EXHIBIT 4.8
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CREDIT AGREEMENT
BETWEEN
AAR CORP.
AND
THE NORTHERN TRUST COMPANY
DATED AS OF NOVEMBER 1, 1997
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
THE CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1. The Advances . . . . . . . . . . . . . . . . . . . . 11
2.2. Extension of Revolving Credit Termination Date . . . 12
2.3. Mandatory Payments . . . . . . . . . . . . . . . . . 12
2.4. Fees . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5. Optional Reductions in Commitment . . . . . . . . . 13
2.6. [Intentionally Omitted] . . . . . . . . . . . . . . 13
2.7. Types of Advances . . . . . . . . . . . . . . . . . 13
2.8. Minimum Amount of Each Advance . . . . . . . . . . . 13
2.9. Optional Principal Payments . . . . . . . . . . . . . . . 13
2.10. Method of Selecting Types and Interest Periods for
New Advances . . . . . . . . . . . . . . . . . . . . 14
2.11. [Intentionally Omitted]. . . . . . . . . . . . . . . 14
2.12. [Intentionally Omitted] . . . . . . . . . . . . . . 14
2.13. Conversion and Continuation of Outstanding Advances. 14
2.14. Restrictions on Interest Periods . . . . . . . . . . 15
2.15. Changes in Interest Rate, etc . . . . . . . . . . . 15
2.16. Rates Applicable After Default . . . . . . . . . . . 15
2.17. Method of Payment . . . . . . . . . . . . . . . . . 15
2.18. [Intentionally Omitted]. . . . . . . . . . . . . . . 16
2.19. [Intentionally Omitted]. . . . . . . . . . . . . . . 16
2.20. Note; Telephonic Notices . . . . . . . . . . . . . . 16
2.21. Interest Payment Dates; Interest and Fee Basis . . . 16
2.22. [Intentionally Omitted] . . . . . . . . . . . . . . 17
2.23. [Intentionally Omitted]. . . . . . . . . . . . . . . 17
2.24. [Intentionally Omitted] . . . . . . . . . . . . . . 17
2.25. Letters of Credit . . . . . . . . . . . . . . . . . 17
2.26. Manner of Issuance . . . . . . . . . . . . . . . . . 17
2.27. Term . . . . . . . . . . . . . . . . . . . . . . . . 18
2.28. Letter of Credit Fees . . . . . . . . . . . . . . . 18
2.29. Reimbursement Obligation . . . . . . . . . . . . . . 18
ARTICLE III
CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . 20
3.1. Yield Protection . . . . . . . . . . . . . . . . . . 20
3.2. Changes in Capital Adequacy Regulations . . . . . . 20
3.3. Availability of Eurodollar Advances . . . . . . . . 21
3.4. Funding Indemnification . . . . . . . . . . . . . . 21
3.5. Lender Statements; Survival of Indemnity . . . . . . 21
3.6. Refund to Borrower . . . . . . . . . . . . . . . . . 22
TABLE OF CONTENTS
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ARTICLE IV
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . 22
4.1. Conditions Precedent to the Effective Date . . . . . 22
4.2. Each Advance . . . . . . . . . . . . . . . . . . . . 23
ARTICLE V
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 23
5.1. Corporate Existence and Standing . . . . . . . . . . 24
5.2. Authorization and Validity . . . . . . . . . . . . . 24
5.3. No Conflict; Government Consent . . . . . . . . . . 24
5.4. Financial Statements . . . . . . . . . . . . . . . . 24
5.5. Material Adverse Change . . . . . . . . . . . . . . 24
5.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . 25
5.7. Litigation and Contingent Obligations . . . . . . . 25
5.8. Subsidiaries . . . . . . . . . . . . . . . . . . . . 25
5.9. ERISA . . . . . . . . . . . . . . . . . . . . . . . 25
5.10. Accuracy of Information . . . . . . . . . . . . . . 26
5.11. Regulation U . . . . . . . . . . . . . . . . . . . . 26
5.12. Compliance With Laws . . . . . . . . . . . . . . . . 26
5.13. Investment Company Act . . . . . . . . . . . . . . . 26
ARTICLE VI
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.1. Financial Reporting . . . . . . . . . . . . . . . . 26
6.2. Use of Proceeds . . . . . . . . . . . . . . . . . . 28
6.3. Notice of Default . . . . . . . . . . . . . . . . . 29
6.4. Conduct of Business . . . . . . . . . . . . . . . . 29
6.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . 29
6.6. Insurance . . . . . . . . . . . . . . . . . . . . . 29
6.7. Compliance with Laws . . . . . . . . . . . . . . . . 29
6.8. Maintenance of Properties . . . . . . . . . . . . . 29
6.9. Inspection . . . . . . . . . . . . . . . . . . . . . 29
6.10. Restricted Payments . . . . . . . . . . . . . . . . 30
6.11. Merger . . . . . . . . . . . . . . . . . . . . . . . 30
6.12. Sale of Assets . . . . . . . . . . . . . . . . . . . 30
6.13. Sale of Accounts . . . . . . . . . . . . . . . . . . 31
6.14. Investments and Acquisitions . . . . . . . . . . . . 32
6.15. Contingent Obligations . . . . . . . . . . . . . . . 33
6.16. Liens . . . . . . . . . . . . . . . . . . . . . . . 33
6.17. Rentals . . . . . . . . . . . . . . . . . . . . . . 35
6.18. Retirement and Modification of Subordinated
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 35
6.19. Affiliates . . . . . . . . . . . . . . . . . . . . . 35
6.20. Working Capital . . . . . . . . . . . . . . . . . . 35
ii
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6.21. Consolidated Tangible Net Worth . . . . . . . . . . 35
6.22. Ratio of Consolidated Liabilities to Consolidated
Tangible Net Worth. . . . . . . . . . . . . . . . . . . . 36
6.23. Consolidated Secured Liabilities . . . . . . . . . . 36
6.24. Limitation on Funded Debt . . . . . . . . . . . . . 36
6.25. Fixed Charge Coverage Ratio . . . . . . . . . . . . 36
ARTICLE VII
DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES . . . . . . . . 40
8.1. Acceleration . . . . . . . . . . . . . . . . . . . . 40
8.2. Amendments . . . . . . . . . . . . . . . . . . . . 40
8.3. Preservation of Rights; Waivers, etc . . . . . . . . 40
ARTICLE IX
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 41
9.1. Survival of Representations . . . . . . . . . . . . 41
9.2. Governmental Regulation . . . . . . . . . . . . . . 41
9.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . 41
9.4. Headings . . . . . . . . . . . . . . . . . . . . . . 41
9.5. Entire Agreement . . . . . . . . . . . . . . . . . . 41
9.6. Benefits of this Agreement . . . . . . . . . . . . . 41
9.7. Expenses; Indemnification . . . . . . . . . . . . . 41
9.8. [Intentionally Omitted] . . . . . . . . . . . . . . 42
9.9. Accounting . . . . . . . . . . . . . . . . . . . . . 42
9.10. Severability of Provisions . . . . . . . . . . . . . 42
9.11. Nonliability of the Lender . . . . . . . . . . . . . 42
9.12. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . 42
9.13. CONSENT TO JURISDICTION . . . . . . . . . . . . . . 42
9.14. Confidentiality . . . . . . . . . . . . . . . . . . 43
9.15. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . 43
ARTICLE X
[Intentionally Omitted] . . . . . . . . . . . . . . . . . . . 43
ARTICLE XI
SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . . . . . . . 43
11.1. Setoff . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . 43
12.1. Successors and Assigns . . . . . . . . . . . . . . . 43
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12.2. Participations . . . . . . . . . . . . . . . . . . . 44
12.2.1. Permitted Participants; Effect . . . . . . . . 44
12.2.2. Voting Rights . . . . . . . . . . . . . . . . . 44
12.2.3. Benefit of Setoff . . . . . . . . . . . . . . . 45
12.3. Assignments . . . . . . . . . . . . . . . . . . . . 45
12.3.1. Permitted Assignments . . . . . . . . . . . . . 45
12.3.2. [Intentionally Omitted] . . . . . . . . . . . . 45
12.4. Dissemination of Information . . . . . . . . . . . . 45
ARTICLE XIII
NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
13.1. Giving Notice . . . . . . . . . . . . . . . . . . . 45
13.2. Change of Address . . . . . . . . . . . . . . . . . 45
ARTICLE XIV
COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 46
iv
SCHEDULES AND EXHIBITS
Schedule "1" - Other Investments
Schedule "2" - Liens
Exhibit "A" - Note
Exhibit "B" - Extension Letter
Exhibit "C" - Borrowing Notice
Exhibit "D" - Letter of Credit Application
Exhibit "E" - Opinion
Exhibit "F" - Transfer Instructions
Exhibit "G" - Compliance Certificate
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of November 1, 1997, between AAR
CORP., a Delaware corporation (the "Borrower"), and THE NORTHERN TRUST
COMPANY, an Illinois banking corporation (the "Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has requested the Lender to make available
to the Borrower a revolving line of credit for loans in an aggregate
amount not to exceed $10,000,000 which extensions of credit the
Borrower will use for its working capital needs and general business
purposes;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
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As used in this Agreement:
"Accounts" has the meaning provided in Section 6.13.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by
which the Borrower or any of its Subsidiaries (i) acquires any going
business or all or substantially all of the assets of any firm,
corporation or division thereof, whether through purchase of assets,
merger or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the
election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding partnership interests of a
partnership.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of advances made by the Lender to the Borrower pursuant to
Section 2.1 which are (a) of the same Type and (b) in the case of
Eurodollar Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with
such Person. A Person shall be deemed to control another Person if
the controlling Person owns 10% or more of any class of voting
securities (or other ownership interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied in a
manner consistent with that used in preparing the financial statements
referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per
annum equal to the higher of (i) the Prime Rate for such day and (ii)
the sum of Federal Funds Effective Rate for such day plus 1/2% per
annum.
"Application" is defined in Section 2.26, as amended, modified or
supplemented from time to time.
"Authorized Officer" means any of the Chairman of the Board,
Chief Executive Officer, President, Chief Operations Officer, Vice
President-Finance or Treasurer of the Borrower.
"Borrower" means AAR Corp., a Delaware corporation, and its
successors and assigns.
"Borrowing Date" means a date on which an Advance is made or a
Letter of Credit is issued hereunder.
"Borrowing Notice" is defined in Section 2.10.
"Business Day" means (i) with respect to any borrowing, payment
or rate selection of Eurodollar Advances, a day (other than a Saturday
or Sunday) on which banks are open for business in Chicago and on
which dealings in U.S. Dollars may be carried on by the Lender in the
interbank Eurodollar market and (ii) for all other purposes, a day
(other than a Saturday or Sunday) on which banks are open for business
in Chicago.
"Capitalized Lease" of a Person means any lease of property by
such Person as lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with Agreement Accounting
Principles.
"Capitalized Lease Obligations" of a Person means the amount of
the obligations of such Person under Capitalized Leases which would be
shown as a liability on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
"Change in Control" means (i) the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission
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under the Securities Exchange Act of 1934) of 20% or more of the
outstanding shares of voting stock of the Borrower or (ii) a majority
of the Directors on the Borrower's Board of Directors shall cease to
be Directors of the Borrower during any twelve-month period.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" means $10,000,000 as such amount may be modified
from time to time pursuant to the terms hereof.
"Consolidated Assets" means the total consolidated assets of the
Borrower and its Subsidiaries determined in accordance with Agreement
Accounting Principles.
"Consolidated Current Assets" means the total consolidated
current assets of the Borrower and its Subsidiaries determined in
accordance with Agreement Accounting Principles.
"Consolidated Current Liabilities" means the total consolidated
current liabilities of the Borrower and its Subsidiaries determined in
accordance with Agreement Accounting Principles.
"Consolidated Funded Debt" means all Indebtedness having a final
maturity of more than one year. Funded Debt shall not include
payments due within one year from the date as of which a calculation
of Funded Debt is made.
"Consolidated Liabilities" means the total consolidated
liabilities of the Borrower and its Subsidiaries determined in
accordance with Agreement Accounting Principles.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of the Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in accordance with Agreement Accounting Principles;
PROVIDED, that there shall be excluded (i) the income (or loss) of any
Affiliate of the Borrower or other Person (other than a Subsidiary of
the Borrower) in which any Person (other than the Borrower or any of
its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to the
Borrower, or any of its Subsidiaries by such Affiliate or other Person
during such period, (ii) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary of the Borrower or is merged
into or consolidated with the Borrower or any of its Subsidiaries or
that Person's assets are acquired by the Borrower or any of its
Subsidiaries, and (iii) the income of any Subsidiary of the Borrower
to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary.
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"Consolidated Secured Liabilities" means the aggregate amount of
Consolidated Liabilities which are secured by any Lien (other than
Liens permitted pursuant to any of clauses (a), (d), (e), (f) and (h)
of Section
6.16) on any property of the Borrower or any of its Subsidiaries.
"Consolidated Tangible Net Worth" means, as of any date of
determination, the sum of (a) the consolidated stockholders' equity of
the Borrower and its Subsidiaries determined in accordance with
Agreement Accounting Principles, less their consolidated Intangible
Assets, plus (b) Subordinated Debt. For purposes of this definition
"Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (i) all
write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made
within twelve months after the acquisition of such business)
subsequent to May 31, 1991 in the book value of any asset owned by the
Borrower or a Consolidated Subsidiary, (ii) all investments in
unconsolidated Subsidiaries and all equity investments in Persons
which are not Subsidiaries and (iii) all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, organization or developmental
expenses and other intangible items, for purposes of this clause
(iii), in each case, to the extent such items are disclosed as
separate line items on the Borrower's financial statements required
under Section 6.1.
"Consolidated Total Capitalization" means Consolidated Net Worth
plus Consolidated Funded Debt. For purposes of this definition,
"Consolidated Net Worth" means the aggregate amount of capital stock
(other than treasury stock), retained earnings and surplus of the
Company and its Subsidiaries (exclusive of any surplus arising by
virtue of any reappraisal or revaluation of any assets) less the
amount of: goodwill, patents, copyrights, trademarks, experimental or
organization expense and other like intangibles, in each case, to the
extent such items are disclosed as separate line items on the
Borrower's financial statements required under Section 6.1.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person, or agrees to maintain the
net worth or working capital or other financial condition of any other
Person, or otherwise assures any creditor of such other Person against
loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit
or similar instrument.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower
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or any of its Subsidiaries, are treated as a single employer under
Section 414 of the Code.
"Default" means an event described in Article VII.
"Domestic Subsidiary" means any Subsidiary of the Borrower
organized under the laws of any State of the United States of America
or the District of Columbia, all or substantially all of whose assets
are located, and whose business is conducted, in one or more of any
such States or District.
"Effective Date" has the meaning provided in Section 4.1.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Advance for the relevant Interest Period, the rate determined by the
Lender to be the rate at which deposits in U.S. dollars are offered to
the Lender by major banks in the interbank Eurodollar market at
approximately 11 a.m. (London time) two Business Days prior to the
first day of such Interest Period, in the amount of the relevant
Eurodollar Advance and having a maturity equal to such Interest
Period.
"Eurodollar Conversion Notice" is defined in Section 2.13.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal)
applicable to such Interest Period, plus (ii) the Applicable Margin.
As used in this definition, "Applicable Margin" means (A) .75% at all
times prior to the Revolving Credit Termination Date when the Borrower
has an Investment Grade Rating and there has been no HLT
Classification, and (B) 1.25% at all times after the Revolving Credit
Termination Date when the Borrower has an Investment Grade Rating and
there has been no HLT Classification. The Applicable Margin shall be
increased by (x) .75% at all times when the Borrower does not have an
Investment Grade Rating and there has been no HLT Classification and
(y) 1.75% at all times when there has been an HLT Classification. The
Eurodollar Rate shall be rounded to the next higher multiple of 1/16
of 1% if the rate is not such a multiple.
"Facility Termination Date" means the twentieth (20th) Payment
Date following the Revolving Credit Termination Date.
"Federal Funds Effective Rate" means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight
-5-
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published for such
day (or, if such day is not a Business Day, for the immediately
preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day,
the average of the quotations at approximately 10 a.m. (Chicago time)
on such day on such transactions received by the Lender from three
Federal funds brokers of recognized standing selected by the Lender in
its sole discretion.
"Floating Rate" means, for any day, a rate per annum equal to (a)
the Alternate Base Rate for such day plus (b) the Applicable Margin,
changing when and as the Alternate Base Rate changes. As used in this
definition, "Applicable Margin" means (i) at all times prior to the
Revolving Credit Termination Date (x) zero % at all times when the
Borrower has an Investment Grade Rating and there has been no HLT
Classification, (y) .50% at all times when the Borrower does not have
an Investment Grade Rating and there has been no HLT Classification
and (z) 1.50% at all times when there has been an HLT Classification
and (ii) at all times on or after the Revolving Credit Termination
Date (x) .50% at all times when the Borrower has an Investment Grade
Rating and there has been no HLT Classification, (y) 1.00% at all
times when the Borrower does not have an Investment Grade Rating and
there has been no HLT Classification and (z) 2.00% at all times when
there has been an HLT Classification.
"Floating Rate Advance" means an Advance which bears interest at
the Floating Rate.
"Foreign Accounts" means Accounts with respect to which the
obligor is a Person which is (i) organized under the laws of a
jurisdiction other than the United States of America, any State of the
United States of America or the District of Columbia, in the case of a
Person which is not a natural person, or (ii) a citizen of a country
other than the United States of America, in the case of a natural
person.
"Foreign Subsidiary" means any Subsidiary of the Borrower which
is not a Domestic Subsidiary.
"HLT Classification" means, in the context of there having been
an HLT Classification, that either (i) the Lender has received notice
from any governmental or quasi-governmental authority, central bank or
comparable agency having jurisdiction over the Lender that the
Advances or the Commitment hereunder are classifiable as being part of
a "highly leveraged transaction" or (ii) the Lender has otherwise
determined that compliance with any law or any governmental or
quasi-governmental rule, regulation, order, policy, guideline or
directive (whether or not having the force of law) requires that the
Advances or Commitment hereunder be classified as part of a "highly
leveraged transaction". The effective date of an "HLT Classification"
for all purposes of this Agreement shall be the date of receipt by the
-6-
Lender of the notice referred to in clause (i) or the date of the
determination by the Lender referred to in clause (ii), as the case
may be, provided that in either case the Lender does in fact promptly
classify either its Advances or its Commitment hereunder as being part
of a "highly leveraged transaction" to the extent required by the
source of such required classification.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred
purchase price of property or services (other than accounts payable
arising in the ordinary course of such Person's business payable on
terms customary in the trade), (iii) obligations, whether or not
assumed, secured by Liens (other than Liens permitted pursuant to any
of clauses (a), (d), (e), (f) and (h) of Section 6.16) or payable out
of the proceeds or production from property now or hereafter owned or
acquired by such Person, (iv) obligations which are evidenced by
notes, acceptances, or other instruments, (v) Capitalized Lease
Obligations and (vi) net liabilities under currency or interest rate
swap, exchange or cap agreements.
"Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two, three or six months commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest
Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter,
provided, however, that if there is no such numerically corresponding
day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If a Interest Period would
otherwise end on a day which is not a Business Day, such Interest
Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately
preceding Business Day. No Interest Period may end after the
Revolving Credit Termination Date.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to its officers, employees,
agents and representatives made in the ordinary course of business),
extension of credit (other than accounts receivable arising in the
ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person
or any investment in, or purchase or other acquisition of, the stock,
partnership interests, notes, debentures or other securities of any
other Person made by such Person.
"Investment Grade Rating" means, in the context of the Borrower
having an Investment Grade Rating, that the Borrower's senior
unsecured long term debt is rated both (a) BBB- or better by Standard
& Poor's Corporation and (b) Baa3 or better by Xxxxx'x Investor
Service, Inc.
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"Letter of Credit" means a standby letter of credit as amended,
modified or supplemented from time to time issued for the account of
Borrower pursuant to Section 2.25.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, the interest of a vendor or lessor under any conditional
sale, Capitalized Lease or other title retention agreement).
"Loan Documents" means this Agreement, the Note, the Letters of
Credit and the Applications.
"Material Adverse Effect" means a material adverse effect on (i)
the business, properties, condition (financial or otherwise), results
of operations, or prospects of the Borrower and its Subsidiaries taken
as a whole, (ii) the ability of the Borrower to perform its
obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies
of the Lender thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the
Borrower or any member of the Controlled Group is a party to which
more than one employer is obligated to make contributions.
"Note" means a promissory note, in substantially the form of
Exhibit "A" hereto, duly executed by the Borrower and payable to the
order of the Lender in the amount of the Commitment, including any
amendment, modification, renewal or replacement of such promissory
note.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Note, all the Borrower's obligations with
respect to any Letter of Credit issued hereunder or any Application
therefor, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to
the Lender or any indemnified party hereunder arising under the Loan
Documents.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September
and December.
"Payment Notes" has the meaning provided in Section 6.12.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
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"Person" means any natural person, corporation, firm, joint
venture, partnership, association, enterprise, trust or other entity
or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code as to which the Borrower or any member of the
Controlled Group may have any liability.
"Purchasers" is defined in Section 12.3.1.
"Prime Rate" means that rate of interest per year announced from
time to time by the Lender called its prime rate, which may not at any
time be the lowest rate of interest charged by the Lender.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor thereto or other regulation or official interpretation of
said Board of Governors relating to reserve requirements applicable to
member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor or other regulation or official interpretation of said Board
of Governors relating to the extension of credit by banks for the
purpose of purchasing or carrying margin stocks applicable to member
banks of the Federal Reserve System.
"Rentals" of a Person means the aggregate fixed amounts payable
by such Person under any lease of real or personal property having an
original term (including any required renewals or any renewals at the
option of the lessor or lessee) of one year or more, but does not
include any amounts payable under Capitalized Leases of such Person.
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the
PBGC by regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such event,
provided, however, that a failure to meet the minimum funding standard
of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA
or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment
has been terminated, Lenders in the aggregate holding at least 66-2/3%
of the aggregate unpaid principal amount of the outstanding Advances.
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"Reserve Requirement" means, with respect to a Interest Period,
the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under
Regulation D on Eurocurrency liabilities.
"Restricted Payments" means collectively, all dividends (cash,
stock, asset or otherwise) and all payments on any class of securities
(specifically including all Subordinated Debt, but excluding any other
debt securities) issued by the Borrower or any Subsidiary, whether
such securities are now, or may hereafter be, authorized or
outstanding and any payment by the Borrower or any Subsidiary on
account of the purchase, redemption or retirement of any class of
securities (specifically including all Subordinated Debt, but
excluding all other debt securities) issued by it, and any
distribution in respect to any of the foregoing, whether directly or
indirectly.
"Revolving Credit Termination Balance" means the aggregate
principal amount of Advances outstanding plus the aggregate Stated
Amount of all issued and outstanding Letters of Credit at the close of
business on the Revolving Credit Termination Date after giving effect
to any Advances made or repaid on such date.
"Revolving Credit Termination Date" means August 31, 1999 or such
later date to which the Revolving Credit Termination Date may be
extended pursuant to Section 2.2.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or
any member of the Controlled Group for employees of the Borrower or
any member of the Controlled Group.
"Stated Amount" of each Letter of Credit shall mean the maximum
amount available to be drawn thereunder, determined without regard to
whether any conditions to drawing could then be met.
"Subordinated Debt" means indebtedness of the Borrower or any
Subsidiary evidenced by instruments containing provisions by which the
payment of such indebtedness is postponed and subordinated to the
payment of the Notes, which subordination provisions and the
provisions for payment shall be in form and substance satisfactory to
the Required Lenders as evidenced by their prior written consent
thereto.
"Subsidiary" of a Person means (i) any corporation more than 50%
of the outstanding securities having ordinary voting power of which
shall at the time be owned or controlled, directly or indirectly, by
such Person or by one or more of its Subsidiaries or by such Person
and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture or similar business organization more than
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50% of the ownership interests having ordinary voting power of which
shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean
a Subsidiary of the Borrower.
"Transferee" is defined in Section 12.4.
"Type" means with respect to any Advance, its nature as a
Floating Rate Advance or Eurodollar Advance.
"Unfunded Liabilities" means the aggregate unfunded value of
accumulated benefits under all Single Employer Plans, all determined
in accordance with Agreement Accounting Principles as of the then most
recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"U.S. Dollars" means the lawful currency of the United States of
America.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary
all of the outstanding voting securities of which shall at the time be
owned or controlled, directly or indirectly, by such Person or one or
more Wholly-Owned Subsidiaries of such Person, or by such Person and
one or more Wholly-Owned Subsidiaries of such Person, or (ii) any
partnership, association, joint venture or similar business
organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDIT
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2.1. THE ADVANCES. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Advances at any time prior to
or on the Revolving Credit Termination Date. No Advances may be
requested or made subsequent to the Revolving Credit Termination Date.
Principal payments made after the Revolving Credit Termination Date
may not be reborrowed.
(a) COMMITMENTS TO MAKE ADVANCES. From and including the
date of this Agreement and to and including the Revolving Credit
Termination Date, the Lender agrees, on the terms and conditions
set forth in this Agreement, to make Advances to the Borrower
from time to time in amounts such that, upon giving effect to
each such Advance, the sum of the aggregate unpaid principal
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amount of all Advances then outstanding plus the aggregate Stated
Amount of all outstanding Letters of Credit shall not exceed the
Commitment then in effect. The foregoing commitment to make
Advances shall expire at the close of business on the Revolving
Credit Termination Date.
(b) [Intentionally Omitted].
2.2. EXTENSION OF REVOLVING CREDIT TERMINATION DATE. The initial
Revolving Credit Termination Date shall be August 31, 1999. The
Borrower may, not earlier than 180 days and not later than 60 days
prior to each anniversary of the Effective Date execute and deliver to
the Lender an Extension Letter in substantially the form of Exhibit
"B" hereto, with appropriate insertions, requesting that the Revolving
Credit Termination Date be extended for one year. Such request for an
extension of the Revolving Credit Termination Date shall become
effective if, and only if, the Lender shall, in its sole and absolute
discretion, execute such Extension Letter and return a copy thereof to
the Borrower prior to each such applicable anniversary of the
Effective Date.
2.3. MANDATORY PAYMENTS. The Borrower shall make the following
mandatory payments on the Advances:
(a) [Intentionally Omitted].
(b) Each Advance outstanding on the Revolving Credit
Termination Date shall be repaid in full on the Revolving Credit
Termination Date (it being understood and agreed that, subject to
the terms and conditions of this Agreement, the Borrower shall be
entitled to make a final borrowing of one or more Advances
pursuant to Section 2.1(a) on the Revolving Credit Termination
Date).
(c) If on the last day of any calendar month, it is
determined by the Lender that the sum of the aggregate amount of
all outstanding Advances plus the aggregate Stated Amount of all
issued and outstanding Letters of Credit exceeds the Commitment
then in effect, the Borrower shall, immediately upon the first to
occur of the Borrower becoming aware of such excess or notice
thereof by the Lender, make a repayment (in U.S. Dollars) of the
outstanding Advances in an amount which is at least sufficient to
eliminate such excess.
(d) The Revolving Credit Termination Balance shall be
payable in twenty (20) equal, consecutive quarterly installments,
commencing on the first Payment Date following the Revolving
Credit Termination Date.
(e) Any outstanding Advances and all other unpaid
Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
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2.4. FEES. The Borrower further agrees to pay to the Lender a
commitment fee of .30% (or if the Borrower no longer has an Investment
Grade Classification .425%) per annum for the period from the date
hereof to and including the Revolving Credit Termination Date on the
average daily principal amount of the Commitment less the average
daily principal amount of outstanding Advances. All of the fees
referred to in this Section 2.4 shall be payable quarterly in arrears
within 15 days after receipt of a statement therefor from the Lender
for such quarter, commencing with the calendar quarter ending December
31, 1997. The obligations of the Borrower under this Section 2.4
shall survive the payment of the Advances and the termination of this
Agreement. In addition upon any HLT Classification, the Borrower
agrees to pay the Lender upon demand, an HLT Classification fee equal
to .125% of the Commitment in effect at the time of such HLT
Classification.
2.5. OPTIONAL REDUCTIONS IN COMMITMENT. The Borrower may
permanently reduce the Commitment in whole, or in part in integral
multiples of $1,000,000, upon at least ten days' written notice to the
Lender, which notice shall specify the amount of any such reduction;
PROVIDED, HOWEVER, that the amount of the Commitment may not be
reduced below the sum of the aggregate principal amount of the
outstanding Advances plus the aggregate Stated Amount of all issued
and outstanding Letters of Credit. All accrued commitment fees shall
be payable on the effective date of any termination of the obligations
of the Lender to make Advances hereunder.
2.6. [Intentionally Omitted].
2.7. TYPES OF ADVANCES. The Advances may be Floating Rate
Advances or Eurodollar Advances, or a combination thereof, selected by
the Borrower in accordance with Sections 2.10 and 2.13.
2.8. MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Advance
shall be in the minimum amount of $1,000,000 (and in multiples of
$100,000 if in excess thereof), and each Floating Rate Advance shall
be in the minimum amount of $500,000 (and in multiples of $100,000 if
in excess thereof); PROVIDED, HOWEVER, that any Floating Rate Advance
may be in the amount of the Commitment.
2.9. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate
Advances, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $100,000 in excess thereof, any portion of the
outstanding Floating Rate Advances upon 5 days' prior notice to the
Lender. Eurodollar Advances may be paid in full prior to the last day
of the applicable Interest Period, subject to compliance with Section
3.4. Principal payments made after the Revolving Credit Termination
Date shall be applied to the principal installments payable under
Section 2.3(d) in the inverse order of maturity.
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2.10. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW
ADVANCES. The Borrower shall select the Type and, in the case of each
Eurodollar Advance, the Interest Period applicable to each new Advance
from time to time. The Borrower shall give the Lender irrevocable
notice in substantially the form of Exhibit "C" hereto with
appropriate insertions (a "Borrowing Notice") not later than 10:00
a.m. (Chicago time) at least (a) one Business Day before the Borrowing
Date of each Floating Rate Advance and (b) three Business Days before
the Borrowing Date for each Eurodollar Advance, in each case
specifying:
(i) the Borrowing Date of such Advance, which shall be
a Business Day, prior to or on the Revolving
Credit Termination Date,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the
Interest Period applicable thereto.
2.11. [Intentionally Omitted].
2.12. [Intentionally Omitted].
2.13. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES.
Outstanding Advances may be continued or converted into Advances of
another Type as provided below in this Section 2.13.
Each Floating Rate Advance shall continue as Floating Rate
Advance unless and until such Floating Rate Advance is repaid pursuant
to Section 2.9 or converted into a Eurodollar Advance pursuant to this
Section 2.13. Each Eurodollar Advance shall continue as a Eurodollar
Advance until the end of its respective Interest Period, at which time
such Eurodollar Advance shall be automatically converted into a
Floating Rate Advance unless the Borrower shall have given the Lender
a Eurodollar Conversion Notice requesting that, at the end of such
Interest Period, such Eurodollar Advance be converted into a new
Eurodollar Advance for a new Interest Period. Subject to the terms of
Section 2.8, the Borrower may from time to time elect to convert all
or any part of any Floating Rate Advance into a Eurodollar Advance, or
to convert all or any part of any Eurodollar Advance into a new
Eurodollar Advance for a new Interest Period; PROVIDED, that any
conversion of any existing Eurodollar Advance shall be made on, and
only on, the last day of its respective Interest Period. The Borrower
shall give the Lender irrevocable notice (a "Eurodollar Conversion
Notice") of each conversion of an outstanding Advance into a
Eurodollar Advance not later than 10:00 a.m. (Chicago time) at least
three Business Days prior to the date of the requested conversion,
specifying:
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(i) the requested date of such conversion, which date
shall be a Business Day;
(ii) the aggregate amount and Type of the Advance which
is to be converted or continued; and
(iii) the amount and Interest Period applicable to each
Eurodollar Advance into which such Advance is to
be converted.
Notwithstanding anything to the contrary contained in this Section
2.13, no Advance may be converted into or continued as a Eurodollar
Advance (a) at any time within 30 days of the Facility Termination
Date or (b) when any Default or Unmatured Default has occurred and is
continuing.
2.14. RESTRICTIONS ON INTEREST PERIODS. No Interest Period
may extend beyond a Payment Date on which principal of the Advances
shall be payable unless outstanding principal of Floating Rate
Advances and Eurodollar Advances with Interest Periods ending prior to
said Payment Date and unused Commitment shall be at least equal to the
amount so payable. No Interest Period shall extend beyond the
Facility Termination Date. No more than ten (10) Interest Periods may
be in effect at any one time.
2.15. CHANGES IN INTEREST RATE, ETC. Changes in the rate of
interest on that portion of any Advance maintained as a Floating Rate
Advance will take effect simultaneously with each change in the
Alternate Base Rate and each change in the Applicable Margin referred
to in the definition "Floating Rate". Each Eurodollar Advance shall
bear interest from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such
Eurodollar Advance, provided that the rate of interest on each
Eurodollar Advance will change simultaneously with each change, during
the applicable Interest Period, of the Applicable Margin referred to
in the definition of "Eurodollar Rate".
2.16. RATES APPLICABLE AFTER DEFAULT. During the continuance
of a Default the Lender may, at its option, by notice to the Borrower,
declare that (i) each Eurodollar Advance shall bear interest for the
remainder of the applicable Interest Period at the rate otherwise
applicable to such Interest Period plus 2% per annum and (ii) each
Floating Rate Advance shall bear interest at a rate per annum equal to
the Floating Rate otherwise applicable to the Floating Rate Advance
plus 2%.
2.17. METHOD OF PAYMENT. (a) All payments of principal,
interest and fees to be made by the Borrower hereunder or under the
Note shall be made in U.S. Dollars, without setoff, deduction, or
counterclaim, in immediately available funds to the Lender at the
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Lender's address specified pursuant to Article XIII by noon (local
time) on the date when due and shall be applied by the Lender.
(b) [Intentionally Omitted].
(c) On or before the time a principal payment is made on any of
the Advances, the Borrower shall inform the Lender as to the
proportionate application of such payment among the Floating Rate
Advances and the Eurodollar Advances. In the absence of such
instructions, the Lender shall apply such payment first to the
outstanding Floating Rate Advances and then apply any remainder to the
outstanding Eurodollar Advances; PROVIDED, that as between Eurodollar
Advances, the Lender shall endeavor to make such application (not
otherwise disadvantageous to the Lender) as will mitigate the
Borrower's liability to the Lender under Section 3.4 as a consequence
of such application.
2.18. [Intentionally Omitted].
2.19. [Intentionally Omitted].
2.20. NOTE; TELEPHONIC NOTICES. The Lender shall, and is
hereby authorized to, record the principal amount of the Advances and
each repayment on the schedule attached to the Note (or to otherwise
record the same in its usual practice); PROVIDED, HOWEVER, that the
failure so to record shall not affect the Borrower's obligations in
respect of such Advances. The Borrower hereby authorizes the Lender
to extend, convert or continue Advances and to transfer funds based on
telephonic notices made by any person or persons the Lender in good
faith believes to be acting on behalf of the Borrower. The Borrower
agrees to deliver promptly to the Lender a written confirmation, if
such confirmation is requested by the Lender, of each telephonic
notice signed by an Authorized Officer. If the written confirmation
differs in any material respect from the action taken by the Lender,
the record of the Lender shall govern absent manifest error.
2.21. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS.
Interest accrued on each Floating Rate Advance shall be payable on
each Payment Date, commencing with the first such date to occur after
the date hereof, on any date on which the Floating Rate Advance is
prepaid, whether due to acceleration or otherwise, and at maturity.
Interest accrued on that portion of the outstanding principal amount
of any Floating Rate Advance converted into a Eurodollar Advance on a
day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be
payable on the last day of its applicable Interest Period, on any date
on which the Eurodollar Advance is prepaid, whether by acceleration or
otherwise, and at maturity. Interest accrued on each Eurodollar
Advance having an Interest Period longer than three months shall also
be payable on the last day of each three-month interval during such
Interest Period. Interest and fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be
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payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local
time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding
Business Day (unless, in the case of any interest payment, such
Business Day would be in the following month, in which case, such
interest shall be paid on the last Business Day in the month when such
interest payment is due) and, in the case of a principal payment, such
extension of time shall be included in computing interest in
connection with such payment. After maturity of any installment,
interest shall be payable on demand.
2.22. [Intentionally Omitted].
2.23. [Intentionally Omitted].
2.24. [Intentionally Omitted].
2.25. LETTERS OF CREDIT. Subject to the terms and conditions
of this Agreement (including, without limitation, the last sentence of
SECTION 2.27) the Lender agrees to issue Letters of Credit for the
account of the Borrower from the Effective Date to but not including
the Revolving Credit Termination Date at such times as the Borrower
may request; provided, however, that the Lender shall not be obligated
to issue any Letter of Credit to the extent that (a) the sum of (i)
the aggregate principal amount of all Advances, plus (ii) the
aggregate Stated Amount of all outstanding Letters of Credit, would
exceed the Commitment or (b) the aggregate Stated Amount of all
outstanding Letters of Credit would exceed $5,000,000.
2.26. MANNER OF ISSUANCE.
(a) APPLICATIONS. The Borrower shall deliver to the Lender
(i) prior to 11:00 a.m., Chicago time, on the Borrowing Date of
any Letter of Credit or the amendment effective date with respect
to any amendment of an outstanding Letter of Credit, the Lender's
standard Application and Agreement for Irrevocable Letter of
Credit ("APPLICATION"), the current form of which is attached
hereto as Exhibit "D" (with blanks filled in accordingly), or an
application for amendment in a form acceptable to the Lender.
(b) AUTHORIZED OFFICERS. Each Authorized Officer may
execute and deliver an Application, and request a Letter of
Credit or an amendment thereto (as applicable) on behalf of the
Borrower. The Lender shall be entitled to rely conclusively on
each such Authorized Officer's authority to take the action
referred to in the immediately preceding sentence until the
Lender receives written notice from the Borrower to the contrary.
The Lender shall not have a duty to verify the authenticity of
the signature appearing on any Application and the Lender shall
have no duty to verify the identity of any Person representing
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himself as one of the Authorized Officers entitled to take the
aforesaid actions on behalf of the Borrower.
(c) NO LIABILITY. The Lender shall not incur any liability
to the Borrower in acting upon any request referred to above
which the Lender believes in good faith to have been given by an
Authorized Officer or for otherwise acting in accordance with
this SECTION 2.26.
(d) APPLICATIONS IRREVOCABLE. Each Application submitted
pursuant to this SECTION 2.26 shall be irrevocable.
(e) ISSUANCE. Subject to the terms and conditions set
forth in SECTION 2.25, the Lender will issue the Letter of Credit
for the account of the Borrower on the applicable Borrowing Date.
2.27. TERM. Letters of Credit shall be stated to expire no
more than one year from the date of issuance and may be renewed if so
requested by the Borrower in the manner required by the Lender (but in
any event such request shall be in writing, shall reasonably describe
the Letter of Credit requested to be renewed and the requested renewal
term and shall be given by an Authorized Officer to the Lender not
less than 30 days prior to expiration of such Letter of Credit);
PROVIDED, that no Letter of Credit shall be stated to expire on a date
after the Revolving Credit Termination Date. No such renewal shall be
for more than one year.
2.28. LETTER OF CREDIT FEES. The Borrower agrees to pay the
Lender, on demand, the Lender's standard issuance, administrative,
operating and other fees and charges in effect from time to time for
issuing and administering any Letters of Credit. It is acknowledged
by the Lender that as of the date of this Agreement, the Lender shall
charge the Borrower $200 as an issuance fee and $100 as an amendment
or renewal fee. The Lender may change such fees at such times, in its
sole discretion. The Borrower further agrees to pay the Lender a
commission on the undrawn amount of each Letter of Credit and on each
draft drawn on the Lender pursuant to a Letter of Credit and accepted
by the Lender in such amount(s) as may from time to time be
established by the Lender. It is acknowledged by the Lender that as
of the date of this Agreement such commission shall be equal to 0.50%
per annum (or at all times when the Borrower does not have an
Investment Grade Rating, 1.00%). The Lender may change such
commissions at such times, in its sole discretion. Such commissions
shall be paid at such frequency as the Lender shall determine. The
Lender may provide for the payment of any fees, charges or commission
due, if not paid by the Borrower when due, by advancing the amount
thereof to the Borrower as an Advance.
2.29. REIMBURSEMENT OBLIGATION.
(a) REIMBURSEMENT. In the event that any amount is drawn
under a Letter of Credit by the beneficiary thereof and the
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Borrower shall not have reimbursed the Lender for such amount
drawn immediately when due in accordance with the Application,
the amount so paid shall be deemed to be an Advance.
(b) IRREVOCABLE OBLIGATION. The obligation of the Borrower
to make payment to the Lender with respect to Letters of Credit
shall be unconditional and irrevocable and shall not be subject
to any qualification or exception whatsoever and shall be made
under all circumstances, 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, setoff, defense or
other right which the 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), the Lender or any other Person, whether
in connection with this Agreement, any other Loan
Document, the transactions contemplated herein or
any unrelated transactions (including any
underlying transactions between the Borrower and
the beneficiary named in any Letter of Credit);
(iii) Any draft, certificate or any other document
presented under the Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any
respect or in any statement therein being untrue
or inaccurate in any respect;
(iv) The surrender or impairment of any security for
the performance or observance of any of the terms
of any of the Loan Documents;
(v) The occurrence of any Default or Unmatured
Default, or termination of the Commitment or this
Agreement;
(vi) Any amendment, modification, waiver, consent or
any substitution, exchange or release of or
failure to perfect any interest in collateral
security, with respect to any Letter of Credit;
(vii) Any failure, omission, delay or lack on the part
of the Lender or any party to any of the Letters
of Credit to enforce, assert or exercise any
right, power or remedy conferred upon the Lender
or any such party under this Agreement or any
Letter of Credit, or any other acts or omissions
on the part of the Lender or any other party; and
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(viii) Any other event or circumstance that would, in the
absence of this clause, result in the release or
discharge by operation of law or otherwise of the
Borrower from the performance or observance of any
obligation, covenant or agreement contained in
this Section 2.29.
ARTICLE III
CHANGE IN CIRCUMSTANCES
-----------------------
3.1. YIELD PROTECTION. If any law or any governmental or quasi-
governmental treaty, statute, rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any
interpretation thereof, or the compliance of any Lender therewith,
(i) subjects the Lender to any tax, duty, charge or
withholding on or from payments due from the Borrower (excluding
federal taxation of the overall net income of the Lender), or
changes the time of payment of such taxes or other amounts or the
basis of taxation of payments to the Lender in respect of its
Advances or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, the Lender (other than reserves and
assessments taken into account in determining the interest rate
applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is
to increase the cost to the Lender of making, funding or
maintaining loans or reduces any amount receivable by the Lender
in connection with loans, or requires the Lender to make any
payment calculated by reference to the amount of loans held or
interest received by it, by an amount deemed material by the
Lender,
then, within 15 days of demand by the Lender, the Borrower shall pay
the Lender that portion of the increased expense incurred or reduction
in an amount received which the Lender determines is attributable to
making, funding and maintaining the Advances and Commitment.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If the Lender
determines the amount of capital required or expected to be maintained
by the Lender or any corporation controlling the Lender is increased
as a result of a Change, then, within 15 days of demand by the Lender,
the Borrower shall pay the Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such
increased capital which the Lender determines is attributable to this
Agreement, the Advances or its obligation to make Advances hereunder
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(after taking into account the Lender's policies as to capital
adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether
or not having the force of law) after the date of this Agreement which
affects the amount of capital required or expected to be maintained by
the Lender or any corporation controlling any Lender. "Risk-Based
Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International
Convergence of Capital Measurements and Capital Standards," including
transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. AVAILABILITY OF EURODOLLAR ADVANCES. If (i) the Lender
determines that maintenance of its Eurodollar Advances would violate
any applicable treaty, law, rule, regulation, or directive, whether or
not having the force of law, (ii) the Lender determines that deposits
of a type and maturity appropriate to match fund Eurodollar Advances
are not available, (iii) the Lender determines that the interest rate
applicable to a Eurodollar Advance does not accurately reflect the
cost of making or maintaining such Eurodollar Advance or (iv)
reasonable means do not exist for the Lender to determine the
Eurodollar Rate for the amount and maturity requested, then the Lender
shall suspend the availability of any new Eurodollar Advances (whether
pursuant to Section 2.10 or Section 2.13).
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar
Advance occurs on a date prior to the last day of the applicable
Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Advance is not made on the date specified
by the Borrower in its Borrowing Notice or Eurodollar Conversion
Notice, as the case may be, as a consequence of any condition
precedent to such Advance under Section 2.1 or Article IV not being
satisfied, as a consequence of any failure by the Borrower to borrow
such Advance when the same has been made available to it pursuant to
Section 2.12 or as a consequence of a prohibition on making,
maintaining or repaying the principal of a Eurodollar Advance, the
Borrower will indemnify the Lender for any loss or cost in liquidating
or employing deposits acquired to fund or maintain the Eurodollar
Advance and, provided that the Lender has taken such reasonable
action, if any, not disadvantageous to it, to mitigate the same, any
other loss or cost incurred by the Lender resulting therefrom.
3.5. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. The Lender shall
deliver a written statement of the Lender as to the amount due, if
any, under Section 2.18, 3.1, 3.2 or 3.4. Such written statement
shall set forth in reasonable detail (and in accordance with Agreement
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Accounting Principles, where applicable) the calculations upon which
the Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection
with a Eurodollar Advance shall be calculated as though the Lender
funded its Eurodollar Advance through the purchase of a deposit of the
type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Eurodollar Advance,
whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement shall be payable
on demand after receipt by the Borrower of the written statement. The
obligations of the Borrower under Sections 2.18, 3.1, 3.2 and 3.4
shall survive payment of the obligations and termination of this
Agreement.
3.6. REFUND TO BORROWER. If, and to the extent that, the Lender
shall actually receive a credit against its United States federal
income tax liability or otherwise receive any rebate or refund from
any government or governmental agency in respect of any amount paid by
the Borrower pursuant to Section 3.1 or Section 3.2, the Lender agrees
to promptly notify the Borrower thereof and make reimbursement of
credit, rebate or refund to the Borrower, provided that if the Lender
reasonably believes that such credit, rebate or refund may be subject
to challenge, then the Lender shall thereupon enter into negotiations
in good faith with the Borrower to determine when reimbursement of
such credit, rebate or refund can be made to the Borrower.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE. This Agreement
shall become effective on the date (the "Effective Date") which is the
date on which the Borrower shall have furnished to the Lender:
(i) A copy, certified by the Secretary or Assistant
Secretary of the Borrower, of its Board of Directors'
resolutions (and resolutions of other bodies, if any
are deemed necessary by counsel for the Lender)
authorizing the execution of the Loan Documents.
(ii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall
identify by name and title and bear the signature of
the officers of the Borrower authorized to sign the
Loan Documents and to make borrowings hereunder, upon
which certificate the Lenders shall be entitled to rely
until informed of any change in writing by the
Borrower.
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(iii) A certificate, signed by the chief financial officer of
the Borrower stating that on the Effective Date no
Default or Unmatured Default has occurred and is
continuing.
(iv) A written opinion of the Borrower's counsel, addressed
to the Lender in substantially the form of Exhibit "E"
hereto.
(iv) Note payable to the order of the Lender.
(v) Such other documents as the Lender or its counsel may
have reasonably requested.
4.2. EACH ADVANCE. The Lender shall not be required to make any
Advance or issue any Letter of Credit, unless on the applicable
Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article
V are true and correct as of such Borrowing Date except
for changes in the Schedules hereto reflecting
transactions permitted by this Agreement.
(iii) The Lender shall have received a duly completed
Borrowing Notice from the Borrower pursuant to Section
2.10 or Application pursuant to Section 2.25.
(iv) [Intentionally Omitted].
(v) All legal matters incident to the making of such
Advance shall be in accordance with this Agreement in
the reasonable judgment of the Lender and its counsel.
Each Borrowing Notice with respect to each such Advance and each
Application shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 4.2(i) and (ii)
have been satisfied. The Lender may require a duly completed
compliance certificate in substantially the form of Exhibit "G" hereto
as a condition to making an Advance or an issuance of a Letter of
Credit.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lender that:
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5.1. CORPORATE EXISTENCE AND STANDING. Each of the Borrower and
its Subsidiaries is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business
in each jurisdiction in which its business is conducted.
5.2. AUTHORIZATION AND VALIDITY. The Borrower has the corporate
power and authority and legal right to execute and deliver the Loan
Documents and to perform its obligations thereunder. The execution
and delivery by the Borrower of the Loan Documents and the performance
of its obligations thereunder have been duly authorized by proper
corporate proceedings, and the Loan Documents constitute legal, valid
and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors, rights generally.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation
of the transactions therein contemplated, nor compliance with the
provisions thereof will violate any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on the Borrower or
any of its Subsidiaries or the Borrower's or any Subsidiary's articles
of incorporation or by-laws or the provisions of any indenture,
instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of
or on the property of the Borrower or a Subsidiary pursuant to the
terms of any such indenture, instrument or agreement. No order,
consent, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof,
is required to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, any of the Loan Documents.
5.4. FINANCIAL STATEMENTS. The August 31, 1997 consolidated
financial statements of the Borrower and its Subsidiaries heretofore
delivered to the Lenders were prepared in accordance with generally
accepted accounting principles in effect on the date such statements
were prepared and fairly present the consolidated financial condition
and operations of the Borrower and its Subsidiaries at such date and
the consolidated results of their operations for the period then
ended.
5.5. MATERIAL ADVERSE CHANGE. Since August 31, 1997, there has
been no change in the business, properties, prospects, condition
(financial or otherwise) or results of operations of the Borrower and
its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
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5.6. TAXES. The Borrower and its Subsidiaries have filed all
United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by the Borrower or any
of its Subsidiaries, except for the filing of such returns and the
payment of such taxes, if any, as (a) are being contested in good
faith and as to which adequate reserves have been provided or (b) do
not in the aggregate exceed $4,000,000 and the failure to file or pay
for which could not reasonably be expected to have a Material Adverse
Effect. As of the date hereof, the United States income tax returns
of the Borrower and its Subsidiaries have been audited by the Internal
Revenue Service through the fiscal year ended 1997. No tax liens have
been filed other than those permitted pursuant to Section 6.16(a).
The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of any taxes or other governmental charges
are adequate.
5.7. LITIGATION AND CONTINGENT OBLIGATIONS. Except as set forth
in the Borrower's Form 10-K filed with the Securities and Exchange
Commission for its fiscal year ended May 31, 1997, there is no
litigation, arbitration, governmental investigation, proceeding or
inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material
Adverse Effect. Other than any liability incident to such litigation,
arbitration or proceedings, the Borrower has no material contingent
obligations not provided for or disclosed in the Borrower's Form 10-K
filed with the Securities and Exchange Commission for its fiscal year
ended May 31, 1997.
5.8. SUBSIDIARIES. As of the date hereof, Borrower's Form 10-K
filed with the Securities and Exchange Commission for its fiscal year
ended May 31, 1997 contains an accurate description of all of the
Borrower's presently existing Significant Subsidiaries (as defined in
Regulation S-X of the Securities and Exchange Commission). All of the
issued and outstanding shares of capital stock of all of the
Borrower's Subsidiaries have been duly authorized and issued and are
fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer
Plans do not in the aggregate exceed $10,000,000. Neither the
Borrower nor any other member of the Controlled Group has incurred, or
is reasonably expected to incur any withdrawal liability to
Multiemployer Plans in an aggregate amount which, when added to the
aggregate Unfunded Liabilities of all Single Employer Plans, would
exceed of $10,000,000. Each Plan complies in all material respects
with all applicable requirements of law and regulations and no
Reportable Event has occurred with respect to any Plan. Neither the
Borrower nor any other member of the Controlled Group has withdrawn
from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.
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5.10. ACCURACY OF INFORMATION. No information, exhibit or
report furnished by the Borrower or any of its Subsidiaries to the
Lender in connection with the negotiation of, or compliance with, the
Loan Documents contained any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the statements
contained therein not misleading.
5.11. REGULATION U. Margin stock (as defined in Regulation
U) constitutes less than 25% of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or
other restriction hereunder.
5.12. COMPLIANCE WITH LAWS. The Borrower and its
Subsidiaries have complied in all respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the
ownership of their respective properties, except where failure to
comply would not reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any Subsidiary has received any
notice to the effect that its operations are not in material
compliance with any of the requirements of applicable federal, state
and local environmental, health and safety statutes and regulations or
the subject of any federal or state investigation evaluating whether
any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have
a Material Adverse Effect.
5.13. INVESTMENT COMPANY ACT. Neither the Borrower nor any
Subsidiary thereof is an "investment company" or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Lender shall
otherwise consent in writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and
administered in accordance with generally accepted accounting
principles and furnish to the Lenders:
(i) Within 90 days after the close of each of its fiscal
years, an unqualified audit report certified by
independent certified public accountants, acceptable to
the Lender, prepared in accordance with generally
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accepted accounting principles on a consolidated basis
for itself and the Subsidiaries, including balance
sheets as of the end of such period, related profit and
loss and reconciliation of surplus statements, and a
statement of cash flows, accompanied by (a) any
management letter prepared by said accountants, at the
request of the Lender, and (b) a certificate of said
accountants that, in the course of their examination
necessary for their certification of the foregoing,
they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall
exist, stating the nature and status thereof.
(ii) At the request of the Lender, within 90 days after the
close of each fiscal year of the Borrower, for each
active Subsidiary, an unaudited balance sheet as at the
close of such fiscal year and an unaudited profit and
loss statement for such fiscal year, all certified by
the Borrower's chief financial officer or Treasurer.
(iii) Within 60 days after the close of the first three
quarterly periods of each of its fiscal years, for
itself and the Subsidiaries, consolidated unaudited
balance sheets as at the close of each such period and
consolidated profit and loss and reconciliation of
surplus statements and a statement of cash flows for
the period from the beginning of such fiscal year to
the end of such quarter, all certified by the
Borrower's chief financial officer or Treasurer.
(iv) At the request of the Lender, within 60 days after the
close of the first three quarterly periods of each of
its fiscal years, for each active Subsidiary, an
unaudited balance sheet as at the close of each such
period and an unaudited profit and loss statement for
the period from the beginning of such fiscal year to
the end of such quarter, all certified by the
Borrower's chief financial officer or Treasurer.
(v) Together with the financial statements required
hereunder, a compliance certificate in substantially
the form of Exhibit "G" hereto signed by the Borrower's
chief financial officer or Treasurer showing the
calculations necessary to determine compliance with
this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(vi) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single
Employer Plan, certified as correct by an actuary
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enrolled under ERISA, except that the Borrower shall
not be required to deliver such statement for any such
fiscal year to the extent that such information is
specifically set forth in the audit report for such
fiscal year delivered to the Lender pursuant to clause
(i) of this Section 6.1.
(vii) As soon as possible and in any event within 10 days
after the Borrower knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed
by the chief financial officer or Treasurer of the
Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with respect
thereto.
(viii) As soon as possible and in any event within 10 days
after receipt by the Borrower, a copy of (a) any notice
or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a
result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or
hazardous waste or substance into the environment, and
(b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or
regulation by the Borrower or any of its Subsidiaries
which, in the case of either clause (a) or clause (b),
could reasonably be expected to have a Material Adverse
Effect.
(ix) Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all financial
statements, reports and proxy statements so furnished.
(x) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly
or other regular reports which the Borrower or any of
its Subsidiaries files with the Securities and Exchange
Commission.
(xi) Such other information (including non-financial
information) as the Lender may from time to time
reasonably request.
6.2. USE OF PROCEEDS. The Borrower will use the proceeds of the
Advances for the general corporate needs of the Borrower and to repay
outstanding Advances. The Borrower will not use any of the proceeds
of the Advances to (i) purchase or carry any "margin stock" (as
defined in Regulation U), (ii) acquire any security in any transaction
which is subject to Sections 13 and 14 of the Securities Exchange Act
of 1934 or (iii) make any unfriendly Acquisition.
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6.3. NOTICE OF DEFAULT. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lender of (i) the
occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which would have a Material
Adverse Effect, or (ii) any threatened or pending litigation or
governmental proceeding or labor controversy against the Borrower or
any Subsidiary which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect.
6.4. CONDUCT OF BUSINESS. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the
same manner and in substantially the same fields of enterprise as it
is presently conducted and to do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic or
foreign corporation, as the case may be, in its jurisdiction of
incorporation and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted;
PROVIDED, that nothing contained in this Section 6.4 shall prohibit
(a) any Subsidiary from entering into a merger or consolidation
otherwise permitted by Section 6.11 or (b) the liquidation of any
Subsidiary substantially all of whose assets have been transferred to
the Borrower or another Subsidiary in compliance with Section 6.12.
6.5. TAXES. The Borrower will, and will cause each Subsidiary
to, pay when due all taxes, assessments and governmental charges and
levies upon it or its income, profits or property, except those which
(a) are being contested in good faith and as to which adequate
reserves have been provided or (b) do not in the aggregate exceed
$4,000,000 and the failure to pay which could not reasonably be
expected to have a Material Adverse Effect.
6.6. INSURANCE. The Borrower will, and will cause each
Subsidiary to, maintain with financially sound and reputable insurance
companies insurance on all their property in such amounts and covering
such risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as
to the insurance carried.
6.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause
each Subsidiary to, comply in all material respects with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject.
6.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its properties in good repair, working
order and condition, and make all necessary and proper repairs,
renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. INSPECTION. The Borrower will, and will cause each
Subsidiary to, permit the Lender, by its representatives and agents,
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to inspect any of the properties, corporate books and financial
records of the Borrower and each Subsidiary, to examine and make
copies of the books of accounts and other financial records of the
Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised
as to the same by, their respective officers at such reasonable times
and intervals as the Lender may designate.
6.10. RESTRICTED PAYMENTS. The Borrower will not, nor will
it permit any Subsidiary to, declare or make any Restricted Payments,
which together with all Restricted Payments made on or after May 31,
1995 would exceed an amount equal to the sum of (i) $20,000,000 plus
(ii) 50% of Consolidated Net Income for the period commencing June 1,
1994 and extending to and including the last day of the fiscal year of
the Borrower immediately preceding the date on which such Restricted
Payment was made, said period to be taken as one accounting period,
except that:
(a) The Borrower may declare and pay dividends payable
solely in stock of the Borrower of the same class as that on
which such dividend is paid.
(b) The Borrower may purchase, redeem or otherwise acquire
or retire any class of its stock out of the proceeds of, or in
exchange for, a substantially concurrent issue and sale of the
same class of such stock in addition to that now issued and
outstanding.
(c) Any Subsidiary may declare and pay dividends to the
Borrower.
6.11. MERGER. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person,
except that:
(a) Any Domestic Subsidiary may merge or consolidate with
the Borrower (providing the Borrower shall be the continuing or
surviving corporation).
(b) Any Domestic Subsidiary may merge or consolidate with
any other Domestic Subsidiary which is a Wholly-Owned Subsidiary.
(c) Any Foreign Subsidiary may merge or consolidate with
any other Subsidiary which is a Wholly-Owned Subsidiary (provided
that if a Domestic Subsidiary is involved, such Domestic
Subsidiary shall be the continuing or surviving corporation).
6.12. SALE OF ASSETS. The Borrower will not, nor will it
permit any Subsidiary to, sell, lease, transfer, assign or otherwise
dispose of (including, for the avoidance of doubt, in connection with
a sale leaseback transaction), any of its assets (including, for the
avoidance of doubt, the capital stock of Subsidiaries, but excluding
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(i) inventory sold in the ordinary course of the Borrower's or any
Subsidiary's business, (ii) property formerly used in the Borrower's
or any Subsidiary's business which is worn out or obsolete, (iii)
assets of any Domestic Subsidiary transferred to the Borrower or to
another Domestic Subsidiary which is a Wholly-Owned Subsidiary, (iv)
assets of any Foreign Subsidiary transferred to the Borrower or to
another Subsidiary which is a Wholly-Owned Subsidiary, (v) assets
permitted to be sold or otherwise transferred pursuant to Section 6.13
and (vi) promissory note ("Payment Note") received as partial or full
payment for assets sold) if, after giving effect thereto, the sum of
all such assets transferred, assigned or otherwise disposed of during
the twelve-month period ending with (and including) the month of such
disposition either (a) represents more than 10% of Consolidated Assets
determined as of the date of (and after giving effect to) such
disposition or (b) were responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the
Borrower and its Subsidiaries during such twelve-month period.
6.13. SALE OF ACCOUNTS. Anything in Section 6.12 to the
contrary notwithstanding, the Borrower will not, nor will it permit
any Subsidiary to, sell, with or without recourse, transfer, assign,
encumber or otherwise dispose of any of its note or accounts
receivable, leases or chattel paper (collectively referred to in this
Section as "Accounts") to any Person, except that:
(a) The Borrower or any Subsidiary may sell or otherwise
dispose of any of its Accounts to the Borrower or any Subsidiary
on terms and conditions which are in compliance with Section
6.20.
(b) The Borrower or any Subsidiary may enter into any
arrangement with another Person pursuant to which such Person
collects the Accounts of the Borrower or such Subsidiary on
behalf of the Borrower or such Subsidiary, so long as such
arrangement does not provide for any transfer of title to, or any
other interest in, such Accounts to such Person.
(c) The Borrower or any Subsidiary may sell or otherwise
dispose of its Foreign Accounts to any Person for the purposes of
collection, provided that the aggregate face amount of all such
Foreign Accounts so transferred by the Borrower and its
Subsidiaries during any fiscal year of the Borrower shall not
exceed an amount equal to 15% of the gross Accounts of the
Borrower and its Subsidiaries as of the last day of the
Borrower's immediately preceding fiscal year and determined from
the Borrower's consolidated balance sheet delivered pursuant to
Section 6.1(i).
(d) The Borrower or any Subsidiary may sell or otherwise
dispose of its Accounts which arise from the sale of machinery
and equipment and have payment terms longer than 90 days and
payable in installments.
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(e) The Borrower or any Subsidiary may sell or otherwise
dispose of Payment Note as permitted under Section 6.12.
6.14. INVESTMENTS AND ACQUISITIONS. The Borrower will not,
nor will it permit any Subsidiary to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and
other Investments in, Subsidiaries), or commitments therefor, or to
create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any
Person, except:
(a) Short-term obligations of, or fully guaranteed by, the
United States of America.
(b) Commercial paper rated A-1 or better by Standard
and Poor's Corporation or P-1 or better by Xxxxx'x Investors
Service, Inc.
(c) Demand deposit accounts maintained in the ordinary
course of business.
(d) Certificates of deposit issued by and time
deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000.
(e) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof and described in
Schedule "1" hereto.
(f) Loans by the Borrower to its Domestic
Subsidiaries.
(g) Equity Investments by AAR Financial Services Corp.
in leveraged leases of aircraft, aircraft engines and
related products.
(h) Loans by the Borrower and its Subsidiaries to
their respective officers and key employees in an aggregate
amount not to exceed $4,000,000 at any one time outstanding.
(i) Investments in the unrated Xxxxxxx Sachs Money
Market Trust Institution Liquid Asset Fund in an amount not
to exceed $15,000,000 in the aggregate, provided, that if at
any time such Fund changes its investment strategy or risk
profile or is credit rated, it is reasonably acceptable to
the Lender.
(j) Investments evidenced by Payment Note.
(k) Acquisitions by the Borrower and all Subsidiaries
during the term of this Agreement not in excess of an
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aggregate amount equal to 25% of Consolidated Tangible Net
Worth as of the last day of the Borrower's fiscal year
immediately preceding the date on which such Acquisition is
made.
(l) Investments in addition to those permitted under
clauses (a) through (k) of this Section, provided that after
giving effect thereto the aggregate amount of all such
Investments for the Borrower and all Subsidiaries during the
term of this Agreement shall not exceed the greater of (i)
$6,000,000 or (ii) 20% of Consolidated Tangible Net Worth as
of the last day of the Borrower's fiscal year immediately
preceding the date on which any such Investment is made.
In determining the amount of Investments permitted under this
Section, Investments shall always be taken at the original cost
thereof, regardless of any subsequent appreciation or depreciation
therein, and loans and advances shall be taken at the principal amount
thereof then remaining unpaid from time to time.
6.15. CONTINGENT OBLIGATIONS. The Borrower will not, nor
will it permit any Subsidiary to, make or suffer to exist any
Contingent Obligation (including, without limitation, any Contingent
Obligation with respect to the obligations of a Subsidiary), except:
(a) Contingent Obligations resulting from endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of the Borrower's and each
Subsidiary's business.
(b) Contingent Obligations by the Borrower of any
Subsidiary's Indebtedness (including, for the avoidance of doubt,
obligations arising out of overdraft and similar cash management
facilities) permitted to exist pursuant to this Agreement and any
Subsidiary's obligations for Rentals permitted by Section 6.17.
(c) Contingent Obligations by the Borrower or any
Subsidiary (other than those referred to in clause (a)
above) so long as (both before and after giving effect
thereto) the sum of (i) Consolidated Funded Debt plus (ii)
the aggregate amount of Contingent Obligations of the
Borrower and its Subsidiaries does not exceed 50% of
Consolidated Total Capitalization.
6.16. LIENS. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on
the property of the Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or
levies on its property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings and
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for which adequate reserves in accordance with generally accepted
principles of accounting shall have been set aside on its books.
(b) Deposits or pledges to secure performance of bids,
tenders, contracts (other than contracts for the repayment of
Indebtedness), leases, public or statutory obligations, surety or
appeal bonds, or other deposits or pledges for purposes of like
general nature in the ordinary course of the Borrower's business
or any Subsidiary's business.
(c) Liens incurred by the Borrower or any Subsidiary in
connection with the acquisition of property provided such Liens
shall attach only to the property acquired in the transactions in
which such Liens were created or assumed and shall secure only
Indebtedness incurred to finance the cost of acquiring such
property.
(d) Liens arising out of pledges or deposits under workers'
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation.
(e) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations
not more than 60 days past due or which are being contested in
good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on its books.
(f) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in
the business of the Borrower or the Subsidiaries.
(g) Liens existing on the date hereof and described in
Schedule "2" hereto.
(h) Liens which secure only Indebtedness of any Domestic
Subsidiary to the Borrower.
(i) Subject to Section 6.15(c), Liens on property the
purchase of which is being financed by the Borrower or any
Domestic Subsidiary, as the case may be, by letters of credit (or
similar instruments) issued for the account of the Borrower or
any Domestic Subsidiary, as the case may be, provided such Liens
secure only the letter of credit (or similar instrument) which is
being used to finance the purchase of such property and provided
further such Liens attach only to such property.
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(j) Liens incurred by the Borrower in connection with
the real estate located in Wooddale, Illinois, known as the
Corporate Headquarters of the Borrower.
6.17. RENTALS. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any obligation for
Rentals if, as a consequence thereof, obligations for Rentals created,
incurred or suffered to exist in any one fiscal year shall be in an
aggregate consolidated amount for the Borrower and its Subsidiaries in
excess of 5% of Consolidated Revenues as at the end of the Borrower's
fiscal year immediately preceding the date on which such obligation is
entered into, on a non-cumulative basis from year to year. It is
expressly agreed and understood that, for the purposes of this
Section, any contract between the Borrower or any Domestic Subsidiary
and the vendor of aircraft fuel shall not be considered a lease and
any payments made under any such contract by the Borrower or any
Domestic Subsidiary to such vendor shall not be considered a lease
payment.
6.18. RETIREMENT AND MODIFICATION OF SUBORDINATED
INDEBTEDNESS. The Borrower will not, nor will it permit any
Subsidiary to, purchase, acquire, redeem or retire, or make any
payment on account of principal of, any Subordinated Debt except at
the stated maturity thereof or as required by mandatory prepayment
provisions or sinking fund provisions relating thereto. The Borrower
will not, nor will it permit any Subsidiary to, alter, amend, modify,
rescind, terminate or waive, or permit any breach or event of default
to exist under, any note or note evidencing such Subordinated Debt.
6.19. AFFILIATES. The Borrower will not, and will not permit
any Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any property or service) with, or
make any payment or transfer to, any Affiliate except in the ordinary
course of business and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than the
Borrower or such Subsidiary would obtain in a comparable arms-length
transaction.
6.20. WORKING CAPITAL. The Borrower will maintain at all
times a ratio of Consolidated Current Assets to Consolidated Current
Liabilities of at least 1.50 to 1.00.
6.21. CONSOLIDATED TANGIBLE NET WORTH. The Borrower will
maintain at all times Consolidated Tangible Net Worth in an amount not
less than the sum of (a) $160,000,000 plus (b) the net cash proceeds
received by the Borrower from the sale of any of its capital stock on
or after May 31, 1996 plus (c) an amount equal to the aggregate of
one-third of Consolidated Net Income earned during each of its fiscal
years beginning with its fiscal year commencing June 1, 1996, said
fiscal years to be taken as one accounting period minus (d) amounts
(not to exceed $10,000,000 in the aggregate for the purposes of this
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covenant) either used for the purchase or retirement of the Borrower's
capital stock or representing the after tax write-down of assets and
associated costs on or after May 31, 1996.
6.22. RATIO OF CONSOLIDATED LIABILITIES TO CONSOLIDATED
TANGIBLE NET WORTH. The Borrower will maintain at all times
Consolidated Liabilities not in excess of 200% of Consolidated
Tangible Net Worth.
6.23. CONSOLIDATED SECURED LIABILITIES. The Borrower will
maintain at all times Consolidated Secured Liabilities in an amount
not in excess of $20,000,000. For purposes of calculating
Consolidated Secured Liabilities hereunder the obligations of the
Borrower not in excess of $10,000,000, secured by the real estate
located in Wooddale, Illinois, known as the Corporate Headquarters of
the Borrower, shall not be included.
6.24. LIMITATION ON FUNDED DEBT. The Borrower will not
permit the sum of (i) Consolidated Funded Debt plus (ii) the aggregate
amount of Contingent Obligations of the Borrower and its Subsidiaries
to exceed 50% of Consolidated Total Capitalization.
6.25. FIXED CHARGE COVERAGE RATIO. The Borrower will
maintain a Fixed Charge Coverage Ratio of not less than 1.20:1:00 as
of the last day of each fiscal quarter of the Borrower commencing on
the date immediately preceding the Revolving Credit Termination Date
and thereafter. The Fixed Charge Coverage Ratio shall be determined
based on four (4) of the previous five (5) fiscal quarters of the
Borrower that occurred immediately prior to the calculation date, at
the Borrower's option.
As used herein the following terms have the following meanings:
"Fixed Charge Coverage Ratio" means, for any period, the
ratio of (a) Consolidated Earnings Available for Fixed
Charges to (b) Consolidated Fixed Charges for such period.
"Consolidated Earnings Available for Fixed Charges" means,
for any period, the sum of (i) Consolidated Net Income
(excluding gains and losses from the sale of assets other
than in the ordinary course of business and income or losses
derived from discontinued operations), PLUS to the extent
deducted in determining Consolidated Net Income (ii) all
provisions for any federal, state, or other income taxes
made by the Borrower and its Subsidiaries during such
period, PLUS (iii) Consolidated Fixed Charges during such
period, and PLUS (v) deferred financing costs for such
period.
"Consolidated Fixed Charges" means, without duplication, for
any period, the sum of (i) current maturities for such
period, (ii) interest expense on indebtedness (excluding
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capitalized leases) for such period, PLUS (iii) total rental
expense under all leases other than capitalized leases, and
PLUS (iv) imputed interest expense under capitalized leases
for the Borrower and its Subsidiaries for such period.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made (or deemed made pursuant
to Section 4.2) by or on behalf of the Borrower or any of its
Subsidiaries to the Lender under or in connection with this Agreement,
any Advance, any Letter of Credit, any Application or any certificate
or information delivered in connection with this Agreement or any
other Loan Document shall be materially false on the date as of which
made.
7.2. Nonpayment of principal of the Note when due, or nonpayment
of interest upon the Note or of any commitment fee or other
obligations under any of the Loan Documents within five Borrowing Days
after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions
of Section 6.2, 6.3, 6.10 or 6.19; or the breach by the Borrower of
any of the terms or provisions of Section 6.11, 6.12, 6.13, 6.14,
6.15, 6.16, 6.17, 6.18 or 6.20 which is not remedied within 10 days
after written notice from the Lender.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the
terms or provisions of this Agreement which is not remedied within 30
days after written notice from the Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay
any Indebtedness (other than the Obligations) in an aggregate
principal amount exceeding $2,000,000 when due; or the default by the
Borrower or any of its Subsidiaries in the performance of any term,
provision or condition contained in any agreement or agreements under
which any Indebtedness (other than the Obligations) in an aggregate
principal amount exceeding $2,000,000 was created or is governed, or
any other event shall occur or condition exist, the effect of which is
to cause, or to permit the holder or holders of such Indebtedness to
cause, such Indebtedness to become due prior to its stated maturity;
or any Indebtedness of the Borrower or any of its Subsidiaries (other
than the Obligations) in an aggregate principal amount exceeding
$2,000,000 shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the
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stated maturity thereof; or the Borrower or any of its Subsidiaries
shall not pay, or admit in writing its inability to pay, its debts
generally as they become due.
7.6. The Borrower or any of its Domestic Subsidiaries shall (i)
have an order for relief entered with respect to it under the Federal
bankruptcy laws as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial
part of its property, (iv) institute any proceeding seeking an order
for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying the material allegations
of any such proceeding filed against it, (v) take any corporate action
to authorize or effect any of the foregoing actions set forth in this
Section 7.6 or (vi) fail to contest in good faith any appointment or
proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower
or any of its Domestic Subsidiaries, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or
any of its Domestic Subsidiaries or any substantial part of its
property, or a proceeding described in Section 7.6(iv) shall be
instituted against the Borrower or any of its Domestic Subsidiaries
and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 30 consecutive days.
7.8. Any Foreign Subsidiary shall have taken or instituted or
permitted to be taken or instituted any action or proceeding, or any
such action or proceeding is instituted against such Foreign
Subsidiary, whereby a substantial amount of its property shall or may
be assigned or in any manner transferred or delivered to any receiver,
assignee, liquidator or other Person, whether appointed by such
Foreign Subsidiary or by a court or by any governmental authority or
any law, whereby such property shall or may be distributed among the
creditors of such Foreign Subsidiary, provided the aggregate claims of
all such creditors against such Foreign Subsidiary or against all such
Foreign Subsidiaries shall exceed $1,000,000 and such action or
proceeding remains undismissed or unstayed on appeal for a period of
90 days; or any governmental authority having jurisdiction shall have
taken or instituted any action or proceeding for the dissolution or
disestablishment of any Foreign Subsidiary or for the suspension of
its operations, provided the assets of any such Foreign Subsidiary or
the aggregate assets of all such Foreign Subsidiaries shall exceed
$500,000 and such action or proceeding remains undismissed or unstayed
on appeal for a period of 90 days; or all of the property of any
Foreign Subsidiary shall have been condemned, seized or appropriated,
provided the net assets of any such Foreign Subsidiary or the
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aggregate net assets of all such Foreign Subsidiaries shall exceed
$1,000,000; or the total of all claims against any Foreign Subsidiary
or all Foreign Subsidiaries resulting from any action or proceeding
described in this Section 7.8 and the amount of assets or net assets,
as the case may be, of any Foreign Subsidiary or all Foreign
Subsidiaries which are subject to any action, proceeding,
condemnation, seizure or appropriation described in this Section 7.8
shall exceed $1,000,000.
7.9. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of all or
any substantial portion of the property of the Borrower or any of its
Subsidiaries.
7.10. The Borrower or any of its Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge any judgment or
order for the payment of money in excess of $1,000,000, which is not
stayed on appeal or otherwise being appropriately contested in good
faith.
7.11. The Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $10,000,000; or any Reportable Event
shall occur in connection with any Plan; or the Borrower or any other
member of the Controlled Group shall have been notified by the sponsor
of a Multiemployer Plan that it has incurred withdrawal liability to
such Multiemployer Plan in an amount which, when aggregated with all
Unfunded Liabilities of all Single Employer Plans and all other
amounts required to be paid to Multiemployer Plans by the Borrower or
any other member of the Controlled Group as withdrawal liability,
exceeds $10,000,000.
7.12. Any court, government or governmental agency shall find
or hold, or formally notify the Borrower or any Subsidiary, that the
Borrower or any Subsidiary (i) has violated any federal, state or
local environmental, health or safety law or regulation, or (ii) bears
responsibility for any removal or remedial or similar action in
connection with the release by the Borrower or any other Person of any
toxic or hazardous waste or substance into the environment, or is
otherwise liable in any manner in connection with any such release;
and such finding, holding or notification could reasonably be expected
(taking into account the expected outcome of any legal appeals
available to the Borrower or such Subsidiary, as well as the
likelihood and extent of contribution from any other Persons who may
be jointly and severally liable with the Borrower or such Subsidiary)
to have a material adverse effect on the ability of the Borrower to
perform its obligations under the Loan Documents.
7.13. Any Change in Control shall occur.
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. ACCELERATION. If any Default described in Section 7.6 or
7.7 occurs with respect to the Borrower, the obligations of the Lender
to make Advances and to issue Letters of Credit hereunder shall
automatically terminate and the Obligations shall immediately become
due and payable without any election or action on the part of the
Lender. If any other Default occurs, the Lender may terminate or
suspend the obligations of the Lender to make Advances and to issue
Letters of Credit hereunder, or by written notice to the Borrower
declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without
presentment, demand, protest or further notice of any kind, all of
which the Borrower hereby expressly waives. The Lender agrees to give
the Borrower prompt subsequent notice of any termination or suspension
of the obligations of the Lender to make Advances and to issue Letters
of Credit hereunder; PROVIDED, that the giving of such notice shall
not be a condition to the effectiveness of any such termination or
suspension.
8.2. AMENDMENTS. The provisions of this Agreement and of each
other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Lender.
8.3. PRESERVATION OF RIGHTS; WAIVERS, ETC. No delay or omission
of the Lender to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of an Advance or issuance of a
Letter of Credit notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such
Advance or issuance of a Letter of Credit shall not constitute any
waiver or acquiescence. Any single or partial exercise of any such
right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lender, and
then only to the extent in such writing specifically set forth. All
remedies contained in the Loan Documents or by law afforded shall be
cumulative and all shall be available to the Lender until the
Obligations have been paid in full.
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ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the Borrower contained in this Agreement shall survive
delivery of the Note, the making of the Advances and the issuance of
the Letters of Credit herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, the Lender shall not be
obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or
regulation.
9.3. TAXES. Any taxes (excluding federal income taxes on the
overall net income of any Lender) or other similar assessments or
charges payable or ruled payable by any governmental authority in
respect of the Loan Documents shall be paid by the Borrower, together
with interest and penalties, if any.
9.4. HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation
of any of the provisions of the Loan Documents.
9.5. ENTIRE AGREEMENT. The Loan Documents embody the entire
agreement and understanding between the Borrower and the Lender and
supersede all prior agreements and understandings between the Borrower
and the Lender relating to the subject matter thereof.
9.6. BENEFITS OF THIS AGREEMENT. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other
than the parties to this Agreement and their respective successors and
assigns.
9.7. EXPENSES; INDEMNIFICATION. The Borrower shall reimburse the
Lender for any and all reasonable costs and out-of-pocket expenses
(including attorneys' fees and time charges of attorneys for the
Lender, which attorneys may be employees of the Lender) paid or
incurred by the Lender in connection with the preparation,
negotiation, execution, delivery, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to
reimburse the Lender for any and all reasonable costs and
out-of-pocket expenses (including attorneys' fees and time charges of
attorneys for the Lender, which attorneys may be employees of the
Lender) paid or incurred by the Lender in connection with the
collection and enforcement of the Loan Documents. The Borrower
further agrees to indemnify the Lender, its directors, officers and
employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Lender is a
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party thereto) which any of them may pay or incur arising out of any
term or condition contained in this Agreement or the other Loan
Documents, or the direct or indirect application or proposed
application of the proceeds of any Advance or Letter of Credit
hereunder, except to the extent any of the foregoing arises solely
from the gross negligence or wilful misconduct of the party requesting
indemnification. The obligations of the Borrower under this Section
shall survive the termination of this Agreement.
9.8. [Intentionally Omitted].
9.9. ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles.
9.10. SEVERABILITY OF PROVISIONS. Any provision in any Loan
Document
that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative,
unenforceable, or invalid without affecting the remaining provisions
in that jurisdiction or the operation, enforceability, or validity of
that provision in any other jurisdiction, and to this end the
provisions of all Loan Documents are declared to be severable.
9.11. NONLIABILITY OF THE LENDER. The relationship between
the Borrower and the Lender shall be solely that of borrower and
lender. The Lender shall not have any fiduciary responsibilities to
the Borrower. The Lender does not undertake any responsibility to the
Borrower to review or inform the Borrower of any matter in connection
with any phase of the Borrower's business or operations.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER AND THE LENDER
EACH HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND THE BORROWER AND THE LENDER EACH HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
BORROWER TO BRING PROCEEDINGS AGAINST THE LENDER, OR THE RIGHT OF THE
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER, IN THE COURTS OF ANY
OTHER JURISDICTION.
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9.14. CONFIDENTIALITY. The Lender agrees to use any
confidential information which it may receive from the Borrower
pursuant to this Agreement solely for the purposes of administering
and monitoring this Agreement and to hold such confidential
information in confidence, except for disclosure (i) to its
Affiliates, (ii) to legal counsel, accountants, and other professional
advisors to the Lender who are advised of and agree to be bound by
this Section 9.14, (iii) to regulatory officials, (iv) as requested
pursuant to or as required by law, regulation, or legal process, (v)
in connection with any legal proceeding to which the Lender is a
party, and (vi) permitted by Section 12.4; PROVIDED that in the case
of each of the preceding clauses (iv) and (v), such Lender agrees, to
the extent reasonably possible and to the extent that it is legally
permitted to do so, to give the Borrower prior notice of such
disclosure and not resist any efforts by the Borrower to obtain
confidential treatment therefor.
9.15. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT
OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE X
[Intentionally Omitted]
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. SETOFF. In addition to, and without limitation of, any
rights of the Lender under applicable law, so long as any Default has
occurred and is continuing, any indebtedness from the Lender to the
Borrower (including all account balances, whether provisional or final
and whether or not collected or available) may be offset and applied
toward the payment of the Obligations then due and owing to the
Lender.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit of
the Borrower and the Lender and their respective successors and
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assigns, except that (i) the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents and (ii) any
assignment by the Lender must be made in compliance with Section 12.3.
Notwithstanding clause (ii) of this Section, the Lender may at any
time, without the consent of the Borrower, assign all or any portion
of its rights under this Agreement and the Note to a Federal Reserve
Bank; provided, however, that no such assignment shall release the
transferor Lender from its obligations hereunder. Any assignee or
transferee of the Note agrees by acceptance thereof to be bound by all
the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of the Note,
shall be conclusive and binding on any subsequent holder, transferee
or assignee of the Note or of any Note or Notes issued in exchange
therefor.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. The Lender may,
in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Advance,
any Letter of Credit, the Note, the Commitment or any other
interest of the Lender under the Loan Documents. The Lender
selling such participating interests to a Participant agrees to
promptly notify the Borrower of such sale and the identity of
such Participant. In the event of any such sale by the Lender of
participating interests to a Participant, the Lender's
obligations under the Loan Documents shall remain unchanged, the
Lender shall remain solely responsible for the performance of
such obligations, the Lender shall remain the holder of the Note
for all purposes under the Loan Documents, and the Borrower shall
continue to deal solely and directly with the Lender in
connection with the Lender's rights and obligations under the
Loan Documents.
12.2.2. VOTING RIGHTS. The Lender shall retain the sole
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with
respect to any Advance, Letter of Credit or Commitment in which
such Participant has an interest which forgives principal,
interest or fees or reduces the interest rate or fees payable
with respect to any such Advance, Letter of Credit or Commitment,
postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Advance, Letter of
Credit or Commitment, releases any guarantor of any such Advance
or Letter of Credit or releases any substantial portion of
collateral, if any, securing any such Advance or Letter of
Credit.
-44-
12.2.3. BENEFIT OF SETOFF. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided
in Section 11.1 in respect of its participating interest in
amounts owing under the Loan Documents to the same extent as if
the amount of its participating interest were owing directly to
it as the Lender under the Loan Documents.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. The Lender may, in the
ordinary course of its business and in accordance with applicable
law, at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations
under the Loan Documents. Unless a Default has occurred and is
continuing, the consent of the Borrower shall be required prior
to an assignment becoming effective with respect to a Purchaser
which is not an Affiliate of the Lender.
12.3.2. [Intentionally Omitted].
12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes
the Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law
(each a "Transferee") and any prospective Transferee any and all
information in the Lender's possession concerning the creditworthiness
of the Borrower and its Subsidiaries; provided that each Transferee
and prospective Transferee agrees in writing for the benefit of the
Borrower to be bound by Section 9.14.
ARTICLE XIII
NOTICES
-------
13.1. GIVING NOTICE. Except as otherwise permitted by
Section 2.20 with respect to Borrowing Notices and Eurodollar
Conversion Notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall
be in writing or by facsimile and addressed or delivered to such party
at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if
transmitted by facsimile, shall be deemed given when transmitted.
13.2. CHANGE OF ADDRESS. The Borrower and the Lender may
each change the address for service of notice upon it by a notice in
writing to the other party hereto.
-45-
ARTICLE XIV
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one agreement, and any of the
parties hereto may execute this Agreement by signing any such
counterpart.
IN WITNESS WHEREOF, the Borrower and the Lender have executed
this Agreement as of the date first above written.
AAR CORP.
By:___________________________________
Title:________________________________
0000 Xxxxx Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx
Vice President-Chief
Financial Officer and
Treasurer
THE NORTHERN TRUST COMPANY
By:___________________________________
Title:________________________________
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxx
Vice President
-46-
SCHEDULE "l"
OTHER INVESTMENTS
(See Section 6.14)
Investment Investment Amount of
In By Investment
---------- ---------- ----------
NONE
SCHEDULE "2"
LIENS
(See Section 6.16)
Mortgage lien on facilities located in Frankfort, New York to secure
indebtedness of Subsidiary AAR Engine Component Services, Inc. to
Norstar Bank in connection with Industrial Revenue Bond financing of
such facilities.
Mortgage lien on facilities located in Aberdeen, North Carolina to
secure indebtedness of Subsidiary AAR Xxxxxx and Xxxxxxx Corp. to
North Carolina National Bank in connection with Industrial Revenue
Bond financing of such facilities.
Security interest in aircraft and related equipment to secure
indebtedness of AAR Financial Services Corp. in connection with
ownership of such aircraft and related equipment.
EXHIBIT "A"
NOTE
$10,000,000 Chicago, Illinois
November 1, 1997
For value received, AAR CORP., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of THE NORTHERN TRUST
COMPANY (the "Lender") in lawful money of the United States of America
in immediately available funds, at the office of the Lender, 00 Xxxxx
Xx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 the principal sum of TEN
MILLION AND NO/100 DOLLARS ($10,000,000) or, if less, the aggregate
unpaid principal amount of all Advances made by the Lender to the
Borrower pursuant to the Credit Agreement referred to below on the
dates set forth in the Credit Agreement. The Borrower shall pay the
principal of the Advances in full on the Facility Termination Date and
shall make such other mandatory payments as are required to be made
pursuant to the Credit Agreement.
Borrower also promises to pay interest to the Lender on the
unpaid principal amount owing hereunder from time to time in like
money at said office from the date hereof until paid in full at the
rates and the times provided in the Agreement. Interest also shall be
payable on any overdue payment of principal and (tho the extent
permitted by law) interest as provided in the Agreement.
This Note is issued pursuant to, and is entitled to the benefits
of, the Credit Agreement, dated as of November 1, 1997, as it may be
amended, supplemented, extended or otherwise modified from time to
time, between the Borrower and the Lender (the "Credit Agreement").
Reference is hereby made to the Credit Agreement for a statement of
the terms and conditions governing this Note, including the terms and
conditions under which this Note may be prepaid or its maturity date
accelerated. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Credit
Agreement.
This Note may, subject to the terms of the Agreement, be declared
(without demand, notice or legal process of any kind other than as
expressly specified in the Agreement) and thereupon immediately shall
become due and payable. The Borrower hereby waives presentment,
demand, protest, notice of protest, notice of demand and notice of
non-payment hereof.
If, as a result of any circumstance whatsoever, the fulfillment
of any payment obligation under this Note would result in a violation
of any applicable usury statute or any other similar law, then the
payment obligation to be fulfilled will be reduced to the limit
provided in such statute or law, so that in no event shall any payment
of or requirement to pay interest under this Note be in excess of the
limit established by any such statute or law. In no event shall the
Borrower be bound to pay interest in any amount in excess of the legal
limit for the use, forbearance or detention of money.
The validity, construction and enforcement of this Note and the
rights and obligations of the holder and the Borrower hereunder, shall
be governed by and construed in accordance with the substantive laws
of the State of Illinois (without regard to conflicts of law
principles).
The Borrower irrevocably consents to the service or process in
any action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Borrower, such
service to be effective ten (10) days after such mailing. The
Borrower absolutely and irrevocably consents and submits to the
jurisdiction of the courts of the State of Illinois and of any Federal
court located in such State in connection with any action or
proceeding brought against the Borrower by the Lender arising out of
or relating to this Note. Nothing herein shall affect the right of
the Lender to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower
in any other jurisdiction.
THE BORROWER ABSOLUTELY AND IRREVOCABLY WAIVES TRIAL BY JURY AND
ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
THE BORROWER MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING, INCLUDING WITH RESPECT TO ANY MATTER WHICH MIGHT
BE ASSERTED AGAINST THE BORROWER, IN ANY SUCH ACTION OR PROCEEDING.
AAR CORP.
By:_______________________________
Title:____________________________
-2-
EXHIBIT "B"
EXTENSION LETTER
____________, 19__
To: The Northern Trust Company
Re: Proposed Extension of the Revolving Credit Termination Date
-----------------------------------------------------------
DATE
Ladies/Gentlemen:
We make reference to that certain Credit Agreement dated as of
November 1, 1997, between AAR Corp. and The Northern Trust Company, as
it may from time to time be amended, modified, renewed or extended
(the "Credit Agreement"). All capitalized terms used herein shall have
the meanings attributed to them in the Credit Agreement.
The Revolving Credit Termination Date currently in effect under
the Credit Agreement is __________, 19__.
The Borrower desires to extend the Revolving Credit Termination
Date by one year and accordingly requests hereby that the Lenders
agree to extend the Revolving Credit Termination Date to __________,
19__.
If the foregoing proposed extension of the Revolving Credit
Termination Date meets with your approval, please so indicate by
executing and returning to the Borrower the accompanying copy of this
letter. Upon receipt by the Borrower of this letter executed by the
Lender, the Revolving Credit Termination Date under the Credit
Agreement shall henceforth be __________, 19__.
Sincerely yours,
AAR CORP.
By:________________________________
Title:_____________________________
ACCEPTED AND AGREED TO:
THE NORTHERN TRUST COMPANY
By:____________________________
Title:_________________________
EXHIBIT "C"
BORROWING NOTICE
_______________, 19__
To: The Northern Trust Company
Re: Borrowing Notice
----------------
Ladies/Gentlemen:
We make reference to that certain Credit Agreement dated as of
November 1, 1997, between AAR Corp. and The Northern Trust Company, as
it may from time to time be amended, modified, renewed or extended
(the "Credit Agreement"). All capitalized terms used herein shall have
the meanings attributed to them in the Credit Agreement.
The Borrower hereby gives irrevocable notice pursuant to Section
2.10 of the Credit Agreement for the following Advance(s):
Borrowing Date: ______________, 19__1
Principal Amount2 Type of Advance3 Interest Period4
---------------- --------------- ---------------
Sincerely yours,
AAR CORP.
By:________________________________
Title:_____________________________
1 Borrowing Date must be a Business Day prior to or on the
Revolving Credit Termination Date.
2 Subject to the minimum amount requirements set forth in Section
2.8.
3 Specify Floating Rate Advance or Eurodollar Advance.
4 Applicable to Eurodollar Advances only. See definition of
Interest Period and Section 2.14 (Restrictions on Interest
Periods).
EXHIBIT "D"
FORM OF LETTER OF CREDIT APPLICATION
EXHIBIT "E"
November __, 1997
The Northern Trust Company
00 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Gentlemen/Ladies:
We are counsel for AAR Corp., a Delaware corporation (the
"Borrower"), and have represented the Borrower in connection with its
execution and delivery of a Credit Agreement dated as of November 1,
1997 between the Borrower and The Northern Trust Company (the
"Lender"), providing for Advances in an aggregate principal amount not
exceeding $10,000,000 at any one time outstanding (the "Agreement").
All capitalized terms used in this opinion and not otherwise defined
shall have the meanings attributed to them in the Agreement.
We have examined the Borrower's articles of incorporation,
by-laws, resolutions, the Loan Documents and such other matters of
fact and law which we deem necessary in order to render this opinion.
Based upon the foregoing, it is our opinion that:
1. The Borrower and each Subsidiary are corporations duly
incorporated, validly existing and in good standing under the laws of
their states of incorporation and have all requisite authority to
conduct their business in each jurisdiction in which their business is
conducted.
2. The execution and delivery of the Loan Documents by the
Borrower and the performance by the Borrower of the Obligations have
been duly authorized by all necessary corporate action and proceedings
on the part of the Borrower and will not:
(a) require any consent of the Borrower's shareholders;
(b) violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or
any of its Subsidiaries or the Borrower's or any Subsidiary's
articles of incorporation or by-laws or any indenture, instrument
or agreement binding upon the Borrower or any of its
Subsidiaries; or
(c) result in, or require, the creation or imposition of
any Lien pursuant to the provisions of any indenture, instrument
or agreement binding upon the Borrower or any of its
Subsidiaries.
3. The Loan Documents have been duly executed and delivered by
the Borrower and constitute legal, valid and binding obligations of
the Borrower enforceable in accordance with their terms except to the
extent the enforcement thereof may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors,
rights generally and subject also to the availability of equitable
remedies if equitable remedies are sought.
4. Except as set forth in the Borrower's Form 10-K filed with
the Securities and Exchange Commission for its fiscal year ended May
31, 1997, there is no litigation or proceeding against the Borrower or
any of its Subsidiaries which, if adversely determined, could have a
Material Adverse Effect.
5. No approval, authorization, consent, adjudication or order
of any governmental authority, which has not been obtained by the
Borrower or any of its Subsidiaries, is required to be obtained by the
Borrower or any of its Subsidiaries in connection with the execution
and delivery of the Loan Documents, the borrowings under the Agreement
or in connection with the payment by the Borrower of the Obligations.
This opinion may be relied upon by the Lender and its
participants, assignees and other transferees.
Very truly yours,
___________________________________
-2-
EXHIBIT "F"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The Northern Trust Company
00 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Credit Agreement, dated as of November 1, 1997 (as the same may
be amended or modified, the "Credit Agreement"), between AAR
Corp. and The Northern Trust Company.
Terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Credit Agreement.
The Lender is specifically authorized and directed to act upon
the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time
until receipt by the Lender of a specific written revocation of such
instructions by the Borrower, provided, however, that the Lender may
otherwise transfer funds as hereafter directed in writing by the
Borrower in accordance with Section 13.1 of the Credit Agreement or
based on any telephonic notice made in accordance with Section 2.20 of
the Credit Agreement.
Facility Identification Number(s) ____________________________________
Customer/Account Name ________________________________________________
Transfer Funds To ____________________________________________________
____________________________________________________
____________________________________________________
For Account No. ____________________________________________________
Reference/Attention To _______________________________________________
Authorized Officer (Customer
Representative) Date _________________________
_________________________________ ________________________________
(Please Print) Signature
Bank Officer Name Date Date _________________________
_________________________________ ________________________________
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate
Processing)
-2-
EXHIBIT "G"
COMPLIANCE CERTIFICATE
To: The Northern Trust Company
00 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of November 1, 1997 (as amended, modified,
renewed or extended from time to time, the "Agreement") between AAR
Corp. and The Northern Trust Company. Unless otherwise defined
herein, capitalized terms used in this Compliance Certificate have the
meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFY THAT:
1. I am the duly elected ___________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of
the transactions and conditions of the Borrower and its Subsidiaries
during the accounting period covered by the attached financial
statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event
which constitutes a Default or Unmatured Default during or at the end
of the accounting period covered by the attached financial statements
or as of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain
covenants of the Agreement, all of which data and computations are
true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period
during which it has existed and the action which the Borrower has
taken, is taking, or proposes to take with respect to each such
condition or event:
______________________________________________________
______________________________________________________
______________________________________________________
The foregoing certifications, together with the computations set
forth in Schedule I hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this _____
day of _______________, 19__.
__________________________________
-2-
[SAMPLE]
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule Of Compliance as of __________, 19__ with Provisions
of Sections 6.21, 6.22, 6.23, 6.24, 6.25 and 6.26 of the Agreement
