EXHIBIT 4.7
AAR CORP.
$50,000,000
CREDIT FACILITY
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF FEBRUARY 10, 1998
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THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.1 The Advances. . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Extension of Revolving Credit Termination Date. . . . . . . . . 12
2.3 Mandatory Payment . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5 Optional Reductions in Aggregate Commitment . . . . . . . . . . 13
2.6 Ratable Loan. . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.7 Types of Advances . . . . . . . . . . . . . . . . . . . . . . . 13
2.8 Minimum Amount of Each Advance. . . . . . . . . . . . . . . . . 13
2.9 Optional Principal Payments . . . . . . . . . . . . . . . . . . 14
2.10 Method of Selecting Types and Interest Periods
for New U.S. Dollar Advances . . . . . . . . . . . . . . 14
2.11 Method of Requesting Alternate Currency Advances. . . . . . . . 14
2.12 Making the Loans. . . . . . . . . . . . . . . . . . . . . . . . 15
2.13 Conversion and Continuation of
Outstanding U.S. Dollar Advances . . . . . . . . . . . . 15
2.14 Restrictions on Interest Period . . . . . . . . . . . . . . . . 16
2.15 Changes in Interest Rate, etc.. . . . . . . . . . . . . . . . . 16
2.16 Rates Applicable After Default. . . . . . . . . . . . . . . . . 17
2.17 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . 17
2.18 Foreign Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.19 Judgement Currency. . . . . . . . . . . . . . . . . . . . . . . 19
2.20 Notes; Telephonic Notice. . . . . . . . . . . . . . . . . . . . 19
2.21 Interest Payment Dates;
Interest and Fee Basis . . . . . . . . . . . . . . . . . 19
2.22 Notification of Advances, Interest Rates
Prepayments and Commitment Reductions. . . . . . . . . . 20
2.23 Lending Installations . . . . . . . . . . . . . . . . . . . . . 20
2.24 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . . 20
2.25 Withholding Tax Exemption . . . . . . . . . . . . . . . . . . . 21
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ARTICLE III. CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . 21
3.1. Yield Protection. . . . . . . . . . . . . . . . . . . . . . . . 21
3.2. Changes in Capital Adequacy Regulations . . . . . . . . . . . . 22
3.3. Availability of Eurodollar Advances . . . . . . . . . . . . . . 22
3.4. Funding Indemnification . . . . . . . . . . . . . . . . . . . . 22
3.5. Lender Statements; Survival of Indemnity. . . . . . . . . . . . 23
3.6. Refund to Borrower. . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . 23
4.1. Conditions Precedent to the Restatement Effective Date. . . . . 23
4.2. Each Advance. . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 25
5.1. Corporate Existence and Standing. . . . . . . . . . . . . . . . 25
5.2. Authorization and Validity. . . . . . . . . . . . . . . . . . . 25
5.3. No Conflict; Government Consent . . . . . . . . . . . . . . . . 25
5.4. Financial Statements. . . . . . . . . . . . . . . . . . . . . . 25
5.5. Material Adverse Change . . . . . . . . . . . . . . . . . . . . 25
5.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.7. Litigation and Contingent Obligations . . . . . . . . . . . . . 26
5.8. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.9. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.10. Accuracy of Information . . . . . . . . . . . . . . . . . . . . 26
5.11. Regulation U. . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.12. Compliance With Laws. . . . . . . . . . . . . . . . . . . . . . 27
5.13. Investment Company Act. . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VI. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.1. Financial Reporting . . . . . . . . . . . . . . . . . . . . . . 27
6.2. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 29
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. . . . . . . . . . . . . . . . . . . . . . 30
6.8. Maintenance of Properties . . . . . . . . . . . . . . . . . . . 30
6.9. Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.10. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . 30
6.11. Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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6.12. Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . 31
6.13. Sale of Accounts. . . . . . . . . . . . . . . . . . . . . . . . 31
6.14. Investments and Acquisitions. . . . . . . . . . . . . . . . . . 32
6.15. Contingent Obligations. . . . . . . . . . . . . . . . . . . . . 33
6.16. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.17. Bank of America Agreement . . . . . . . . . . . . . . . . . . . 34
6.18. Rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.19. Retirement and Modification of Subordinated Indebtedness . . . 34
6.20. Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.21. Working Capital . . . . . . . . . . . . . . . . . . . . . . . . 35
6.22. Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . 35
6.23. Ratio of Consolidated Liabilities to
Consolidated Tangible Net Worth. . . . . . . . . . . 35
6.24. Consolidated Secured Liabilities. . . . . . . . . . . . . . . . 35
6.25. Limitation on Funded Debt . . . . . . . . . . . . . . . . . . . 35
6.26. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . 35
ARTICLE VII. DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES. . . . . . . . . 38
8.1. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.2. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.3. Preservation of Rights. . . . . . . . . . . . . . . . . . . . . 39
ARTICLE IX. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 40
9.1. Survival of Representations . . . . . . . . . . . . . . . . . . 40
9.2. Governmental Regulations. . . . . . . . . . . . . . . . . . . . 40
9.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.4. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.5. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . 40
9.6. Several Obligations; Benefits of this Agreement . . . . . . . . 40
9.7. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . 40
9.8. Numbers of Documents. . . . . . . . . . . . . . . . . . . . . . 41
9.9. Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.10. Severability of Provisions. . . . . . . . . . . . . . . . . . . 41
9.11. Nonliability of Lenders . . . . . . . . . . . . . . . . . . . . 41
9.12. Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.13. Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . 41
9.14. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 41
9.15. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . 42
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ARTICLE X. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.2. Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.3. General Immunity. . . . . . . . . . . . . . . . . . . . . . . . 42
10.4. No Responsibility for Loans, Recitals, Etc. . . . . . . . . . . 43
10.5. Action on Instructions of Lenders . . . . . . . . . . . . . . . 43
10.6. Employment of Agents and Counsel. . . . . . . . . . . . . . . . 43
10.7. Reliance on Documents; Counsel. . . . . . . . . . . . . . . . . 43
10.8. Agent's Reimbursement and Indemnification . . . . . . . . . . . 43
10.9. Rights as a Lender. . . . . . . . . . . . . . . . . . . . . . . 44
10.10. Lender Credit Decision. . . . . . . . . . . . . . . . . . . . . 44
10.11. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . 44
10.12. Delegation to Affiliates. . . . . . . . . . . . . . . . . . . . 44
ARTICLE XI. SETOFF; RATABLE PAYMENTS. . . . . . . . . . . . . . . . . . . . 45
11.1. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.2. Ratable Payments. . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . 45
12.1. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . 45
12.2. Participations. . . . . . . . . . . . . . . . . . . . . . . . . 46
12.2.1. Permitted Participants; Effect. . . . . . . . . . . . . 46
12.2.2. Voting Rights . . . . . . . . . . . . . . . . . . . . . 46
12.2.3. Benefit of Setoff . . . . . . . . . . . . . . . . . . . 46
12.3. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.3.1. Permitted Assignments . . . . . . . . . . . . . . . . . 46
12.3.2. Effect; Effective Date. . . . . . . . . . . . . . . . . 47
12.4. Dissemination of Information. . . . . . . . . . . . . . . . . . 47
12.5. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE XIII. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.1. Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.2. Change of Address . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XIV. COUNTERPARTS, TERMINATION OF ORIGINAL CREDIT AGREEMENT
AND EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . 48
SCHEDULES AND EXHIBITS
Schedule "1" - Other Investments
Schedule "2" - Liens
Exhibit "A" - Note
Exhibit "B" - Extension Letter
Exhibit "C" - Borrowing Notice
Exhibit "D" - Alternate Currency Borrowing Request
Exhibit "E" - Opinion
Exhibit "F" - Transfer Instructions
Exhibit "G" - Compliance Certificate
Exhibit "H" - Assignment Agreement
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 10,
1998, amending and restating the AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of October 7, 1996, which amended and restated the CREDIT AGREEMENT, dated
as of October 15, 1991, among AAR CORP., a Delaware corporation, the Lenders
from time to time party hereto, and THE FIRST NATIONAL BANK OF CHICAGO, as
Agent for the Lenders.
WITNESSETH:
WHEREAS, the Borrower and the Lenders are party to a Credit Agreement,
dated as of October 15, 1991, as amended and restated by that certain Amended
and Restated Credit Agreement, dated as of October 7, 1996 (as amended, the
"Original Credit Agreement"); and
WHEREAS, the parties hereto agree that the Original Credit Agreement
shall be and hereby is amended and restated in its entirety as follows,
provided that if the Restatement Effective Date has not occurred on or prior
to February 27, 1998, this amendment and restatement shall be void and of no
further effect, with the Original Credit Agreement to remain in effect:
ARTICLE I
DEFINITIONS
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 the several Loans made by the Lenders to the Borrower which are
(a) denominated in the same currency, (b) of the same Type and (c) in the
case of Fixed Rate 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.
"Agent" means The First National Bank of Chicago in its capacity as
agent for the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this second amended and restated credit agreement, as
it may by 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 Corporate Base Rate for such day and (ii) the
sum of Federal Funds Effective Rate for such day plus 1/2% per annum.
"Alternative Currency" means, with respect to an Alternative Currency
Advance, such currency (which shall be freely transferable and convertible
into U.S. Dollars) as the Borrower shall have requested in its Alternate
Currency Borrowing Request for such Advance, and in which each of the
Banks, in its sole discretion, shall have agreed to make its Loan comprising
such Advance.
"Alternate Currency Borrowing Request" is defined in Section 2.11.
"Alternate Currency Advance" means an Advance denominated in an
Alternate Currency made pursuant to Section 2.1(b).
"Alternate Currency Loan" means, with respect to a Lender, such Lender's
portion of any Alternate Currency Advance.
"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.
"Bank of America Agreement" means the Amended and Restated Credit
Agreement dated as of September 9, 1996 between the Borrower and Bank of
America Illinois, as the same may from time to time be amended, supplemented
or otherwise modified, and including any replacement credit facility between
the Borrower and Bank of America Illinois.
"Borrower" means AAR CORP., a Delaware corporation, and its successors
and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.10.
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"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 New York and are open for
international business (including dealings in U.S. Dollars) in London, (ii)
with respect to any borrowing or payment of Alternate Currency Advances, a
day (other than a Saturday or Sunday) on which banks are open for business in
Chicago and New York and are open for domestic and international business
(including dealings in such Alternate Currency) in both London and the place
where such funds are to be paid or made available and (iii) 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 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, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below,
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 of the Borrower and
its Subsidiaries 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.
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"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.
"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 the sum of Consolidated
Tangible Net Worth plus Consolidated Funded Debt.
"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.
"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 or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
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"Conversion Notice" is defined in Section 2.13.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.
"Default" means an event described in Article VII.
"Dollar Amount" means, as of any of date of determination, (i) with
respect to an Advance denominated in U.S. Dollars, the principal amount of
such Advance and (ii) with respect to an Advance denominated in an Alternate
Currency, the Dollar Equivalent of the principal amount of such Advance.
"Dollar Equivalent" means, with respect to an amount in an Alternate
Currency on a given date, the amount of U.S. Dollars which First Chicago could
purchase with such amount at the Exchange Rate.
"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.
"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 Eurodollar Interest Period, the rate determined by the Agent to
be the rate at which deposits in U.S. dollars are offered by First Chicago to
first-class banks, in the approximate amount of First Chicago's relevant
Eurodollar Loan and having a maturity approximately equal to such Eurodollar
Interest Period, (i) in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Eurodollar
Interest Period, if three Business Days notice has been given to the Agent or
(ii) in the offshore interbank market at approximately 11 a.m. (New York
time) two Business Days prior to the first day of such Eurodollar Interest
Period, if two Business Days notice has been given to the Agent.
"Eurodollar Interest Period" means, with respect to a Eurodollar
Advance, a period of fourteen (14) days or one, two or three months
commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Eurodollar Interest Period shall end on (but exclude) the day
which is fourteen (14) days subsequent to such date or which corresponds
numerically to such date one, two or three months thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second or third succeeding month, such Eurodollar Interest Period shall end
on the last Business Day of such next, second or third succeeding month. If a
Eurodollar Interest Period would otherwise end on a day which is not a
Business Day, such Eurodollar 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 Eurodollar Interest Period
shall end on the immediately preceding Business Day. No Eurodollar Interest
Period may end after the Revolving Credit Termination Date.
Page 5
"Eurodollar Loan" means, with respect to a Lender, such Lender's
portion of any Eurodollar Advance.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided
by (b) one minus the Reserve Requirement (expressed as a decimal) applicable
to such Eurodollar Interest Period, plus (ii) the Applicable Margin. As used
in this definition, "Applicable Margin" means (x) .225% at all times when the
Borrower has an Investment Grade Rating and (y) .50% at all times when the
Borrower does not have an Investment Grade Rating. The Eurodollar Rate shall
be rounded to the next higher multiple of 1/16 of 1% if the rate is not such
a multiple.
"Exchange Rate" means, in relation to the purchase of one currency (the
"first currency") with another currency (the "second currency") on a given
date, First Chicago's spot rate of exchange at or about 11:00 a.m. London
time on such date for the purchase of the first currency with the second
currency, including any premium or costs payable in connection with such
purchase.
"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 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 Agent
from three Federal funds brokers of recognized standing selected by the Agent
in its sole discretion.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fixed Rate" means the Eurodollar Rate, a Negotiated Rate or a
Transaction Rate.
"Fixed Rate Advance" means (a) any Alternate Currency Advance (each of
which bears interest at a Transaction Rate) or (b) any U.S. Dollar Advance
which bears interest at the Eurodollar Rate or a Negotiated Rate.
"Fixed Rate Loan" means, with respect to a Lender, such Lender's
portion of any Fixed Rate Advance.
"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 (x) zero % at all times when the Borrower has an
Investment Grade Rating and (y) .50% at all times when the Borrower does not
have an Investment Grade Rating.
Page 6
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means, with respect to a Lender, such Lender's
portion of any Floating Rate Advance.
"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.
"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 a Eurodollar Interest Period, a Negotiated Rate
Period or a Transaction Rate Interest Period.
"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.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means (i) with respect to a Lender, any office,
branch, subsidiary or affiliate of such Lender and (ii) with respect to the
Agent, any office, branch, subsidiary, affiliate or correspondent bank of the
Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon
which such Person is an account party or for which such Person is in any
way liable.
Page 7
"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" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement and the Notes.
"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 Agent or the Lenders 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.
"Negotiated Rate" means, with respect to a U.S. Dollar Advance, such
fixed rate per annum to which the Borrower and each of the Banks, in its sole
discretion, shall have agreed to for its respective Loan comprising such
Advance.
"Negotiated Rate Advance" means an Advance which bears interest at the
Negotiated Rate.
"Negotiated Rate Interest Period" means, with respect to a U.S.
Dollar Advance, such number of days (at least 1 and not more than 29) as
the Borrower shall have requested in its Borrowing Notice for such
Advance, and which each of the Banks, in its sole discretion, shall have
agreed to for its respective Loan comprising such Advance. No
Transaction Rate Interest Period may end after the Revolving Credit
Termination Date.
"Note" means a promissory note, in substantially the form of Exhibit "A"
hereto, duly executed by the Borrower and payable to the order of a Lender in
the amount of its 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 an accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the
Lenders or to any Lender, the Agent or any indemnified party hereunder
arising under the Loan Documents.
"Original Credit Agreement" has the meaning provided in the first WHEREAS
clause of this Agreement.
Page 8
"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.
"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.
"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.
Page 9
"Reserve Requirement" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation
D on Eurocurrency liabilities.
"Restatement Effective Date" has the meaning provided in Section 4.1.
"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 to any of the foregoing, whether directly or indirectly.
"Revolving Credit Termination Balance" means the aggregate principal
amount of Advances outstanding 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 February 9, 2001 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.
"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 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.
"Termination Balance" means the aggregate principal amount of Advances
outstanding on the Revolving Credit Termination Date after giving effect
to any Advances made or paid on such date.
Page 10
"Transaction Rate" means, with respect to an Alternate Currency Advance,
such fixed rate per annum as the Borrower shall have requested in its
Alternate Currency Borrowing Request for such Advance, and which each of the
Banks, in its sole discretion, shall have agreed to for its respective Loan
comprising such Advance.
"Transaction Rate Advance" means an Advance which bears interest at the
Transaction Rate.
"Transaction Rate Interest Period" means, with respect to an Alternate
Currency Advance, such number of days (not to exceed 180) as the Borrower
shall have requested in its Alternate Currency Borrowing Request for such
Advance, and which each of the Banks, in its sole discretion, shall have
agreed to for its respective Loan comprising such Advance. No Transaction
Rate Interest Period may end after the Revolving Credit Termination Date.
"Transferee" is defined in Section 12.4.
"Type" means (a) with respect to any U.S. Dollar Advance, its nature as
a Floating Rate Advance, a Negotiated Rate Advance or Eurodollar Advance or
(b) with respect to any Alternate Currency Advance, its nature as a
Transaction Rate 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. Dollar Advance" means an Advance denominated in U.S. Dollars.
"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 CREDITS
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. The Advances
Page 11
may be U.S. Dollar Advances made pursuant to Section 2.1(a) or Alternate
Currency Advances made pursuant to Section 2.1(b). 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 U.S. DOLLAR ADVANCES. From and including
the date of this Agreement and to and including the Revolving Credit
Termination Date, the Lenders severally agree, on the terms and
conditions set forth in this Agreement, to make U.S. Dollar Advances to
the Borrower from time to time in amounts such that, upon giving effect
to each such U.S. Dollar Advance, the aggregate principal Dollar Amount
of all Advances then outstanding shall not exceed the Aggregate
Commitment then in effect. The foregoing commitment to make U.S. Dollar
Advances shall expire at the close of business on the Revolving Credit
Termination Date; PROVIDED, that notwithstanding anything in this
Agreement to the contrary, Eurodollar Advances may only be requested and
made prior to, but not on, the Revolving Credit Termination Date.
(b) DISCRETIONARY ALTERNATE CURRENCY ADVANCES. From and including
the date of this Agreement and to (but not including) the Revolving
Credit Termination Date, the Lenders may, on the terms and conditions
set forth in this Agreement, make Alternate Currency Advances to the
Borrower from time to time; PROVIDED, that (i) any Alternate Currency
Advance requested by the Borrower pursuant to Section 2.11 shall be
made if, and only if, each of the Lenders in its sole and absolute
discretion, has agreed in writing (as provided in Section 2.11) to make
its respective Loan comprising such requested Advance and (ii) upon
giving effect to each such Alternate Currency Advance, the aggregate
principal Dollar Amount of all Loans then outstanding shall not exceed
the Aggregate Commitment then in effect.
2.2. EXTENSION OF REVOLVING CREDIT TERMINATION DATE. The initial
Revolving Credit Termination Date shall be February 9, 2001. The Borrower
may, not earlier than 180 days and not later than 60 days prior to each
anniversary of the Restatement Effective Date, execute and deliver to the
Agent (who shall promptly forward a copy of the same to each of the Lenders)
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, each Lender
shall, in its sole and absolute discretion, execute such Extension Letter and
return copies thereof to the Agent and the Borrower prior to such anniversary
of the Restatement Effective Date.
2.3. MANDATORY PAYMENTS. The Borrower shall make the following mandatory
payments on the Advances:
(a) Each Alternate Currency Advance shall be repaid in full on the
last day of its respective Transaction Rate Interest Period.
(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
Page 12
borrowing of one or more U.S. Dollar Floating Rate 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 Agent that the aggregate Dollar Amount of all outstanding Advances
exceeds the Aggregate Commitment then in effect, the Borrower shall
within 3 Business Days of demand by the Agent 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.
2.4. FEES. The Borrower agrees to pay to the Agent, for the ratable
account of the Lenders, a facility fee on the amount of the Aggregate
Commitment, for the period from the date hereof to and including the Revolving
Credit Termination Date, payable quarterly in advance on the date of this
Agreement and on each Payment Date hereafter, equal to (x) .175% per annum at
all times when the Borrower has an Investment Grade Rating and (y) .25% per
annum at all times when the Borrower does not have an Investment Grade Rating.
2.5. OPTIONAL REDUCTIONS IN AGGREGATE COMMITMENT. The Borrower may
permanently reduce the Aggregate Commitment in whole, or in part ratably
among the Lenders in integral multiples of $1,000,000, upon at least ten
days' written notice to the Agent, which notice shall specify the amount of
any such reduction, provided, however, that the amount of the Aggregate
Commitment may not be reduced below the aggregate principal Dollar Amount of
the outstanding Advances. All accrued interest and fees shall be payable on
the effective date of any termination of the obligations of the Lenders to
make Loans hereunder.
2.6. RATABLE LOANS. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.7. TYPES OF ADVANCES. The U.S. Dollar Advances may be Floating Rate
Advances, Negotiated Rate Advances or Eurodollar Advances, or a combination
thereof, selected by the Borrower in accordance with Sections 2.10 and 2.13.
All Alternate Currency Advances shall be Transaction Rate Advances selected
by the Borrower in accordance with Section 2.11.
2.8. MINIMUM AMOUNT OF EACH ADVANCE. Each Fixed Rate 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
unused Aggregate Commitment.
Page 13
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 Agent. Fixed Rate Advances may be
paid prior to the last day of the applicable Interest Period, subject to
compliance with Section 3.4; PROVIDED, HOWEVER, that Negotiated Rate Loans
may not be prepaid prior to the last day of the applicable Interest Period.
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.
2.10. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW U.S. DOLLAR
ADVANCES. The Borrower shall select the Type and, in the case of each
Eurodollar Advance and Negotiated Rate Advance, the Eurodollar Interest
Period or the Negotiated Rate Interest Period, as the case may be, applicable
to each new U.S. Dollar Advance from time to time. The Borrower shall give
the Agent irrevocable notice in substantially the form of Exhibit "C" hereto
with appropriate insertions (a "Borrowing Notice") not later than (a) 10:00
a.m. (Chicago time) at least (i) one Business Day before the Borrowing Date
for each Floating Rate Advance and (ii) two Business Days before the
Borrowing Date for each Eurodollar Advance and (b) 11:30 a.m. (Chicago time)
on the Borrowing Date for each Negotiated Rate Advance, in each case
specifying:
(i) the Borrowing Date of such Advance, which shall be a Business
Day prior to or, for Floating Rate Advances only, 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 and Negotiated Rate
Advance, the Eurodollar Interest Period or Negotiated Rate Interest
Period applicable thereto.
2.11. METHOD OF REQUESTING ALTERNATE CURRENCY ADVANCES. The Borrower may
from time to time in accordance with this Section 2.11 request the Lenders to
make one or more Alternate Currency Advances. The Lenders shall have no
obligation to make any such Alternate Currency Advance so requested by the
Borrower. If, and only if, each of the Lenders in its sole and absolute
discretion agrees, in the manner provided for in this Section 2.11, to make
its respective Loan comprising any such Alternate Currency Advance, will such
Alternate Currency Advance be made.
In order to request an Alternate Currency Advance, the Borrower shall
give the Agent a request in substantially the form of Exhibit "D" hereto with
appropriate insertions (an "Alternate Currency Borrowing Request"), which
request shall be irrevocable, not later than 10:00 a.m. (Chicago time) at
least five (5) Business Days before the requested Borrowing Date for such
Alternate Currency Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day prior to the
Revolving Credit Termination Date, of such Advance,
Page 14
(ii) the aggregate amount of such Advance,
(iii) the alternate Currency in which such Advance is to be denominated.
(iv) the Transaction Rate for such Advance, and
(v) the Transaction Rate Interest Period for such Advance.
Upon receipt of any such Alternate Currency Borrowing request, the Agent
shall promptly forward copies thereof to each of the Lenders. The requested
Alternate Currency Advance will be made as requested if, and only if, each
Lender shall, in its sole and absolute discretion, execute and return a copy
of such alternate Currency Borrowing Request to the Agent not later than
10:00 a.m. (Chicago time) at least three Business Days before the requested
Borrowing Date for such Alternate Currency Advance. Upon such receipt of an
executed copy of such Alternate Currency Borrowing Request from each of the
Lenders (which copy may be a facsimile transmittal), the Agent shall promptly
notify the Borrower and each of the Lenders of such acceptance, and thereupon
the Lenders shall be jointly and severally committed to make the requested
Alternate Currency Advance, subject to the terms and conditions of this
Agreement. The making by the Lenders of any one or more Alternate Currency
Advances shall not constitute a consent by the Lenders to make any subsequent
Alternate Currency Advances, whether in the same or a different Alternate
Currency.
2.12. MAKING THE LOANS. On each Borrowing Date, each Lender shall make
available its Loan or Loans comprising the Advance or Advances to be made on
such Borrowing Date (i) in the case of a Loan denominated in U.S. Dollars,
not later than noon (Chicago time), in immediately available funds to the
Agent at its address specified pursuant to Article XIII, provided that no
Lender shall be obligated to make available its Loan comprising part of a
Negotiated Rate Advance unless the Borrower and each Lender have agreed on a
Negotiated Rate for the requested Negotiated Rate Interest Period and (ii) in
the case of a Loan denominated in an Alternate Currency, not later than noon
(local time), in the city of the Agent's Lending Installation for such
Alternate Currency, in such funds as may then be customary for the settlement
of international transactions in such currency in the city of and at the
address of the Agent's Lending Installation for such currency. The Agent will
make the funds so received from the Lenders available to the Borrower at the
Agent's aforesaid address.
2.13. CONVERSION AND CONTINUATION OF OUTSTANDING U.S. DOLLAR ADVANCES.
Outstanding U.S. Dollar Advances may be continued or converted into U.S.
Dollar Advances of another Type as provided below in this Section 2.13;
PROVIDED, that notwithstanding anything else in this Section 2.13 to the
contrary, (a) outstanding U.S. Dollar Advances may not be converted into
Alternate Currency Advances pursuant to this Section 2.13 and (b) outstanding
Alternate Currency Advances may not be continued or converted pursuant to
this Section 2.13, but must be repaid on or prior to the last day of their
respective Interest Periods pursuant to Section 2.3(a) and may only be
reborrowed pursuant to Section 2.1(b) and Section 2.11.
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
Page 15
its respective Eurodollar Interest Period, at which time such Eurodollar
Advance shall be automatically converted into a Floating Rate Advance unless
the Borrower shall have given the Agent a Conversion Notice requesting that,
at the end of such Eurodollar Interest Period, such Eurodollar Advance be
converted into a new Eurodollar Advance for a new Eurodollar Interest Period.
Each Negotiated Rate Advance shall continue as Negotiated Rate Advance until
the end of its respective Negotiated Rate Interest Period, at which time such
Negotiated Rate Advance shall be automatically converted into a Floating Rate
Advance unless the Borrower shall have given the Agent a Conversion Notice
requesting that, at the end of such Negotiated Rate Interest Period, such
Negotiated Rate Advance be converted into a new Negotiated Rate Advance for a
new Negotiated Rate Interest Period. Subject to the terms of Section 2.8, the
Borrower may from time to time prior to the Revolving Credit Termination Date
elect a 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 Eurodollar Interest Period, or to
convert all or any part of any Negotiated Rate Advance into a new Negotiated
Rate Advance for a new Negotiated Rate Interest Period; PROVIDED, that any
conversion of any existing Eurodollar Advance or Negotiated Rate Advance
shall be made on, and only on, the last day of its respective Eurodollar
Interest Period or Negotiated Rate Interest Period, as the case may be. The
Borrower shall give the Agent irrevocable notice (a "Conversion Notice") of
each conversion of an outstanding U.S. Dollar Advance into a (i) Eurodollar
Advance not later than 10:00 a.m. (Chicago time) at least two Business Days
prior to the date of the requested conversion or (ii) Negotiated Rate Advance
not later than 11:30 a.m. (Chicago time) on the date of the requested
conversion, in each case specifying:
(i) the requested date of such conversion, which date shall be a
Business Day prior to the Revolving Credit Termination Date;
(ii) the aggregate amount and Type of the U.S. Dollar Advance which is
to be converted or continued; and
(iii) the the amount and Eurodollar Interest Period applicable to each
Eurodollar Advance into which such U.S. Dollar Advance is to be
converted and/or the amount and Negotiated Rate Interest Period
applicable to each Negotiated Rate Advance into which such
U.S. Dollar Advance is to be converted.
Notwithstanding anything to the contrary contained in this Section 2.13, no
U.S. Dollar Advance may be converted into or continued as a Eurodollar
Advance or a Negotiated Rate Advance (a) at any time subsequent to the
Revolving Credit Termination Date, (b) (except with the consent of the
Required Lenders) when any default or Unmatured Default has occurred and is
continuing or (c) unless, with respect to a Negotiate Rate Advance, the
Borrower and each Lender have agreed upon a Negotiated Rate for the
applicable Negotiated Rate Interest Period.
2.1.4. RESTRICTIONS ON INTEREST PERIODS. No Interest Period may end
after the Revolving Credit Termination Date. No more than ten (10) Interest
Periods may be in effect at any one time.
2.1.5. 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
Page 16
Rate". Each Fixed Rate 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 Fixed Rate Advance, provided that the rate of interest on
each Eurodollar Advance will change simultaneously with each change, during
the applicable Eurodollar 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 Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of
the Lenders to changes in interest rates), declare that (i) each Fixed Rate
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% per annum.
2.17. METHOD OF PAYMENT. (a) All payments of principal, interest and
fees to be made by the Borrower hereunder or under the Notes in U.S. Dollars
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when
due and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds which the
Agent received at such Lender's address specified pursuant to Article XIII or
at any Lending Installation specified in a notice received by the Agent from
such Lender.
(b) Each Advance shall be repaid or prepaid in the currency in which it
was made in the amount borrowed and interest payable thereon shall be paid in
such currency. All payments to be made by the Borrower hereunder or under the
Notes in any Alternate Currency shall be made in such Alternate Currency on
the date due in such funds as may then be customary for the settlement of
international transactions in such Alternate Currency for the account of the
Agent, at its Lending Installation for such Alternate Currency. The Agent
will promptly cause such payments to be distributed to each Lender in like
funds and currency at such Lender's address specified pursuant to Article
XIII or at any Lending Installation specified in a notice received by the
Agent from such Lender. Notwithstanding the foregoing provisions of this
Section, if, after the making of any Advance in any Alternate Currency,
currency control or exchange regulations are imposed in the country which
issues such Alternate Currency with the result that different types of such
Alternate Currency (the "New Currency") are introduced and the type of
Alternate Currency in which the Advance was made (the "Original Currency") no
longer exists or the Borrower is not able to make payment to the Agent for
the account of the Lenders in such Original Currency, then all payments to be
made by the Borrower hereunder or under the Notes in such Alternate Currency
shall be made in such amount and such type of the New Currency as shall be
equivalent to the amount of such payment otherwise due hereunder or under the
Notes in the Original Currency, it being the intention of the Borrower and
the Lenders that the Borrower take all risks of the imposition of any such
currency control or exchange regulations.
(c) On or before the time a principal payment is made on any of the
Advances, the Borrower shall inform the Agent as to the proportionate
application of such payment among the Floating Rate
Page 17
Advances, the Eurodollar Advances, the Negotiated Rate Advances and the
Alternate Currency Advances. In the absence of such instructions, the Agent
shall apply such payment first to the outstanding Floating Rate Advances and
then apply any remainder to the outstanding Eurodollar Advances, Negotiated
Rate Advances and Alternate Currency Advances in whatever proportion it shall
determine in its sole discretion; PROVIDED, that as between Eurodollar
Advances, as between Negotiated Rate Advances and as between Alternate
Currency Advances of the same Alternate Currency, the Agent shall endeavor to
make such application (not otherwise disadvantageous to the Agent or the
Lenders) as will mitigate the Borrower's liability to the Lenders under
Section 3.4 as a consequence of such application.
2.18. FOREIGN TAXES. (a) All payments made by the Borrower in respect of
principal of and interest on the Advances and of all other amounts payable by
it under this Agreement are payable without deduction for or on account of
any present or future taxes, duties, withholdings or other charges levied or
imposed by the government of any jurisdiction outside the United States of
America or by any political subdivision or taxing authority thereof or
therein (herein called "Foreign Taxes"). If the Borrower shall be required by
law to deduct or withhold any Foreign Taxes from any such amount payable by
it hereunder or under any of the Notes to or for the account of any Lender,
(i) such amount shall be increased as may be necessary so that, after making
such deductions or withholdings (including any deductions or withholdings
applicable to additional amounts payable pursuant to this Section), such
Lender receives an amount equal to the amount it would have received had no
such deductions or withholdings been made and (ii) the Borrower shall make
such deductions and withholdings and pay the amount thereof to the relevant
government, political subdivision or taxing authority at or prior to the
time required to be paid under applicable law (and shall promptly furnish to
the Agent, for the benefit of the Lenders, official receipts evidencing such
payment). In addition, the Borrower will pay any present or future stamp or
documentary taxes or similar taxes or levies imposed by any government,
political subdivision or taxing authority referred to in the first sentence
of this subsection arising from any payment by it hereunder or under any of
the Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any of the Notes (herein called "Other
Taxes"). The Borrower will indemnify each Lender and the Agent for, and hold
each Lender and the Agent harmless against, the full amount of Foreign Taxes
or Other Taxes (including, without limitation, any Foreign Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section) paid
or payable by such Lender or the Agent and any liability of such Lender or
the Agent relating thereto (including, without limitation, penalties,
interest and expenses).
(b) If the cost to any Lender of making or maintaining any Loan to the
Borrower is increased, or the amount of any sum received or receivable by any
Lender (or its applicable Lending Installation) is reduced, by an amount
deemed by such Lender to be material, which increase or reduction (i) is due
to any law or any governmental or quasi-governmental 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, and
(ii) would not have occurred but for the fact that the Borrower (or one or
more of its Subsidiaries) conducts business in a jurisdiction outside the
United States of America, the Borrower shall indemnify such Lender for such
increased cost or reduction within 15 days after demand by such Lender (with
a copy to the Agent).
(c) If, and to the extent that, any Lender shall actually receive a
credit against its United States federal income tax liability for any Foreign
Taxes or Other Taxes indemnified or paid by the Borrower
Page 18
pursuant to this Section, such Lender agrees to promptly notify the Borrower
thereof and make reimbursement of such credit to the Borrower, provided that
if such Lender reasonably believes that such credit may be subject to
challenge, then such Lender shall thereupon enter into negotiations in good
faith with the Borrower to determine when reimbursement of such credit can be
made to the Borrower.
(d) All tax receipts required to be delivered under this Section shall be
originals, duplicate originals or duly certified or authenticated copies
within the meaning of Treasury Regulation Section 1.905-2(a)(2).
2.19. JUDGMENT CURRENCY. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from the Borrower hereunder or
under any of the Notes in the currency expressed to be payable herein or under
the Notes (the "specified currency") into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase the specified currency with such
other currency at the Agent's main Chicago office on the Business Day
preceding that on which final, non-appealable judgment is given. The
obligations of the Borrower in respect of any sum due to any Lender or the
Agent hereunder or under any Note shall, notwithstanding any judgment in a
currency other than the specified currency, be discharged only to the extent
that on the Business Day following receipt by such Lender or the Agent (as
the case may be) of any sum adjudged to be so due in such other currency such
Lender or the Agent (as the case may be) may in accordance with normal,
reasonable banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than
the sum originally due to such Lender or the Agent (as the case may be), in
the specified currency, the Borrower agrees, to the fullest extent that it
may effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Lender or the Agent (as the case may be) against
such loss, and if the amount of the specified currency so purchased exceeds
(a) the sum originally due to such Lender or the Agent (as the case may be)
in the specified currency and (b) any amounts shared with other Lenders as a
result of allocations of such excess as a disproportionate payment to such
Lender under Section 11.2, such Lender or the Agent (as the case may be)
agrees to remit such excess to the Borrower.
2.20. NOTES; TELEPHONIC NOTICES. Each Lender shall, and is hereby
authorized to, record the principal amount of each of its Loans and each
repayment on the schedule attached to its Note (or to otherwise record the
same in its usual practice) provided, however, that the failure to so record
shall not affect the Borrower's obligations in respect of such Loans. The
Borrower hereby authorizes the Lenders and the Agent to extend, convert or
continue U.S. Dollar Advances (it being understood and agreed that Alternate
Currency Borrowing Requests must be in writing or by facsimile) and to
transfer funds based on telephonic notices made by any person or persons the
Agent or any Lender in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any 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
Agent and the Lenders, the records of the Agent and the Lenders 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
Page 19
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 Fixed Rate Advance on a day other than a Payment
Date shall be payable on the date of conversion. Interest accrued on each
Fixed Rate Advance shall be payable on the last day of its applicable
Interest Period, on any date on which the Fixed Rate Advance is prepaid,
whether by acceleration or otherwise, and at maturity. Interest accrued on
each Fixed Rate 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 facility fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be 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 and, in the case of a principal payment,
such extension of time shall be included in computing interest in connection
with such payment.
2.22. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Alternate Currency Borrowing Request, Conversion Notice and
repayment notice received by it hereunder. The Agent will notify each Lender
of the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.23. LENDING INSTALLATIONS. Each Lender may book its Loans at any one
or more Lending Installations selected by such Lender and may change its
Lending Installation(s) form time to time. All terms of this Agreement shall
apply to any such Lending Installation and the Notes shall be deemed held by
each Lender for the benefit of such Lending Installations(s). Each Lender may
from time to time, by written or facsimile notice to the Agent and the
Borrower, designate a new Lending Installation through which Loans (or Loans
in a particular currency) will be made by it and for whose account Loan
payments (or Loans payments in a particular currency) are to be made. The
Agent may from time to time, by written or facsimile notice to the Borrower
and each Lender, designate a new Lending Installation at which Advances (or
Advances in a particular currency) will be made available to the Borrower and
at which payments on the Advances (or payments on Advances in a particular
currency) are to be made by the Borrower.
2.24. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it
is scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders, that
it does not intend to make such payment, the Agent may assume that such
payment has been made. The Agent may, but shall not be obligated to, make the
amount of such payment available to the intended recipient in reliance upon
such assumption. If such Lender or the Borrower, as the case may be, has not
in fact made such payment to the Agent, the recipient of such payment shall,
on demand by the Agent, repay to the Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Agent until
the date the Agent recovers such amount at a rate
Page 20
per annum equal to (i) in the case of payment by a Lender, the Federal Funds
Effective Rate for such day or (ii) in the case of payment by the Borrower,
the interest rate applicable to the relevant Loan.
2.25. WITHHOLDING TAX EXEMPTION. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States of America, or a state thereof, agrees that it will deliver
to each of the Borrower and the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes
to deliver to each of the Borrower and the Agent two additional copies of
such form (or a successor form) on or before the date that such form expires
(currently, three successive calendar years for Form 1001 and one calendar
year for Form 4224) or becomes obsolete or after the occurrence of any event
requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Agent, in each case certifying that such
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such form
with respect to it and such Lender advises the Borrower and the Agent that it
is not capable of receiving payments without any deduction or withholding of
United States federal income tax.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. YIELD PROTECTION. If any law or any governmental or
quasi-governmental 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 any Lender or any applicable Lending Installation
to any tax, duty, charge or withholding on or from payments due from
the Borrower (excluding federal taxation of the overall net income of
any Lender or applicable Lending Installation), or changes the basis
of taxation of payments to any Lender in respect of its Loans 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, any Lender or any applicable Lending Installation (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 any Lender or any applicable Lending Installation
of making, funding or maintaining loans or reduces any
Page 21
amount receivable by any Lender or any applicable Lending Installation
in connection with loans, or requires any Lender or any applicable
Lending Installation to make any payment calculated by reference to the
amount of loans held or interest received by it, by an amount deemed
material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans and its Commitment.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines
the amount of capital required or expected to be maintained by such Lender,
any Lending Installation of such Lender or any corporation controlling such
Lender is increased as a result of a Change, then, within 15 days of demand
by such Lender, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans or its obligation to make Loans hereunder (after taking
into account such 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 any Lender or any Lending Installation 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) any Lender
determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or
directive, whether or not having the force of law, (ii) the Required Lenders
determine that deposits of a type and maturity appropriate to match fund
Eurodollar Advances are not available or (iii) the Required Lenders
determine that the interest rate applicable to a Eurodollar Advance does not
accurately reflect the cost of making or maintaining such Eurodollar
Advance, then the Agent 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 Fixed Rate Advance
occurs on a date prior to the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Fixed Rate
Advance is not made on the date specified by the Borrower in its Borrowing
Notice, Alternate Currency Borrowing Request or 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 or 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, the Borrower will indemnify
each Lender for any loss or cost in liquidating or employing deposits
acquired to fund or maintain the Fixed Rate Advance and, provided that such
Lender has taken such reasonable action, if any, not disadvantageous to it,
to mitigate the same, any other loss or cost incurred by such Lender
resulting therefrom.
Page 22
3.5 LENDER STATEMENTS: SURVIVAL OF INDEMNITY. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Fixed Rate Loans to reduce any liability of
the Borrower to such Lender under Sections 2.18, 3.1 and 3.2 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender shall deliver
a written statement of such Lender as to the amount due, if any, under
Sections 2.18, 3.1, 3.2 or 3.4. Such written statement shall set forth in
reasonable detail (and in accordance with Agreement Accounting Principles,
where applicable) the calculations upon which such 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 Loan shall be calculated as though
each Lender funded its Eurodollar Loan 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 Loan, 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, any 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, such Lender agrees to promptly notify the
Borrower thereof and make reimbursement of credit, rebate or refund to the
Borrower, provided that if such Lender reasonably believes that such credit,
rebate or refund may be subject to challenge, then such 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 RESTATEMENT EFFECTIVE DATE. This
Agreement shall become effective on the date (the "Restatement Effective
Date") which is the date upon which the Borrower shall have furnished to the
Agent with sufficient copies for the Lenders:
(i) Copies, certified by the Secretary or Assistant Secretary of
the Borrower, of its articles of incorporation and by-laws or,
in lieu thereof, a certificate of the Secretary or Assistant
Secretary of the Borrower to the effect that neither said
articles or incorporation or by-laws have been amended since
the date of the Original Credit Agreement except for such
amendments, if any, as are attached to said certificate.
(ii) Copies, 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 any Lender) authorizing the execution of the Loan
Documents.
Page 23
(iii) 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.
(iv) A certificate, signed by the chief financial officer of the
Borrower, stating that on the Restatement Effective Date no
Default or Unmatured Default has occurred and is continuing.
(v) A written opinion of the Borrower's counsel, addressed to the
Lenders in substantially the form of Exhibit "E" hereto.
(vi) Replacement Notes payable to the order of each of the Lenders.
(vii) Written money transfer instructions, in substantially the form
of Exhibit "F" hereto, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(viii) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. EACH ADVANCE. The Lenders shall not be required to make any
Advance, 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) If such Advance is a U.S. Dollar Advance, the Agent shall have
received a duly completed Borrowing Notice from the Borrower
pursuant to Section 2.10 and if such Advance is a Negotiated
Rate Advance, the Borrower and each Lender shall have agreed
upon a Negotiated Rate for the applicable Negotiated Rate
Interest Period.
(iv) If such Advance is an Alternate Currency Advance, the Agent
shall have received a duly completed Alternate Currency
Borrowing Request from the Borrower pursuant to Section 2.11,
and such Alternate Currency Borrowing Request shall have been
agreed to in writing by each of the Lenders pursuant to
Section 2.11.
(v) All legal matters incident to the making of such Advance shall
be in accordance with this Agreement in the reasonable
judgement the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied.
Page 24
Any Lender may require a duly completed compliance certificate in
substantially the form of Exhibit "G" hereto as a condition to making an
Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
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, binding effect or
enforceability of, any of the Loan Documents.
5.4. FINANCIAL STATEMENTS. The May 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 May 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.
Page 25
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 of 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 May 31, 1992. 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, the 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.
5.10. ACCURACY OF INFORMATION. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
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.
Page 26
5.12. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have
complied in all material 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 could 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 Required Lenders 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 Lenders, prepared in accordance
with generally 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 (if requested by the Lenders), 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 any 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.
Page 27
(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 any 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 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 Agent 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.
Page 28
(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
Agent or any Lender may from time to time reasonably request.
6.2. USE OF PROCEEDS. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Advances for the general corporate needs of the
Borrower and its Subsidiaries and to repay outstanding Advances. The Borrower
will not, nor will it permit any Subsidiary to, use any of the proceeds of the
Advances to (i) make any payments on any of the Borrower's commercial paper
which has been placed or underwritten by First Chicago or any Affiliate of
First Chicago, (ii) purchase or carry any "margin stock" (as defined in
Regulation U), (iii) acquire any security in any transaction which is subject
to Sections 13 and 14 of the Securities Exchange Act of 1934 or (iv) make any
unfriendly Acquisition.
6.3. NOTICE OF DEFAULT. The Borrower will, and will cause each Subsidiary
to, give prompt notice in writing to the Lenders of (i) the occurrence of any
Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to 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.
Page 29
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 Lenders, by their respective representatives and agents, 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 Lenders 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 June 1, 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).
Page 30
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 (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 notes ("Payment Notes") 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
(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 notes 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 25% 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.
(e) The Borrower or any Subsidiary may sell or otherwise dispose of
Payment Notes as permitted under Section 6.12.
Page 31
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
Ratings Services, a division of The McGraw Hill Companies, Inc. 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 by 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 any Institutional Money Market Fund (i) rated
A-1 or better by Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc., (ii) rated P-1 or better by Xxxxx'x
Investors Service, Inc. or (iii) that invests in High Quality Money
Market Instruments. For purposes of this Agreement, "High Quality Money
Market Instruments" are (i) U.S. dollar-denominated instruments that
have a remaining maturity of 397 days or less and (ii) issued by an
issuer that is rated in one of the two highest rating categories for
short-term debt by any two nationally recognized statistical rating
organizations ("NRSROs") or, if only one NRSRO has issued a rating, by
that NRSRO, or if unrated, the investment advisor determines the issuer is
of comparable quality.
(j) Investments evidenced by Payment Notes.
(k) Acquisitions and other Investments in addition to those
permitted under clauses (a) through (j) of this Section, provided that
after giving effect thereto the aggregate amount of all such
Acquisitions and Investments for the Borrower and all Subsidiaries since
January 1, 1998 shall not exceed 25% of Consolidated Tangible Net Worth
as of the last day of the Borrower's fiscal year immediately preceding
the date on which any such Acquisition or Investment is made.
Page 32
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 6.18.
(c) Contingent Obligations by the Borrower or any Subsidiary
(other than those permitted under clauses (a) and (b) above), provided
that the sum of (i) Consolidated Funded Debt plus (ii) the aggregate
amount of all Contingent Obligations of the Borrower and its
Subsidiaries does not at any time exceed an amount equal to 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 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 worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
Page 33
(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 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 which is being used to finance
the purchase of such property and provided further such Liens attach only
to such property.
(j) Liens on the real estate located in Wood Dale, Illinois, known
as the Corporate Headquarters of the Borrower, securing obligations of the
Borrower not to exceed $10,000,000 in the aggregate at any time
outstanding.
6.17. BANK OF AMERICA AGREEMENT. The Borrower will give the Lenders a
copy of each amendment, supplement or other modification to the Bank of
America Agreement promptly, and in any event within thirty (30) days,
following execution thereof.
6.18. 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. For purposes of this Section,
"Consolidated Revenues" means the amount of "net revenues" as shown on the
Borrower's consolidated income statement.
6.19. 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
Page 34
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 notes
evidencing such Subordinated Debt.
6.20. 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.
6.21. 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.
6.22. 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 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.
6.23. 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.
6.24. CONSOLIDATED SECURED LIABILITIES. The Borrower will maintain at
all times Consolidated Secured Liabilities in an amount in excess of
$20,000,000. For purposes of calculating Consolidated Secured Liabilities
hereunder, there shall be excluded all obligations of the Borrower secured by
the real estate located in Wood Dale, Illinois, known as the Corporate
Headquarters of the Borrower.
6.25. LIMITATION ON CONSOLIDATED FUNDED DEBT. The Borrower will not
permit the sum of (i) Consolidated Funded Debt plus (ii) the aggregate amount
of all Contingent Obligations of the Borrower and its Subsidiaries to at any
time exceed an amount equal to 50% of Consolidated Total Capitalization.
6.26. 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.
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"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 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 Lenders or the Agent under or in connection with this Agreement, any
Loan, 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 any Note when due, or nonpayment of
interest upon any Note or of any facility fee or other obligations under any
of the Loan Documents within five Business 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 Agent or any 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 Agent or any 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
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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 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
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.
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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.
7.13. Any Change in Control shall occur.
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 Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part
of the Agent or any Lender. If any other Default occurs, the Required Lenders
may terminate or suspend the obligations of the Lenders to make Loans
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 Required
Lenders agree to give the Borrower prompt subsequent notice of any
termination or suspension of the obligations of the Lenders to make Loans
hereunder; PROVIDED, that the giving of such notice shall not be a condition
to the effectiveness of any such termination or suspension.
Page 38
If, within 30 days after acceleration of the maturity of the Obligations
or termination of the obligations of the Lenders to make Loans hereunder as a
result of any Default (other than any Default as described in Section 7.6 or
7.7 with respect to the Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct, the Agent shall,
by notice to the Borrower, rescind and annul such acceleration and/or
termination.
8.2. AMENDMENTS. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for
the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such supplemental
agreement shall, without the consent of each Lender affected thereby:
(i) Extend the maturity of any Loan or Note or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of
interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Revolving Credit Termination Date, or reduce the amount
or extend the payment date for, the mandatory payments required
under Section 2.3, or increase the amount of the Commitment of any
Lender hereunder, or permit the Borrower to assign its rights
under this Agreement.
(vi) Amend this Section 8.2.
(v) Release any guarantor of any Advance or release all or
substantially all of any collateral, if any, supporting the
Obligations.
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the Agent. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.
8.3 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent 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 a Loan notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Loan
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 Lenders required
pursuant to Section 8.2, 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 Agent and
the Lenders until the Obligations have been paid in full.
Page 39
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 Notes
and the making of the Loans herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall 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 among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
9.6. SEVERAL OBLIGATIONS: BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any
of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. 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 Agent
for any and all reasonable costs and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, which attorneys
may be employees of the Agent) paid or incurred by the Agent in connection
with the preparation, negotiation, execution, delivery, review, amendment,
modification, and administration of the Loan Documents. The Borrower also
agrees to reimburse the Agent and the Lenders for any and all reasonable
costs and out-of-pocket expenses (including attorneys' fees and time charges
of attorneys for the Agent and the Lenders, which attorneys may be employees
of the Agent or the Lenders) paid or incurred by the Agent or any Lender in
connection with the collection and enforcement of the Loan Documents. The
Borrower further agrees to indemnify the Agent and each 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 Agent or any Lender is a 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 Loan hereunder, except to the extent any
of the foregoing arises solely from the gross negligence or wilful misconduct
of the party requesting
Page 40
indemnification. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
9.8. NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
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 LENDERS. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower. Neither the Agent nor any Lender undertakes 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, THE AGENT AND EACH LENDER
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,
THE AGENT AND EACH LENDER 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 AGENT OR ANY LENDER, OR THE
RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER,
IN THE COURTS OF ANY OTHER JURISDICTION.
9.14. CONFIDENTIALITY. Each 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
Page 41
monitoring this Agreement and to hold such confidential information in
confidence, except for disclosure (i) to other Lenders and Affiliates of the
Lenders, (ii) to legal counsel, accountants, and other professional advisors
to that 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 that 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.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH 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
THE AGENT
10.1. APPOINTMENT; NATURE OF RELATIONSHIP. The First National Bank of
Chicago is hereby appointed by each of the Lenders as its contractual
representative (herein referred to as the "Agent") hereunder and under each
other Loan Document, and each of the Lenders irrevocably authorizes the Agent
to act as the contractual representative of such Lender with the rights and
duties expressly set forth herein and in the other Loan Documents. The Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article X. Notwithstanding the use of the defined term
"Agent," it is expressly understood and agreed that the Agent shall not have
any fiduciary responsibilities to any Lender by reason of this Agreement or
any other Loan Document and that the Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agent (i) does not
hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender
hereby waives.
10.2. POWERS. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to
the Lenders to take any action thereunder except any action specifically
provided by the Loan Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to
Page 42
be taken by it or them hereunder or any other Loan Document or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (b) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information
directly to each Lender; (c) the satisfaction of any condition specified in
Article IV, except receipt of items required to be delivered solely to the
Agent; (d) the existence or possible existence of any Default or Unmatured
Default; (e) the validity, enforceability, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing furnished
in connection therewith; (f) the value, sufficiency, creation, perfection or
priority of any Lien in any collateral security; or (g) the financial
condition of the Borrower or any guarantor of any of the Obligations or of
any of the Borrower's or any such guarantor's respective Subsidiaries. The
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as
Agent or in its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders. The
Lenders hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions
of this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Agent shall be fully justified
in failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the
Lender pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. RELIANCE ON DOCUMENTS: COUNSEL. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and,
in respect to legal matters, upon the opinion of counsel selected by the
Agent, which counsel may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not
Page 43
reimbursed by the Borrower for which the Agent is entitled to reimbursement
by the Borrower under the Loan Documents, (ii) for any other expenses
incurred by the Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Document
or any other document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of
any such other documents, provided that no Lender shall be liable for any of
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the Agent.
10.9. RIGHTS AS A LENDER. With respect to its Commitment, Loans made
by it and the Note issued to it, the Agent shall have the same rights and
powers hereunder and under any other Loan Document as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. The Agent may accept deposits from, lend money to,
and generally engage in any kind of trust, debt, equity or other transaction,
in addition to those contemplated by this Agreement or any other Loan
Document, with the Borrower or any of its Subsidiaries in which the Borrower
or such Subsidiary is not restricted hereby from engaging with any other
Person.
10.10. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.11. SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, and the Agent may be
removed at any time with or without cause by written notice received by the
Agent from the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, on behalf of the Borrower
and the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after the retiring Agent's giving notice of resignation,
then the retiring Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Agent. Such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article X
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and
under the other Loan Documents.
10.12. DELEGATION TO AFFILIATES. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of
its Affiliates. Any such Affiliate (and such Affiliate's directors, officers,
agents and employees) which performs duties in connection with this
Page 44
Agreement shall be entitled to the same benefits of the indemnification,
waiver and other protective provisions to which the Agent is entitled under
Articles IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any rights of
the Lenders under applicable law, so long as any Default has occurred and is
continuing, any indebtedness from any 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 such Lender.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant
to Sections 2.18, 3.1, 3.2 or 3.4) in a greater proportion than that received
by any other Lender, such Lender agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Lenders so that after such purchase
each Lender will hold its ratable proportion of Loans. If any Lender, whether
in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
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 Lenders and their respective successors and 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 any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (ii) of this Section,
any Lender may at any time, without the consent of the Borrower or the Agent,
assign all or any portion of its rights under this Agreement and its Notes to
a Federal Reserve Bank; provided, however, that no such assignment shall
release the transferor Lender from its obligations hereunder. The Agent may
treat the payee of any Note as the owner thereof for all purposes hereof
unless and until such payee complies with Section 12.3 in the case of an
assignment thereof or, in the case of any other transfer, a written notice of
the transfer is filed with the Agent. Any assignee or transferee of a 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 any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in
exchange therefor.
Page 45
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any 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 Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. Any 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 a Lender of participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations, such
Lender shall remain the holder of any such Note for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement
shall be determined as if such Lender had not sold such participating
interests, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.
12.2.2. VOTING RIGHTS. Each 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 Loan 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 Loan or
Commitment, postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan or Commitment, releases
any guarantor of any such Loan or releases any substantial portion of
collateral, if any, securing any such Loan.
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 a Lender under the Loan Documents, provided that
each Lender shall retain the right of setoff provided in Section 11.1 with
respect to the amount of participating interests sold to each Participant. The
Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 11.1, agrees to share with
each Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if each
Participant were a Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any 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. Such assignment shall be
substantially in the form of Exhibit "H" hereto. Unless a Default has occurred
and is continuing, the consent of the Borrower and the Agent shall be
required prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an
Page 46
Affiliate thereof. Such consent shall be substantially in the form
attached as Exhibit "II" to Exhibit "H" hereto and shall not be
unreasonably withheld.
12.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a
notice of assignment, substantially in the form attached as Exhibit "I"
to Exhibit "H" hereto (a "Notice of Assignment"), together with any
consents required by Section 12.3.1, and (ii) payment of a $2,500 fee to
the Agent for processing such assignment, such assignment shall become
effective on the effective date specified in such Notice of Assignment.
On and after the effective date of such assignment, such Purchaser shall
for all purposes be a Lender party to this Agreement and any other Loan
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as
if it were an original party hereto, and no further consent or action by
the Borrower, the Lenders or the Agent shall be required to release the
transferor Lender with respect to the percentage of the Aggregate
Commitment and Loans assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor
Lender and new Notes or, as appropriate, replacement Notes, are issued
to such Purchaser, in each case in principal amounts reflecting their
Commitment, as adjusted pursuant to such assignment.
12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each 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 such 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.
12.5. TAX TREATMENT. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall
cause such Transferee, concurrently with the effectiveness of such transfer,
to comply with the provisions of Section 2.25.
ARTICLE XIII
NOTICES
13.1. GIVING NOTICE. Except as otherwise permitted by Section 2.20 with
respect to Borrowing Notices and 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.
Page 47
13.2. CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS, TERMINATION OF ORIGINAL CREDIT AGREEMENT
AND EFFECTIVENESS
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. By their
execution of this Agreement, each of the Borrower and the Lenders hereby
agree that as of the Restatement Effective Date the Original Credit Agreement
shall be terminated and of no further force and effect, except for the terms
and provisions of the Original Credit Agreement which expressly survive the
termination thereof and except for the Borrower's obligation to repay all
accrued and unpaid fees thereunder in accordance with the terms thereof. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by telex or
telephone, that it has taken such action.
Page 48
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
AAR CORP.
By:
-------------------------------------------
Title:
----------------------------------------
0000 Xxxxx Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Vice President -- Chief Financial
Officer
Commitments
-----------
$50,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
INDIVIDUALLY AND AS AGENT
By:
-------------------------------------------
Title:
----------------------------------------
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
Senior Vice President
------------
$50,000,000
Page 49
SCHEDULE "1"
OTHER INVESTMENTS
(SEE SECTION 6.14)
Investment Investment Amount of
In By Investment
---------- ---------- ----------
NONE
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
(AND NOT THE LAWS OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
AAR CORP.
By:
--------------------------
Title:
-----------------------
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF AAR CORP.
DATED FEBRUARY 10, 1998
Principal Maturity Principal
Amount of Currency of Interest Amount Unpaid
Date Loan of Loan Period Paid Balance
---- --------- -------- ----------- --------- -------
EXHIBIT "B"
EXTENSION LETTER
, 19
--------- --
To: The First National Bank of Chicago,
as Agent for the Lenders party to the
Second Amended and Restated Credit Agreement referred to below
Re: PROPOSED EXTENSION OF THE REVOLVING CREDIT TERMINATION DATE
Gentlemen:
We make reference to that certain Second Amended and Restated Credit
Agreement dated as of February 10, 1998, among AAR Corp., the Lenders party
thereto and The First National Bank of Chicago as Agent for the Lenders, as
it may from time to time be amended, modified, renewed or extended (the
"Second Amended and Restated Credit Agreement"). All capitalized terms used
herein shall have the meanings attributed to them in the Second Amended and
Restated Credit Agreement.
The Revolving Credit Termination Date currently in effect under the
Second Amended and Restated 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 both the Agent and the Borrower the accompanying copy of this letter. Upon
receipt by both the Agent and the Borrower of counterparts of this letter
executed by each of the Lenders, the Revolving Credit Termination Date under
the Second Amended and Restated Credit Agreement shall henceforth be
_________, 19__.
Sincerely yours,
AAR CORP.
By:
------------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED TO:
THE FIRST NATIONAL BANK OF CHICAGO
By:
---------------------------
Title:
------------------------
[Add Signature Lines for all Lenders]
EXHIBIT "C"
BORROWING NOTICE
________, 19__
To: The First National Bank of Chicago, as an Agent for the Lenders party to
the Second Amended and Restated Credit Agreement referred to below
Re: U.S. Dollar Borrowing Notice
----------------------------
Gentlemen:
We make reference to that certain Second Amended and Restated Credit
Agreement dated as of February 10, 1998, among AAR Corp., the Lenders party
thereto and The First National Bank of Chicago as Agent for the Lenders, as
it may from time to time be amended, modified, renewed or extended (the
"Second Amended and Restated Credit Agreement"). All capitalized terms used
herein shall have the meanings attributed to them in the Second Amended and
Restated Credit Agreement.
The Borrower hereby gives irrevocable notice pursuant to Section 2.10 of
the Second Amended and Restated Credit Agreement for the following U.S.
Dollar Advance(s):
Borrowing Date: ___________, 19__(1)
Principal Amount(2) Type of Advance(3) Interest Period(4)
---------------- --------------- ---------------
$
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, Negotiated Rate Advance or Eurodollar
Advance.
(4) Applicable to Eurodollar Advances and Negotiated Rate Advances only. See
definitions of Eurodollar Interest Period, Negotiated Rate Interest Period
and Section 2.14 (Restrictions on Interest Periods).
EXHIBIT "D"
ALTERNATE CURRENCY BORROWING REQUEST
________, 19__
To: The First National Bank of Chicago,
as Agent for the Lenders party to the
Second Amended and Restated Credit Agreement referred to below
Re: Alternate Currency Borrowing Request
------------------------------------
Gentlemen:
We make reference to that certain Second Amended and Restated Credit
Agreement dated as of February 10, 1998, among AAR Corp., the Lenders party
thereto and The First National Bank of Chicago as Agent for the Lenders, as
it may from time to time be amended, modified, renewed or extended (the
"Second Amended and Restated Credit Agreement"). All capitalized terms used
herein shall have the meanings attributed to them in the Second Amended and
Restated Credit Agreement.
The Borrower hereby gives its irrevocable request, pursuant to Section
2.11 of the Second Amended and Restated Credit Agreement, for the following
Alternate Currency Advance(s):
Borrowing Date: _________, 19__(1)
Principal Alternate Transaction Transaction Rate
Amount(2) Currency Rate(3) Interest Period(4)
--------- ---------- ----------- ------------------
$
If the foregoing requested Alternate Currency Advance(s) meets with your
approval, please so indicate by executing and returning to the Agent the
accompanying copy of this Request. Upon receipt by the Agent prior to the
time specified in Section 2.11 of Second Amended and Restated Credit
Agreement of counterparts of this Request executed by each of the Lenders,
the Lenders shall be jointly and severally committed to make the Alternate
Currency Advance(s) requested hereby, subject to the terms and conditions of
the Second Amended and Restated Credit Agreement.
Sincerely yours,
AAR CORP.
By:
----------------------
Title:
-------------------
ACCEPTED AND AGREED TO:
THE FIRST NATIONAL BANK OF CHICAGO
By:
-------------------------
Title:
----------------------
[Add Signature Lines for all Lenders]
--------------
(1) Borrowing Date must be a Business Day prior to the Revolving Credit
Termination Date.
(2) Subject to the minimum amount requirements set forth in Section 2.8.
(3) Specify an absolute fixed rate of interest per annum.
(4) Insert a fixed number of days (not to exceed 180 days).
EXHIBIT "E"
February 10, 1998
The Lenders who are parties to the
Second Amended and Restated Credit Agreement described below.
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 Second Amended and Restated Credit Agreement among the
Borrower, The First National Bank of Chicago, individually and as Agent, and
the Lenders named therein, providing for Advances in an aggregate principal
amount not exceeding $50,000,000 at any one time outstanding and dated as of
February 10, 1998 (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 Lenders and their participants,
assignees and other transferees. No opinion is expressed herein as to the
relation between the Agent and the Lenders or the relation between the
Lenders.
Very truly yours,
--------------------------
EXHIBIT "F"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The First National Bank of Chicago,
as Agent (the "Agent") under the
Second Amended and Restated Credit Agreement Described Below.
Re: Second Amended and Restated Credit Agreement, dated February 10, 1998
(as the same may be amended or modified, the "Second Amended and Restated
Credit Agreement"), among AAR CORP. (THE "BORROWER"), THE AGENT, AND THE
LENDERS NAMED THEREIN
Terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Second Amended and Restated Credit Agreement.
The Agent 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 Agent of a specific written revocation of such instructions by the
Borrower, provided, however, that the Agent may otherwise transfer funds as
hereafter directed in writing by the Borrower in accordance with Section 13.1
of the Second Amended and Restated Credit Agreement or based on any
telephonic notice made in accordance with the Section 2.20 of the Second
Amended and Restated Credit Agreement.
Facility Identification Number(s)_____________________________________________
Customer/Account Name_________________________________________________________
Transfer Funds To_____________________________________________________________
_____________________________________________________________
For Account No. ______________________________________________________________
Reference/Attention To________________________________________________________
Authorized Officer (Customer Date___________________________
Representative)
___________________________________________ _______________________________
(Please Print) Signature
Bank Officer Name Date___________________________
___________________________________________ _______________________________
(Please Print) Signature
(DELIVER COMPLETED FORM TO CREDIT SUPPORT STAFF FOR IMMEDIATE PROCESSING)
EXHIBIT "G"
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Second Amended and Restated Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Second
Amended and Restated Credit Agreement dated as of February 10, 1998 (as
amended, modified, renewed or extended from time to time, the "Agreement")
among the Borrower, the lenders party thereto and The First National Bank of
Chicago, as Agent for the Lenders. Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings
ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES 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___.
______________________________________
[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
EXHIBIT "H"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
___________________ (the "Assignor") and __________________ (the "Assignee")
is dated as of ____________, 19__. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Second Amended and
Restated Credit Agreement, dated as of February 10, 1998 (which, as it may be
amended, modified, renewed or extended from time to time, is herein called
the "Second Amended and Restated Credit Agreement"), among AAR Corp. (the
"Borrower"), certain lenders party thereto and The First National Bank of
Chicago, as agent for such lenders. Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Second Amended and Restated Credit Agreement. The Assignor desires to assign
to the Assignee, and the Assignee desires to assume from the Assignor, an
undivided interest (the "Purchased Percentage") in the Commitment of the
Assignor such that after giving effect to the assignment and assumption
hereinafter provided, the Commitment of the Assignee shall equal
$____________ and its percentage of the Aggregate Commitment shall equal ___%.
2. ASSIGNMENT. For and in consideration of the assumption of obligations
by the Assignee set forth in Section 3 hereof and the other consideration set
forth herein, and effective as of the Effective Date (as hereinafter
defined), the Assignor does hereby sell, assign, transfer and convey all of
its right, title and interest in and to the Purchased Percentage of (i) the
Commitment of the Assignor (as in effect on the Effective Date), (ii) any
Loan outstanding on the Effective Date and (iii) the Second Amended and
Restated Credit Agreement and other Loan Documents. Pursuant to Section
12.3.2 of the Second Amended and Restated Credit Agreement, on and after the
Effective Date the Assignee shall have the same rights, benefits and
obligations as the Assignor had under the Loan Documents with respect to the
Purchased Percentage of the Loan Documents, all determined as if the Assignee
were a "Lender" under the Second Amended and Restated Credit Agreement with
__% of the Aggregate Commitment. The Effective Date shall be the later of
_________, 19__ or two Business Days (or such shorter period agreed to by the
Agent) after a Notice of Assignment substantially in the form of Exhibit "I"
attached hereto and any consents substantially in the form of Exhibit "II"
attached hereto required to be delivered to the Agent by Section 12.3.1 of
the Second Amended and Restated Credit Agreement have been delivered to the
Agent. In no event will the Effective Date occur if the payments required to
be made by the Assignee to the Assignor on the Effective Date under Sections
4 and 5 hereof are not made on the proposed Effective Date. The Assignor will
notify the Assignee of the proposed Effective Date on the Business Day prior
to the proposed Effective Date.
3. ASSUMPTION. For and in consideration of the assignment of rights by the
Assignor set forth in Section 2 hereof and the other consideration set forth
herein, and effective as of the Effective Date, the Assignee does hereby
accept that assignment, and assume and covenant and agree fully, completely
and timely to perform, comply with and discharge, each and all of the
obligations, duties and liabilities of the Assignor under the Second Amended
and Restated Credit Agreement which are assigned to the Assignee hereunder,
which assumption includes, without limitation, the obligation to fund the
unfunded portion of the Aggregate Commitment in accordance with the
provisions set forth in the Second Amended
and Restated Credit Agreement as if the Assignee were a "Lender" under the
Second Amended and Restated Credit Agreement with ___% of the Aggregate
Commitment. The Assignee agrees to be bound by all provisions relating to
"Lenders" under and as defined in the Second Amended and Restated Credit
Agreement, including, without limitation, provisions relating to the
dissemination of information and the payment of indemnification.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal,
interest and fees with respect to the Purchased Percentage of the Assignor's
Commitment and Loans. The Assignee shall advance funds directly to the Agent
with respect to all Loans and reimbursement payments made on or after the
Effective Date. In consideration for the transfer to the Assignee of the
Purchased Percentage of the Loans made by the Assignor which are outstanding
on the Effective Date, (i) with respect to all Floating Rate Loans made by
the Assignor outstanding on the Effective Date, the Assignee shall pay the
Assignor, on the Effective Date, an amount equal to the Purchased Percentage
of all such Floating Rate Loans; and (ii) with respect to each Fixed Rate
Loan made by the Assignor outstanding on the Effective Date, (a) on the last
day of the Interest Period therefor or (b) on such earlier date agreed to by
the Assignor and the Assignee or (c) on the date on which any such Fixed Rate
Loan either becomes due (by acceleration or otherwise) or is prepaid (the
date as described in the foregoing clauses (a), (b) or (c) being hereinafter
referred to as the "Payment Date"), the Assignee shall pay the Assignor an
amount equal to the Purchased Percentage of such Fixed Rate Loan. On and
after the Effective Date, the Assignee will also remit to the Assignor any
amounts of interest on Loans and fees received from the Agent which relate to
the Purchased Percentage of Loans made by the Assignor accrued for periods
prior to the Effective Date, in the case of Floating Rate Loans, or the
Payment Date, in the case of Fixed Rate Loans, and not heretofore paid by the
Assignee to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the
Borrower with respect to any Fixed Rate Loan sold by the Assignor to the
Assignee hereunder, the Assignee shall pay to the Assignor interest for such
period on such Fixed Rate Loan at the applicable rate provided by the Second
Amended and Restated Credit Agreement. In the event that either party hereto
receives any payment to which the other party hereto is entitled under this
Assignment Agreement, then the party receiving such amount shall promptly
remit it to the other party hereto.
5. FEES PAYABLE BY ASSIGNEE. On each day on which the Assignee receives
a payment of interest or commitment fees under the Second Amended and
Restated Credit Agreement (other than a payment of interest or commitment
fees which the Assignee is obligated to deliver to the Assignor pursuant to
this Section 4 hereof, which shall be excluded in determining fees payable to
the Assignor pursuant to this Section), the Assignee shall pay to the
Assignor a fee. The amount of such fee shall be the difference between (i)
the amount of such interest or fee, as applicable, received by the Assignee
and (ii) the amount of the interest or fee, as applicable, which would have
been received by the Assignee if each interest rate was ____ of 1% less than
the interest rate paid by the Borrower or if the commitment fee was ___ of 1%
less than the commitment fee paid by the Borrower, as applicable. In
addition, the Assignee agrees to pay ___% of the fee required to be paid to
the Agent pursuant to Section ____ of the Second Amended and Restated Credit
Agreement.
6. CREDIT DETERMINATION; LIMITATIONS ON ASSIGNOR'S LIABILITY. The
Assignee represents and warrants to the Assignor that it is capable of making
and had made and shall continue to make its own credit determinations and
analysis based upon such information as the Assignee deemed
sufficient to enter into the transaction contemplated hereby and not based on
any statements or representations by the Assignor. It is understood and
agreed that the assignment and assumption hereunder are made without recourse
to the Assignor and that the Assignor makes no representation or warranty of
any kind to the Assignee and shall not be responsible for (i) the due
execution, legality, validity, enforceability, genuineness, sufficiency or
collectability of the Second Amended and Restated Credit Agreement or any
other Loan Document, including without limitation, documents granting the
Assignor and the other Lenders a security interest in assets of the Borrower
or any guarantor, (ii) any representation, warranty or statement made in or
in connection with any of the Loan Documents, (iii) the financial condition
or creditworthiness of the Borrower or any guarantor, (iv) the performance of
or compliance with any of the terms or provisions of any of the Loan
Documents, (v) inspecting any of the property, books or records of the
Borrower or (vi) the validity, enforceability, perfection, priority,
condition, value or sufficiency of any collateral securing or purporting to
secure the Loans. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be liable for any mistake, error of
judgment, or action taken or omitted to be taken in connection with the Loans
or the Loan Documents, except for its or their own bad faith or willful
misconduct.
7. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
performance or non-performance of obligations assumed under this Assignment
Agreement.
8. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee
shall have the right pursuant to Section 12.3.1 of the Second Amended and
Restated Credit Agreement to assign the rights which are assigned to the
Assignee hereunder to any entity or person, provided that (i) any such
subsequent assignment does not violate any of the terms and conditions of the
Loan Documents or any law, rule, regulation, order, writ, judgment,
injunction or decree and that any consent required under the terms of the
Loan Documents has been obtained, (ii) the assignee under such assignment
from the Assignee shall agree to assume all of the Assignee's obligations
hereunder in a manner satisfactory to the Assignor and (ii) the Assignee is
not thereby released from any of its obligations to the Assignor hereunder.
9. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
Commitment occurs between the date of this Assignment Agreement and the
Effective Date, the percentage of the Aggregate Commitment assigned to the
Assignee shall remain the percentage specified in Section 1 hereof and the
dollar amount of the Commitment of the Assignee shall be recalculated based
on the reduced Aggregate Commitment.
10. ENTIRE AGREEMENT. This Assignment Agreement and the attached
consent embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the
parties hereto relating to the subject matter hereof.
11. GOVERNING LAW. This Assignment Agreement shall be governed by
internal law, and not the laws of conflicts, of the State of Illinois.
12. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Second Amended and Restated Credit Agreement. For
the purpose hereof, the addresses of the
parties hereto (until notice of a change is delivered) shall be the address
set forth under each party's name on the signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above
written.
[NAME OF ASSIGNOR]
By:_____________________________
Title: ________________________
________________________
________________________
[NAME OF ASSIGNEE]
By:_____________________________
Title: _________________________
_________________________
_________________________
EXHIBIT "I"
NOTICE
OF ASSIGNMENT
To: [AAR CORP.]*
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent under the Second Amended and Restated Credit Agreement
Described Below.
From: [NAME OF ASSIGNOR]
[NAME OF ASSIGNEE]
_______________, 19__
1. We refer to that Second Amended and Restated Credit Agreement,
dated as of February 10, 1998 (which, as it may be amended, modified, renewed
or extended from time to time, is herein called the "Second Amended and
Restated Credit Agreement") among AAR Corp. (the "Borrower"), certain lenders
party thereto (each a "Lender"), including _____________(the "Assignor") and
The First National Bank of Chicago, as agent for the Lenders (as such, the
"Agent"). Capitalized terms used herein and in any consent delivered in
connection herewith and not otherwise defined herein or in such consent shall
have the meanings attributed to them in the Second Amended and Restated
Credit Agreement.
2. This Notice of Assignment (the "Notice") is given and delivered
to **** [the Borrower and]**** the Agent pursuant to Section 12.3.2 of the
Second Amended and Restated Credit Agreement.
3. The Assignor and ______________ (the "Assignee") have entered
into an Assignment Agreement, dated as of ________, 19__, pursuant to which,
among other things, the Assignor has sold, assigned, delegated and
transferred to the Assignee, and the Assignee has purchased, accepted and
assumed from the Assignor, an undivided interest in and to all of the
Assignor's rights and obligations under the Second Amended and Restated
Credit Agreement such that Assignee's percentage of the Aggregate Commitment
shall equal __%, effective as of the "Effective Date" (as hereinafter
defined). The "Effective Date" shall be the later of _________, 19__ or two
Business Days (or such shorter period as agreed to by the Agent) after this
Notice.
__________________
*To be included only if consent must be obtained from the Borrower pursuant
to Section 12.3.1 of the Second Amended and Restated Credit Agreement.
of Assignment and any consents and fees required by Sections 12.3.1 and 12.3.2
of the Second Amended and Restated Credit Agreement have been delivered to
the Agent, provided that the Effective Date shall not occur if any condition
precedent agreed to by the Assignor and the Assignee has not been satisfied.
4. As of this date, the percentage of the Assignor in the Aggregate
Commitment and Advances is ___%. As of the Effective Date, the percentage of
the Assignor in the Aggregate Commitment and Advances will be ___% (as such
percentage may be reduced or increased by assignments which become effective
prior to the assignment to the Assignee becoming effective) and the
percentage of the Assignee in the Aggregate Commitment and Advances will be
___%.
5. The Assignor and the Assignee hereby give to ****[the Borrower
and]**** the Agent notice of the assignment and delegation referred to
herein. The Assignor will confer with the Agent before ________, 19_____
to determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to satisfy
the conditions precedent agreed to by the Assignor and the Assignee. At the
request of the Agent, the Assignor will give the Agent written confirmation
of the occurrence of the Effective Date.
6. The Assignee hereby accepts and assumes the assignment and
delegation referred to herein and agrees as of the Effective Date (i) to
perform fully all of the obligations under the Second Amended and Restated
Credit Agreement which it has hereby assumed and (ii) to be bound by the
terms and conditions of the Second Amended and Restated Credit Agreement as
if it were a "Lender".
7. The Assignor and the Assignee request and agree that any payments to
be made by the Agent to the Assignor on and after the Effective Date shall,
to the extent of the assignment referred to herein, be made entirely to the
Assignee, it being understood that the Assignor and the Assignee shall make
between themselves any desired allocations.
8. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $2,500 required by Section 12.3.2 of the
Second Amended and Restated Credit Agreement.
9. The Assignor and the Assignee request and direct that the Agent
prepare and cause the Borrower to execute and deliver [new Notes or, as
appropriate,] replacements notes, to the Assignor and the Assignee in
accordance with Section 12.3.2 of the Second Amended and Restated Credit
Agreement. The Assignor [and the Assignee] agree[s] to deliver to the
Agent the original Note received by it from the Borrower upon its receipt of
a new Note in the amount set forth above.
10. The Assignee advises the Agent that the address listed below is its
address for notices under the Second Amendment and Restated Credit Agreement:
__________________________________
__________________________________
__________________________________
ASSIGNOR ASSIGNEE
By: ____________________________ By: ____________________________
Title: _________________________ Title: _________________________
EXHIBIT "II"
CONSENT AND RELEASE
TO: [NAME OF ASSIGNOR]
______________________________
______________________________
[NAME OF ASSIGNEE]
_____________________________
_____________________________
___________, 19__
1. We acknowledge receipt from ________________ (the "Assignor")
and ___________ (the "Assignee") of the Notice of Assignment, dated as of
___________, 19__ (the "Notice"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Notice.
****[2. In consideration of the assumption by the Assignee of the
obligations of the Assignor as referred to in the Notice, the Borrower hereby
(i) irrevocably consents, as required by Section 12.3.1 of the Second Amended
and Restated Credit Agreement, to the assignment and delegation referred to
in the Notice and (ii) as of the Effective Date, irrevocably reduces the
percentage of the Assignor in the Aggregate Commitment by the percentage of
the Aggregate Commitment assigned to the Assignee and releases the Assignor
from all of its obligations to the Borrower under the Loan Documents to the
extent that such obligations have been assumed by the Assignee.]****
****[3. The Borrower directs the Agent to prepare for issuance by
the Borrower new Notes as requested by the Assignor and the Assignee in the
Notice.]****
4. In consideration of the assumption by the Assignee of the
obligations of the Assignor as referred to in the Notice, the Agent hereby
(i) irrevocably consents, as required by Section 12.3.1 of the Second Amended
and Restated Credit Agreement, to the assignment and delegation referred to in
the Notice, (ii) as of the Effective Date, irrevocably releases the Assignor
from its obligations to the Agent under the Loan Documents to the extent that
such obligations have been assumed by the Assignee, and (iii) agrees that, as
of the Effective Date,
the Agent shall consider the Assignee as a "Lender" for all purposes under
the Loan Documents to the extent of the assignment and delegation referred to
in the Notice.
****[AAR CORP.]**** THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By: __________________________ By: _________________________
Title: _______________________ Title: ______________________
Paragraph 2 is to be included only if the consent of the Borrower is required
pursuant to Section 12.3.1 of the Second Amended and Restated Credit
Agreement.
