agent's (or such
Lender's) calculation thereof, which statement shall be deemed true and correct
absent manifest error.
SECTION 4.11. Assumptions Concerning Funding of LIBOR Rate
Loans. Calculation of all amounts payable to the Lenders under this Article 4
shall be made as though each Lender had actually funded or committed to fund its
LIBOR Rate Loans through the purchase of an underlying deposit in an amount
equal to the amount of such ratable share and having a maturity comparable to
the relevant Interest Period for such LIBOR Rate Loan; provided, however, each
Lender may fund its LIBOR Rate Loans in any manner it deems fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Article 4.
SECTION 4.12. Notice of Conversion or Continuation. Whenever
the Borrowers desire, subject to the provisions of Section 4.13, to convert an
outstanding Loan into a Loan or Loans of a different Type or to continue all or
a portion of an outstanding LIBOR Rate Loan for a subsequent Interest Period,
the Borrowers shall notify the Agent by telephone or in writing by telex or
facsimile transmission (which notice shall be irrevocable) not later than 11:00
a.m. (Atlanta time) on the date three Business Days before the day on which such
proposed conversion or continuation is to be effective (and such effective date
of any continuation shall be the last day of the Interest Period for the
applicable LIBOR Rate Loan), provided the Borrowers shall not be permitted to
convert Loans into (or continue Loans as) LIBOR Rate Loans at any time during
the existence of an Event of Default. Each such notice (a "Notice of Conversion
or Continuation") shall (i) identify the Loan to be converted or continued, the
aggregate outstanding principal
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balance thereof and, if a LIBOR Rate Loan, the last day of the Interest Period
applicable to such Loan, (ii) specify the effective date of such conversion or
continuation, (iii) specify the principal amount of such Loan to be converted or
continued and, if converted, the Type or Types into which the same is to be
converted, and (iv) the Interest Period to be applicable to the LIBOR Rate Loan
as converted or continued, and shall, if notice thereof was originally given by
telephone, be immediately followed by a signed, written confirmation thereof by
the Borrowers in a form acceptable to the Agent, provided that if such written
confirmation differs in any respect from the action taken by the Lenders, the
records of the Agent shall control absent manifest error.
SECTION 4.13. Conversion or Continuation. Provided that no
Event of Default shall have occurred and be continuing (but subject to the
provisions of Sections 4.12 and 4.15), the Borrowers may request that all or any
part of any outstanding Loan be converted into a Loan or Loans of a different
Type or be continued as a Loan or Loans of the same Type, in the same aggregate
principal amount, on any Business Day (which, in the case of continuation of a
LIBOR Rate Loan, shall be the last day of the Interest Period applicable to such
Loan), upon notice (which notice shall be irrevocable) given in accordance with
Section 4.12; provided that nothing in this Article 4 shall be construed to
permit the conversion of a Revolving Credit Loan to an amortizing Capital
Expenditure Loan, or vice versa.
SECTION 4.14. Duration of Interest Periods; Maximum Number of
LIBOR Rate Loans; Minimum Increments.
(a) Subject to the provision of the definition of "Interest
Period", the duration of each Interest Period applicable to a LIBOR
Rate Loan shall be as specified in the applicable Notice of Borrowing
or Notice of Conversion or Continuation. The Borrowers may elect a
subsequent Interest Period to be applicable to any LIBOR Rate Loan by
giving a Notice of Conversion or Continuation with respect to such Loan
in accordance with Section 4.12.
(b) If the Agent does not receive a notice of election in
accordance with Section 4.12 with respect to the continuation of a
LIBOR Rate Loan within the applicable time limits specified in said
Section 4.12, or if, when such notice must be given, an Event of
Default exists or such Type of Loan is not available, the Borrowers
shall be deemed to have elected to convert such LIBOR Rate Loan in
whole into a Prime Rate Loan on the last day of the Interest Period
therefor.
(c) Notwithstanding the foregoing, the Borrowers may not
select an Interest Period that would end, but for the provisions of the
definition "Interest Period," after the Termination Date.
(d) In no event shall there be more than 3 LIBOR Rate
Revolving Credit Loans or 3 LIBOR Rate Capital Expenditure Loans
outstanding hereunder at any time. For the purpose of this subsection
(d), each LIBOR Rate Revolving Credit Loan and each LIBOR Rate Capital
Expenditure Loan having a distinct Interest Period shall be deemed to
be a separate Loan hereunder.
(e) Each LIBOR Rate Loan shall be in a minimum amount of
$1,000,000, with LIBOR Rate Loans in excess of such amount in integral
multiples of $500,000.
SECTION 4.15. Changed Circumstances.
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(a) If the introduction of or any change in or in the
interpretation of (in each case, after the date hereof) any law or
regulation makes it unlawful, or any Governmental Authority asserts,
after the date hereof, that it is unlawful, for any Lender to perform
its obligations hereunder to make LIBOR Rate Loans or to fund or
maintain LIBOR Rate Loans hereunder, such Lender shall notify the Agent
of such event and the Agent shall notify the Borrowers of such event,
and the right of the Borrowers to select LIBOR Rate Loans for any
subsequent Interest Period or in connection with any subsequent
conversion of any Loan shall be suspended until the Agent shall notify
the Borrowers that the circumstances causing such suspension no longer
exist, and the Borrowers shall forthwith prepay in full all LIBOR Rate
Revolving Credit Loans then outstanding and shall convert each LIBOR
Rate Capital Expenditure Loan into a Prime Rate Capital Expenditure
Loan, and shall pay all interest accrued thereon through the date of
such prepayment or conversion, unless the Borrowers, within three
Business Days after such notice from the Agent, request the conversion
of all LIBOR Rate Loans then outstanding into Prime Rate Loans;
provided, that if the date of such repayment or proposed conversion is
not the last day of the Interest Period applicable to such LIBOR Rate
Loan, the Borrowers shall also pay any amount due pursuant to Section
4.10.
(b) If the Agent shall, at least one Business Day before the
date of any requested Loan or the effective date of any conversion or
continuation of an existing Loan to be made or continued as or
converted into a LIBOR Rate Loan (each such requested Loan made and
Loan to be converted or continued, a "Pending Loan"), notify the
Borrowers that the LIBOR Rate will not adequately reflect the cost to
the Lenders of making or funding such Pending Loan as a LIBOR Rate Loan
or that the Interbank Offered Rate is not reasonably determinable,
including from any interest rate reporting service of recognized
standing, then the right of the Borrowers to select LIBOR Rate Loans
for such Pending Loan, any subsequent Loan or in connection with any
subsequent conversion or continuation of any Loan shall be suspended
until the Agent shall notify the Borrowers that the circumstances
causing such suspension no longer exist, and each Pending Loan and each
such subsequent Loan requested to be made, continued or converted shall
be made or continued as or converted into a Prime Rate Loan.
(c) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve
requirements included in the LIBOR Reserve Percentage) in or in the
interpretation of, in each case after the date hereof, any law or
regulation (except to the extent such introduction, change or
interpretation affects taxes measured by net income), or (ii) the
compliance with a guideline or request (except to the extent such
guideline or request affects taxes measured by net income) from any
central bank or other governmental authority (whether nor not having
the force of law) made after the date hereof, there shall be any
increase in the cost to any Lender of agreeing to make or making,
funding or maintaining LIBOR Rate Loans (other than as separately
provided for in Section 4.15(d)), then the Borrowers shall from time to
time, within 30 days after demand by such Lender (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such
increased cost.
(d) If (i) the adoption of or change in, after the date
hereof, any law, rule, regulation or guideline regarding capital
requirements for banks or bank holding companies, or any change, after
the date hereof, in the interpretation or application thereof by any
governmental authority charged with the interpretation or
administration thereof, or (ii) compliance by such Lender with any
guideline, request or directive, made or promulgated after the date
hereof, of any such entity regarding capital adequacy (whether or not
having the force of law), has the effect of reducing the
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return on a Lender's capital as a consequence of its maintaining its
Loans or commitment to make Loans hereunder to a level below that which
such Lender could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's policies with
respect to capital adequacy immediately before such adoption, change or
compliance and assuming the full utilization of such Lender's capital
immediately before such adoption, change or compliance) or if any
change in law, regulation, treaty or official directive or the
interpretation or application thereof by any court or by any
governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law)
subjects a Lender to any tax with respect to payments of principal or
interest or any other amounts payable hereunder by the Borrowers or
otherwise with respect to the transactions contemplated hereby (except
for taxes on the overall net income of such Lender imposed by the
United States of America or any political subdivision thereof), in each
case by any amount deemed by such Lender to be material, then such
Lender shall promptly after its determination of such occurrence notify
the Borrowers and the Agent thereof. The Borrowers agree to pay to the
Agent, for the account of such Lender, as an additional fee from time
to time, within 30 days after demand by such Lender, such amount as
such Lender certifies to be the amount that will compensate it for such
reduction.
(e) Before giving any notice pursuant to Section 4.15(a) or
making any demand pursuant to Section 4.15(c) or (d), each Lender
agrees to use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different
lending office if the making of such a designation would avoid the need
for such notice or demand, or reduce the amount of such increased cost
or reduction in return and would not, in the judgment of such Lender,
be otherwise disadvantageous to such Lender.
(f) A certificate of the Lender claiming compensation under
Section 4.15(c) or (d) shall be conclusive in the absence of manifest
error. Such certificate shall set forth the nature of the occurrence
giving rise to such compensation, the additional amount or amounts to
be paid to it hereunder, and the method by which such amounts were
determined. In determining such amount, a Lender may use any reasonable
averaging and attribution methods.
SECTION 4.16. Cash Collateral Account. The Borrowers shall
establish a Cash Collateral Account in which to deposit Collateral consisting of
cash or Cash Equivalents from time to time: (a) representing payments received
pursuant to Sections 2.3(c) and 4.9 in excess of then outstanding Revolving
Credit Loans or on account of LIBOR Rate Loans which would otherwise result in
repayment of such Loans prior to the end of the Interest Period applicable
thereto, (b) with respect to Letter of Credit Obligations (i) at the request of
the Agent upon the occurrence of an Event of Default, or (ii) for the purposes
set forth in Section 4.6 in the event of termination of this Agreement, or (c)
for any other purpose appropriate under this Agreement to provide security for
the Secured Obligations. On the last day of the applicable Interest Period as to
any amounts deposited to the Cash Collateral Account pursuant to clause (a)
above or if a drawing under a Letter of Credit occurs with respect to any
amounts deposited to the Cash Collateral Account pursuant to clause (b) above,
each Borrower hereby authorizes the Agent to use the monies deposited in the
Cash Collateral Account to make payment to the payee with respect to such Loan
or drawing. The Cash Collateral Account shall be in the name of the Agent and
the Agent shall have sole dominion and control over, and sole access to, the
Cash Collateral Account. Neither any Borrower nor any Person claiming on behalf
of or through any Borrower shall have any right to withdraw any of the funds
held in the Cash Collateral Account. Each Borrower agrees that it will not at
any time (i) sell or otherwise dispose of any interest in the Cash Collateral
Account or any funds held therein or (ii) create or permit to exist any Lien
upon or with respect to the Cash Collateral Account or any funds held therein,
except as
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provided in or contemplated by this Agreement. The Agent shall exercise
reasonable care in the custody and preservation of any funds held in the Cash
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
other funds deposited with the Agent, it being understood that the Agent shall
not have any responsibility for taking any necessary steps to preserve rights
against any parties with respect to any funds held in the Cash Collateral
Account. Subject to the right of the Agent to withdraw funds from the Cash
Collateral Account as provided herein, the Agent will, so long as no Default or
Event of Default shall have occurred and be continuing, from time to time invest
funds on deposit in the Cash Collateral Account, reinvest proceeds of any such
investments which may mature or be sold, and invest interest or other income
received from any such investments, in each case, in Cash Equivalents, as the
Borrowers may direct prior to the occurrence of a Default or Event of Default
and as the Agent may select after the occurrence and during the continuance of a
Default or Event of Default. Such proceeds, interest and income which are not so
invested or reinvested in Cash Equivalents shall be deposited and held by the
Agent in the Cash Collateral Account. The Agent makes no representation or
warranty as to, and shall not be responsible for, the rate of return, if any,
earned in any Cash Collateral. Any earnings on Cash Collateral shall be held as
additional Cash Collateral on the terms set forth in this Section 4.16.
SECTION 4.17. Borrowers' Representative. Each of the Borrowers
other than AAS hereby appoints AAS as, and AAS shall act under this Agreement
as, the representative of such other Borrowers for all purposes, including,
without being limited to, requesting Borrowings and receiving account statements
and other notices and communications to the Borrowers (or any of them) from the
Agent or any Lender. The Agent and the Lenders may rely, and shall be fully
protected in relying, on any Notice of Borrowing, Notice of Conversion or
Continuation, disbursement instruction, report, information or any other notice
or communication made or given by AAS, whether in its own name, on behalf of any
other Borrower or on behalf of "the Borrowers," and neither the Agent nor any
Lender shall have any obligation to make any inquiry or request any confirmation
from or on behalf of any other Borrowers as to the binding effect on it of any
such Notice, instruction, report, information, other notice or communications,
nor shall the joint and several character of the Borrowers' liability for the
Secured Obligations be affected, provided that the provisions of this Section
4.17 shall not be construed so as to preclude any Borrower from directly
requesting Borrowings or taking other actions permitted to be taken by "a
Borrower" hereunder. The Agent and each Lender intend to maintain a single Loan
Account in the name of "American Aircarriers Support, Incorporated" hereunder
and each Borrower expressly agrees to such arrangement and confirms that such
arrangement shall have no effect on the joint and several character of its
liability for the Secured Obligations.
SECTION 4.18. Joint and Several Liability.
(a) Joint and Several Liability. The Secured Obligations shall
constitute one joint and several direct and general obligation of all
of the Borrowers. Notwithstanding anything to the contrary contained
herein, each of the Borrowers shall be jointly and severally, with each
other Borrower, directly and unconditionally liable to the Agent and
the Lenders for all Secured Obligations and shall have the obligations
of co-maker with respect to the Loans, the Notes and the Secured
Obligations, it being agreed that the advances to each Borrower inure
to the benefit of all Borrowers, and that the Agent and the Lenders are
relying on the joint and several liability of the Borrowers as
co-makers in extending the Loans hereunder. Each Borrower hereby
unconditionally and irrevocably agrees that upon default in the payment
when due (whether at stated maturity, by acceleration or otherwise) of
any principal of, or interest on, any Loan or other Secured Obligation
payable to the Agent or any Lender, it will forthwith pay the same,
without notice or demand.
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(b) No Reduction in Obligations. No payment or payments made
by any of the Borrowers or any other Person or received or collected by
the Agent or any Lender from any of the Borrowers or any other Person
by virtue of any action or proceeding or any set-off or appropriation
or application at any time or from time to time in reduction of or in
payment of the Secured Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of each Borrower under this
Agreement, which shall remain liable for the Secured Obligations until
the Secured Obligations are paid in full and the Revolving Credit
Facility and Capital Expenditure Loan Facility are terminated.
SECTION 4.19. Obligations Absolute. Each Borrower agrees that
the Secured Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Agent or any Lender with respect thereto. All Secured Obligations shall be
conclusively presumed to have been created in reliance hereon. The liabilities
under this Agreement shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any Loan
Documents or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payments of, or
in any other term of, all or any part of the Secured Obligations, or
any other amendment or waiver thereof or any consent to departure
therefrom, including, but not limited to, any increase in the Secured
Obligations resulting from the extension of additional credit to any
Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty for all or any of the Secured Obligations;
(d) any change, restructuring or termination of the corporate
structure or existence of any Borrower; or
(e) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Borrower.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of any Borrower or otherwise, all as though such
payment had not been made.
SECTION 4.20. Waiver of Suretyship Defenses. Each Borrower
agrees that the joint and several liability of the Borrowers provided for in
Section 4.18 shall not be impaired or affected by any modification, supplement,
extension or amendment or any contract or agreement to which the other Borrowers
may hereafter agree (other than an agreement signed by the Agent and the Lenders
specifically releasing such liability), nor by any delay, extension of time,
renewal, compromise or other indulgence granted by the Agent or any Lender with
respect to any of the Secured Obligations, nor by any other agreements or
arrangements whatever with the other Borrowers or with anyone else, each
Borrower hereby waiving all notice of such delay, extension, release,
substitution, renewal, compromise or other indulgence, and hereby consenting to
be bound thereby as fully and effectually as if it had expressly agreed thereto
in advance. The liability of each Borrower is direct and unconditional as to all
of the Secured Obligations, and
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may be enforced without requiring the Agent or any Lender first to resort to any
other right, remedy or security. Each Borrower hereby expressly waives
promptness, diligence, notice of acceptance and any other notice (except to the
extent expressly provided for herein or in another Loan Document) with respect
to any of the Secured Obligations, the Notes, this Agreement or any other Loan
Document and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against any Borrower or any other Person or any collateral,
including any rights any Borrower may otherwise have under O.C.G.A. ss. 10-7-24
or any successor statute or any analogous statute in any jurisdiction under the
laws of which any Borrower is incorporated or in which any Borrower conducts
business.
SECTION 4.21. Withholding Taxes. Except as otherwise required
by Applicable Law, each payment by the Borrowers under this Agreement or the
Notes or in respect of the Letters of Credit shall be made without setoff or
counterclaim and without withholding for or on account of any present or future
taxes imposed by or within the jurisdiction in which any Borrower is domiciled,
any jurisdiction from which the Borrowers make any payment hereunder, or (in
each case) any political subdivision or taxing authority thereof or therein
(excluding any such tax imposed on the overall net income of the Agent or the
Lenders). If any such withholding is so required, the Borrowers shall make the
withholding, pay the amount withheld to the appropriate governmental authority
before penalties attach thereto or interest accrues thereon, and forthwith pay
such additional amount as may be necessary to ensure that the net amount
actually received free and clear of such taxes (including such taxes on such
additional amount) is equal to the amount which Agent or the Lenders would have
received had such withholding not been made. If the Agent or the Lenders pay any
amount in respect of any such taxes, penalties or interest, the Borrowers shall
reimburse the Agent or the Lenders (as appropriate) for that payment on demand
in the currency in which such payment was made. If a Borrower pays any such
taxes, penalties or interest, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Agent on or before the thirtieth
day after payment.
ARTICLE 5
CONDITIONS PRECEDENT
SECTION 5.1. Conditions Precedent to Loans and Letters of
Credit. Notwithstanding any other provision of this Agreement, the initial Loans
will not be made and no Letters of Credit will be issued, until the fulfillment
of each of the following conditions prior to or contemporaneously with the
making of the first to be made of such Loans or issuance of such Letters of
Credit:
(a) Financial Condition. The Borrowers shall have delivered to
the Agent a fair saleable value balance sheet prepared and certified to
by the Financial Officer in form and substance satisfactory to the
Agent dated the Effective Date, and setting forth valuations of the
assets, the Projections, together with a certificate executed by the
Financial Officer or the chief financial officer of each Borrower, in
form and substance satisfactory to the Agent, certifying that as of the
Effective Date, after giving effect to the extension of the initial
Loans, and the payment of all fees and expenses in connection with such
transactions, the fair saleable value of each Borrower's assets will
exceed the amount required to pay its debts as they become absolute and
matured (including contingent, subordinated, unmatured and unliquidated
liabilities), that each Borrower is able and anticipates that it will
be able to meet its debts as they mature and has adequate capital to
conduct the business in which it is or proposes to be engaged, together
with attachments demonstrating the basis of such conclusions.
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(b) Fees. The Borrowers shall have paid all of the fees
payable on the Effective Date referred to herein and in the Fee Letter.
(c) Security Interests. The Agent shall have received
satisfactory evidence that the Agent (for the benefit of the Secured
Parties) has a valid and perfected first priority security interest as
of such date in all of the Collateral, subject only to Permitted Liens.
(d) Closing Documents. The Agent shall have received each of
the following documents, all of which shall be satisfactory in form and
substance to the Agent and its counsel and to the Lenders:
(i) certified copies of the articles or certificate
of incorporation and bylaws of each Borrower as in effect on
the Effective Date,
(ii) certified copies of all corporate action,
including shareholder approval, if necessary, taken by each
Borrower to authorize the execution, delivery and performance
of this Agreement, the Loan Documents, and the borrowings
under this Agreement,
(iii) certificates of incumbency and specimen
signatures with respect to each of the officers of each
Borrower authorized to execute and deliver this Agreement and
the Loan Documents on behalf of each Borrower or other Person
executing any document, certificate or instrument to be
delivered in connection with this Agreement or the Loan
Documents and, in the case of each Borrower, to request
borrowings under this Agreement,
(iv) a certificate evidencing the good standing of
each Borrower in the jurisdiction of its incorporation and in
each other jurisdiction in which it is required to be
qualified as a foreign corporation to transact its business as
presently conducted,
(v) copies of all financial statements referred to in
Section 6.1(o) and meeting the requirements thereof,
(vi) a signed opinion of Xxxx, Layton, Kersh,
Solomon, Sigmon, Xxxx & Xxxxx, P.A., counsel for the
Borrowers, substantially in the form of Exhibit C, and of such
local counsel for the Borrowers as may be required, opining as
to such matters in connection with the transactions
contemplated by this Agreement as the Agent or its counsel may
reasonably request,
(vii) an opinion of Xxxxx & Xxxxxxx, dated the
Effective Date (which opinion may be delivered orally on the
Effective Date and followed by a signed written opinion
promptly thereafter) opining that (A) the Engine Mortgage and
the Mortgage Supplement are in due form for recordation by the
FAA and have been duly filed for recordation with the FAA, (B)
the Collateral described in the Engine Mortgage and in the
Mortgage Supplement is free and clear of all Liens other than
the Security Interest, (C) the Security Interest in all Engine
Inventory is a perfected, first priority Security Interest,
(D) no filings or recordings (other than the above described
filings with the FAA) are necessary to perfect the Security
Interest in any jurisdiction within the United
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States, and (E) no authorization, approval, consent, license,
or order of, registration with, or giving of notice to, the
FAA Engines Registry is required for the valid authorization,
delivery or performance of the Engine Mortgage and any
Mortgage Supplement except for such authorizations, approvals,
consents, licenses, orders, registrations and notices as have
been effected,
(viii) the Financing Statements duly executed and
delivered by the Borrowers and acknowledgement copies
evidencing the filing of such Financing Statements in each
jurisdiction where such filing may be necessary or appropriate
to perfect the Security Interest,
(ix) the Engine Mortgage and the Mortgage Supplement
duly executed by each Borrower,
(x) a certification from the principal officers of
the Borrowers as to such factual matters as shall be requested
by the Agent,
(xi) certificates or binders of insurance relating to
each of the policies of insurance covering any of the
Collateral, together with loss payable clauses which comply
with the terms of Section 8.8 and the Engine Mortgage,
(xii) a certificate of the Financial Officer (or such
other officer of AAS as may be acceptable to the Agent)
stating that, to the best of his knowledge and based on an
examination sufficient to enable him to make an informed
statement,
(A) all of the representations and
warranties made or deemed to be made under this
Agreement are true and correct as of the Effective
Date, after giving effect to the Loans to be made at
such time and the application of the proceeds
thereof, and
(B) no Default or Event of Default exists,
(xiii) a Borrowing Base Certificate, prepared as of
May 24, 1999, a Schedule of Inventory, prepared as of April
22, 1999, and a Schedule of Receivables, prepared as of April
30, 1999,
(xiv) solvency certificates, certificates of
projection of income and cash flow, and such other
certificates as the Agent may require to evidence each
Borrower's solvency,
(xv) landlord's, warehouseman's or mortgagee's waiver
and consent agreements duly executed on behalf of each
landlord, warehouseman or mortgagee, as the case may be, of
Real Estate and any other real property on which any
Collateral is located,
(xvi) Agency Account Agreements, each duly executed
by the applicable Borrowers and the Clearing Bank party
thereto,
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(xvii) the Initial Notice of Borrowing, duly executed
by the chief financial officer of AAS,
(xviii) copies of each of the other Loan Documents
duly executed by the parties thereto, together with evidence
satisfactory to the Agent of the due authorization and binding
effect of each such Loan Document on such party, and
(xix) such other documents and instruments as the
Agent or any Lender may reasonably request.
(e) Notes. Each Lender shall have received a Revolving Credit
Note and a Capital Expenditure Note duly executed and delivered by the
Borrowers, complying with the terms of Section 2A.4 and 2B.4.
(f) Pledge Agreement. The Agent shall have received the Pledge
Agreement, in form and substance satisfactory to the Agent and the
Lenders, duly executed and delivered by AAS, together with stock
transfer powers duly executed in blank by AAS and stock certificates
representing all of the stock subject to the Pledge Agreement.
(g) Other Security Documents. The Agent shall have received
each other Security Document, in form and substance satisfactory to the
Agent and the Lenders, duly executed and delivered by the applicable
Borrowers.
(h) Indemnification Agreement. The Agent shall have received
the Indemnification Agreement, in form and substance satisfactory to
the Agent and the Lenders, duly executed and delivered by the
Borrowers.
(i) Availability. The Agent shall be provided with evidence
satisfactory to it that, as of the Effective Date, after giving effect
to the Initial Loans and the issuance of any Letters of Credit on the
Effective Date, Availability is not less than $6,000,000.
(j) No Injunctions, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any court, governmental agency or legislative body to
enjoin, restrain, or prohibit, or to obtain damages in respect of, or
which is related to or arises out of this Agreement or the consummation
of the transactions contemplated hereby, or which, in the Agent's or
the Lenders' discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement.
(k) Material Adverse Change. As of the Effective Date, there
shall not have occurred any change which is materially adverse, in the
Agent's or the Lenders' discretion, to the assets, liabilities,
businesses, operations, condition (financial or otherwise) or prospects
of the Borrowers or their Subsidiaries from those presented by the
financial statements described in Section 6.1(n).
(l) Release of Security Interests. The Agent shall have
received evidence satisfactory to it of the release and termination of
all Liens other than Permitted Liens.
(m) Syndication Market. There shall not have occurred any
change which is materially adverse in the market for syndicated bank
credit facilities, or a material disruption
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of, or a material adverse change in, financial, banking or capital
market conditions, in each case as determined by the Agent in its sole
discretion.
SECTION 5.2. Conditions Precedent to Capital Expenditure
Loans. Notwithstanding any other provision of this Agreement, no Capital
Expenditure Loan will be made until the Agent has received each of the following
documents, all of which shall be satisfactory in form and substance to the Agent
and its counsel:
(a) a Notice of Borrowing, duly executed by AAS on behalf of
the Borrowers, which shall be delivered at the time, and shall contain
the information (including invoices, receipts and purchase orders) set
forth in Section 2B.1; and
(b) such other documents and instruments as the Agent may
reasonably request, including lien release agreements with respect to
any other Person holding a Lien on the Equipment subject to such
Capital Expenditure Loan.
SECTION 5.3. All Loans; Letters of Credit. At the time of
making of each Loan, including the Initial Loans and all subsequent Loans, and
the issuance of each Letter of Credit:
(a) all of the representations and warranties made or deemed
to be made under this Agreement (including the representation regarding
absence of Defaults contained in Section 6.1(q)) shall be true and
correct at such time both with and without giving effect to the Loan to
be made at such time and the application of the proceeds thereof,
(b) the corporate actions of the Borrowers (and any Subsidiary
Guarantors) referred to in Section 5.1(d) shall remain in full force
and effect and the incumbency of officers shall be as stated in the
certificates of incumbency delivered pursuant to Section 5.1 or as
subsequently modified and reflected in a certificate of incumbency
delivered to the Agent, and
(c) each request or deemed request for any Borrowing hereunder
shall be deemed to be a certification by the Borrowers to the Agent and
the Secured Parties as to the matters set forth in Section 5.3(a) and
(b) and the Agent may, without waiving either condition, consider the
conditions specified in Sections 5.3(a) and (b) fulfilled and a
representation by the Borrowers to such effect made, if no written
notice to the contrary is received by the Agent prior to the making of
the Loan then to be made.
SECTION 5.4. Conditions as Covenants. In the event that the
Lenders make the Initial Loans or any Letter of Credit is issued prior to the
satisfaction of all conditions precedent set forth in Section 5.1 or the Lenders
make any Capital Expenditure Loan prior to the satisfaction of all conditions
precedent set forth in Section 5.2, and such conditions are not waived in
writing by the Required Lenders, the Borrowers shall nevertheless cause such
condition or conditions to be satisfied within 30 days after the making of such
Loans or the issuance of any other Letter of Credit.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
SECTION 6.1. Representations and Warranties. Each Borrower
represents and warrants to the Agent and to the Lenders as follows:
(a) Organization; Power; Qualification. Each Borrower and each
of its Subsidiaries is a corporation, duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, having the power and authority to own its properties and
to carry on its business as now being and hereafter proposed to be
conducted and is duly qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization. The
jurisdictions in which each Borrower and each of its Subsidiaries is
qualified to do business as a foreign corporation are listed on
Schedule 6.1(a).
(b) Capitalization. The outstanding capital stock of each
Borrower has been duly and validly issued and is fully paid and
nonassessable, and the number and owners of such shares of capital
stock of each Borrower are set forth on Schedule 6.1(b). Each issuance
and sale of each Borrower's capital stock was made in accordance with
applicable federal, state and foreign securities laws or pursuant to an
exemption therefrom. Except as set forth on Schedule 6.1(b), there are
no shareholder agreements, options, subscription agreements or other
agreements or understandings to which any Borrower is a party in effect
with respect to the capital stock of such Borrower, including, without
limitation, agreements providing for special voting requirements or
arrangements for approval of corporate actions or other matters
relating to corporate governance or restrictions on share transfer or
providing for the issuance of any securities convertible into shares of
the capital stock of such Borrower, any warrants or other rights to
acquire any shares or securities convertible into such shares, or any
agreement that obligates such Borrower, either by its terms of at the
election of any other Person, to repurchase such shares under any
circumstances.
(c) Subsidiaries. Schedule 6.1(c) correctly sets forth the
name of each Subsidiary of each Borrower, its jurisdiction of
incorporation, the name of its immediate parent or parents, and the
percentage of its issued and outstanding securities owned by a Borrower
or any other Subsidiary of a Borrower and indicating whether such
Subsidiary is a Consolidated Subsidiary and whether such Subsidiary is
a Special Purpose Subsidiary. Except as set forth on Schedule 6.1(c),
(i) no Subsidiary of a Borrower has issued any
securities convertible into shares of such Subsidiary's
capital stock or any options, warrants or other rights to
acquire any shares or securities convertible into such shares,
(ii) the outstanding stock and securities of each
Borrower other than AAS are owned by AAS, free and clear of
all Liens, warrants, options and rights of others of any kind
whatsoever, and each Borrower other than AAS is a Wholly-Owned
Subsidiary of AAS, and
(iii) no Borrower has any Subsidiaries.
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The outstanding capital stock of each Subsidiary of each Borrower has
been duly and validly issued and is fully paid and nonassessable by the
issuer, and the number and owners of the shares of such capital stock
are set forth on Schedule 6.1(c).
(d) Authorization of Agreement, Notes, Loan Documents and
Borrowing. Each Borrower has the right, power and authority to execute,
deliver and perform this Agreement and each of the Loan Documents to
which it is a party in accordance with their respective terms. This
Agreement and each of the Loan Documents have been duly executed and
delivered by the duly authorized officers of each Borrower party
thereto and each is, or each when executed and delivered in accordance
with this Agreement will be, a legal, valid and binding obligation of
each Borrower party thereto, enforceable in accordance with its terms.
(e) Compliance of Agreement, Notes, Loan Documents and
Borrowing with Laws, Etc. Except as set forth on Schedule 6.1(e), the
execution, delivery and performance of this Agreement and each of the
Loan Documents in accordance with their respective terms and the
borrowings hereunder do not and will not, by the passage of time, the
giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to any Borrower or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute a
default under the articles or certificate of incorporation or by-laws
of any Borrower or any of its Subsidiaries, (iii) conflict with, result
in a breach of or constitute a default under any material provisions of
any indenture, agreement or other instrument to which any Borrower or
any of its Subsidiaries is a party or by which any Borrower or any of
its Subsidiaries or any of a Borrower's or such Subsidiaries' property
may be bound, or any Governmental Approval relating to a Borrower or
any of its Subsidiaries, or (iv) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned
or hereafter acquired by any Borrower or any of its Subsidiaries other
than the Security Interest.
(f) Business. Each Borrower is engaged principally in the
business set forth next to its name on Schedule 6.1(f).
(g) Compliance with Law; Governmental Approvals. (i) Except as
set forth in Schedule 6.1(g), each Borrower and each of its
Subsidiaries (A) has all Governmental Approvals, including permits
relating to federal, state, local and foreign Environmental Laws,
ordinances and regulations, required by any Applicable Law for it to
conduct its business, each of which is in full force and effect, is
final and not subject to review on appeal and is not the subject of any
pending or, to the knowledge of any Borrower, threatened attack by
direct or collateral proceeding, and (B) is in compliance with each
Governmental Approval applicable to it and in compliance with all other
Applicable Laws relating to it, including, without being limited to,
all Environmental Laws and all occupational health and safety laws
applicable to any Borrower, any of its Subsidiaries or their respective
properties, except for instances of noncompliance which would not,
singly or in the aggregate, cause a Default or Event of Default or have
a Materially Adverse Effect and in respect of which reserves in respect
of such Borrower's or such Subsidiary's reasonably anticipated
liability therefor have been established on the consolidated books of
the Borrowers. (ii) Without limiting the generality of the above,
except as disclosed on a report delivered pursuant to Section 5.1(d) or
with respect to matters which could not reasonably be expected to have,
singly or in the aggregate, a Materially Adverse Effect: (A) the
operations of each Borrower and each of its Subsidiaries comply in all
material respects with all applicable environmental, health and safety
requirements of Applicable Law; (B) each Borrower and each of its
Subsidiaries has obtained all environmental,
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health and safety permits necessary for its operation, and all such
permits are in good standing and each Borrower and each of its
Subsidiaries is in compliance in all material respects with all terms
and conditions of such permits; (C) neither any Borrower nor any of its
Subsidiaries nor any of their respective present or past property or
operations are subject to any order from or agreement with any public
authority or party respecting (x) any environmental, health or safety
requirements of Applicable Law, (y) any Remedial Action, or (z) any
liabilities and costs arising from the Release or threatened Release of
a Contaminant into the environment; (D) none of the operations of any
Borrower or of any of its Subsidiaries is subject to any judicial or
administrative proceeding alleging a violation of any environmental,
health or safety requirement of Applicable Law; (E) none of the present
nor past operations of any Borrower or any of its Subsidiaries is the
subject of any investigation by any public authority evaluating whether
any Remedial Action is needed to respond to a Release or threatened
Release of a Contaminant into the environment; (F) neither any Borrower
nor any of its Subsidiaries has filed any notice under any requirement
of Applicable Law indicating past or present treatment, storage or
disposal of a hazardous waste, as that term is defined under 40 CFR
Part 261 or any state equivalent; (G) neither any Borrower nor any of
its Subsidiaries has filed any notice under any requirement of
Applicable Law reporting a Release of a Contaminant into the
environment; (H) except in compliance in all material respects with
applicable Environmental Laws, during the course of any Borrower's or
any of its Subsidiaries' ownership of or operations on the Real Estate,
there have been no (1) generation, treatment, recycling, storage or
disposal of hazardous waste, as that term is defined under 40 CFR Part
261 or any state equivalent, (2) use of underground storage tanks or
surface impoundments, (3) use of asbestos-containing materials, or (4)
use of polychlorinated biphenyls (PCB) used in hydraulic oils,
electrical transformers or other equipment; (I) neither any Borrower
nor any of its Subsidiaries has entered into any negotiations or
agreements with any Person (including, without limitation, any prior
owner of any of the Real Estate or other property of any Borrower or
any of its Subsidiaries) relating to any Remedial Action or
environmental related claim; (J) neither any Borrower nor any of its
Subsidiaries has received any notice or claim to the effect that it is
or may be liable to any Person as a result of the Release or threatened
Release of a Contaminant into the environment; (K) neither any Borrower
nor any of its Subsidiaries has any material contingent liability in
connection with any Release or threatened Release of any Contaminant
into the environment; (L) no Environmental Lien has attached to any of
the Real Estate or other property of any Borrower or of any of its
Subsidiaries; (M) the presence and condition of all asbestos-containing
material which is on or part of the Real Estate (excluding any raw
materials used in the manufacture of products or products themselves)
do not violate in any material respect any currently applicable
requirement of Applicable Law; and (N) neither any Borrower nor any of
its Subsidiaries manufactures, distributes or sells, and has never
manufactured, distributed or sold, products which contain
asbestos-containing material. (iii) Each Borrower has notified the
Agent of the receipt by it or any of its Subsidiaries of any notice of
a material violation of any Environmental Laws and occupational health
and safety laws applicable to such Borrower, Subsidiaries or any of
their respective properties.
(h) Title to Properties. Except as set forth in Schedule
6.1(h), each Borrower and each of its Subsidiaries has valid and legal
title to or leasehold interest in all personal property, Real Estate
owned and other assets used in its business, including, but not limited
to, those reflected on the most recent balance sheets of the Borrowers
delivered pursuant to Section 6.1(n).
(i) Liens. Except as set forth in Schedule 6.1(i), none of the
properties and assets of any Borrower or any of its Subsidiaries is
subject to any Lien, except Permitted Liens.
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Other than the Financing Statements, the Engine Mortgage and the
Mortgage Supplements, no financing statement under the Uniform
Commercial Code or similar laws of any jurisdiction, no filing with the
FAA, and no other instrument evidencing a Lien which names any Borrower
or any of its Subsidiaries as debtor has been filed (and has not been
terminated) in any jurisdiction, and neither any Borrower nor any of
its Subsidiaries has signed any such financing statement, FAA filing or
other instrument or any security agreement authorizing any secured
party thereunder to file any such financing statement or instrument,
except to perfect those Liens listed on Schedule 6.1(i).
(j) Indebtedness and Guaranties. Schedule 6.1(j) is a complete
and correct listing of all Indebtedness for Money Borrowed and
Guaranties of each Borrower and its Subsidiaries. Each Borrower and its
Subsidiaries has performed and is in compliance with all of the terms
of such Indebtedness and Guaranties and all instruments and agreements
relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute
such a default or event of default, exists with respect to any such
Indebtedness or Guaranty.
(k) Litigation. Except as set forth on Schedule 6.1(k), there
are no actions, suits or proceedings pending (nor, to the knowledge of
any Borrower, are there any actions, suits or proceedings threatened,
or any reasonable basis therefor) against or in any other way relating
to or affecting any Borrower or any of its Subsidiaries or any of any
Borrower's or any of its Subsidiaries' other properties in any court or
before any arbitrator of any kind or before or by any governmental
body, except actions, suits or proceedings of the character normally
incident to the kind of business conducted by the Borrowers or any of
its Subsidiaries which, if adversely determined, would not singly or in
the aggregate have a Materially Adverse Effect, and there are no
strikes or walkouts in progress, pending or, to the knowledge of any
Borrower, threatened, relating to any labor contracts to which any
Borrower or any of its Subsidiaries is a party, relating to any labor
contracts being negotiated, or otherwise.
(l) Tax Returns and Payments. Except as set forth on Schedule
6.1(l), all United States federal, state and local as well as foreign
national, provincial and local and other tax returns of each Borrower
and each of its Subsidiaries required by Applicable Law to be filed
have been duly filed, and all United States federal, state and local
and foreign national, provincial and local and other taxes, assessments
and other governmental charges or levies upon each Borrower and each of
its Subsidiaries and each Borrower's and any of its Subsidiaries'
property, income, profits and assets which are due and payable have
been paid, except any such nonpayment which is at the time permitted
under Section 9.6. The charges, accruals and reserves on the books of
each Borrower and each of its Subsidiaries in respect of United States
federal, state and local and foreign national, provincial and local
taxes for all fiscal years and portions thereof since the organization
of each Borrower and each of its Subsidiaries are in the judgment of
each Borrower adequate, and no Borrower knows of any reason to
anticipate any additional assessments for any of such years which,
singly or in the aggregate, might have a Materially Adverse Effect.
(m) Burdensome Provisions. Neither any Borrower nor any of its
Subsidiaries is a party to any indenture, agreement, lease or other
instrument, or subject to any charter or corporate restriction,
Governmental Approval or Applicable Law compliance with the terms of
which might have a Materially Adverse Effect.
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(n) Financial Statements.
(i) The Borrowers have furnished to the Agent and the
Lenders (A) copies of the annual audited consolidated balance
sheet of AAS and its Consolidated Subsidiaries as of December
31, 1998 and the related audited consolidated statements of
operations, cash flows and shareholder's equity for the fiscal
year ended on such date and (B) copies of the unaudited
consolidated balance sheet of AAS and its Consolidated
Subsidiaries as of March 31, 1999 and of the related
statements of operations and cash flows for the 3-month period
then ended. Such financial statements present fairly, in all
material respects, as of their respective dates and in
accordance with GAAP (subject to year-end adjustments and but
for the omission of footnotes in the unaudited statements) the
consolidated financial condition of AAS and its Consolidated
Subsidiaries as of such dates and the consolidated results of
operations of AAS and its Consolidated Subsidiaries for the
periods ended on such dates.
(ii) The Borrowers have furnished to the Agent and
the Lenders copies of the Projections. The Projections have
been be prepared by the Borrowers in light of the past
operations of the business of the Borrowers and their
Subsidiaries and represent as of the respective dates thereof
the good faith opinion of the Borrowers and their senior
management concerning the likely course of business of the
Borrowers and their Subsidiaries.
(iii) Except as disclosed or reflected in the
financial statements described in clauses (i) and (ii) above,
no Borrower nor any of its Subsidiaries has any material
liabilities, contingent or otherwise, and there were no
material unrealized or anticipated losses of any Borrower or
any of its Subsidiaries.
(o) Adverse Change. Since the date of the audited financial
statements of the Borrowers delivered to the Agent pursuant to Section
6.1(n)(i), (i) no material adverse change has occurred in the business,
assets, liabilities, financial condition, results of operations or
business prospects of any Borrower or any of its Subsidiaries, and (ii)
no event has occurred or failed to occur which has had, or may have,
singly or in the aggregate, a Materially Adverse Effect.
(p) ERISA.
(i) Neither any Borrower nor any Related Company
maintains or contributes to any Benefit Plan other than those
listed on Schedule 6.1(p).
(ii) No Benefit Plan has been terminated or partially
terminated, and no Multiemployer Plan is insolvent or in
reorganization, nor have any proceedings been instituted to
terminate any Benefit Plan or to reorganize any Multiemployer
Plan.
(iii) Neither any Borrower nor any Related Company
has withdrawn from any Benefit Plan or Multiemployer Plan, nor
has a condition occurred which if continued would result in a
withdrawal.
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(iv) Neither any Borrower nor any Related Company has
incurred any withdrawal liability, including contingent
withdrawal liability, to any Multiemployer Plan pursuant to
Title IV of ERISA.
(v) Neither any Borrower nor any Related Company has
incurred any liability to the PBGC other than for required
insurance premiums which have been paid when due.
(vi) No Reportable Event has occurred with respect to
a Plan.
(vii) No Benefit Plan has an "accumulated funding
deficiency" (whether or not waived) as defined in Section 302
of ERISA or in Section 412 of the Internal Revenue Code.
(viii) Each Plan is in substantial compliance with
ERISA, and neither any Borrower nor any Related Company has
received any communication from a governmental agency
asserting that a Plan is not in compliance with ERISA.
(ix) Each Plan which is intended to be a qualified
Plan has been determined by the IRS to be qualified under
Section 401(a) of the Internal Revenue Code as currently in
effect or will be submitted to the IRS for such determination
prior to the end of the remedial amendment period under
Section 401(b) of the Internal Revenue Code and the
regulations promulgated thereunder and neither any Borrower
nor any Related Company knows or has reason to know why each
such Plan should not continue to be so qualified, and each
trust related to such Plan that has been submitted to the IRS
for determination of exempt status has been determined to be
exempt from federal income tax under Section 501(a) of the
Internal Revenue Code or will be submitted to the IRS for a
determination of exempt status.
(x) Except as provided on Schedule 6.1(p), neither
any Borrower nor any Related Company maintains or contributes
to any employer welfare benefit plan within the meaning of
Section 3(l) of ERISA which provides benefits to employees
after termination of employment other than as required by
Section 601 of ERISA.
(xi) Schedule B to the most recent annual report
filed with the IRS with respect to each Benefit Plan and
furnished to the Agent is complete and accurate. Since the
date of each such Schedule B, there has been no adverse change
in funding status or financial condition of the Benefit Plan
relating to such Schedule B.
(xii) Neither any Borrower nor any Related Company
has failed to make a required installment under Subsection (m)
of Section 412 of the Internal Revenue Code or any other
payment required under Section 412 of the Internal Revenue
Code on or before the due date for such installment or other
payment.
(xiii) Neither any Borrower nor any Related Company
is required to provide security to a Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code due to a
Benefit Plan amendment that results in an increase in current
liability for the plan year.
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(xiv) Neither any Borrower nor any Related Company,
nor any other "party-in-interest" or "disqualified person" has
engaged in a nonexempt "prohibited transaction," as such terms
are defined in Section 4975 of the Internal Revenue Code and
Section 406 of ERISA, in connection with any Plan or has taken
or failed to take any action which would constitute or result
in a Termination Event.
(xv) Neither any Borrower nor any Related Company has
failed to comply with the health care continuation coverage
requirements of Section 4980B of the Internal Revenue Code in
respect of employees and former employees of such Borrower or
such Related Company and their dependents and beneficiaries
which alone or in the aggregate would subject such Borrower or
such Related Company to any material liability.
(xvi) Neither any Borrower nor any Related Company
has (i) failed to make a required contribution or payment to a
Multiemployer Plan or (ii) made a complete or partial
withdrawal under Sections 4203 or 4205 of ERISA from a
Multiemployer Plan. Except as provided on Schedule 6.1(p), to
the best knowledge of each Borrower after due inquiry, neither
any Borrower nor any Related Company shall have any obligation
to (A) make contributions to any Multiemployer Plan on or
after the Effective Date, or (B) pay withdrawal liability to
any Multiemployer Plan in an amount in excess of a "de minimis
amount" as such term is defined in Section 4209 of ERISA.
(q) Absence of Defaults. Neither any Borrower nor any of its
Subsidiaries is in default under its articles or certificate of
incorporation or by-laws and no event has occurred, which has not been
remedied, cured or waived, (i) which constitutes a Default or an Event
of Default, or (ii) which constitutes, or which with the passage of
time or giving of notice or both would constitute, a default or event
of default by any Borrower or any of its Subsidiaries under any
material agreement (other than this Agreement) or judgment, decree or
order to which any Borrower or any of its Subsidiaries is a party or by
which any Borrower, any of its Subsidiaries or any of their properties
may be bound or which would require any Borrower or any of its
Subsidiaries to make any payment under any such agreement, judgment,
decree or order prior to the scheduled maturity date therefor, except,
in the case only of any such agreement, for alleged defaults which are
being contested in good faith by appropriate proceedings and with
respect to which reserves in respect of any Borrower's or such
Subsidiary's reasonably anticipated liability have been established on
the books of such Borrower or Subsidiary.
(r) Accuracy and Completeness of Information.
(i) All written information, reports and other papers
and data produced by or on behalf of the Borrowers were, at
the time the same were so furnished, complete and correct in
all material respects to the extent necessary to give the
recipient a true and accurate knowledge of the subject matter.
No fact is known to any Borrower which has had, or may in the
future have, a Materially Adverse Effect which has not been
set forth in the financial statements or disclosure delivered
prior to the Effective Date, in each case referred to in
Section 6.1(n), or in such written information, reports or
other papers or data or otherwise disclosed in writing to the
Agent and the Lenders prior to the Agreement Date. No document
furnished or written statement made to the Agent or any Lender
by any Borrower or any of its Subsidiaries in connection with
the negotiation, preparation or execution of this Agreement or
any of the Loan Documents
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contains or will contain any untrue statement of a fact
material to the creditworthiness of any Borrower or any of its
Subsidiaries or omits or will omit to state a material fact
necessary in order to make the statements contained therein
not misleading.
(ii) No Borrower has any reason to believe that any
document furnished or written statement made to the Agent or
any Lender by any Person other than the Borrowers in
connection with the negotiation, preparation or execution of
this Agreement or any of the Loan Documents contained any
incorrect statement of a material fact or omitted to state a
material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not
misleading.
(s) Solvency. In each case after giving effect to the
Indebtedness represented by the Loans outstanding and to be incurred
and the transactions contemplated by this Agreement, each Borrower and
each of its Subsidiaries is solvent, having assets of a fair salable
value which exceeds the amount required to pay its debts as they become
absolute and matured (including contingent, subordinated, unmatured and
unliquidated liabilities), and each Borrower and each of its
Subsidiaries is able to and anticipates that it will be able to meet
its debts as they mature and has adequate capital to conduct the
business in which it is or proposes to be engaged.
(t) Receivables.
(i) Status.
(A) Each Receivable reflected in the
computations included in any Borrowing Base
Certificate meets the criteria enumerated in the
definition of Eligible Receivables, and each Lease
Receivable reflected in the computations included in
any Borrowing Base Certificate as Eligible Domestic
Receivables or Eligible Foreign Receivables meets the
criteria enumerated in the definition of Eligible
Domestic Receivables or Eligible Foreign Receivables,
as applicable, except in each case as disclosed in
such Borrowing Base Certificate or as disclosed in a
timely manner in a subsequent Borrowing Base
Certificate or otherwise in writing to the Agent.
(B) No Borrower has any knowledge of any
fact or circumstance not disclosed to the Agent in a
Borrowing Base Certificate or otherwise in writing
which would impair the validity or collectibility of
any Receivable of $150,000 or more or of Receivables
which (regardless of the individual amount thereof)
aggregate $500,000 or more.
(C) Each Lease Agreement dated after the
Effective Date has been executed in the manner set
forth in Section 8.4(c). Other than as has been
disclosed to the Agent in writing, no Lease Agreement
is in default.
(ii) Chief Executive Office. The chief executive
office of each Borrower and the books and records relating to
the Receivables are located at the address or addresses set
forth on Schedule 6.1(t); no Borrower has maintained its chief
executive office or books and records relating to any
Receivables at any other address at any time
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during the five years immediately preceding the Agreement Date
except as disclosed on Schedule 6.1(t).
(u) Inventory.
(i) Schedule of Inventory. All Inventory included in
any Schedule of Inventory or Borrowing Base Certificate
delivered to the Agent or any Lender pursuant to Section 8.12
meets the criteria enumerated in the definition of Eligible
Inventory, and all Inventory classified on any Schedule of
Inventory or Borrowing Base Certificate as Eligible Engine
Inventory or Eligible Parts Inventory meets all of the
criteria set forth for such type of Inventory in its
definition, except in each case as disclosed in such Schedule
of Inventory or Borrowing Base Certificate or in a subsequent
Schedule of Inventory or Borrowing Base Certificate, or as
otherwise specifically disclosed in writing to the Agent.
(ii) Condition. All Inventory is in good condition,
meets all standards imposed by any governmental agency, or
department or division thereof, having regulatory authority
over such goods, their use, sale or lease, and is currently
either usable, leaseable or salable in the normal course of
the applicable Borrower's business, except to the extent
reserved against in the financial statements referred to in
Section 6.1(n) or delivered pursuant to Article 10 or as
disclosed on a Schedule of Inventory delivered to the Agent
and the Lenders pursuant to Section 8.12(b).
(iii) Location. All Engine Inventory other than
Engine Inventory subject to a Lease Agreement is located on
the premises set forth on Schedule 6.1(u), is in transit to
one of such locations, or is in transit to or being
maintained, serviced, repaired or overhauled at an
FAA-certified repair station, except as otherwise disclosed in
writing to the Agent; all Parts Inventory other than Parts
Inventory subject to a Lease Agreement is located at the
premises set forth on Schedule 6.1(u), except as otherwise
disclosed in writing to Agent; no Borrower has, in the last
year, located such Inventory at premises other than those set
forth on Schedule 6.1(u), except for at such times as such
Inventory was subject to a Lease Agreement or was off-site for
maintenance, service, repair or overhaul.
(v) Equipment. All Equipment is in good order and repair in
all material respects and is located on the premises set forth on
Schedule 6.1(v) and has been so located at all times during the last
year.
(w) Real Property. No Borrower owns any Real Estate or leases
any Real Estate other than that described on Schedule 6.1(w) and other
than Real Estate acquired or leased after the Effective Date for which
the Borrowers have complied with the requirements of Section 8.14.
(x) Corporate and Fictitious Names. Except as otherwise
disclosed on Schedule 6.1(x), during the five-year period preceding the
Agreement Date, no Borrower, nor any predecessor thereof nor any
Subsidiary of any Borrower has been known as or used any corporate or
fictitious name other than the corporate names of the Borrowers on the
Effective Date.
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(y) Federal Reserve Regulations. No Borrower nor any of its
Subsidiaries is engaged and none will engage, principally or as one of
its important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" (as each of
the quoted terms is defined or used in Regulation U of the Board of
Governors of the Federal Reserve System). No part of the proceeds of
any of the Loans will be used for so purchasing or carrying margin
stock or, in any event, for any purpose which violates, or which would
be inconsistent with, the provisions of Regulations T, U or X of such
Board of Governors. If requested by the Agent or any Lender, the
Borrowers will furnish to the Agent and the Lenders a statement or
statements in conformity with the requirements of said Regulations T, U
or X to the foregoing effect.
(z) Investment Company Act. No Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or used in
the Investment Company Act of 1940, as amended).
(aa) Employee Relations. Each Borrower has a stable work force
in place and is not, except as set forth on Schedule 6.1(aa), party to
any collective bargaining agreement nor has any labor union been
recognized as the representative of any Borrower's or any of its
Subsidiaries' employees, and no Borrower knows of any pending,
contemplated or threatened strikes, work stoppage or other labor
disputes involving any Borrower's or any of its Subsidiaries'
employees.
(bb) Proprietary Rights. Schedule 6.1(bb) sets forth a correct
and complete list of all of the Proprietary Rights. None of the
Proprietary Rights is subject to any licensing agreement or similar
arrangement except as set forth on Schedule 6.1(bb) or as entered into
in the sale or distribution of any Borrower's Inventory in the ordinary
course of business. To the best of each Borrower's knowledge, none of
the Proprietary Rights infringes on or conflicts with any other
Person's property, and no other Person's property infringes on or
conflicts with the Proprietary Rights. The Proprietary Rights described
on Schedule 6.1(bb) constitute all of the property of such type
necessary to the current and anticipated future conduct of each
Borrower's business.
(cc) Trade Names. All trade names or styles under which any
Borrower sells or leases Inventory or Equipment or creates Receivables
or enters into Lease Agreements, or to which instruments in payment of
Receivables are made payable, are listed on Schedule 6.1(cc).
(dd) Bank Accounts, Lockboxes, Etc. Schedule 6.1(dd) is a
complete and correct list of all checking accounts, deposit accounts,
lockboxes and other bank accounts maintained by any Borrower.
(ee) Year 2000 Compliance. Each Borrower has (a) initiated a
review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected by
suppliers, vendors and customers) that could be adversely affected by
the "Year 2000 Problem" (that is, the risk that computer applications
used by such Borrower or any of its Subsidiaries (or suppliers, vendors
and customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (b) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (c) to date,
implemented that plan in accordance with that timetable. Based on the
foregoing, each Borrower believes that all computer applications
(including those of its
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suppliers, vendors and customers) that are material to its or any of
its Subsidiaries' business and operations are reasonably expected on a
timely basis to be able to perform properly date-sensitive functions
for all dates before and after January 1, 2000 (that is, be "Year 2000
compliant").
SECTION 6.2. Survival of Representations and Warranties, Etc.
All representations and warranties set forth in this Article 6 and all
statements contained in any certificate, financial statement, or other
instrument delivered by or on behalf of any Borrower pursuant to or in
connection with this Agreement or any of the Loan Documents (including, but not
limited to, any such representation, warranty or statement made in or in
connection with any amendment thereto) shall constitute representations and
warranties made under this Agreement. All representations and warranties made
under this Agreement shall be made or deemed to be made at and as of the
Agreement Date, at and as of the Effective Date and at and as of the date of
each Loan, except that representations and warranties which, by their terms are
applicable only to one such date shall be deemed to be made only at and as of
such date. All representations and warranties made or deemed to be made under
this Agreement shall survive and not be waived by the execution and delivery of
this Agreement, any investigation made by or on behalf of the Lender or any
borrowing hereunder.
ARTICLE 7
SECURITY INTEREST
SECTION 7.1. Security Interest.
(a) To secure the payment, observance and performance of the
Secured Obligations, each Borrower hereby mortgages, pledges and
assigns all of its right, title and interest in and to the Collateral
to the Agent, for the benefit of the Secured Parties, and grants to the
Agent, for the benefit of the Secured Parties, a continuing security
interest in, and a continuing Lien upon, all of its right, title and
interest in and to the Collateral.
(b) As additional security for all of the Secured Obligations,
each Borrower grants to the Agent, each Lender and the Affiliates of
the Lenders, for the benefit of the Secured Parties, a security
interest in, and assigns to the Agent, for the benefit of the Secured
Parties, all of such Borrower's right, title and interest in and to,
any deposits or other sums at any time credited by or due from each
Lender and each Affiliate of a Lender to such Borrower, or credited by
or due from any participant of any Lender to such Borrower, with the
same rights therein as if the deposits or other sums were credited by
or due from such Lender. Each Borrower hereby authorizes each Lender
and each Affiliate of such Lender and each participant to pay or
deliver to the Agent, for the account of the Secured Parties, without
any necessity on the Agent's or any Lender's part to resort to other
security or sources of reimbursement for the Secured Obligations, at
any time during the continuation of any Event of Default or in the
event that the Agent, on behalf of the Secured Parties, should make
demand for payment hereunder and without further notice to any Borrower
(such notice being expressly waived), any of the aforesaid deposits
(general or special, time or demand, provisional or final) or other
sums for application to any Secured Obligation, irrespective of whether
any demand has been made or whether such Secured Obligation is mature,
and the rights given the Secured Parties and participants hereunder are
cumulative with such Person's other rights and remedies, including
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other rights of set-off. The Agent will promptly notify AAS of its
receipt of any such funds for application to the Secured Obligations,
but failure to do so will not affect the validity or enforceability
thereof. The Agent may give notice of the above grant of a security
interest in and assignment of the aforesaid deposits and other sums,
and authorization to, and make any suitable arrangements with, any
Lender, any such Affiliate of any Lender or participant for
effectuation thereof, and each Borrower hereby irrevocably appoints the
Agent as its attorney to collect any and all such deposits or other
sums to the extent any such payment is not made to the Agent or any
Lender by such Lender, Affiliate or participant.
SECTION 7.2. Continued Priority of Security Interest.
(a) The Security Interest granted by each Borrower shall at
all times be valid, perfected and enforceable against each Borrower and
all third parties in accordance with the terms of this Agreement, as
security for the Secured Obligations, and the Collateral shall not at
any time be subject to any Liens that are prior to, on a parity with or
junior to the Security Interest, other than Permitted Liens.
(b) Each Borrower shall, at its sole cost and expense, take
all action that may be necessary or desirable, or that the Agent may
reasonably request, so as at all times to maintain the validity,
perfection, enforceability and rank of the Security Interest in the
Collateral in conformity with the requirements of Section 7.2(a), or to
enable the Agent and the Lenders to exercise or enforce their rights
hereunder, including, but not limited to:
(i) paying all taxes, assessments and other claims
lawfully levied or assessed on any of the Collateral, except
to the extent that such taxes, assessments and other claims
constitute Permitted Liens,
(ii) obtaining, after the Agreement Date, landlords'
and mortgagees' releases, subordinations or waivers, and using
all reasonable efforts to obtain mechanics' releases,
subordinations or waivers,
(iii) delivering to the Agent, for the benefit of the
Secured Parties, any and all Chattel Paper, marked as the
"chattel paper original", as well as the original of any
letter of credit supporting the obligations evidenced by such
Chattel Paper,
(iv) delivering to the Agent, for the benefit of the
Secured Parties, endorsed or accompanied by such instruments
of assignment as the Agent may specify, and stamping or
marking, in such manner as the Agent may specify, any and all
instruments, letters and advices of guaranty and documents
evidencing or forming a part of the Collateral, and
(v) executing and delivering financing statements,
Mortgage Supplements, pledges, designations, hypothecations,
notices and assignments in each case in form and substance
satisfactory to the Agent relating to the creation, validity,
perfection, maintenance or continuation of the Security
Interest under the Uniform Commercial Code or other Applicable
Law.
(c) The Agent is hereby authorized to file one or more
financing or continuation statements or amendments thereto and Engine
Mortgages and Mortgage Supplements without
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the signature of or in the name of any Borrower for any purpose
described in Section 7.2(b). The Agent will give the Borrowers notice
of the filing of any such statements or amendments, which notice shall
specify the locations where such statements or amendments were filed. A
carbon, photographic, xerographic or other reproduction of this
Agreement or of any of the Security Documents or of any financing
statement filed in connection with this Agreement is sufficient as a
financing statement.
(d) Each Borrower shall xxxx its books and records as directed
by the Agent and as may be necessary or appropriate to evidence,
protect and perfect the Security Interest and shall cause its financial
statements to reflect the Security Interest.
ARTICLE 8
COLLATERAL COVENANTS
Until the Revolving Credit Facility and the Capital
Expenditure Loan Facility have been terminated and all the Secured Obligations
have been paid in full, unless the Required Lenders shall otherwise consent in
the manner provided in Section 15.11:
SECTION 8.1. Collection of Receivables.
(a) At the request of the Agent, each Borrower shall cause all
Lease Receivables to be delivered directly by the Account Debtors by
wire transfer to an Agency Account and all monies, checks, notes,
drafts and other payments relating to or constituting proceeds of all
Receivables other than Lease Receivables to be forwarded to a Lockbox
for deposit in an Agency Account in accordance with the procedures set
out in the corresponding Agency Account Agreement. The Borrowers will
promptly cause all monies, checks, notes, drafts and other payments
relating to or constituting proceeds of Receivables other than Lease
Receivables, of any other Collateral and of any trade accounts
receivable that are not forwarded to a Lockbox to be transferred to or
deposited in an Agency Account. In particular, each Borrower will:
(i) advise each Account Debtor on trade accounts
receivable to address all remittances with respect to amounts
payable on account thereof to a specified Lockbox,
(ii) advise each other Account Debtor that makes
payment to such Borrower by wire transfer, automated
clearinghouse transfer or similar means to make payment
directly to an Agency Account, and
(iii) stamp all invoices relating to trade accounts
receivable with a legend satisfactory to the Agent indicating
that payment is to be made to such Borrower via a specified
Lockbox.
(b) The Borrowers and the Agent shall cause all balances in
each Agency Account to be transmitted daily by wire transfer,
depository transfer check or other means in accordance with the
procedures set forth in the corresponding Agency Account Agreement, to
the Agent at the Agent's Office:
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(i) for application, on account of the Secured
Obligations, as provided in Sections 2A.3(c), 12.2, and 12.3,
such credits to be entered as of the Business Day they are
received if they are received prior to 1:30 p.m. (Atlanta
time) and to be conditioned upon final payment in cash or
solvent credits of the items giving rise to them, and
(ii) with respect to the balance, so long as no
Default or Event of Default has occurred and is continuing,
for transfer by wire transfer or depository transfer check to
a Disbursement Account.
(c) Any monies, checks, notes, drafts or other payments
referred to in subsection (a) of this Section 8.1 which,
notwithstanding the terms of such subsection, are received by or on
behalf of a Borrower will be held in trust for the Agent and will be
delivered to the Agent or a Clearing Bank, as promptly as possible, in
the exact form received, together with any necessary endorsements for
application by the Agent directly to the Secured Obligations or, if
applicable, for deposit in the Agency Account maintained with a
Clearing Bank and processing in accordance with the terms of the
corresponding Agency Account Agreement.
SECTION 8.2. Verification and Notification. The Agent shall
have the right at any time and from time to time,
(a) in the name of the Agent, the Lenders or in the name of
any Borrower, to verify the validity, amount or any other matter
relating to any Receivables by mail, telephone, telegraph or otherwise,
(b) to review, audit and make extracts from all records and
files related to any of the Receivables, and
(c) to notify the Account Debtors under any Receivables of the
assignment of such Receivables to the Agent, for the benefit of the
Secured Parties, and to direct such Account Debtor to make payment of
all amounts due or to become due thereunder directly to the Agent, for
the account of the Lenders, and, upon such notification and at the
expense of the Borrowers, to enforce collection of any such Receivables
and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as the Borrowers might have
done.
SECTION 8.3. Disputes, Returns and Adjustments.
(a) In the event any amounts due and owing under any
Receivable for an amount in excess of $150,000 are in dispute between
an Account Debtor and a Borrower, the Borrowers shall provide the Agent
with prompt written notice thereof.
(b) The Borrowers shall notify the Agent promptly of all
returns and credits in excess of $150,000 in respect of any Receivable,
which notice shall specify the Receivable affected.
(c) The Borrowers may, in the ordinary course of business
unless a Default or an Event of Default has occurred and is continuing,
grant any extension of time for payment of any Receivable or
compromise, compound or settle the same for less than the full amount
thereof, or release wholly or partly any Person liable for the payment
thereof, or allow any
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credit or discount whatsoever therein; provided that (i) no such action
results in the reduction of more than $150,000 in the amount payable
with respect to any Receivable or of more than $500,000 with respect to
all Receivables in any fiscal year (in each case, excluding the
allowance of credits or discounts generally available to Account
Debtors in the ordinary course of the Borrowers' business and
appropriate adjustments to the accounts of Account Debtors in the
ordinary course of business), and (ii) the Agent is promptly notified
of the amount of such adjustments and the Receivable(s) affected
thereby.
SECTION 8.4. Invoices and Lease Agreements.
(a) No Borrower will use any invoices other than invoices in
the form delivered to the Agent prior to the Agreement Date without
giving the Agent 30 days prior notice of the intended use of a
different form of invoice together with a copy of such different form.
(b) Each Borrower shall, prior to executing any Lease
Agreement, xxxx in a plain, distinct, permanent and conspicuous manner
that one single original Lease Agreement is the chattel paper original,
and each Borrower shall cause all executed counterparts of such Lease
Agreement to be marked as duplicate originals.
(c) No Borrower shall terminate any Lease Agreement (other
than because of a default by the Account Debtor under such Lease
Agreement), or enter into any amendment, modification, or consent with
respect to a Lease Agreement that materially affects any Borrower's
rights under such Lease Agreement, unless the Agent consents to such
amendment, modification or consent.
(d) Upon the request of the Agent, each Borrower shall deliver
to the Agent, at the Borrowers' expense, copies of customers' invoices
or the equivalent, original shipping and delivery receipts or other
proof of delivery, customers' statements, customer address lists, the
original copy of all documents, including, without limitation,
repayment histories and present status reports, relating to Receivables
and such other documents and information relating to the Receivables as
the Agent shall specify.
SECTION 8.5. Delivery of Instruments, Chattel Paper and
Mortgage Supplements. In the event any Receivable is at any time evidenced by a
promissory note, trade acceptance or any other instrument for the payment of
money, the Borrowers will promptly thereafter deliver such instrument to the
Agent, appropriately endorsed to the Agent, for the benefit of the Secured
Parties. All Chattel Paper shall be marked as such by the Borrowers, and shall
be promptly delivered to the Agent, along with the original of any letter of
credit supporting the obligation evidenced by the Chattel Paper, duly assigned
to the Agent for the benefit of the Secured Parties. Each time any Borrower
acquires an interest in Engine Inventory or a Lease Agreement, such Borrower
shall execute and deliver to the Agent a Mortgage Supplement in the form
attached to the Engine Mortgage, granting to the Agent, for the benefit of the
Secured Parties, a perfected, first-priority purchase money Security Interest in
such Inventory, and a perfected, first-priority Security Interest in any Lease
Agreement relating thereto, along with copies of the necessary FAA Application
for Aircraft or Engine Registration and FAA xxxx of sale, if applicable, and, to
the extent necessary, copies of Lien releases and lease terminations relating to
any FAA filings against any such Inventory, together with such additional legal
opinions and documents as the Agent might request.
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SECTION 8.6. Sales and Leases of Inventory. All sales and
leases of Inventory will be made in compliance with all requirements of
Applicable Law.
SECTION 8.7. Ownership and Defense of Title.
(a) Except for Permitted Liens, the Borrowers shall at all
times be the sole owners of each and every item of Collateral and shall
not create any lien on, or sell, lease, exchange, assign, transfer,
pledge, hypothecate, grant a security interest or security title in or
otherwise dispose of, any of the Collateral or any interest therein,
except for (i) sales and leases of Inventory in the ordinary course of
business, for cash or on open account or on terms of payment ordinarily
extended to its customers, and (ii) other dispositions that are
expressly permitted under this Agreement. The inclusion of "proceeds"
of the Collateral under the Security Interest shall not be deemed a
consent by the Agent or the Lenders to any other sale or other
disposition of any part or all of the Collateral.
(b) Each Borrower shall defend its title or leasehold interest
in and to, and the Security Interest in, the Collateral against the
claims and demands of all Persons.
SECTION 8.8. Insurance.
(a) The Borrowers shall at all times maintain insurance (or
cause insurance to be maintained) on the Inventory and Equipment in an
amount insuring not less than the Orderly Liquidation Value of the
Inventory and Equipment against loss or damage by fire, theft
(excluding theft by employees), burglary, pilferage, loss in transit
and such other hazards as are specified in the Engine Mortgage or as
the Agent shall reasonably specify, under policies issued by insurers
acceptable to the Agent in the exercise of its reasonable judgment. All
premiums on such insurance shall be paid by the Borrowers and copies of
the policies delivered to the Agent. The Borrowers will not use or
permit the Inventory or Equipment to be used in violation of Applicable
Law or in any manner which might render inapplicable any insurance
coverage.
(b) All insurance policies required under Section 8.8(a) shall
name the Agent, for the benefit of the Secured Parties, as an
additional insured and shall contain loss payable clauses in the form
submitted to the Borrowers by the Agent, or otherwise in form and
substance satisfactory to the Agent, naming the Agent, for the benefit
of the Secured Parties, as loss payee, as its interests may appear, and
providing that
(i) all proceeds thereunder shall be payable to the
Agent, for the benefit of the Secured Parties,
(ii) no such insurance shall be affected by any act
or neglect of the insurer or owner of the property described
in such policy, and
(iii) such policy and loss payable clauses may be
canceled, amended or terminated only upon at least 30 days
prior written notice given to the Agent.
(c) Any proceeds of insurance referred to in this Section 8.8
which are paid to the Agent, for the account of the Secured Parties,
shall be, at the option of the Required Lenders in
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their sole discretion, either (i) applied to replace the damaged or
destroyed property, or (ii) applied to the payment or prepayment of the
Secured Obligations.
SECTION 8.9. Location of Offices and Collateral.
(a) No Borrower will change the location of its chief
executive office or the place where it keeps its books and records
relating to the Collateral or change its name, its identity or
corporate structure without giving the Agent 60 days prior written
notice thereof.
(b) All Inventory, other than Inventory subject to a Lease
Agreement, will at all times be kept by each Borrower at the locations
set forth in Schedule 6.1(u), and shall not, without the prior written
consent of the Agent, be removed therefrom except pursuant to sales or
leases of Inventory permitted under Section 8.7(a).
(c) If any Inventory is in the possession or control of any of
a Borrower's agents or processors, such Borrower shall notify such
agents or processors of the Security Interest (and shall promptly
provide copies of any such notice to the Agent and the Lenders) and,
upon the occurrence of an Event of Default, shall instruct them (and
cause them to acknowledge such instruction) to hold all such Inventory
for the account of the Lenders, subject to the instructions of the
Agent.
SECTION 8.10. Records Relating to Collateral.
(a) Each Borrower will at all times
(i) keep complete and accurate records of Inventory
on a basis consistent with past practices of such Borrower so
as to permit comparison of Inventory records relating to
different time periods, itemizing and describing the kind,
type and quantity of Inventory and such Borrower's cost
therefor and a current price list for such Inventory, and
(ii) keep complete and accurate records of all other
Collateral.
(b) Each Borrower will provide the Agent and each Lender a
physical listing of all Inventory, wherever located, at least annually.
SECTION 8.11. Inspection. The Agent and each Lender (by any of
their officers, employees or agents) shall have the right, to the extent that
the exercise of such right shall be within the control of the Borrowers,
(a) at any time or times, to visit the properties of the
Borrowers and their Subsidiaries, inspect the Collateral and the other
assets of the Borrowers and their Subsidiaries, and inspect and make
extracts from the books and records of the Borrowers and their
Subsidiaries, including but not limited to management letters prepared
by independent accountants, all during customary business hours at such
premises;
(b) at any time or times, to discuss the Borrowers' and its
Subsidiaries' business, assets, liabilities, financial condition,
results of operations and business prospects, insofar as the same are
reasonably related to the rights of the Agent or the Lenders hereunder
or under any of
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the Loan Documents, with the Borrowers' and its Subsidiaries' (i)
principal officers, (ii) independent accountants, and (iii) any other
Person (except that any such discussion with any third parties shall be
conducted only in accordance with the Agent's or such Lender's standard
operating procedures relating to the maintenance of the confidentiality
of confidential information of borrowers); and
(c) at any time or times, to verify the amount, quantity,
value and condition of, or any other matter relating to, any of the
Collateral and in this connection to review, audit and make extracts
from all records and files related to any of the Collateral, including
all maintenance records, flight records and mileage logs. Neither the
Agent nor any Lender shall have any duty to make any such inspection,
and shall not incur any liability or obligation by reason of not making
such inspection.
The Borrowers will deliver to the Agent, for the benefit of the Secured Parties,
any instrument necessary for the Agent to obtain records from any service bureau
maintaining records on behalf of the Borrowers or any of its Subsidiaries (or
any of them).
SECTION 8.12. Information and Reports.
(a) Schedule of Receivables. The Borrowers shall deliver to
the Agent and to each Lender on or before the Effective Date and not
later than 15 Business Days after the end of each calendar month
thereafter a Schedule of Receivables which
(i) shall be as of the last Business Day reported on
in the immediately preceding Schedule of Receivables,
(ii) shall be reconciled to the Borrowing Base
Certificate as of such last Business Day,
(iii) shall show a separate detailed listing of each
Lease Receivable, including the name and address of the
Account Debtor with respect to such Lease Receivable, a
statement of funds on deposit under each Lease Agreement for
maintenance reserves and security deposits, a statement of the
remaining term and the lease number of the Lease Agreement,
and such other information as the Agent shall request, and
(iv) shall set forth a detailed aged trial balance of
all of the Borrowers' then existing Receivables, specifying
the names, addresses and balance due for each Account Debtor
obligated on a Receivable so listed.
(b) Schedule of Inventory. The Borrowers shall deliver to the
Agent the following listings of Inventory at the following times: (i)
on a weekly basis, within 2 Business Days after the end of each
calendar week, a listing of all Engine Inventory of the Borrowers,
showing the make, model and serial number, designating which Engine
Inventory has been acquired since the previous week, which Engine
Inventory has been sold since the previous week and which Engine
Inventory is subject to a Lease Agreement; (ii) on a weekly basis,
within 2 Business Days after the end of each calendar week, a detailed
description of all Inventory acquired in connection with any Bulk
Purchase during the previous week; (iii) on a weekly basis, within 2
Business Days after the end of each calendar week, a detailed listing
of all Inventory subject
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to a Lease Agreement, referencing the name and address of the lessee,
the lease number, the jurisdiction of registration of the airframe on
which such Inventory is installed, and the type and serial number of
the airframe on which such Inventory is installed; and (iv) on or
before the Effective Date, and not later than 15 Business Days after
the end of each month, a Schedule of Inventory as of the last Business
Day reported on in the immediately preceding month, describing the
kind, type and quantity of the Borrowers' Inventory, the location
thereof, whether such Inventory is subject to a Lease Agreement, the
net book value thereof, and such other detail as the Agent may require.
(c) Schedule of Equipment. The Borrowers shall deliver to the
Agent upon the Agent's request, a Schedule of Equipment, describing
each item of the Borrowers' Equipment and the location, cost and then
current book value thereof.
(d) Borrowing Base Certificate. The Borrowers shall deliver to
the Agent and to each Lender on or before the Effective Date and not
later than fifteen Business Days after the end of each calendar month a
Borrowing Base Certificate prepared as of the close of business on the
last Business Day of the immediately preceding month.
(e) Accounts Payable Listings. The Borrowers shall deliver to
the Agent, on or before the Effective Date and not later than 15
Business Days after the end of each calendar month thereafter, a
listing of all of the Borrowers' then existing trade payables as of the
last Business Day of such month, specifying the name of and balance due
to each trade creditor of the Borrowers. Upon the Agent's request, the
Borrowers shall deliver to the Agent monthly detailed trade payable
agings in form acceptable to the Agent.
(f) Appraisals. On or before the Effective Date and not later
than 30 days after the end of each month, the Borrowers shall deliver
to the Agent appraisals setting forth the Orderly Liquidation Value of
all of the Borrowers' Inventory. Each appraisal shall be conducted at
the Borrowers' expense by an appraiser satisfactory to the Agent in its
sole discretion, and each appraisal shall be in form reasonably
acceptable to the Agent. The Orderly Liquidation Value of each item of
Inventory set forth on the Borrowing Base Certificate shall be adjusted
based on the monthly appraisals within 7 days of the Agent's receipt of
each such appraisal, together with a revised Borrowing Base Certificate
prepared by the Borrowers, showing the most recent Orderly Liquidation
Values. The Borrowers agree to provide the appraiser with the
information necessary for the appraiser to conduct the appraisal not
later than the fifth day of each month.
(g) Notice of Diminution of Value. The Borrowers shall give
prompt notice to the Agent of any matter or event which has resulted
in, or may result in, the diminution in excess of $1,000,000 in the
value of any Collateral, except for any such diminution in the value of
any Receivables or Inventory in the ordinary course of business which
has been appropriately reserved against, as reflected in financial
statements previously delivered to the Agent and the Lenders pursuant
to Article 10.
(h) Additional Information. The Agent may in its discretion
from time to time request that the Borrowers deliver the schedules,
certificates, notices, and appraisals described in Sections 8.12(a),
(b), (c), (d), (e), (f) and (g) more or less often and on different
schedules than specified in such Sections and the Borrowers will comply
with such requests. The
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Borrowers will also furnish to the Agent and each Lender such other
information with respect to the Collateral as the Agent or such Lender
may from time to time reasonably request.
SECTION 8.13. Power of Attorney. Each Borrower hereby appoints
the Agent as its attorney, with power
(a) at any time or times, to endorse the name of such Borrower
on any checks, notes, acceptances, money orders, drafts or other forms
of payment or security that may come into the Agent's or any Lender's
possession,
(b) at any time or times, to sign the name of such Borrower on
any invoice or xxxx of lading relating to any Receivable, Inventory or
other Collateral, on any drafts against customers related to letters of
credit, on schedules and assignments of Receivables furnished to the
Agent or any Lender by the Borrowers (or any of them) on notices of
assignment, financing statements, Mortgage Supplements and other public
records relating to the perfection or priority of the Security
Interest, and on verifications of account and on notices to or from
customers.
SECTION 8.14. Additional Real Estate and Leases.
(a) Promptly upon any Borrower's acquisition of any ownership
or long-term leasehold interest in any Real Estate, the Borrowers shall
deliver to the Agent, for the benefit of the Secured Parties, an
executed mortgage in form and substance satisfactory to the Agent,
conveying to the Agent, for the benefit of the Secured Parties, a first
priority Lien on such Real Estate, including, if requested by the
Agent, on any long-term leasehold interest therein, subject only to
such prior Liens as the Agent shall consent to in writing. If requested
by the Agent, the Borrowers shall also deliver to the Agent at
Borrowers' expense a mortgagee title insurance policy in favor of the
Agent and the Lenders insuring such mortgage to create and convey such
Lien, subject only to such exceptions consented to by the Agent, and
shall deliver to the Agent such other items as it may require with
respect to such Real Estate, all in form and substance satisfactory to
the Agent.
(b) Promptly upon any Borrower's entry into any lease of Real
Estate (other than a lease conveying a long-term leasehold interest in
Real Estate, which shall be subject to the provisions of clause (a)
above), the Borrowers shall deliver to the Agent an executed landlord's
waiver and consent with respect to such lease in form and substance
satisfactory to the Agent.
SECTION 8.15. Assignment of Claims Act. Upon the request of
the Agent, the Borrowers (or any of them) shall execute any documents or
instruments and shall take such steps or actions reasonably required by the
Agent so that all monies due or to become due under any contract with the United
States of America, the District of Columbia or any state, county, municipality
or other domestic or foreign governmental entity, or any department, agency or
instrumentality thereof, will be assigned to the Agent, for the benefit of the
Secured Parties, and notice given thereof in accordance with the requirements of
the Assignment of Claims Act of 1940, as amended, or any other laws, rules or
regulations relating to the assignment of any such contract and monies due to or
to become due.
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ARTICLE 9
AFFIRMATIVE COVENANTS
Until the Revolving Credit Facility and the Capital
Expenditure Loan Facility have been terminated and all the Secured Obligations
have been paid in full, unless the Required Lenders shall otherwise consent in
the manner provided for in Section 15.11, each Borrower will, and will cause
each of its Subsidiaries to:
SECTION 9.1. Preservation of Corporate Existence and Similar
Matters. Preserve and maintain its corporate existence, rights, franchises,
licenses and privileges in the jurisdiction of its incorporation and qualify and
remain qualified as a foreign corporation and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization.
SECTION 9.2. Compliance with Applicable Law. Comply with all
Applicable Law relating to such Borrower or such Subsidiary except to the extent
being contested in good faith by appropriate proceedings and for which reserves
in respect of such Borrower's or Subsidiary's reasonably anticipated liability
therefor have been appropriately established.
SECTION 9.3. Maintenance of Property. In addition to, and not
in derogation of, the requirements of Section 8.7 and of the Security Documents,
(a) protect and preserve all properties material to its
business, including all Proprietary Rights, and maintain in good
repair, working order and condition in all material respects, with
reasonable allowance for wear and tear, all tangible properties, and
(b) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such
properties necessary for the conduct of its business, so that the
business carried on in connection therewith may be properly and in
accordance with past practices conducted at all times.
SECTION 9.4. Conduct of Business. At all times engage only in
the business described in Section 6.1(f).
SECTION 9.5. Insurance. Maintain, in addition to the coverage
required by Section 8.8 and the Security Documents, insurance with responsible
insurance companies against such risks and in such amounts as is customarily
maintained by similar businesses or as may be required by Applicable Law, and
from time to time deliver to the Agent or any Lender upon its request a detailed
list of the insurance then in effect, stating the names of the insurance
companies, the amounts and rates of the insurance, the dates of the expiration
thereof and the properties and risks covered thereby.
SECTION 9.6. Payment of Taxes and Claims. Pay or discharge
when due
(a) all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any properties
belonging to it, except that real property ad valorem taxes shall be
deemed to have been so paid or discharged if the same are paid before
they become delinquent, and
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(b) all lawful claims of materialmen, mechanics, carriers,
warehousemen and landlords for labor, materials, supplies and rentals
which, if unpaid, might become a Lien on any of its properties;
except that this Section 9.6 shall not require the payment or discharge of any
such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings and for which reserves in respect of the
reasonably anticipated liability therefor have been appropriately established.
SECTION 9.7. Accounting Methods and Financial Records.
Maintain a system of accounting, and keep such books, records and accounts
(which shall be true and complete), as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP and, with
respect to AAS only, shall comply with all timeframes applicable to annual and
quarterly financial reporting promulgated by the SEC.
SECTION 9.8. Use of Proceeds.
(a) Use the proceeds of
(i) the initial Revolving Credit Loan to pay amounts
indicated on Schedule 9.8 to the Persons indicated thereon,
and
(ii) all subsequent Loans only for working capital,
general business purposes and Permitted Acquisitions, and
(b) not use any part of such proceeds to purchase or, to carry
or reduce or retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System) or, in any event, for
any purpose which would involve a violation of such Regulation U or of
Regulation T or X of such Board of Governors, or for any purpose
prohibited by law or by the terms and conditions of this Agreement.
SECTION 9.9. Hazardous Waste and Substances; Environmental
Requirements.
(a) In addition to, and not in derogation of, the requirements
of Section 9.2 and of the Security Documents, comply with all
Environmental Laws and all Applicable Laws relating to occupational
health and safety (except for instances of noncompliance that are being
contested in good faith by appropriate proceedings if reserves in
respect of such Borrower's or such Subsidiary's reasonably anticipated
liability therefor have been appropriately established), promptly
notify the Agent of its receipt of any notice of a violation of any
such Environmental Laws or other such Applicable Laws, and indemnify
and hold the Agent and the Lenders harmless from all loss, cost,
damage, liability, claim and expense incurred by or imposed upon the
Agent or any Lender on account of such Borrower's failure to perform
its obligations under this Section 9.9.
(b) Whenever such Borrower gives notice to the Agent pursuant
to this Section 9.9 with respect to a matter that reasonably could be
expected to result in liability to such Borrower or Subsidiary in
excess of $100,000 in the aggregate, such Borrower shall, at the
Agent's request and the Borrowers' expense (i) cause an independent
environmental engineer acceptable to the Agent to conduct an
assessment, including tests where necessary, of the site where the
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noncompliance or alleged noncompliance with Environmental Laws has
occurred and prepare and deliver to the Agent a report setting forth
the results of such assessment, a proposed plan to bring such Borrower
or Subsidiary into compliance with such Environmental Laws (if such
assessment indicates noncompliance) and an estimate of the costs
thereof, and (ii) provide to the Agent a supplemental report of such
engineer whenever the scope of the noncompliance, or the response
thereto or the estimated costs thereof, shall materially adversely
change.
SECTION 9.10. Year 2000 Compliance. Promptly notify the Agent
in the event such Borrower discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
compliant (as defined in Section 6.1(ee)).
SECTION 9.11. Additional Borrowers. Upon the formation or
acquisition of any new direct or indirect Subsidiaries by any Borrower other
than a Special Purpose Subsidiary within 10 days after such formation or
acquisition, at its expense and with the approval of the Agent (such approval to
be granted or denied in the Agent's sole discretion), cause any wholly-owned
U.S. Subsidiary of any Borrower to become a party to this Agreement as a
Borrower by: (a) causing such Subsidiary to execute a Joinder Agreement in
substantially the same form as Exhibit F hereto, (b) causing such Subsidiary to
execute a Note in favor of each Lender, and (c) delivering such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing statements
(and lien searches), security agreements (and FAA lien searches), landlord
waivers, certified resolutions and other organizational and authorizing
documents of such Subsidiary and favorable opinions of counsel to such
Subsidiary (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to above), all
in form, content and scope reasonably satisfactory to the Agent.
SECTION 9.12. Subsidiary Guarantors. Upon the formation or
acquisition of any new direct or indirect Subsidiaries by any Borrower (other
than a Special Purpose Subsidiary), if such Subsidiary is not made a Borrower
pursuant to Section 9.11, then in each instance, within 10 days after such
formation or acquisition, at its expense:
(a) cause each such U.S. Subsidiary (each, a "Subsidiary
Guarantor") to duly execute and deliver to the Agent a Guaranty, in
form and substance satisfactory to the Agent, guaranteeing the payment
in full of the Secured Obligations and the performance of all of the
Borrowers' obligations under the Loan Documents (each a "Subsidiary
Guaranty"),
(b) cause each such U.S. Subsidiary to duly execute and
deliver to the Agent, for the benefit of the Secured Parties,
mortgages, pledges, assignments and other security agreements, as
specified by and in form and substance consistent with this Agreement
and otherwise reasonably satisfactory to the Agent, securing such
Subsidiary's obligations under its Subsidiary Guaranty and constituting
first priority Liens on all of such Subsidiary's assets (real and
personal), subject only to Permitted Liens,
(c) duly execute and deliver to the Agent, for the benefit of
the Secured Parties, a stock pledge agreement and blank stock power, as
specified by and in form and substance satisfactory to the Agent,
securing the Secured Obligations and constituting a first priority Lien
on, in the case of U.S. Subsidiaries, all of each such U.S.
Subsidiary's capital stock, and in the case of foreign Subsidiaries,
65% of each such foreign Subsidiary's voting stock and 100% of such
foreign Subsidiary's non-voting stock, subject only to Xxxxxxxxx Xxxxx,
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(x) take, and cause each Subsidiary Guarantor to take, such
action (including, without limitation, the recording of mortgages, the
filing of Uniform Commercial Code financing statements, the filing of
security agreements, and the delivery of original stock certificates)
as may be reasonably necessary or advisable in the opinion of the Agent
to vest in the Agent, for the benefit of the Secured Parties, valid and
subsisting perfected Liens on the properties purported to be subject to
the mortgages, pledges, assignments and security agreements delivered
pursuant to this Section 9.12, enforceable against all third parties in
accordance with their terms, subject only to Permitted Liens,
(e) deliver to the Agent, upon the request of the Agent in its
sole discretion, a signed copy of a favorable opinion of counsel for
the Borrowers or such Subsidiary Guarantor, addressed to the Agent and
the other Lenders, acceptable to the Agent as to the matters contained
above, as applicable, as to such guaranties, mortgages, pledges,
assignments and security agreements being legal, valid and binding
obligations of each party thereto enforceable in accordance with their
terms, and as to such other matters as the Agent may reasonably
request, and
(i) deliver to the Agent, upon the request of the Agent in its
sole discretion, with respect to each parcel of real property owned or
held by such Subsidiary Guarantor, all items as Agent may reasonably
request with respect to such real property, together with such
environmental audits of such real property as the Agent reasonably
requests, all in form and substance reasonably satisfactory to the
Agent.
SECTION 9.13. Syndication. Cooperate fully with the Agent (a)
through meetings with and providing requested information to prospective
assignees of the Commitments, and in such other matters as the Agent may
reasonably request, in connection with the syndication of the Commitments, and
(b) in considering in good faith any amendment to this Agreement or any other
Loan Document as the Agent may reasonably request in order to assure a
satisfactory syndication of the Commitments, provided the Agent shall use its
good faith efforts to syndicate the Commitments on the terms set forth herein.
SECTION 9.14. Bulk Purchase of Parts Inventory and Engines.
Provide the Agent with (a) at least 5 Business Days' notice of any Bulk
Purchase, (b) at least 10 Business Days' notice of any purchase of Parts
Inventory with a purchase price greater than $2,000,000, and (c) at least 5
Business Days' notice of any purchase of Engine Inventory with a purchase price
greater than $1,000,000.
SECTION 9.15. Formation of Special Purpose Subsidiaries.
Comply with the following with respect to the formation and maintenance of any
Special Purpose Subsidiary: (a) no third-party lender shall finance the purchase
of a Special Purpose Subsidiary Asset unless the Lenders have been provided with
the opportunity to finance the Borrower's acquisition or maintenance of the
Special Purpose Subsidiary Asset and the Required Lenders have declined to do so
on terms at least as favorable as those offered by such third-party lender; (b)
no Special Purpose Subsidiary shall be formed by any Borrower or any Special
Purpose Subsidiary during the occurrence or continuation of an Event of Default;
(c) in the event the Special Purchase Subsidiary Indebtedness is repaid in full
or the Special Purpose Subsidiary Guaranty is collected by the lender financing
the Special Purchase Subsidiary, the Borrowers or the Subsidiary Guarantor shall
advise the Agent of such fact and shall execute and deliver such transfer
documents, lien releases, Mortgage Supplements, and other
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documents requested by the Agent so that the Special Purchase Subsidiary Asset
will be owned by a Borrower or Subsidiary Guarantor and subject to the Security
Interest; and (d) in the event any Special Purpose Subsidiary Asset is sold or
otherwise transferred from the Special Purpose Subsidiary, the net proceeds from
such sale or other disposition shall be distributed to the Parent of such
Special Purpose Subsidiary.
SECTION 9.16. Consolidated Subsidiaries. For purposes of this
Agreement, any reference to Consolidated Subsidiaries shall be deemed to mean
Consolidated Subsidiaries agreed to be treated as such by the Required Lenders
pursuant to their written consent, which consent may be withheld in their
absolute discretion conditioned upon, inter alia, the execution and delivery of
guaranties, security agreements, mortgages and other documents required by the
Required Lenders in their absolute discretion.
ARTICLE 10
INFORMATION
Until the Revolving Credit Facility and the Capital
Expenditure Loan Facility have been terminated and all the Secured Obligations
have been paid in full, unless the Required Lenders shall otherwise consent in
the manner set forth in Section 15.11, the Borrowers will furnish to the Agent
and to each Lender at the offices then designated for such notices pursuant to
Section 15.1:
SECTION 10.1. Financial Statements.
(a) Audited Year-End Statements. Upon the earlier to occur of
(i) 90 days after the end of each fiscal year, or (ii) the date that
AAS is required to file its 10K with the SEC for such year, copies of
the consolidating and consolidated balance sheets of the Borrowers and
their Consolidated Subsidiaries as at the end of such fiscal year and
the related statements of operations, shareholders' equity and cash
flows for such fiscal year, in each case setting forth in comparative
form the figures for the previous fiscal year, reported on, as to such
consolidated statements, without qualification by independent certified
public accountants of nationally recognized standing;
(b) Quarterly Financial Statements. Upon the earlier to occur
of (i) 45 days after the end of each quarter, or (ii) the date that AAS
is required to file its 10Q with the SEC for such quarter, copies of
the unaudited consolidated balance sheet and unaudited statements of
cash flow of the Borrowers and their Consolidated Subsidiaries as at
the end of such quarter and the related unaudited consolidated
statements of operations for the Borrowers and their Consolidated
Subsidiaries for such quarter and for the portion of the fiscal year
through such quarter, in each case certified by the Financial Officer
as presenting fairly the financial condition and results of operations
of the Borrowers and their Consolidated Subsidiaries (subject to normal
year-end audit adjustments);
(c) Projections. Not later than 60 days prior to the beginning
of each fiscal year, the Projections; and
(d) Annual Budget. As soon as available, but in any event at
least 60 days prior to the beginning of each fiscal year, an operating
budget for the Borrowers and their Consolidated
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Subsidiaries for such fiscal year, in the form customarily prepared by
management of the Borrowers consistent with past practice, together
with a statement of the assumptions upon which such budget was
prepared.
All such financial statements referred to in clauses (a), (b) and (c) shall be
complete and correct in all material respects and prepared in accordance with
GAAP (except, with respect to interim financial statements described in clause
(b), for the omission of footnotes and for the effect of normal year-end audit
adjustments) applied consistently throughout the periods reflected therein.
SECTION 10.2. Accountants' Certificate. Together with the
financial statements referred to in Section 10.1(a), the Borrowers shall deliver
a certificate of such accountants addressed to the Agent
(a) stating that in making the examination necessary for the
certification of such financial statements, nothing has come to their
attention to lead them to believe that any Default or Event of Default
exists and, in particular, they have no knowledge of any Default or
Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature, and
(b) having attached the calculations, prepared by the
Borrowers and reviewed by such accountants, required to establish
whether or not the Borrowers are in compliance with the covenants
contained in Sections 11.1, 11.2, 11.5, 11.10 and 11.11, as at the date
of such financial statements.
SECTION 10.3. Officer's Certificate. At the time that the
Borrowers furnish the financial statements pursuant to Section 10.1(b), the
Borrowers shall also furnish a certificate of the Financial Officer
(a) setting forth as at the end of such fiscal quarter or
fiscal year, as the case may be, the calculations required to establish
whether or not the Borrowers were in compliance with the requirements
of Sections 11.1, 11.2, 11.5, 11.10 and 11.11, as at the end of each
respective period,
(b) stating that the information on the schedules to this
Agreement are complete and accurate as of the date of such certificate
or, if such is not the case, attaching to such certificate updated
schedules, and
(c) stating that, based on a reasonably diligent examination,
no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default and its nature, when it
occurred, whether it is continuing and the steps being taken by the
Borrowers with respect to such Default or Event of Default.
SECTION 10.4. Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to any Borrower or its Board of Directors by its
independent public accountants, including, without limitation, any
management report.
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(b) As soon as practicable, copies of all financial statements
and reports that any Borrower shall send to its shareholders generally
and of all registration statements and all regular or periodic reports
which any Borrower shall file with the SEC.
(c) From time to time and as soon as reasonably practicable
following each request, such forecasts, data, certificates, reports,
statements, opinions of counsel, documents or further information
regarding the business, assets, liabilities, financial condition,
results of operations or business prospects of any Borrower or any of
its Subsidiaries as the Agent or any Lender may reasonably request and
that any Borrower has or (except in the case of legal opinions relating
to the perfection or priority of the Security Interest) without
unreasonable expense can obtain. The rights of the Agent and the
Lenders under this Section 10.4 are in addition to and not in
derogation of their rights under any other provision of this Agreement
or of any other Loan Document.
(d) If requested by the Agent or any Lender, statements in
conformity with the requirements of Federal Reserve Form U-1 referred
to in Regulation U of the Board of Governors of the Federal Reserve
System.
SECTION 10.5. Notice of Litigation and Other Matters. Prompt
notice of:
(a) the commencement, to the extent any Borrower is aware of
the same, of all proceedings and investigations by or before any
governmental or nongovernmental body and all actions and proceedings in
any court or before any arbitrator against or in any other way relating
to or affecting any Borrower, any of its Subsidiaries, or any of any
Borrower's or any of its Subsidiaries' properties, assets or
businesses, which might, singly or in the aggregate, result in the
occurrence of a Default or an Event of Default, or have a Materially
Adverse Effect,
(b) any amendment of the articles of incorporation or by-laws
of any Borrower or any of its Subsidiaries,
(c) any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of any Borrower
or any of its Subsidiaries which has had or may have, singly or in the
aggregate, a Materially Adverse Effect and any change in the executive
officers of any Borrower or any of its Subsidiaries, and
(d) any Default or Event of Default or any event which
constitutes or which with the passage of time or giving of notice or
both would constitute a default or event of default by any Borrower or
any of its Subsidiaries under any material agreement (other than this
Agreement) to which such Borrower or any of its Subsidiaries is a party
or by which such Borrower, any of its Subsidiaries or any of their
properties may be bound.
SECTION 10.6. ERISA. As soon as possible and in any event
within 30 days after any Borrower knows, or has reason to know, that:
(a) any Termination Event with respect to a Plan has occurred
or will occur, or
(b) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans is equal to an amount in excess of $0, or
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(c) any Borrower or any of its Subsidiaries is in "default"
(as defined in Section 4219(c)(5) of ERISA) with respect to payments to
a Multiemployer Plan required by reason of any Borrower's or such
Subsidiary's complete or partial withdrawal (as described in Section
4203 or 4205 of ERISA) from such Multiemployer Plan,
a certificate of the Financial Officer setting forth the details of such event
and the action which is proposed to be taken with respect thereto, together with
any notice or filing which may be required by the PBGC or other agency of the
United States government with respect to such event.
SECTION 10.7. Accuracy of Information. All written
information, reports, statements and other papers and data furnished to the
Agent or any Lender, whether pursuant to this Article 10 or any other provision
of this Agreement or of any other Loan Document, shall be, at the time the same
is so furnished, complete and correct in all material respects to the extent
necessary to give the Agent and the Lenders true and accurate knowledge of the
subject matter.
SECTION 10.8. Revisions or Updates to Schedules. Should any of
the information or disclosures provided on any of the Schedules originally
attached hereto become outdated or incorrect in any material respect, as part of
the officer's certificate required pursuant to Section 10.3(b), such revisions
or updates to such Schedule(s) as may be necessary or appropriate to update or
correct such Schedule(s), provided that no such revisions or updates to any
Schedule(s) shall be deemed to have amended, modified or superseded such
Schedule(s) as originally attached hereto, or to have cured any breach of
warranty or representation resulting from the inaccuracy or incompleteness of
any such Schedule(s), unless and until the Required Lenders in their sole and
absolute discretion, shall have accepted in writing such revisions or updates to
such Schedule(s).
SECTION 10.9. Subordinated Indebtedness Certificate. Not less
than five Business Days prior to any scheduled payment of any principal of, or
interest or other amounts on, the Subordinated Indebtedness, and as a condition
precedent to making such payment, the Borrowers shall furnish a certificate of
the Financial Officer stating:
(a) that no Default or Event of Default is in existence as of
the date of the certificate or will be in existence as of the date of
such payment, both with and without giving effect to the making of such
payment, and
(b) the amount of principal and interest to be paid.
SECTION 10.10. Formation of Special Purpose Subsidiary. The Borrowers
shall advise the Agent of the formation of any Special Purpose Subsidiary by any
Borrower or Subsidiary Guarantor and shall provide the Agent with such
documentation as the Agent requests in connection with such Special Purpose
Subsidiary or any Special Purpose Subsidiary Indebtedness.
SECTION 10.11. Permitted Acquisitions. As soon as available but in any
event not less than 10 Business Days prior to the closing of any Permitted
Acquisitions by a Borrower, such Borrower shall provide the Agent with each of
the following: (a) projections of the Borrowers and their Consolidated
Subsidiaries giving pro forma effect to the Acquisition, along with a pro forma
balance sheet, covering 3 years from the effective date of the Acquisition, in
form acceptable to the Agent, (b) the most recent audited financial statements
(if available or required) of the Person or Business Unit being acquired,
together with current interim financial statements, (c) the state and federal
tax returns
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for the Person or Business Unit being acquired for the most recent three fiscal
years, if such tax returns were reviewed by the Borrowers or their
representatives in connection with their due diligence, (d) the letter of intent
and, as soon as available, the stock or asset purchase agreement documenting the
terms and conditions of such Permitted Acquisition, and (e) such other items
provided to the Borrowers relating to the Person or Business Unit being acquired
if requested by the Agent and not prohibited by confidentiality agreements.
ARTICLE 11
NEGATIVE COVENANTS
Until the Revolving Credit Facility and the Capital
Expenditure Loan Facility have been terminated and all the Secured Obligations
have been paid in full, unless the Required Lenders shall otherwise consent in
the manner set forth in Section 15.11, the Borrowers will not directly or
indirectly and, in the case of Sections 11.2 through 11.17, will not permit any
of their Subsidiaries (exclusive of any Special Purpose Subsidiary) to, and, in
the case of Sections 11.2, 11.3, 11.4, 11.5, 11.6, 11.7, 11.8, 11.9, 11.10,
11.11 and 11.13, will not permit any Special Purpose Subsidiary to:
SECTION 11.1. Financial Ratios.
(a) Minimum Consolidated Tangible Net Worth. Permit the
Consolidated Tangible Net Worth of the Borrowers and their Consolidated
Subsidiaries, measured at the end of the 1999 fiscal year, to be less
than $17,750,000; for each subsequent fiscal year end, the required
Minimum Consolidated Tangible Net Worth shall be increased by the
greater of (i) 75% of the Consolidated positive Net Income of the
Borrowers and their Consolidated Subsidiaries for the previous fiscal
year, or (ii) $2,500,000.
(b) Maximum Consolidated Funded Indebtedness to Consolidated
EBITDA Ratio. Permit the ratio of the Consolidated Funded Indebtedness
of the Borrowers and their Consolidated Subsidiaries as of any fiscal
quarter end, to the Consolidated EBITDA of the Borrowers and their
Consolidated Subsidiaries for the preceding four fiscal quarters, to be
greater than 4.5 to 1 for any quarter ending in 1999, 4.75 to 1 for any
quarter ending in 2000, and 5.0 to 1 for any quarter ending thereafter.
(c) Minimum Consolidated Fixed Charge Coverage Ratio. Permit
the ratio of (i) the Consolidated EBITDA of the Borrowers and their
Consolidated Subsidiaries other than any Special Purpose Subsidiaries,
minus Unfunded Capital Expenditures, dividends and cash taxes paid by
the Borrowers and their Consolidated Subsidiaries other than any
Special Purpose Subsidiaries to (ii) the Consolidated Fixed Charges of
the Borrowers and their Consolidated Subsidiaries other than any
Special Purpose Subsidiaries, to be less than 4.0 to 1 as of any fiscal
quarter ending in 1999, measured for the 1999 fiscal quarters that have
ended up to and including the date of measurement, or to be less than
2.0 to 1 as of any fiscal quarter ending thereafter, measured for the
immediately preceding four fiscal quarters.
SECTION 11.2. Indebtedness for Money Borrowed. Create, assume,
or otherwise become or remain obligated in respect of, or permit or suffer to
exist or to be created, assumed or
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incurred or to be outstanding any Indebtedness for Money Borrowed, except that
this Section 11.2 shall not apply to:
(a) with respect to the Borrowers, Indebtedness for Money
Borrowed represented by the Loans and the Notes,
(b) Indebtedness for Money Borrowed existing on the Effective
Date and reflected on Schedule 6.1(g) (excluding any such Indebtedness
that is to be paid in full on the Effective Date),
(c) with respect to the Borrowers, Indebtedness for Money
Borrowed evidenced by Hedge Agreements in a notional amount not to
exceed $1,500,000 entered into for the purpose of managing existing or
anticipated interest rate risks in connection with the Loans hereunder,
(d) with respect to the Borrowers, Permitted Purchase Money
Indebtedness,
(e) Special Purpose Subsidiary Indebtedness in an amount not
to exceed $10,000,000 in the aggregate for all Special Purpose
Subsidiaries at any one time, and
(f) with respect to the Borrowers, the Subordinated
Indebtedness.
SECTION 11.3. Guaranties. Become or remain liable with respect
to any Guaranty of any obligation of any other Person, other than (i) any
Subsidiary Guaranty under Section 9.12, and (ii) any Special Purpose Subsidiary
Guaranty.
SECTION 11.4. Investments. Acquire, after the Agreement Date,
any Business Unit or Investment or, after such date, maintain any Investment,
other than Permitted Investments.
SECTION 11.5. Capital Expenditures. Make or incur any Capital
Expenditures, except that the Borrowers and their Subsidiaries in the aggregate
may make or incur Capital Expenditures in the 1999 fiscal year in an amount not
to exceed, in the aggregate, $6,000,000, and the Borrowers and their
Subsidiaries in the aggregate may make or incur Capital Expenditures in any
subsequent fiscal year in an amount not to exceed in the aggregate for any such
fiscal year $2,500,000.
SECTION 11.6. Restricted Dividend Payments and Purchases, Etc.
Declare or make any Restricted Dividend Payment, Restricted Payment or
Restricted Purchase, other than (i) Special Purpose Subsidiary Investments by
any Borrower, (ii) payments by any Borrower of any amounts due under a Special
Purpose Subsidiary Guaranty, (iii) payments by a Special Purpose Subsidiary of
amounts due on Special Purpose Subsidiary Indebtedness, (iv) distributions or
dividends by a Special Purpose Subsidiary to its Parent, and (v) payments made
to Xxxxx X. Xxxx or to Xxxx, Layton, Kersh, Solomon, Sigmon, Xxxx & Xxxxx, P.A.
for legal services or for services provided in connection with the voting trust
described in Schedule 6.1(b).
SECTION 11.7. Merger, Consolidation and Sale of Assets. Merge
or consolidate with any other Person or sell, lease or transfer or otherwise
dispose of all or a substantial portion of its assets to any Person other than
sales and leases of Inventory in the ordinary course of business.
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SECTION 11.8. Transactions with Affiliates. Effect any
transaction with any Affiliate on a basis less favorable to the Borrowers or
such Subsidiary than would be the case if such transaction had been effected
with a Person not an Affiliate.
SECTION 11.9. Liens. Create, assume or permit or suffer to
exist or to be created or assumed any Lien on any of the Collateral or its other
assets, other than Permitted Liens.
SECTION 11.10. Capitalized Lease Obligations. Incur or permit
to exist any Capitalized Lease Obligation if such Capitalized Lease Obligation
when added to existing Capitalized Lease Obligations and Permitted Purchase
Money Indebtedness of the Borrowers and their Subsidiaries (including Special
Purpose Subsidiary Indebtedness) would exceed $12,000,000 in the aggregate.
SECTION 11.11. Real Estate Leases. Enter into any real
property lease, including a lease relating to the Real Estate occupied by the
Borrowers or their Subsidiaries on the Effective Date, without the prior written
consent of the Agent, on behalf of the Secured Parties, which consent shall not
be unreasonably withheld.
SECTION 11.12. 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, and any other condition, event or transaction with respect
to any Plan which could result in the incurrence by any Borrower or its
Subsidiaries of any material liability, fine or penalty.
SECTION 11.13. [Intentionally Omitted].
SECTION 11.14. Amendments of Other Agreements. Amend in any
way the subordination provisions applicable to the Subordinated Indebtedness.
SECTION 11.15. Fiscal Year. Change the end of their fiscal
year from December 31.
SECTION 11.16. Insurance; Prohibited Countries. Permit any
Inventory or any part thereof to be operated in or to any area excluded from
coverage by any insurance required by the provisions of Section 8.8 or the
insurance provisions of the Engine Mortgage, or permit any Inventory or any part
thereof to be operated in or to any Prohibited Country.
SECTION 11.17. Minimum Availability. Permit Availability to be
less than $1,000,000 at any time.
ARTICLE 12
DEFAULT
SECTION 12.1. Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any governmental or nongovernmental body:
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(a) Default in Payment. The Borrowers shall default in any
payment of principal of or interest on any Loan or any Note within 5
days of the date due (whether at maturity, by reason of acceleration or
otherwise).
(b) Other Payment Default. The Borrowers shall default in the
payment, as and when due, of principal of or interest on, any other
Secured Obligation, and such default shall continue for more than 5
days after written notice has been given to AAS by the Agent.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by any Obligor under this Agreement or any Loan
Document, or any amendment hereto or thereto, shall at any time prove
to have been incorrect or misleading in any material respect when made.
(d) Default in Performance. Any Borrower shall default in the
performance or observance of any term, covenant, condition or agreement
to be performed by the Borrowers (or any of them), contained in this
Agreement.
(e) Indebtedness Cross-Default.
(i) Any Borrower or any Subsidiary of any Borrower
(including any Special Purpose Subsidiary) shall fail to pay
when due and payable the principal of or interest on the
Subordinated Indebtedness or any other Indebtedness for Money
Borrowed (other than the Loans) in an amount in excess of
$250,000, provided that the Borrowers' failure to make a
payment of the principal of or interest on the Subordinated
Indebtedness on account of the operation of the subordination
provisions applicable thereto shall not be an Event of
Default, and provided further that the Borrowers' failure to
make a payment on Indebtedness for Money Borrowed consisting
of financing extended by the seller of a Person or a Business
Unit in connection with the sale of such Person or Business
Unit to a Borrower shall not be an Event of Default so long as
(A) such missed payment results from Borrowers' exercise of
setoff rights in accordance with the terms of the purchase
agreement relating to the sale of such Person or Business
Unit, (B) the missed payment of principal or interest is no
greater than $100,000 in the aggregate, (C) the missed payment
is being contested by the Borrowers in good faith, and (D)
adequate reserves for such missed payment have been
established on the Borrowers' books, or
(ii) the maturity of any such Indebtedness described
in clause (i) shall have (A) been accelerated in accordance
with the provisions of any indenture, contract or instrument
providing for the creation of or concerning such Indebtedness,
or (B) been required to be prepaid prior to the stated
maturity thereof, or
(iii) any event shall have occurred and be continuing
which would permit any holder or holders of such Indebtedness
described in clause (i), any trustee or agent acting on behalf
of such holder or holders or any other Person so to accelerate
such maturity, and such Borrower or Subsidiary shall have
failed to cure such default prior to the expiration of any
applicable cure or grace period.
(f) Other Cross-Defaults. Any Obligor shall default in the
payment when due, or in the performance or observance, subject to
applicable cure periods, of any obligation or
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condition of any agreement, contract or lease (other than this
Agreement, the Security Documents or any such agreement, contract or
lease relating to Indebtedness for Money Borrowed) if the existence of
any such defaults, singly or in the aggregate, could in the reasonable
judgment of the Agent have a Materially Adverse Effect; provided,
however, that for the purposes of this provision where such a default
could result only in a monetary loss, a Materially Adverse Effect shall
not be deemed to have occurred unless the aggregate of such losses
would exceed $250,000.
(g) Voluntary Bankruptcy Proceeding. Any Obligor shall (i)
commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (ii) file a petition seeking to take advantage of
any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of
debts, (iii) consent to or fail to contest in a timely and appropriate
manner any petition filed against it in an involuntary case under such
bankruptcy laws or other laws, (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee, or liquidator
of itself or of a substantial part of its property, domestic or
foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of
authorizing any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against any Obligor in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy
laws (as now or hereafter in effect) or under any other laws, domestic
or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of such Obligor, or of all
or any substantial part of the assets, domestic or foreign, of such
Obligor, and such case or proceeding shall continue undismissed or
unstayed for a period of 60 consecutive calendar days, or an order
granting the relief requested in such case or proceeding against such
Obligor (including, but not limited to, an order for relief under such
federal bankruptcy laws), shall be entered.
(i) Failure of Agreements. Any Obligor shall challenge the
validity and binding effect of any provision of any Loan Document after
delivery thereof or shall state its intention to make such a challenge
in writing, or any Loan Document, after delivery thereof hereunder,
shall for any reason (except to the extent permitted by the terms
thereof) cease to create a valid and perfected first priority Lien
(except for Permitted Liens) on, or security interest in, any of the
Collateral purported to be covered thereby.
(j) Judgment. A final, unappealable judgment or order for the
payment of money in an amount which exceeds $250,000 shall be entered
against any Obligor by any court and such judgment or order shall
continue undischarged or unstayed for 30 days.
(k) Attachment. A warrant or writ of attachment or execution
or similar process which exceeds $250,000 in value shall be issued
against any property of any Obligor, and such warrant or process shall
continue undischarged or unstayed for 30 days.
(l) Loan Documents. Any event of default under any Loan
Document shall occur or any Obligor shall default in the performance or
observance of any material term, material covenant, material condition
or material agreement contained in any Loan Document other than
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this Agreement, or any Obligor shall default in the payment of any
other sum covenanted to be paid by any Obligor under any Loan Document;
provided, however that no event of default under any Loan Document
shall be deemed to have occurred until any notice required under such
Loan Document has been given and any grace period granted under such
Loan Document has expired.
(m) ERISA.
(i) Any Termination Event with respect to a Plan
shall occur that, after taking into account the excess, if
any, of (A) the fair market value of the assets of any other
Plan with respect to which a Termination Event occurs on the
same day (but only to the extent that such excess is the
property of the Borrowers) over (B) the present value on such
day of all vested nonforfeitable benefits under such other
Plan, results in an Unfunded Vested Accrued Benefit in excess
of $0, or
(ii) any Plan shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the Internal Revenue
Code or Section 302 of ERISA) for which a waiver has not been
obtained in accordance with the applicable provisions of the
Internal Revenue Code and ERISA, or
(iii) any Borrower or any of its Subsidiaries is in
"default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan resulting from a
Borrower's or any of its Subsidiaries complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA)
from such Multiemployer Plan.
(n) Change in Control. At any time after the Agreement Date,
either a Person or "group" of Persons (within the meaning of section
13(d) of the Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder, but not including the Control Group), shall (i)
acquire, beneficially or of record, 50% or more of the outstanding
voting stock (stock entitled to vote for election of directors
excluding rights subject to a contingency) of AAS, or (ii) acquire,
beneficially or of record, a greater percentage of the outstanding
voting stock than that then owned by the Control Group, or (iii) obtain
the right to elect a majority of the Board of Directors of AAS.
(o) Change in Management. For any reason any of Xxxx X. Xxxxx,
Xxxxxx Xxxxxxxxx or Xxxxxx Xxxxxxxx is no longer actively involved in
the day-to-day operations of the Borrowers, unless a replacement
reasonably satisfactory to the Required Lenders is appointed within 120
days.
(p) General Insecurity. The occurrence of any act, omission,
circumstance, event or condition or series of acts, omissions,
circumstances, events or conditions which have or, in the Agent's or
the Required Lenders' judgment, would have, either individually or in
the aggregate, a Materially Adverse Effect.
SECTION 12.2. Remedies.
(a) Automatic Acceleration and Termination of Facilities. Upon
the occurrence of an Event of Default specified in Section 12.1(g) or
(h), (i) the principal of and the interest on the Loans and any Note at
the time outstanding, and all other amounts owed to the Agent or the
Lenders under this Agreement or any of the Loan Documents and all other
Secured Obligations,
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shall thereupon become due and payable without presentment, demand,
protest, or other notice of any kind, all of which are expressly
waived, anything in this Agreement or any of the Loan Documents to the
contrary notwithstanding, and (ii) the Revolving Credit Facility and
the Capital Expenditure Loan Facility and the right of the Borrowers to
request borrowings under this Agreement shall immediately terminate.
(b) Other Remedies. If any Event of Default shall have
occurred, and during the continuance of any such Event of Default, the
Agent may, and at the direction of the Required Lenders in their sole
and absolute discretion shall, do any of the following:
(i) declare the principal of and interest on the
Loans and any Note at the time outstanding, and all other
amounts owed to the Agent or the Lenders under this Agreement
or any of the Loan Documents and all other Secured
Obligations, to be forthwith due and payable, whereupon the
same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all
of which are expressly waived, anything in this Agreement or
the Loan Documents to the contrary notwithstanding;
(ii) terminate the Revolving Credit Facility and the
Capital Expenditure Loan Facility and any other right of the
Borrowers to request borrowings or Letters of Credit
hereunder;
(iii) notify, or request the Borrowers to notify, in
writing or otherwise, any Account Debtor with respect to any
one or more of the Receivables to make payment to the Agent,
for the benefit of the Secured Parties, or any agent or
designee of the Agent, at such address as may be specified by
the Agent and if, notwithstanding the giving of any notice,
any Account Debtor shall make payments to the Borrowers, the
Borrowers shall hold all such payments they receive in trust
for the Agent, for the account of the Lenders, without
commingling the same with other funds or property of, or held
by, the Borrowers, and shall deliver the same to the Agent or
any such agent or designee of the Agent immediately upon
receipt by the Borrowers in the identical form received,
together with any necessary endorsements;
(iv) settle or adjust disputes and claims directly
with Account Debtors on Receivables for amounts and on terms
which the Agent considers advisable and in all such cases only
the net amounts received by the Agent, for the account of the
Lenders, in payment of such amounts, after deductions of costs
and attorneys' fees, shall constitute Collateral and the
Borrowers shall have no further right to make any such
settlements or adjustments or to accept any returns of
merchandise;
(v) enter upon any premises at which Inventory or
Equipment may be located and, without resistance or
interference by the Borrowers, take physical possession of any
or all thereof and maintain such possession on such premises
or move the same or any part thereof to such other place or
places as the Agent shall choose, without being liable to the
Borrowers on account of any loss, damage or depreciation that
may occur as a result thereof, so long as the Agent shall act
reasonably and in good faith;
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(vi) require the Borrowers to and the Borrowers
shall, without charge to the Agent or any Lender, assemble the
Inventory and Equipment and maintain or deliver it into the
possession of the Agent or any agent or representative of the
Agent at such place or places as the Agent may designate and
as are reasonably convenient to both the Agent and the
Borrowers;
(vii) at the expense of the Borrowers, cause any of
the Inventory and Equipment to be placed in a public or field
warehouse, and the Agent shall not be liable to the Borrowers
on account of any loss, damage or depreciation that may occur
as a result thereof, so long as the Agent shall act reasonably
and in good faith;
(viii) without notice, demand or other process, and
without payment of any rent or any other charge, enter any of
the Borrowers' premises and, without breach of the peace,
until the Agent, on behalf of the Lenders, completes the
enforcement of its rights in the Collateral, take possession
of such premises or place custodians in exclusive control
thereof, remain on such premises and use the same and any of
the Borrowers' Equipment, for the purpose of (A) completing
any work-in-process, preparing any Inventory for disposition
and disposing thereof, and (B) collecting any Receivable, and
the Agent for the benefit of the Secured Parties is hereby
granted a license or sublicense and all other rights as may be
necessary, appropriate or desirable to use the Proprietary
Rights in connection with the foregoing, and the rights of the
Borrowers under all licenses, sublicenses and franchise
agreements shall inure to the Agent for the benefit of the
Secured Parties (provided, however, that any use of any
federally registered trademarks as to any goods shall be
subject to the control as to the quality of such goods of the
owner of such trademarks and the goodwill of the business
symbolized thereby);
(ix) exercise any and all of its rights under any and
all of the Security Documents;
(x) apply the funds in the Cash Collateral Account
and any other Collateral consisting of cash to the payment of
the Secured Obligations in any order in which the Agent, on
behalf of the Lenders, may elect or use such cash in
connection with the exercise of any of its other rights
hereunder or under any of the Security Documents;
(xi) establish or cause to be established one or more
Lockboxes or other arrangement for the deposit of proceeds of
Receivables, and, in such case, the Borrowers shall cause to
be forwarded to the Agent at the Agent's Office, on a daily
basis, copies of all checks and other items of payment and
deposit slips related thereto deposited in such Lockboxes,
together with collection reports in form and substance
satisfactory to the Agent; and
(xii) exercise all of the rights and remedies of a
secured party under the Uniform Commercial Code and under any
other Applicable Law, including, without limitation, the
right, without notice except as specified below and with or
without taking the possession thereof, to sell the Collateral
or any part thereof in one or more parcels at public or
private sale, at any location chosen by the Agent, for cash,
on credit or for future delivery, and at such price or prices
and upon such other terms as the Agent may deem commercially
reasonable. The Borrowers agree that, to the extent
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notice of sale shall be required by law, at least 10 days
notice to the Borrowers of the time and place of any public
sale or the time after which any sale is to be made shall
constitute reasonable notification, but notice given in any
other reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice
of sale having been given. The Agent may adjourn any public or
sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
SECTION 12.3. Application of Proceeds. All proceeds from each
sale of, or other realization upon, all or any part of the Collateral following
an Event of Default shall be applied or paid over as follows:
(a) First: to the payment of all costs and expenses incurred
in connection with such sale or other realization, including reasonable
attorneys' fees,
(b) Second: to the payment of the Secured Obligations (with
the Borrowers remaining liable for any deficiency) in accordance with
Section 4.8(e), and
(c) Third: the balance (if any) of such proceeds shall be paid
to the Borrowers, subject to any duty imposed by law, or otherwise to
whomsoever shall be entitled thereto.
The Borrowers shall remain jointly and severally liable and will pay, on demand,
any deficiency remaining in respect of the Secured Obligations, together with
interest thereon at a rate per annum equal to the highest rate then payable
hereunder on such Secured Obligations, which interest shall constitute part of
the Secured Obligations.
SECTION 12.4. Power of Attorney. In addition to the authorizations
granted to the Agent under Section 8.13 or under any other provision of this
Agreement or of any other Loan Document, during the continuance of an Event of
Default, each Borrower hereby irrevocably designates, makes, constitutes and
appoints the Agent (and all Persons designated by the Agent from time to time)
as such Borrower's true and lawful attorney, and agent in fact, and the Agent,
or any agent of the Agent, may, without notice to any Borrower, and at such time
or times as the Agent or any such agent in its sole discretion may determine, in
the name of such Borrower, another Borrower, the Agent or the Lenders,
(a) demand payment of the Receivables,
(b) enforce payment of the Receivables by legal proceedings or
otherwise,
(c) exercise all of the Borrowers' rights and remedies with
respect to the collection of Receivables,
(d) settle, adjust, compromise, extend or renew any or all of
the Receivables,
(e) settle adjust or compromise any legal proceedings brought
to collect the Receivables,
(f) discharge and release the Receivables or any of them,
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(g) prepare, file and sign the name of any Borrower on any
proof of claim in bankruptcy or any similar document against any
Account Debtor,
(h) prepare, file and sign the name of any Borrower on any
notice of Lien, assignment or satisfaction of Lien, or similar document
in connection with any of the Collateral,
(i) endorse the name of any Borrower upon any chattel paper,
document, instrument, notice, freight xxxx, xxxx of lading or similar
document or agreement relating to the Receivables, the Inventory or any
other Collateral,
(j) use the stationery of any Borrower and sign the name of
any Borrower to verifications of the Receivables and on any notice to
the Account Debtors,
(k) open the Borrowers' mail,
(l) notify the post office authorities to change the address
for delivery of the Borrowers' mail to an address designated by the
Agent, and
(m) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the
Receivables, Inventory or other Collateral to which any Borrower have
access.
SECTION 12.5. Miscellaneous Provisions Concerning Remedies.
(a) Rights Cumulative. The rights and remedies of the Agent
and the Lenders under this Agreement, the Notes and each of the Loan
Documents shall be cumulative and not exclusive of any rights or
remedies which it or they would otherwise have. In exercising such
rights and remedies the Agent and the Lenders may be selective and no
failure or delay by the Agent or any Lender in exercising any right
shall operate as a waiver of it, nor shall any single or partial
exercise of any power or right preclude its other or further exercise
or the exercise of any other power or right.
(b) Waiver of Marshaling. Each Borrower hereby waives any
right to require any marshaling of assets and any similar right.
(c) Limitation of Liability. Nothing contained in this Article
12 or elsewhere in this Agreement or in any of the other Loan Documents
shall be construed as requiring or obligating the Agent, any Lender or
any agent or designee of the Agent or any Lender to make any demand, or
to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice or take any
action, with respect to any Receivable or any other Collateral or the
monies due or to become due thereunder or in connection therewith, or
to take any steps necessary to preserve any rights against prior
parties, and the Agent, the Lenders and their agents or designees shall
have no liability to the Borrowers (or any of them) for actions taken
pursuant to this Article 12, any other provision of this Agreement or
any of the other Loan Documents so long as the Agent or such Lender
shall act reasonably and in good faith.
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(d) Appointment of Receiver. In any action under this Article
12, the Agent shall be entitled during the continuance of an Event of
Default to the appointment of a receiver, without notice of any kind
whatsoever, to take possession of all or any portion of the Collateral
and to exercise such power as the court shall confer upon such
receiver.
ARTICLE 13
ASSIGNMENTS
SECTION 13.1. Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrowers, the Lenders, the Agent, all future holders of
the Notes, and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Each Lender may, without the consent of the Borrowers, but
with the Agent's consent (which consent shall not be unreasonably
withheld and shall not be required if the assignment is to an Affiliate
of such Lender), assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Loans at the
time owing to it and the Notes held by it); provided, however, that (i)
each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning
Lender that is subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is
delivered to the Agent) shall in no event be less than the Minimum
Commitment, (iii) in the case of a partial assignment, the amount of
the Commitment that is retained by the assigning Lender (determined as
of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Agent) shall in no event be less than
the Minimum Commitment, (iv) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in
the Register (as hereinafter defined) an Assignment and Acceptance,
together with any Note or Notes subject to such assignment, (v) such
assignment shall not, without the consent of the Borrowers, require any
Borrower to file a registration statement with the SEC or apply to or
qualify the Loans or the Notes under the blue sky laws of any state,
(vi) the representation contained in Section 13.2 hereof shall be true
with respect to any such proposed assignee, (vii) the Commitment
Percentage of the assigning Lender that is subject to each such
assignment shall be of an equal percentage of such Lender's interest
and obligations in the Revolving Credit Facility and the Capital
Expenditure Loan Facility, and (viii) the parties to such assignment
shall deliver to the Agent a processing fee of $5,000. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution
thereof, (x) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder, and (y) the Lender assignor
thereunder shall, to the extent provided in such assignment, be
released from its obligations under this Agreement (except with respect
to its obligations under Section 14.7).
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(c) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i)
other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, such Lender assignor makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such Lender
assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers
(or any of them) or the performance or observance by the Borrowers (or
any of them) of any of their obligations under this Agreement or any
other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section
6.1(o) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Agent, such Lender assignor 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; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the
names and addresses of the Lenders and the Commitment Percentage of,
and principal amount of the Loans owing to, each Lender from time to
time (the "Register"). The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrowers, the Agent and the
Lenders may treat each person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Eligible Assignee together with any Note
or Notes subject to such assignment, the fee described in clause (vii)
of Section 13.1(b), and the written consent of the Agent to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in the form of Exhibit D, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the
Register, (iii) give prompt notice thereof to the Lenders and the
Borrowers, and (iv) promptly deliver a copy of such Assignment and
Acceptance to the Borrowers. Within five Business Days after receipt of
notice, the Borrowers shall execute and deliver to the Agent in
exchange for the surrendered Note or Notes a new Note or Notes to the
order of such Eligible Assignee in amounts equal to the Commitment
Percentage assumed by such Eligible Assignee pursuant to such
Assignment and Acceptance and a new Note or Notes to the order of the
assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note
or Notes, shall be dated the effective date
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of such Assignment and Acceptance and shall otherwise be in
substantially the form of the assigned Notes delivered to the assignor
Lender. Following the Agent's receipt of the new Note or Note, each
surrendered Note or Notes shall be cancelled and returned to the
Borrowers.
(f) Each Lender may, without the consent of the Borrowers,
sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its commitments hereunder and
the Loans owing to it and the Notes held by it); provided, however,
that (i) each such participation shall be in an amount not less than
the Minimum Commitment, (ii) such Lender's obligations under this
Agreement (including, without limitation, its commitments hereunder)
shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iv) such Lender shall remain the holder of the Notes held
by it for all purposes of this Agreement, (v) the Borrowers, the Agent
and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under this Agreement; provided, that such Lender may agree with any
participant that such Lender will not, without such participant's
consent, agree to or approve any waivers or amendments which would
reduce the principal of or the interest rate on any Loans, extend the
term or increase the amount of the commitments of such participant,
reduce the amount of any fees to which such participant is entitled,
extend any scheduled payment date for principal or release Collateral
securing the Loans (other than Collateral disposed of pursuant to
Section 8.7 hereof or otherwise in accordance with the terms of this
Agreement or the Security Documents), and (vi) any such disposition
shall not, without the consent of the Borrowers, require any Borrower
to file a registration statement with the SEC to apply to qualify the
Loans or the Notes under the blue sky law of any state. Any Lender
selling a participation to any bank or other entity that is not an
Affiliate of such Lender shall give prompt notice thereof to the
Borrowers.
(g) Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation pursuant
to this Section 13.1, disclose to the assignee, participant, proposed
assignee or proposed participant, any information relating to the
Borrowers and its Subsidiaries furnished to such Lender by or on behalf
of the Borrowers; provided that, prior to any such disclosure, each
such assignee, proposed assignee, participant or proposed participant
shall agree with the Borrowers or such Lender (which in the case of an
agreement with only such Lender, the Borrowers shall be recognized as a
third party beneficiary thereof) to preserve the confidentiality of any
confidential information relating to the Borrowers and its Subsidiaries
received from such Lender.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
SECTION 13.2. Representation of Lenders. Each Lender hereby
represents that it will make each Loan hereunder as a commercial loan for its
own account in the ordinary course of its business; provided, however, that
subject to Section 13.1 hereof, the disposition of the Notes or other evidence
of the Secured Obligations held by any Lender shall at all times be within its
exclusive control.
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ARTICLE 14
AGENT
SECTION 14.1. Appointment of Agent. Each of the Lenders hereby
irrevocably designates and appoints NationsBank, N.A. as the Agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Agent, as the agent for such Lender to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and such other Loan
Documents, including, without limitation, to make determinations as to the
eligibility of Inventory and Receivables, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Agent.
SECTION 14.2. Delegation of Duties. The Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
SECTION 14.3. Exculpatory Provisions. Neither the Agent nor
any of its trustees, officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable to any Lender (or any Lender's participants)
for any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Agreement or the other Loan Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any Lender (or any Lender's participants) for any
recitals, statements, representations or warranties made by the Borrowers or any
of its Subsidiaries or any officer thereof contained in this Agreement or the
other Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or for any failure of the Borrowers or any of its
Subsidiaries to perform its obligations hereunder or thereunder. The Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrowers or any of its Subsidiaries.
SECTION 14.4. Reliance by Agent. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrowers or any of its Subsidiaries), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless such Note shall have been transferred in
accordance with Section 13.1. The Agent
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shall be fully justified in failing or refusing to take any action under this
Agreement and the other Loan Documents unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the Notes in accordance
with a request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
SECTION 14.5. Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall promptly give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Lenders; provided
that unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) continue making Revolving Credit Loans to
the Borrowers on behalf of the Lenders in reliance on the provisions of Section
4.7 and take such other action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
SECTION 14.6. Non-Reliance on Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrowers and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrowers and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents 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 analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Agent hereunder or by
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrowers and its Subsidiaries which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
SECTION 14.7. Indemnification. The Lenders agree to indemnify
the Agent in its capacity as such (to the extent not reimbursed by the Borrowers
and without limiting the obligation of the Borrowers to do so), ratably
according to their respective Commitment Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Notes) be imposed on, incurred by or asserted
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against the Agent in any way relating to or arising out of this Agreement or the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Agent's gross
negligence or willful misconduct or resulting solely from transactions or
occurrences that occur at a time after such Lender has assigned all of its
interests, rights and obligations under this Agreement pursuant to Section 13.1
or, in the case of a Lender to which an assignment is made hereunder pursuant to
Section 13.1, at a time before such assignment. The agreements in this
subsection shall survive the payment of the Notes, the Secured Obligations and
all other amounts payable hereunder and the termination of this Agreement.
SECTION 14.8. Agent in Its Individual Capacity. The Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrowers and its Subsidiaries as if the Agent
were not the Agent hereunder. With respect to its Commitment, the Loans made or
renewed by it and any Note issued to it and any Letter of Credit issued by it,
the Agent shall have and may exercise the same rights and powers under this
Agreement and the other Loan Documents and is subject to the same obligations
and liabilities as and to the extent set forth herein and in the other Loan
Documents for any other Lender. The terms "Lenders" or "Required Lenders" or any
other term shall, unless the context clearly otherwise indicates, include the
Agent in its individual capacity as a Lender or one of the Required Lenders.
SECTION 14.9. Successor Agent. The Agent may resign as Agent
upon 30 days written notice to the Lenders and the Borrowers; provided, however,
that such resignation shall not take effect until a successor agent has been
appointed. If the Agent shall resign as Agent under this Agreement, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders which successor agent shall be approved by the Borrowers (which approval
shall not be unreasonably withheld and shall not be required if an Event of
Default has occurred and is continuing), whereupon such successor agent shall
succeed to the rights, powers and duties of the Agent, and the term "Agent"
shall mean such successor agent effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. If the Required Lenders
have failed to appoint a successor agent within 30 days after the resignation
notice given by the Agent as provided above, then the Agent shall be entitled to
appoint a successor agent from among the Lenders. After any Agent's resignation
hereunder as Agent, the provisions of Article 14 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 14.10. Notices from Agent to Lenders. The Agent shall
promptly, upon the written request from any Lender, forward to each Lender
copies of any written notices, reports or other information supplied to it by
the Borrowers (but which the Borrowers are not required to supply directly to
the Lenders).
ARTICLE 15
MISCELLANEOUS
SECTION 15.1. Notices.
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(a) Method of Communication. Except as specifically provided
in this Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by
telephone, subsequently confirmed in writing. Notices in writing shall
be delivered personally or sent by certified or registered mail,
postage pre-paid, or by overnight courier, telex or facsimile
transmission and shall be deemed received in the case of personal
delivery, when delivered, in the case of mailing, when receipted for,
in the case of overnight delivery, on the next Business Day after
delivery to the courier, and in the case of telex and facsimile
transmission, upon transmittal, provided that in the case of notices to
the Agent, notice shall be deemed to have been given only when such
notice is actually received by the Agent. A telephonic notice to the
Agent, as understood by the Agent, will be deemed to be the controlling
and proper notice in the event of a discrepancy with or failure to
receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent
to it at the following addresses, or any other address of which all the
other parties are notified in writing
If to the Borrowers: American Aircarriers Support,
Incorporated
000 Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
with a courtesy copy to: Xxxx, Layton, Kersh, Solomon, Sigmon,
Xxxx & Xxxxx, P.A.
X.X. Xxx 0000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn.: Xxxxx Xxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Agent: NationsBank, N.A.
Business Credit Division
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx, III, VP
Facsimile No.: 000-000-0000
with a courtesy copy to: Xxxxxxxx Xxxxxxx LLP
NationsBank Plaza
Suite 5200
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Facsimile No.: 000-000-0000
If to a Lender: At the address of such Lender set forth on the
signature page hereof.
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(c) Agent's Office. The Agent hereby designates its office
located at 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, or any
subsequent office which shall have been specified for such purpose by
written notice to the Borrowers, as the office to which payments due
are to be made and at which Loans will be disbursed.
SECTION 15.2. Expenses. The Borrowers jointly and severally
agree to pay or reimburse on demand all costs and expenses incurred by the
Agent, including, without limitation, the reasonable fees and disbursements of
counsel, in connection with
(a) the negotiation, preparation, execution, delivery,
administration, enforcement and termination of this Agreement and each
of the other Loan Documents, whenever the same shall be executed and
delivered, including, without limitation
(i) the out-of-pocket costs and expenses incurred in
connection with the administration and interpretation of this
Agreement and the other Loan Documents;
(ii) the costs and expenses of appraisals of the
Collateral;
(iii) the costs and expenses of lien and title
searches; and
(iv) taxes, fees and other charges for filing the
Financing Statements and continuations and the costs and
expenses of taking other actions to perfect, protect, and
continue the Security Interests, including all filings with
the FAA;
(b) the preparation, execution and delivery of any waiver,
amendment, supplement or consent by the Agent and the Lenders relating
to this Agreement or any of the Loan Documents;
(c) sums paid or incurred to pay any amount or take any action
required of the Borrowers under the Loan Documents that the Borrowers
fails to pay or take;
(d) costs of inspections and verifications of the Collateral,
including, without limitation, standard per diem fees charged by the
Agent for travel, lodging, and meals for inspections of the Collateral
and the Borrowers' operations and books and records by the Agent's
employees or agents up to four times per year and whenever an Event of
Default exists;
(e) costs of inspections, verifications and field examinations
of the Collateral incurred prior to the Effective Date;
(f) costs and expenses of forwarding loan proceeds, collecting
checks and other items of payment, and establishing and maintaining
each Disbursement Account, Agency Account and Lockbox;
(g) costs and expenses of preserving and protecting the
Collateral; and
(h) consulting, after the occurrence of a Default, with one or
more Persons, including appraisers, accountants and lawyers, concerning
the value of any Collateral for the Secured Obligations or related to
the nature, scope or value of any right or remedy of the Agent or any
Lender hereunder or under any of the Loan Documents, including any
review of factual
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matters in connection therewith, which expenses shall include the fees
and disbursements of such Persons.
The Borrowers jointly and severally agree to pay or reimburse on demand all
costs and expenses incurred by the Agent and the Lenders, including, without
limitation, the reasonable fees and disbursements of counsel, experts and other
consultants to the Agent and any Lender, in connection with (a) any Default or
Event of Default or any modification, amendment, waiver, restructuring or
forbearance with respect to any of the Loan Documents in connection with such
Default or Event of Default, and (b) any actions taken to obtain payment of the
Secured Obligations, enforce the Security Interests, sell or otherwise realize
upon the Collateral, and otherwise enforce the provisions of the Loan Documents,
or to prosecute or defend any claim in any way arising out of, related to or
connected with, this Agreement or any of the Loan Documents.
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrowers. Each
Borrower hereby authorizes the Agent and the Lenders to debit such Borrower's
Loan Accounts (by increasing the principal amount of the Revolving Credit Loan)
in the amount of any such costs and expenses owed by the Borrowers when due.
SECTION 15.3. Stamp and Other Taxes. The Borrowers will pay
any and all stamp, registration, recordation and similar taxes, fees or charges
and shall indemnify the Agent and the Lenders against any and all liabilities
with respect to or resulting from any delay in the payment or omission to pay
any such taxes, fees or charges, which may be payable or determined to be
payable in connection with the execution, delivery, performance or enforcement
of this Agreement and any of the Loan Documents or the perfection of any rights
or security interest thereunder, including, without limitation, the Security
Interest.
SECTION 15.4. Setoff. In addition to any rights now or
hereafter granted under Applicable Law and not by way of limitation of any such
rights, during the continuance of any Event of Default, each Lender, any
participant with such Lender in the Loans and each Affiliate of each Lender are
hereby authorized by each Borrower at any time or from time to time, without
notice to any Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by any Lender or any Affiliate of
any Lender or any participant to or for the credit or the account of any
Borrower against and on account of the Secured Obligations irrespective or
whether or not
(a) the Agent or such Lender shall have made any demand under
this Agreement or any of the Loan Documents, or
(b) the Agent or such Lender shall have declared any or all of
the Secured Obligations to be due and payable as permitted by Section
12.2 and although such Secured Obligations shall be contingent or
unmatured.
SECTION 15.5. Litigation. THE BORROWERS, THE AGENT, AND EACH
LENDER HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN ACTION
MAY BE COMMENCED BY OR AGAINST THE BORROWERS (OR ANY OF THEM), THE AGENT AND
SUCH LENDER ARISING OUT OF THIS AGREEMENT, THE
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COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE
WHATSOEVER BETWEEN THE BORROWERS (OR ANY OF THEM) AND THE AGENT OR ANY LENDER OF
ANY KIND OR NATURE. THE BORROWERS, THE AGENT AND THE LENDERS HEREBY AGREE THAT
THE FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE OPTION OF THE
AGENT OR ANY LENDER, ANY COURT IN WHICH THE AGENT OR SUCH LENDER SHALL INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN CONTROVERSY, SHALL HAVE NONEXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE BORROWERS (OR ANY OF THEM) AND THE
AGENT OR SUCH LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE
LOAN DOCUMENTS OR TO ANY MATTER ARISING THEREFROM. EACH BORROWER EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS, HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN AND AGREEING THAT SERVICE
OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE BORROWERS AT THE ADDRESS OF THE
BORROWERS SET FORTH IN SECTION 15.1. SHOULD ANY BORROWER FAIL TO APPEAR OR
ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN 30 DAYS AFTER
THE MAILING THEREOF, IT SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT
MAY BE ENTERED AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT,
PROCESS OR PAPERS. THE NONEXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY
APPROPRIATE JURISDICTION.
SECTION 15.6. Waiver of Rights. EACH BORROWER HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES ALL RIGHTS WHICH SUCH BORROWER
HAS UNDER CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY
SIMILAR PROVISION OF APPLICABLE LAW TO NOTICE AND TO A JUDICIAL HEARING PRIOR TO
THE ISSUANCE OF A WRIT OF POSSESSION ENTITLING THE AGENT OR ANY LENDER, OR THE
SUCCESSORS AND ASSIGNS OF THE AGENT OR SUCH LENDER TO POSSESSION OF THE
COLLATERAL UPON AN EVENT OF DEFAULT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING AND WITHOUT LIMITING ANY OTHER RIGHT WHICH THE AGENT OR THE LENDERS
MAY HAVE, EACH BORROWER CONSENTS THAT IF LENDER FILES A PETITION FOR AN
IMMEDIATE WRIT OF POSSESSION IN COMPLIANCE WITH SECTIONS 00-00-000 AND 00-00-000
OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR PROVISION OF APPLICABLE
LAW, AND THIS WAIVER OR A COPY HEREOF IS ALLEGED IN SUCH PETITION AND ATTACHED
THERETO, THE COURT BEFORE WHICH SUCH PETITION IS FILED MAY DISPENSE WITH ALL
RIGHTS AND PROCEDURES HEREIN WAIVED AND MAY ISSUE FORTHWITH AN IMMEDIATE WRIT OF
POSSESSION IN ACCORDANCE WITH CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF
GEORGIA OR IN ACCORDANCE WITH ANY SIMILAR PROVISION OF APPLICABLE LAW, WITHOUT
THE NECESSITY OF AN ACCOMPANYING BOND AS OTHERWISE REQUIRED BY SECTION 00-00-000
OF THE OFFICIAL CODE OF GEORGIA OR BY ANY SIMILAR PROVISION UNDER APPLICABLE
LAW. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS READ AND FULLY UNDERSTANDS
THE TERMS OF THIS WAIVER AND THE EFFECT HEREOF.
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SECTION 15.7. Consent to Advertising and Publicity. With the
prior written consent of the Borrowers, which consent shall not be unreasonably
withheld, the Agent, on behalf of the Lenders, may issue and disseminate to the
public information describing the credit accommodation entered into pursuant to
this Agreement, including the name and address of each Borrower, the amount,
interest rate, maturity, collateral and a general description of the Borrowers'
business.
SECTION 15.8. Reversal of Payments. The Agent and each Lender
shall have the continuing and exclusive right to apply, reverse and re-apply any
and all payments to any portion of the Secured Obligations in a manner
consistent with the terms of this Agreement. To the extent any Borrower makes a
payment or payments to the Agent, for the account of the Lenders, or any Lender
receives any payment or proceeds of the Collateral for the Borrowers' benefit,
which payment(s) or proceeds 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 law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the Secured Obligations or part thereof intended
to be satisfied shall be revived and continued in full force and effect, as if
such payment or proceeds had not been received by the Agent or such Lender.
SECTION 15.9. Injunctive Relief. Each Borrower recognizes
that, in the event such Borrower fails to perform, observe or discharge any of
its obligations or liabilities under this Agreement, any remedy at law may prove
to be inadequate relief to the Agent and the Lenders; therefore, each Borrower
agrees that if any Event of Default shall have occurred and be continuing, the
Agent and the Lenders, if the Agent or any Lender so requests, shall be entitled
to temporary and permanent injunctive relief without the necessity of proving
actual damages.
SECTION 15.10. Accounting Matters. All financial and
accounting calculations, measurements and computations made for any purpose
relating to this Agreement, including, without limitation, all computations
utilized by the Borrowers to determine whether they are in compliance with any
covenant contained herein, shall, unless this Agreement otherwise provides or
unless Required Lenders shall otherwise consent in writing, be performed in
accordance with GAAP.
SECTION 15.11. Amendments.
(a) Except as set forth in subsection (b) below, any term,
covenant, agreement or condition of this Agreement or any of the Loan
Documents may be amended or waived, and any departure therefrom may be
consented to by the Required Lenders, if, but only if, such amendment,
waiver or consent is in writing signed by the Required Lenders and, in
the case of an amendment (other than an amendment described in Section
15.11(d)), by the Borrowers, and in any such event, the failure to
observe, perform or discharge any such term, covenant, agreement or
condition (whether such amendment is executed or such waiver or consent
is given before or after such failure) shall not be construed as a
breach of such term, covenant, agreement or condition or as a Default
or an Event of Default; provided that:
(i) without the written consent of NationsBank, no
amendment or waiver shall be made to any provision of Article
3 hereof or any of NationsBank's rights or obligations with
respect to Letters of Credit,
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(ii) without the written consent of NationsBank, no
amendment or waiver shall be made to any of NationsBank's
rights or obligations with respect to Non-Ratable Loans, and
(iii) without the written consent of the Agent, no
amendment or waiver shall be made to any provision of Article
14 as such provisions apply to the Agent or to any other
provision of any Loan Document as such provisions relate to
the rights and obligations of the Agent.
Unless otherwise specified in such waiver or consent, a waiver or
consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given. In the event
that any such waiver or amendment is requested by the Borrowers, the
Agent and the Lenders may require and charge a fee in connection
therewith and consideration thereof in such amount as shall be
determined by the Agent and the Required Lenders in their discretion.
(b) Except as otherwise set forth in this Agreement, without
the prior unanimous written consent of the Lenders,
(i) no amendment, consent or waiver shall affect the
amount (except as provided in the definition of "Revolving
Credit Facility") or extend the time of the obligation of the
Lenders to make Loans or extend the originally scheduled time
or times of payment of the principal of any Loan or alter the
time or times of payment of interest on any Loan or the amount
of the principal thereof or the rate of interest thereon or
the amount of any commitment fee payable hereunder or permit
any subordination of the principal or interest on such Loan,
permit the subordination of the Security Interests in any
material Collateral or amend the provisions of Article 12 or
of this Section 15.11(b),
(ii) no material Collateral shall be released by the
Agent other than releases of Collateral in connection with the
sale of any such Collateral in the ordinary course of a
Borrower's business or as otherwise specifically permitted in
this Agreement,
(iii) no amendment shall be made to the definitions
of "Commitment", "Commitment Percentage", "Eligible Assignee",
"Proportionate", "Ratable", "Required Lenders" or "Secured
Obligations",
(iv) neither the Agent nor any Lender shall consent
to any amendment to or waiver of the amortization, deferral or
subordination provisions of the Subordinated Indebtedness or
any other instrument or agreement evidencing or relating to
obligations of the Borrowers that are expressly subordinate to
any of the Secured Obligations if such amendment or waiver
would be adverse to the Lenders in their capacities as Lenders
hereunder;
(v) no Borrower or Guarantor shall be released; and
(vi) no amendment shall be made or waiver or consent
given that increases the advance rates set forth in the
definition of "Borrowing Base";
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provided, however, that anything herein to the contrary
notwithstanding, the Required Lenders shall have the right to waive any
Default or Event of Default (unless such Default or Event of Default
arises out of a provision of this Agreement which can only be amended
with the unanimous consent of the Lenders) and the consequences
hereunder of such Default or Event of Default and shall have the right
to enter into an agreement with the Borrowers providing for the
forbearance from the exercise of any remedies provided hereunder or
under the other Loan Documents without waiving any Default or Event of
Default.
(c) The making of Loans hereunder by the Lenders during the
existence of a Default or Event of Default shall not be deemed to
constitute a waiver of such Default or Event of Default.
(d) Notwithstanding any provision of this Agreement or any
other Loan Document to the contrary, no consent, written or otherwise,
of the Borrowers shall be necessary or required in connection with any
amendment to Article 14 or Section 4.7, and any amendment to such
provisions shall be effected solely by and among the Agent and the
Lenders, provided that no such amendment shall impose any obligation on
the Borrowers.
SECTION 15.12. Assignment. All the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that no Borrower may assign
or transfer any of its rights under this Agreement.
SECTION 15.13. Performance of Borrowers' Duties.
(a) The Borrowers' obligations under this Agreement and each
of the Loan Documents shall be performed by the Borrowers at their sole
cost and expense.
(b) If the Borrowers shall fail to do any act or thing which
they have covenanted to do under this Agreement or any of the Loan
Documents, the Agent, on behalf of the Lenders, may (but shall not be
obligated to) do the same or cause it to be done either in the name of
the Agent or the Lenders or in the name and on behalf of the Borrowers,
and the Borrowers hereby irrevocably authorize the Agent so to act.
SECTION 15.14. Indemnification. The Borrowers jointly and
severally agree to reimburse the Agent and the Lenders and each of their
Affiliates, agents, employees, officers, directors, Subsidiaries, successors and
assigns (the "Indemnitees") for all costs and expenses, including reasonable
counsel fees and disbursements, incurred, and to indemnify and hold the
Indemnitees harmless from and against all losses suffered by, any Indemnitee in
connection with
(i) the exercise by any Indemnitee of any right or
remedy granted to it under this Agreement or any of the Loan
Documents,
(ii) any claim, and the prosecution or defense
thereof, arising out of or in any way connected with this
Agreement or any of the Loan Documents, including without
limitation any claim relating to Environmental Laws,
(iii) the collection or enforcement of the Secured
Obligations or any of them, and
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(iv) any Acquisition or proposed Acquisition by the
Borrowers or any of their Subsidiaries,
other than such costs, expenses and liabilities arising out of such Indemnitee's
gross negligence or willful misconduct.
SECTION 15.15. All Powers Coupled with Interest. All powers of
attorney and other authorizations granted to the Agent and the Lenders and any
Persons designated by the Agent or the Lenders pursuant to any provisions of
this Agreement or any of the Loan Documents shall be deemed coupled with an
interest and shall be irrevocable so long as any of the Secured Obligations
remain unpaid or unsatisfied.
SECTION 15.16. Survival. Notwithstanding any termination of
this Agreement,
(a) until all Secured Obligations have been irrevocably paid
in full or otherwise satisfied and all Commitments have been
terminated, the Agent, for the benefit of the Secured Parties, shall
retain its Security Interest and shall retain all rights under this
Agreement and each of the Security Documents with respect to such
Collateral as fully as though this Agreement had not been terminated,
(b) the indemnities to which the Agent and the Lenders are
entitled under the provisions of this Article 15 and any other
provision of this Agreement and the Loan Documents shall continue in
full force and effect and shall protect the Agent and the Lenders
against events arising after such termination as well as before, and
(c) in connection with the termination of this Agreement and
the release and termination of the Security Interests, the Agent, on
behalf of itself as agent and the Lenders, may require such assurances
and indemnities as it shall reasonably deem necessary or appropriate to
protect the Agent and the Lenders against loss on account of such
release and termination, including, without limitation, with respect to
credits previously applied to the Secured Obligations that may
subsequently be reversed or revoked.
SECTION 15.17. Titles and Captions. Titles and captions of
Articles, Sections and subsections in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement.
SECTION 15.18. Severability of Provisions. Any provision of
this Agreement or any Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 15.19. Governing Law. This Agreement and the Notes
shall be construed in accordance with and governed by the law of the State of
Georgia.
SECTION 15.20. Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all of
which taken together shall constitute one and the same agreement.
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SECTION 15.21. Reproduction of Documents. This Agreement, each
of the Loan Documents and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by the Agent or any Lender, and (c) financial
statements, certificates and other information previously or hereafter furnished
to the Agent or any Lender, may be reproduced by the Agent or such Lender by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and such Person may destroy any original document so produced.
Each party hereto stipulates that, to the extent permitted by Applicable Law,
any such reproduction shall be as admissible in evidence as the original itself
in any judicial or administrative proceeding (whether or not the original shall
be in existence and whether or not such reproduction was made by the Agent or
such Lender in the regular course of business), and any enlargement, facsimile
or further reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION 15.22. Term of Agreement. This Agreement shall remain
in effect from the Agreement Date through the Termination Date and thereafter
until all Secured Obligations shall have been irrevocably paid and satisfied in
full. No termination of this Agreement shall affect the rights and obligations
of the parties hereto arising prior to such termination.
SECTION 15.23. Pro-Rata Participation.
(a) Each Lender agrees that if, as a result of the exercise
of a right of setoff, banker's lien or counterclaim or other similar
right or the receipt of a secured claim it receives any payment in
respect of the Secured Obligations, it shall promptly notify the Agent
thereof (and the Agent shall promptly notify the other Lenders). If, as
a result of such payment, such Lender receives a greater percentage of
the Secured Obligations owed to it under this Agreement than the
percentage received by any other Lender, such Lender shall purchase a
participation (which it shall be deemed to have purchased
simultaneously upon the receipt of such payment) in the Secured
Obligations then held by such other Lenders so that all such recoveries
of principal and interest with respect to all Secured Obligations owed
to each Lender shall be pro rata on the basis of its respective amount
of the Secured Obligations owed to all Lenders, provided that if all or
part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered by or on behalf of the
Borrowers from such Lender, such purchase shall be rescinded and the
purchase price paid for such participation shall be returned to such
Lender to the extent of such recovery, but without interest.
(b) Each Lender which receives such a secured claim shall
exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section
15.23 to share in the benefits of any recovery on such secured claim.
(c) Each Borrower expressly consents to the foregoing
arrangements and agrees that any holder of a participation in any
Secured Obligation so purchased or otherwise acquired may exercise any
and all rights of banker's lien, set-off or counterclaim with respect
to any and all monies owing by such Borrower to such holder as fully as
if such holder were a holder of such Secured Obligation in the amount
of the participation held by such holder.
SECTION 15.24. Final Agreement. This Agreement and the other
Loan Documents are intended by the parties hereto as the final, complete and
exclusive expression of the agreement among them with respect to the subject
matter hereof and thereof. This Agreement and the other Loan Documents supersede
any and all prior oral or written agreements between the parties hereto relating
to the subject
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matter hereof and thereof, it being understood that the Fee Letter (as described
in Section 4.2(a)) shall survive the execution and delivery of this Agreement.
SECTION 15.25. Waiver of Consequential Damages, Etc.. THE
BORROWERS AGREE NOT TO ASSERT ANY CLAIM AGAINST THE AGENT, ANY LENDER, ANY OF
THEIR AFFILIATES, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS AND AGENTS, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO ANY OF
THE TRANSACTIONS CONTEMPLATED HEREIN OR IN ANY OTHER LOAN DOCUMENT OR THE ACTUAL
OR PROPOSED USE OF THE PROCEEDS OF THE LOANS.
[Signatures commence on next page.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers in several
counterparts all as of the day and year first written above.
BORROWERS:
American Aircarriers Support, Incorporated
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-------------------------------------
Title: President and COO
------------------------------------
Attest:
-----------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL]
AAS Engine Services, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-------------------------------------
Title: President and COO
------------------------------------
Attest:
-----------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL]
AAS Landing Gear Services, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-------------------------------------
Title: President and COO
------------------------------------
Attest:
-----------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL]
129
AAS Complete Controls, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-------------------------------------
Title: President and COO
------------------------------------
Attest:
-----------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL]
AAS-Amjet, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
-------------------------------------
Title: President and COO
------------------------------------
Attest:
-----------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[CORPORATE SEAL]
LENDERS:
NATIONSBANK, N.A.
By:
---------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address: 000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx, III, VP,
Business Credit
Facsimile No.: 000-000-0000
130
AGENT:
NATIONSBANK, N.A.
By:
---------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address: 000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx, III, VP,
Business Credit
Facsimile No.: 000-000-0000
131
ANNEX I
Performance Pricing Matrix
-------------------------------------------------- ---------------------------------- --------------------------------
Revolver Cap. Ex. Loans
Ratio of Consolidated Funded ---------------------------------- --------------------------------
Indebtedness to Consolidated EBITDA (trailing 12 Prime Rate LIBOR Rate Prime Rate LIBOR Rate
months) Margin Margin Margin Margin
-------------------------------------------------- ---------------- ----------------- --------------- ----------------
Greater than 4.5 to 1 but less than or equal to 0.5% 2.75% 0.50% 3.0%
5.0 to 1
-------------------------------------------------- ---------------- ----------------- --------------- ----------------
Greater than 4.0 to 1 but less than or equal to 0.25% 2.5% 0.25% 2.75%
4.5 to 1
-------------------------------------------------- ---------------- ----------------- --------------- ----------------
Greater than 3.5 to 1 but less than or equal to 0% 2.25% 0% 2.5%
4.0 to 1
-------------------------------------------------- ---------------- ----------------- --------------- ----------------
Greater than 3.0 to 1 but less than or equal to 0% 2.0% 0% 2.25%
3.5 to 1
-------------------------------------------------- ---------------- ----------------- --------------- ----------------
Less than or equal to 3 to 1 0% 1.75% 0% 2.0%
-------------------------------------------------- ---------------- ----------------- --------------- ----------------
132
ANNEX II
Commitments
1. NationsBank
Total Commitment $100,000,000
133
NOTARY JURAT FOR EXECUTION OF
WRITTEN OBLIGATIONS TO PAY MONEY
BY FLORIDA BORROWERS
On this the 25th day of May, 1999, before me, the undersigned, a Notary
Public in and for the State of Georgia, County of Xxxx, Xxxxxx X. Xxxxxxxxx
personally appeared, personally known to me or proved to me on the basis of
satisfactory evidence to be the President of American Aircarriers Support,
Incorporated, a Delaware corporation, who, being by me first duly sworn, stated
that:
1. He executed the foregoing Loan and Security Agreement on behalf of such
corporation pursuant to its by-laws or a resolution of its board of
directors, said execution taking place in the State of Georgia, County of
Xxxxxx; and
2. He has this day delivered the foregoing instrument to NationsBank, N.A. at
Xxxxxx County, Georgia.
Signature of Borrower's Officer:
By:
-----------------------------------
Name:
---------------------------------
Sworn to and subscribed before me this 25th day of May, 1999:
----------------------------------
Notary Signature
My Commission Expires:
----------------------------------
[Affix Notarial Seal]
134
NOTARY JURAT FOR EXECUTION OF
WRITTEN OBLIGATIONS TO PAY MONEY
BY FLORIDA BORROWERS
On this the 25th day of May, 1999, before me, the undersigned, a Notary
Public in and for the State of Georgia, County of Xxxx, Xxxxxx X. Xxxxxxxxx
personally appeared, personally known to me or proved to me on the basis of
satisfactory evidence to be the President of AAS Engine Services, Inc., a
Florida corporation, who, being by me first duly sworn, stated that:
1. He executed the foregoing Loan and Security Agreement on behalf of such
corporation pursuant to its by-laws or a resolution of its board of
directors, said execution taking place in the State of Georgia, County of
Xxxxxx; and
2. He has this day delivered the foregoing instrument to NationsBank, N.A. at
Xxxxxx County, Georgia.
Signature of Borrower's Officer:
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------------
Sworn to and subscribed before me this 25th day of May, 1999:
----------------------------------
Notary Signature
My Commission Expires:
----------------------------------
[Affix Notarial Seal]
135
NOTARY JURAT FOR EXECUTION OF
WRITTEN OBLIGATIONS TO PAY MONEY
BY FLORIDA BORROWERS
On this the 25th day of May, 1999, before me, the undersigned, a Notary
Public in and for the State of Georgia, County of Xxxx, Xxxxxx X. Xxxxxxxxx
personally appeared, personally known to me or proved to me on the basis of
satisfactory evidence to be the President of AAS-Amjet, Inc., a Florida
corporation, who, being by me first duly sworn, stated that:
1. He executed the foregoing Loan and Security Agreement on behalf of such
corporation pursuant to its by-laws or a resolution of its board of
directors, said execution taking place in the State of Georgia, County of
Xxxxxx; and
2. He has this day delivered the foregoing instrument to NationsBank, N.A. at
Xxxxxx County, Georgia.
Signature of Borrower's Officer:
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------------
Sworn to and subscribed before me this 25th day of May, 1999:
----------------------------------
Notary Signature
My Commission Expires:
----------------------------------
[Affix Notarial Seal]
136
NOTARY JURAT FOR EXECUTION OF
WRITTEN OBLIGATIONS TO PAY MONEY
BY FLORIDA BORROWERS
On this the 25th day of May, 1999, before me, the undersigned, a Notary
Public in and for the State of Georgia, County of Xxxx, Xxxxxx X. Xxxxxxxxx
personally appeared, personally known to me or proved to me on the basis of
satisfactory evidence to be the President of AAS Landing Gear Services, Inc., a
Florida corporation, who, being by me first duly sworn, stated that:
1. He executed the foregoing Loan and Security Agreement on behalf of such
corporation pursuant to its by-laws or a resolution of its board of
directors, said execution taking place in the State of Georgia, County of
Xxxxxx; and
2. He has this day delivered the foregoing instrument to NationsBank, N.A. at
Xxxxxx County, Georgia.
Signature of Borrower's Officer:
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------------
Sworn to and subscribed before me this 25th day of May, 1999:
----------------------------------
Notary Signature
My Commission Expires:
----------------------------------
[Affix Notarial Seal]
137
'
NOTARY JURAT FOR EXECUTION OF
WRITTEN OBLIGATIONS TO PAY MONEY
BY FLORIDA BORROWERS
On this the 25th day of May, 1999, before me, the undersigned, a Notary
Public in and for the State of Georgia, County of Xxxx, Xxxxxx X. Xxxxxxxxx
personally appeared, personally known to me or proved to me on the basis of
satisfactory evidence to be the President of AAS Complete Controls, Inc., an
Arizona corporation, who, being by me first duly sworn, stated that:
1. He executed the foregoing Loan and Security Agreement on behalf of such
corporation pursuant to its by-laws or a resolution of its board of
directors, said execution taking place in the State of Georgia, County of
Xxxxxx; and
2. He has this day delivered the foregoing instrument to NationsBank, N.A. at
Xxxxxx County, Georgia.
Signature of Borrower's Officer:
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------------
Sworn to and subscribed before me this 25th day of May, 1999:
----------------------------------
Notary Signature
My Commission Expires:
----------------------------------
[Affix Notarial Seal]
000
XXXXXXXXX XXXXXXXXX XXXXXXXX
Xx this the 25th day of May, 1999, before me, the undersigned, a Notary
Public in and for the State of Georgia, County of Xxxx, Xxxxx XxXxxxx personally
appeared, personally known to me or proved to me on the basis of satisfactory
evidence to be a Vice President of NationsBank, N.A., who, being by me first
duly sworn, stated that NationsBank, N.A., as Agent, has received delivery of
the foregoing Loan and Security Agreement in the State of Georgia, County of
Xxxxxx.
-------------------------------------------------
Signature of Officer of Agent
Sworn to and subscribed before me this 25th day of May, 1999:
----------------------------------
Notary Signature
My Commission Expires:
----------------------------------
[Affix Notarial Seal]
