--------------------------------------------------------------------------------
AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
XXXXXX LEASE FINANCE CORPORATION
AND
CERTAIN BANKING INSTITUTIONS NAMED HEREIN
WITH
FIRST UNION NATIONAL BANK
(successor by merger to CoreStates Bank, N.A.)
AS AGENT
dated
JUNE 2, 1998
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TABLE OF CONTENTS
1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . .11
2. The Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
2.1. The Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
(a) Revolving Credit Loans; Commitment. . . . . . . . . . . .12
(b) Interest Rate Options. . . . . . . . . . . . . . . . . .12
(c) Maximum Loans Outstanding. . . . . . . . . . . . . . . .12
(d) Minimum Loan Amount . . . . . . . . . . . . . . . . . . .12
(e) Prepayment and Reborrowing. . . . . . . . . . . . . . . .12
(f) Limit for Category B Equipment. . . . . . . . . . . . . .13
(g) Revolving Loan Commitment Percentages . . . . . . . . . .13
(h) Several Obligations . . . . . . . . . . . . . . . . . . .13
(i) Payment of Additional Amount . . . . . . . . . . . . . .13
2.2. Standby Letters of Credit . . . . . . . . . . . . . . . . . . . .13
2.3. The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
2.4. Funding Procedures. . . . . . . . . . . . . . . . . . . . . . . .14
(a) Request for Advance . . . . . . . . . . . . . . . . . . .14
(b) Actions by Agent. . . . . . . . . . . . . . . . . . . . .15
(c) Availability of Funds . . . . . . . . . . . . . . . . . .15
(d) Funding Assumptions . . . . . . . . . . . . . . . . . . .15
(e) Proceeds of Loan Being Repaid . . . . . . . . . . . . . .16
2.5. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
(a) Base Rate Loans . . . . . . . . . . . . . . . . . . . . .16
(b) LIBO Rate Loans . . . . . . . . . . . . . . . . . . . . .16
(c) Conversion to Base Rate . . . . . . . . . . . . . . . . .16
(d) Renewals and Conversions. . . . . . . . . . . . . . . . .16
(e) Interim Payments At Base Rate . . . . . . . . . . . . . .16
(f) Reinstatements. . . . . . . . . . . . . . . . . . . . . .17
2.6. Revolving Loan Commitment Fee . . . . . . . . . . . . . . . . . .17
2.7. Reduction or Termination of Revolving Loan Commitments. . . . . .17
(a) Voluntary . . . . . . . . . . . . . . . . . . . . . . . .17
(b) Revolving Loan Commitment Termination . . . . . . . . . .17
2.8. Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . .18
(a) Base Rate Loans . . . . . . . . . . . . . . . . . . . . .18
(b) LIBO Rate Loans . . . . . . . . . . . . . . . . . . . . .18
2.9. Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
(a) Accrued Interest. . . . . . . . . . . . . . . . . . . . .18
(b) Form of Payments, Application of Payments,
Payment Administration, Etc. . . . . . . . . . . . . . .18
(c) Demand Deposit Account. . . . . . . . . . . . . . . . . .18
(d) Net Payments. . . . . . . . . . . . . . . . . . . . . . .19
2.10. Change in Circumstances, Yield Protection . . . . . . . . . . . .19
(a) Certain Regulatory Changes. . . . . . . . . . . . . . . .19
i
(b) Capital Adequacy. . . . . . . . . . . . . . . . . . . . .19
(c) Ability to Determine LIBO Rate. . . . . . . . . . . . . .19
(d) Yield Protection. . . . . . . . . . . . . . . . . . . . .20
(e) Notice of Events. . . . . . . . . . . . . . . . . . . . .20
2.11. Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
2.12. Discretion of Each Bank as to Manner of Funding . . . . . . . . .20
3. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . .20
3.1. Organization, Standing. . . . . . . . . . . . . . . . . . . . . .21
3.2. Corporate Authority, Validity, Etc. . . . . . . . . . . . . . . .21
3.3. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . .21
3.4. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
3.5. Financial Statements. . . . . . . . . . . . . . . . . . . . . . .22
3.6. Not in Default, Judgments, Etc. . . . . . . . . . . . . . . . . .22
3.7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
3.8. Permits, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . .22
3.9. No Materially Adverse Contracts, Etc. . . . . . . . . . . . . . .22
3.10. Compliance with Laws, Etc . . . . . . . . . . . . . . . . . . . .22
(a) Compliance Generally. . . . . . . . . . . . . . . . . . .22
(b) Hazardous Wastes, Substances and Petroleum Products . . .23
3.11. Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
3.12. Subsidiaries, Etc . . . . . . . . . . . . . . . . . . . . . . . .23
3.13. Title to Properties, Leases . . . . . . . . . . . . . . . . . . .23
3.14. Public Utility Holding Company; Investment Company. . . . . . . .23
3.15. Margin Stock. . . . . . . . . . . . . . . . . . . . . . . . . . .23
3.16. Use of Proceeds.. . . . . . . . . . . . . . . . . . . . . . . . .24
3.17. Depreciation Policies . . . . . . . . . . . . . . . . . . . . . .24
3.18. Disclosure Generally. . . . . . . . . . . . . . . . . . . . . . .24
4. Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . .24
4.1. All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
(a) Request For Advance. . . . . . . . . . . . . . . . . . .24
(b) Borrowing Base Certificate . . . . . . . . . . . . . . .24
(c) Covenants; Representations . . . . . . . . . . . . . . .24
(d) Defaults . . . . . . . . . . . . . . . . . . . . . . . .24
(e) Material Adverse Change. . . . . . . . . . . . . . . . .24
4.2. Conditions to First Loan. . . . . . . . . . . . . . . . . . . . .24
(a) Articles, Bylaws . . . . . . . . . . . . . . . . . . . .24
(b) Evidence of Authorization. . . . . . . . . . . . . . . .25
(c) Legal Opinions . . . . . . . . . . . . . . . . . . . . .25
(d) Incumbency . . . . . . . . . . . . . . . . . . . . . . .25
(e) Notes. . . . . . . . . . . . . . . . . . . . . . . . . .25
(f) Documents. . . . . . . . . . . . . . . . . . . . . . . .25
(g) Consents . . . . . . . . . . . . . . . . . . . . . . . .25
(h) Other Agreements . . . . . . . . . . . . . . . . . . . .25
(i) Fees, Expenses . . . . . . . . . . . . . . . . . . . . .25
5. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . .25
5.1. Financial Statements and Reports. . . . . . . . . . . . . . . . .25
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(a) Annual Statements. . . . . . . . . . . . . . . . . . . .25
(b) Quarterly Statements . . . . . . . . . . . . . . . . . .26
(c) No Default . . . . . . . . . . . . . . . . . . . . . . .26
(d) ERISA. . . . . . . . . . . . . . . . . . . . . . . . . .27
(e) Material Changes . . . . . . . . . . . . . . . . . . . .27
(f) Other Information. . . . . . . . . . . . . . . . . . . .27
(g) Borrowing Base Certificates. . . . . . . . . . . . . . .27
(h) Monthly Lease Portfolio and Receivables Report . . . . .27
(i) Maintenance of Current Depreciation Policies . . . . . .27
(j) Monthly Lease Receipts Report. . . . . . . . . . . . . .27
5.2. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . .27
5.3. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
5.4. Compliance with Regulations. . . . . . . . . . . . . . . . . . . .28
5.5. Conduct of Business; Permits and Approvals, Compliance
with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
5.6. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . .28
5.7. Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . .28
5.8. Payment of Debt; Payment of Taxes, Etc . . . . . . . . . . . . . .28
5.9. Notice of Events . . . . . . . . . . . . . . . . . . . . . . . . .28
5.10. Inspection Rights . . . . . . . . . . . . . . . . . . . . . . . .29
5.11. Generally Accepted Accounting Principles. . . . . . . . . . . . .29
5.12. Compliance with Material Contracts. . . . . . . . . . . . . . . .29
5.13. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . .29
5.14. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . .29
6. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . .30
6.1. Consolidation and Merger. . . . . . . . . . . . . . . . . . . . .30
6.2. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
6.3. Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . .30
6.4. Margin Stock. . . . . . . . . . . . . . . . . . . . . . . . . . .30
6.5. Acquisitions and Investments. . . . . . . . . . . . . . . . . . .30
6.6. Transfer of Assets; Nature of Business. . . . . . . . . . . . . .31
6.7. Accounting Change . . . . . . . . . . . . . . . . . . . . . . . .31
6.8. Transactions with Affiliates . . . . . . . . . . . . . . . . . .31
6.9. Restriction on Amendment of This Agreement . . . . . . . . . . .31
7. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . .31
7.1. No losses . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
7.3. Debt to Tangible Net Worth. . . . . . . . . . . . . . . . . . . .31
7.4. Minimum Interest Expense Coverage . . . . . . . . . . . . . . . .31
7.5. Borrowing Base. . . . . . . . . . . . . . . . . . . . . . . . . .31
8. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . .32
(a) Payments . . . . . . . . . . . . . . . . . . . . . . . .32
(b) Covenants. . . . . . . . . . . . . . . . . . . . . . . .32
(c) Representations, Warranties. . . . . . . . . . . . . . .32
(d) Bankruptcy . . . . . . . . . . . . . . . . . . . . . . .32
(e) Certain Other Defaults . . . . . . . . . . . . . . . . .32
(f) Judgments. . . . . . . . . . . . . . . . . . . . . . . .33
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(g) Attachments . . . . . . . . . . . . . . . . . . . . . . .33
(h) Change in Control . . . . . . . . . . . . . . . . . . . .33
(i) Security Interests . . . . . . . . . . . . . . . . . . .33
(j) Changes in Senior Management . . . . . . . . . . . . . .33
9. Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
9.1. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
9.2. Security Agreement . . . . . . . . . . . . . . . . . . . . . . . .34
9.3. Release of Collateral. . . . . . . . . . . . . . . . . . . . . . .34
10. Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
10.1. Appointment and Authorization. . . . . . . . . . . . . . . . . .34
10.2. Duties and Obligations . . . . . . . . . . . . . . . . . . . . .34
10.3. First Union as a Bank. . . . . . . . . . . . . . . . . . . . . .35
10.4. Independent Credit Decisions . . . . . . . . . . . . . . . . . .35
10.5. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . .35
10.6. Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . .36
10.7. Allocations Made By First Union. . . . . . . . . . . . . . . . .36
11. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
11.1. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
11.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . .36
11.3. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . .36
11.4. Participations and Assignments . . . . . . . . . . . . . . . . .37
11.5. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
11.6. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
11.7. Sharing of Collections, Proceeds and Set-Offs:
Application of Payments. . . . . . . . . . . . . . . . . . . . .37
11.8. Expenses; Indemnification. . . . . . . . . . . . . . . . . . . .38
11.9. Survival of Warranties and Certain Agreements. . . . . . . . . .39
11.10. Severability. . . . . . . . . . . . . . . . . . . . . . . . . .39
11.11. Banks' Obligations Several; Independent Nature of
Banks' Rights . . . . . . . . . . . . . . . . . . . . . . . . .39
11.12. No Fiduciary Relationship . . . . . . . . . . . . . . . . . . .39
11.13. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. . . . . . . . .39
11.14. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . .40
11.15. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . .40
11.16. Use of Defined Terms. . . . . . . . . . . . . . . . . . . . . .40
11.17. Offsets . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
11.18. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . .41
__________________________________________________________
Exhibit A List of Banks and Commitments
Exhibit B Note
Exhibit C Borrowing Base Certificate
Exhibit D Mortgage and Security Agreement
Exhibit E Compliance Certificate
Exhibit F Depreciation Policies
Exhibit G Description of Aircraft, Engines and Propellers
Schedule 1 Miscellaneous Information
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AMENDED AND RESTATED
CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated June 2, 1998 (the
"AGREEMENT"), is entered into by and between XXXXXX LEASE FINANCE
CORPORATION, a California corporation ("XXXXXX"), the banking institutions
signatories hereto and named in Exhibit A attached hereto and such other
institutions that hereafter become a "Bank" pursuant to Section 10.4 hereof
(collectively the "BANKS" and individually a "BANK") and FIRST UNION NATIONAL
BANK, a national banking association, as agent for the Banks under this
Agreement ("FIRST UNION", which shall mean in its capacity as agent unless
specifically stated otherwise). This Agreement amends and restates in its
entirety the Credit Agreement, dated June 12, 1997, between Xxxxxx and
CoreStates Bank, N.A. (now First Union National Bank by reason of the merger
of CoreStates Bank, N.A. with and into First Union National Bank on May 15,
1998), as said Credit Agreement was amended through the date hereof.
PRELIMINARY STATEMENT
WHEREAS, Xxxxxx desires to have available to it a revolving credit
facility which will be used for the purchase or refinance of Equipment (as
defined herein) most of which will be held for sale or for lease to
unaffiliated persons, said Equipment and related leases to constitute part of
the Collateral (as defined herein) and for general working capital purposes.
WHEREAS, the Banks are willing to establish such revolving credit
facility and make loans to Xxxxxx under the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises and promises
hereinafter set forth and intending to be legally bound hereby, the parties
hereto agree as follows:
1. CERTAIN DEFINITIONS
1.1. DEFINITIONS.
"ADJUSTED LIBO RATE" shall mean, for any Interest Period, the rate per
annum (rounded upwards, if necessary to the next 1/16 of 1%) determined
pursuant to the following formula:
Adjusted LIBO Rate = LIBO Rate
_____________________
1 -Reserve Percentage
"AFFILIATE" shall mean any Person: (1) which directly or indirectly
controls, or is controlled by, or is under common control with Xxxxxx; (2)
which directly or indirectly beneficially owns or holds ten percent (10%)
or more of any class of voting stock of Xxxxxx; or (3) ten percent (10%) or
more of whose voting stock of which is directly or indirectly beneficially
owned or held by Xxxxxx. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract, or otherwise.
1
"AGGREGATE REVOLVING LOAN COMMITMENT" shall have the meaning set forth in
Section 2.1(a).
"AGREEMENT" shall mean this Credit Agreement, as amended, supplemented,
modified, replaced, substituted for or restated from time to time and all
exhibits and schedules attached hereto.
"BASE RATE" shall mean (i) the rate of interest for commercial loans
established and publicly announced by First Union from time to time as its
prime rate, or, if higher, (ii) the Federal Funds Rate plus __%* per annum.
Any change in such interest rate due to a change in the Base Rate shall be
effective on the date of such change.
"BASE RATE LOAN" shall mean a Loan, or any portion thereof, made at the
Base Rate pursuant to a request for advance made under Section 2.4 herein
or as otherwise provided in Section 2.5 or in any other provision hereof or
in any other Loan Document.
"BASE RATE MARGIN" shall mean the percentage listed in the following table:
LEVERAGE RATIO* BASE RATE MARGIN*
Less than ___ ___%
Equal to or greater than ___ but less than ___ ___%
Equal to or greater than ___ but less than ___ ___%
Equal to or greater than ___ but less than ___ ___%
Equal to or greater than ___ ___%
"BORROWING BASE" shall mean __% of Xxxxxx'x acquisition cost of Equipment
included in the Collateral, PROVIDED, HOWEVER, that on June 30 and December
31 of each year a review of the Collateral shall be made to determine
whether the net book value of each piece of Equipment has declined by more
than __% from the acquisition cost. In each such case where the net book
value has decreased by more than __% from the acquisition cost, the
Borrowing Base shall mean __% of the net book value of such Equipment. No
item of Category A Equipment shall be included in the Borrowing Base unless
either (1) it shall be the subject of an Eligible Lease which is also
included in the Collateral or (2) it was purchased by Xxxxxx for the
purpose of sale or lease to an unaffiliated Person and the purchase date is
not later than nine months previous. No item of Category B(1) Equipment
shall be included in the Borrowing Base if it was purchased by Xxxxxx more
than nine months prior to the date of determination of the Borrowing Base.
No item of Category B(2) Equipment shall be included in the Borrowing Base
unless it shall be the subject of an Eligible Lease which is also included
in the Collateral.*
_________________________
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately.
2
"BORROWING BASE CERTIFICATE" shall mean a certificate in substantially the
form attached hereto as Exhibit C hereto which shall be signed by the chief
financial officer or chief executive officer of Xxxxxx.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday, or other
day on which commercial banks in Philadelphia or San Francisco are
authorized or required to close under the laws of the Commonwealth of
Pennsylvania and, if the applicable day relates to a LIBO Rate Loan, or
notice with respect to a LIBO Rate Loan, a day on which dealings in Dollar
deposits are also carried on in the London interbank market and banks are
open for business in London ("London Business Day").
"CAPITALIZED LEASE" shall mean all lease obligations of any Person for any
property (whether real, personal or mixed) which have been or should be
capitalized on the books of the lessee in accordance with Generally
Accepted Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" with respect to any Person, shall mean the
aggregate amount which, in accordance with GAAP, is required to be reported
as a liability on the balance sheet of such Person at such time in respect
of such Person's interest as lessee under a Capital Lease.
"CATEGORY A EQUIPMENT" shall mean equipment purchased by Xxxxxx from
unaffiliated Persons and which is either (1) the subject of an Eligible
Lease or (2) held for sale or lease to unaffiliated Persons. Category A
Equipment shall be composed of Stage III compliant jet engines which are
less than 15 years from the date of manufacture and are suitable for use in
major aircraft manufactured by The Boeing Co., XxXxxxxxx Xxxxxxx Corp. or
Airbus Industrie. Category A Equipment also shall include two de Havilland
Dash 8-103 turbo prop aircraft, four Xxxxx & Whitney Model PW121 engines
and four Xxxxxxxx Standard Model 14 SF-7 propellers, each as more fully
described in Exhibit G attached hereto which have been or will be purchased
from de Havilland Corporation and leased to Aloha Islandair, Inc.
"CATEGORY B EQUIPMENT" shall mean equipment purchased by Xxxxxx from
unaffiliated Persons which is either (1) Stage II or III engines or
aircraft acquired for the purpose of salvaging and/or retrofitting, or (2)
traceable spare parts the purchase price of which was in excess of $3,000
in each case, are the subject of Eligible Leases and have discrete serial
and part numbers or other identifying numbers acceptable to the Required
Banks.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and all rules and regulations with respect thereto in effect from
time to time.
"COLLATERAL" shall have the meaning set forth in Section 9.1.
"COMPLIANCE CERTIFICATE" shall mean a certificate in substantially the form
attached hereto as Exhibit E which shall be signed by the chief financial
officer, treasurer or controller of Xxxxxx.
"DEBT" shall mean, as of any date of determination with respect to Xxxxxx,
without duplication and determined on a consolidated basis, (i) all items
which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of Xxxxxx as
of the date on which Debt is to be determined, (ii) all indebtedness of
others with respect to which Xxxxxx has become liable by way of a guarantee
or endorsement (other than for
3
collection or deposit in the ordinary course of business), (iii) all
contingent liabilities of Xxxxxx, (iv) lease obligations that, in
conformity with GAAP, have been capitalized on Xxxxxx' balance sheet,
and (v) the present value of any outstanding Operating Lease payments
(discounted at a rate of 10%), LESS (1) maintenance reserves and
security deposits that are cash backed, and (2) liabilities of
Unrestricted Subsidiaries.
"DEBT SERVICE" shall mean actual payments of principal on Debt and
Capitalized Lease Obligations (including any Debt or Capital Lease
Obligations paid from the sale of equipment during the period), plus
interest expense incurred during the period.
"DEFAULT RATE" on any Loan shall mean two percent (2.0%) per annum above
the rate then applicable to each Loan or portion thereof.
"DOLLARS" shall mean the lawful currency of the United States of America.
"EBIT" shall mean the sum of (i) Net Income, plus (ii) amounts deducted for
interest and income taxes.
"ELIGIBLE LEASE" shall mean a lease for Equipment to an unaffiliated Person
in which (i) Xxxxxx or its trustee is the sole lessor (ii) the lease arose
in the ordinary course of business of Xxxxxx, (iii) the Equipment has been
delivered to the lessee and is currently subject to the lease, (iv) neither
the lease nor the Equipment is subject to any currently outstanding
assignment, claim, lien, security interest or other limitation on the
absolute title of Xxxxxx or its trustee thereto, (v) the lease payments are
not more than 90 days past due with respect to any payment required thereby
(based on the original contractual term and not including any amendment or
modification thereof, unless the Required Banks have specifically consented
thereto in writing), (vi) the lease is freely assignable (with any notices
or consents required in connection therewith having been previously
obtained), (vii) the lease is dated and has been in effect for not more
than 45 days prior to the date the lease was assigned to First Union, as
Agent, and included in the Collateral in the case of leases entered into
subsequent to the date hereof; or the lease was assigned to First Union, as
Agent, and included in the Collateral within 45 days immediately following
the date hereof, in the case of leases existing at the date hereof without
regard to the date of the lease; or the lease was assigned to First Union,
as Agent, and included in the Collateral within 45 days immediately
following the date of acquisition of said lease by Xxxxxx, in the case of
leases purchased from unaffiliated persons, (viii) the lease has not been
included in the Collateral for a period of more than twenty-four months,
(ix) the lease and the Equipment being leased constitute Collateral, (x)
the remaining lease term at the time of assignment to First Union, as
Agent, is for a period of ten years or less in the case of Category A
Equipment and Category B(2) Equipment, (xi) the lease is a noncancellable,
triple net lease in which the lessee may not assert, as an offset, any
defenses or claims against the lessor arising from the condition or the
intended use of the subject matter, except in the case of leases with terms
of less than 6 months in which Xxxxxx may be responsible for maintenance
and (xii) the lessee is not a resident of, and the Equipment will not be
used in any foreign jurisdiction in which the ability of First Union, as
Agent, to perfect a first priority security interest in the Equipment is
unsatisfactory or the ability of First Union, as Agent, to foreclose upon
the Equipment and receive possession to or sell said Equipment is
unsatisfactory.
4
"ENVIRONMENTAL CONTROL STATUTES" shall mean each and every applicable
federal, state, county or municipal environmental statute, ordinance, rule,
regulation, order, directive or requirement, together with all successor
statutes, ordinances, rules, regulations, orders, directives or
requirements, of any Governmental Authority, including without limitation
laws in any way related to Hazardous Substances.
"EQUIPMENT" shall mean Category A Equipment and Category B Equipment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
"ERISA AFFILIATE" shall mean any corporation which is a member of the same
controlled group of corporations as Xxxxxx within the meaning of Section
414(b) of the Code, or any trade or business which is under common control
with Xxxxxx within the meaning of Section 414(c) of the Code.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 8.1.
"FEDERAL FUNDS RATE" shall mean the daily rate of interest announced from
time to time by the Board of Governors of the Federal Reserve System in
publication H. 15 as the "Federal Funds Rate," or if such publication is
unavailable, such rate as is available to First Union on such day.
"FISCAL QUARTER" shall mean a fiscal quarter of Xxxxxx, which shall be any
quarterly period ending on March 31, June 30, September 30 or December 31
of any year.
"FISCAL YEAR" shall mean a fiscal year of Xxxxxx, which shall end on the
last day of December.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" OR "GAAP" shall mean generally
accepted accounting principles as in effect from time to time in the United
States, consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean the federal, state, county or municipal
government, or any department, agency, bureau or other similar type body
obtaining authority therefrom or created pursuant to any laws, including
without limitation Environmental Control Statutes.
"HAZARDOUS SUBSTANCES" shall mean without limitation, any regulated
substance, toxic substance, hazardous substance, hazardous waste,
pollution, pollutant or contaminant, as defined or referred to in the
Resource Conservation and Recovery Act, as amended, 15 U.S.C., Section 2601
ET SEG.; the Comprehensive Environmental Response, Compensation and
Liability Act, 33 U.S.C. Section 1251 ET SEG.; the federal underground
storage tank law, Subtitle I of the Resource Conservation and Recovery Act,
as amended, P.L. 98-616, 42 U.S.C. Section 6901 ET SEG.; together with any
amendments thereto, regulations promulgated thereunder and all
substitutions thereof, as well as words of similar purport or meaning
referred to in any other federal, state, county or municipal environmental
statute, ordinance, rule or regulation.
"INDEBTEDNESS FOR BORROWED MONEY" shall mean (i) all indebtedness,
liabilities, and obligations, now existing or hereafter arising, for money
borrowed by Xxxxxx, whether or not evidenced by any note, indenture, or
agreement (including, without limitation, the Note and
5
any indebtedness for money borrowed from an Affiliate) and (ii) all
indebtedness of others for money borrowed (including indebtedness of an
Affiliate) with respect to which Xxxxxx has become liable by way of a
guarantee or indemnity.
"INTANGIBLE ASSETS" shall mean all assets which would be classified as
intangible assets under GAAP consistently applied, including, without
limitation, goodwill (whether representing the excess of cost over book
value of assets acquired or otherwise), patents, trademarks, trade names,
copyrights, franchises, and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs, and
research and development costs). For purposes of this definition,
prepayments of taxes, license fees and other expenses shall not be deemed
Intangible Assets.
"INTEREST PERIOD" shall mean a period commencing on the date of a LIBO Rate
Loan or with respect to a Loan being renewed, the last day of the next
preceding Interest Period and ending one, two or three months thereafter,
as requested by Xxxxxx at the time of its Request for Advance; provided
also that (i) an Interest Period which would otherwise expire on a day
which is not a London Business Day shall be extended to the next succeeding
London Business Day unless such London Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding London Business Day, (ii) any Interest Period which begins on the
last London Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to the next succeeding clause, end on
the last London Business Day of a calendar month; and (iii) no Interest
Period shall end later than the Revolver Termination Date.
"INVESTMENT" in any Person shall mean (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or other
securities of such Person; (b) any deposit with, or advance, loan or other
extension of credit to, such Person (other than any such deposit, advance,
loan or extension of credit having a term not exceeding 90 days in the
case of unaffiliated Persons and 120 days in the case of Affiliates
representing the purchase price of inventory or supplies purchased in the
ordinary course of business) or guarantee or assumption of, or other
contingent obligation with respect to, Indebtedness for Borrowed Money or
other liability of such Person; and (c) (without duplication of the amounts
included in (a) and (b)) any amount that may, pursuant to the terms of such
investment, be required to be paid, deposited, advanced, lent or extended
to or guaranteed or assumed on behalf of such Person.
"LEVERAGE RATIO" shall mean the ratio of the Debt of Xxxxxx to its Tangible
Net Worth calculated based on the most recent financial statements
furnished to the Banks in accordance herewith.
"LIBO RATE" shall mean the arithmetic average of the rates of interest per
annum (rounded upwards, if necessary to the next 1/16 of 1%) at which First
Union National Bank, individually, is offered deposits of United States
Dollars by leading banks in the interbank eurodollar or eurocurrency market
on or about eleven o'clock (11:00) a.m. London time two London Business
Days prior to the commencement of the requested Interest Period in an
amount substantially equal to the outstanding principal amount of the LIBO
Rate Loan requested for a maturity of comparable duration to the Interest
Period.
6
"LIBO RATE LOAN" shall mean a Loan made at Adjusted LIBO Rate plus the LIBO
Rate Margin, pursuant to a request for advance made under Section 2.4
herein.
"LIBO RATE MARGIN" shall mean the percentage listed in the following table.
LEVERAGE RATIO (*) LIBO RATE MARGIN*
Less than ___ ___%
Equal to or greater than ___ but less than 3.00 ___%
Equal to or greater than ___ but less than 4.00 ___%
Equal to or greater than ___ but less than 5.00 ___%
Equal to or greater than ___ ___%
"LIEN" shall mean any lien, mortgage, security interest, chattel mortgage,
pledge or other encumbrance (statutory or otherwise) of any kind securing
satisfaction of an Obligation, including any agreement to give any of the
foregoing, any conditional sales or other title retention agreement, any
lease in the nature thereof, and the filing of or the agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction
or similar evidence of any encumbrance, whether within or outside the
United States.
"LOAN" or "LOANS" shall mean LIBO Rate or Base Rate Revolving Credit Loan
or Loans.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Security
Agreement, and all other documents directly related or incidental to said
documents, the Loans or the Collateral.
"MATERIAL ADVERSE CHANGE" shall mean any event or condition which, in the
reasonable determination of the Required Banks, could result in a material
adverse change in the financial condition, business, properties or profits
of Xxxxxx or which gives reasonable grounds to conclude that Xxxxxx, may
not or will not be able to perform or observe (in the normal course) its
obligations under the Loan Documents to which it is a party, including but
not limited to the Notes.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect (i) on the
financial condition, business, properties, or profits of Xxxxxx, (ii) the
ability of Xxxxxx to perform its obligations under this Agreement, the
Notes and the other Loan Documents, or (iii) the legality, validity or
enforceability of this Agreement or the Notes or the rights and remedies of
the holders of the Loans.
"MONTHLY LEASE PORTFOLIO AND RECEIVABLES REPORT" shall mean a report in
summary form of the status of accounts receivable in respect of all leases
which are part of the Collateral in form and substance reasonably
satisfactory to First Union, as Agent.
_________________________
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately.
7
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in ERISA
Section 4001(a)(3), which covers employees of Xxxxxx or any ERISA
Affiliate.
"NET INCOME" shall mean net income after income taxes as shown on the
Statement of Income.
"NET WORTH" shall mean the sum of capital stock, plus paid-in capital, plus
retained earnings, minus treasury stock and minus the net worth of any
Unrestricted Subsidiaries.
"NOTE" or "NOTES" shall have the meaning set forth in Section 2.3.
"OBLIGATIONS" shall mean all now existing or hereafter arising debts,
obligations, covenants, and duties of payment or performance of every kind,
matured or unmatured, direct or contingent, owing, arising, due, or payable
to the Banks or First Union, as Agent, by or from Xxxxxx arising out of
this Agreement or any other Loan Document, including, without limitation,
all obligations to repay principal of and interest on the Loans, and to pay
interest, fees, costs, charges, expenses, professional fees, and all sums
chargeable to Xxxxxx or for which Xxxxxx is liable as indemnitor under the
Loan Documents, whether or not evidenced by any note or other instrument.
"OPERATING LEASE" shall mean, with respect to any Person, the aggregate
amount which, in accordance with GAAP, is not required to be reported as a
liability on the balance sheet of such Person at such time in respect of
such Person's interest as lessee under an Operating Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"PENSION PLAN" shall mean, at any time, any Plan (including a Multiemployer
Plan), the funding requirements of which (under ERISA Section 302 or Code
Section 412) are, or at any time within the six years immediately preceding
the time in question, were in whole or in part, the responsibility of
Xxxxxx or any ERISA Affiliate.
"PERMITTED LIENS" shall mean (a) any Liens for current taxes, assessments
and other governmental charges not yet due and payable or being contested
in good faith by Xxxxxx by appropriate proceedings and for which adequate
reserves have been established by Xxxxxx as reflected in Xxxxxx'x financial
statements; (b) any mechanic's, materialman's, carrier's, warehousemen's or
similar Liens for sums not yet due or being contested in good faith by
Xxxxxx by appropriate proceedings and for which adequate reserves have been
established by Xxxxxx as reflected in Xxxxxx'x financial statements; (c)
easements, rights-of-way, restrictions and other similar encumbrances on
the real property or fixtures of Xxxxxx incurred in the ordinary course of
business which individually or in the aggregate are not substantial in
amount and which do not in any case materially detract from the value or
marketability of the property subject thereto or interfere with the
ordinary conduct of the business of Xxxxxx; (d) Liens (other than Liens
imposed on any property of Xxxxxx pursuant to ERISA or Section 412 of the
Code) incurred or deposits made in the ordinary course of business,
including Liens in connection with workers' compensation, unemployment
insurance and other types of social security and Liens to secure
performance of tenders, statutory obligations, surety and appeal bonds (in
the case of appeal bonds such Lien shall not secure any reimbursement or
indemnity obligation in an
8
amount greater than $2,500,000), bids, leases that are not Capitalized
Leases, performance bonds, sales contracts and other similar
obligations, in each case, not incurred in connection with the obtaining
of credit or the payment of a deferred purchase price, and which do not,
in the aggregate, result in a Material Adverse Effect; and (e) Liens, if
any, existing on the date hereof and listed in Schedule 1 hereto other
than Liens of the character referred to in clause (g); (f) Liens in
favor of First Union, as Agent, in the Collateral as contemplated by
this Agreement and the other Loan Documents; (g) Liens on specific
assets purchased which are not included in the Collateral and whether
such assets are purchased before or after the date hereof and any
revenue stream directly attributable thereto provided that such liens
are limited to the equipment so purchased and the revenue stream
generated therefrom.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, association, company, business trust or entity, or other entity of
whatever nature.
"PLAN" shall mean an employee benefit plan as defined in Section 3(3) of
ERISA, other than a Multiemployer Plan, whether formal or informal and
whether legally binding or not.
"POTENTIAL DEFAULT" shall mean an event, condition or circumstance that
with the giving of notice or lapse of time or both would become an Event of
Default.
"PRIME RATE" shall mean, for any day, the prime commercial lending rate of
First Union National Bank, as announced from time to time at its head
office, calculated on the basis of 30 day months and a year of 360 days.
"PROHIBITED TRANSACTION" shall mean a transaction that is prohibited under
Code Section 4975 or ERISA Section 406 and not exempt under Code Section
4975 or ERISA Section 408.
"REGULATION" shall mean any statute, law, ordinance, regulation, order or
rule of any United States or foreign, federal, state, local or other
government or governmental body, including, without limitation, those
covering or related to banking, financial transactions, securities, public
utilities, environmental control, energy, safety, health, transportation,
bribery, record keeping, zoning, antidiscrimination, antitrust, wages and
hours, employee benefits, and price and wage control matters.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as it may be amended from time to time.
"REGULATORY CHANGE" shall mean any change after the date of this Agreement
in any Regulation (including Regulation D) or the adoption or making after
such date of any interpretations, directives or requests of or under any
Regulation (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof applying to a class of banks including any one of
the Banks but excluding any foreign office of any Bank.
"RELEASE" shall mean without limitation, the presence, leaking, leaching,
pouring, emptying, discharging, spilling, using, generating, manufacturing,
refining, transporting, treating, or storing of Hazardous Substances at,
into, onto, from or about the property or the threat
9
thereof, regardless of whether the result of an intentional or
unintentional action or omission, and which is in violation of applicable
law.
"REPORTABLE EVENT" shall mean, with respect to a Pension Plan: (a) Any of
the events set forth in ERISA Sections 4043(b) (other than a reportable
event as to which the provision of 30 days' notice to the PBGC is waived
under applicable regulations) or 4063(a) or the regulations thereunder, (b)
an event requiring any Xxxxxx or any ERISA Affiliate to provide security to
a Pension Plan under Code Section 401(a)(29) and (c) any failure by any
Xxxxxx or any ERISA Affiliate to make payments required by Code Section
412(m).
"REQUEST FOR ADVANCE" shall have the meaning set forth in Section 2.4.
"REQUIRED BANKS" at any time shall mean Banks whose Revolving Loan
Commitments equal or exceed 66 2/3% of the total of such Revolving Loan
Commitments if no Loans are outstanding or, if Loans are outstanding, Banks
whose outstanding Loans equal or exceed 66 2/3% of the Loans.
"RESERVE PERCENTAGE" shall mean, for any LIBO Rate Loan for any Interest
Period, the daily average of the stated maximum rate (expressed as a
decimal) at which reserves (including any marginal, supplemental, or
emergency reserves) are required to be maintained during such Interest
Period under Regulation D by the Bank against "Eurocurrency liabilities"
(as such term is used in Regulation D) but without benefit of credit
proration, exemptions, or offsets that might otherwise be available to the
Bank from time to time under Regulation D. Without limiting the effect of
the foregoing, the Reserve Percentage shall reflect any other reserves
required to be maintained by the Bank against (1) any category of
liabilities which includes deposits by reference to which the rate for LIBO
Rate Loans is to be determined; or (2) any category of extension of credit
or other assets which include LIBO Rate Loans. The Adjusted LIBO Rate
shall be adjusted on and as of the effective day of any change in the
Reserve Percentage.
"REVOLVER TERMINATION DATE" shall have the meaning set forth in Section
2.1.
"REVOLVING CREDIT LOAN" shall have the meaning set forth in Section 2.1.
"REVOLVING CREDIT NOTE" shall have the meaning set for in Section 2.2.
"REVOLVING LOAN COMMITMENT" shall have the meaning set forth in Section
2.1.
"REVOLVING LOAN COMMITMENT FEE" shall have the meaning set forth in
Section 2.6.
"REVOLVING LOAN COMMITMENT PERCENTAGE" shall mean with respect to each Bank
the percentage set forth opposite its name in Exhibit A hereto.
"SECURITY AGREEMENT" shall mean the Mortgage and Security Agreement in the
form and substance attached hereto as Exhibit D.
"SOLVENT" shall mean, with respect to any Person, that the aggregate
present fair saleable value of such Person's assets is in excess of the
total amount of its probable liabilities on its existing
10
debts as they become absolute and matured, such Person has not incurred
debts beyond its foreseeable ability to pay such debts as they mature, and
such Person has capital adequate to conduct the business it is presently
engaged in or is about to engage in.
"STANDBY LETTER OF CREDIT" shall mean only those standby letters of credit
issued pursuant to a completed application on the form of letter of credit
application required by First Union at the time of the request for each
Standby Letter of Credit.
"SUBSIDIARY" shall mean a corporation or other entity the shares of stock
or other equity interests of which having ordinary voting power (other than
stock or other equity interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors
or other managers of such corporation are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries or both, by Xxxxxx.
"TANGIBLE NET WORTH" shall mean Net Worth, minus Intangible Assets.
"TERMINATION EVENT" shall mean, with respect to a Pension Plan: (a) a
Reportable Event, (b) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension
Plan amendment as a termination under ERISA Section 4041(c), (c) the
institution of proceedings to terminate a Pension Plan under ERISA Section
4042 or (d) the appointment of a trustee to administer any Pension Plan
under ERISA Section 4042.
"UNFUNDED PENSION LIABILITIES" shall mean, with respect to any Pension Plan
at any time, the amount determined by taking the accumulated benefit
obligation, as disclosed in accordance with Statement of Accounting
Standards No. 87, over the fair market value of Pension Plan assets.
"UNRECOGNIZED RETIREE WELFARE LIABILITY" shall mean, with respect to any
Plan that provides post-retirement benefits other than pension benefits,
the amount of the accumulated post-retirement benefit obligation, as
determined in accordance with Statement of Financial Accounting Standards
No. 106, as of the most recent valuation date. Prior to the date such
statement is applicable to any Xxxxxx, such amount of the obligation shall
be based on an estimate made in good faith.
"UNRESTRICTED SUBSIDIARY" shall mean WLFC Funding Corporation, T-5, Inc.,
T-7, Inc., T-10, Inc., T-12, Inc. and any additional subsidiary named by
Xxxxxx after the date hereof with the written consent of the Required
Banks.
1.2. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with Generally Accepted Accounting
Principles consistent with those applied in the preparation of the financial
statements referred to in Section 3.5, and all financial data submitted
pursuant to this Agreement shall be prepared in accordance with such
principles.
11
2. THE CREDIT
2.1. THE LOANS.
(a) REVOLVING CREDIT LOANS; COMMITMENT. Subject to the terms and
conditions herein set forth and in reliance upon the representations,
warranties and covenants contained herein, each Bank agrees, severally and
not jointly, to make revolving credit loans (collectively, the "REVOLVING
CREDIT LOANS" or the "LOANS", and individually a "REVOLVING CREDIT LOAN" or a
"LOAN") to Xxxxxx during the period beginning on the date hereof and ending
on July 31, 1998 or on the earlier date of termination in full, pursuant to
Section 2.7 or Section 8.1 hereof, of the obligations of such Bank under this
Section 2.1 (July 31, 1998 or such earlier date of termination being herein
called the "REVOLVER TERMINATION DATE") in amounts not to exceed at any time
outstanding, in the aggregate, the commitment amount set forth opposite the
name of such Bank on Exhibit A hereto (each such amount, as the same may be
reduced pursuant to Section 2.7 hereof being hereinafter called such Bank's
"REVOLVING LOAN COMMITMENT"). The Banks' collective commitment to make Loans
shall be the "AGGREGATE REVOLVING LOAN COMMITMENT". All Loans shall be made
by the Banks simultaneously and PRO RATA in accordance with their respective
Revolving Loan Commitments. All Loans shall be made to Xxxxxx at the main
office of First Union, Xxxxx xxx Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000.
(b) INTEREST RATE OPTIONS. Revolving Credit Loans shall bear
interest at (i) the Base Rate plus the Base Rate Margin, (ii) Adjusted LIBO
Rate plus the LIBO Rate Margin or (iii) some combination of the foregoing, as
requested by Xxxxxx, subject to the terms and conditions hereof including the
requirements concerning minimum Loan requests and the requirements that (i)
no request may be made which would require more than one interest rate option
or more than one Interest Period to apply to Loans made on any single date,
and (ii), in the case of LIBO Rate Loans, (a) not more than five such Loans
may be outstanding at any one time, and (b) no LIBO Rate Loan may have an
Interest Period extending beyond the Revolver Termination Date.
(c) MAXIMUM LOANS OUTSTANDING. Xxxxxx shall not be entitled to any
new Revolving Credit Loan if, after giving effect to such Loan, the unpaid
amount of the then outstanding Loans would exceed the lesser of (i) the
Aggregate Revolving Loan Commitment or (ii) the then current Borrowing Base,
as stated in the most recent Borrowing Base Certificate furnished to the
Banks as provided herein. For purposes of determining the amount of
Revolving Credit Loans outstanding, the Standby Letters of Credit issued
pursuant to Section 2.2 hereof shall be deemed Revolving Credit Loans and
shall be added to the Revolving Credit Loans outstanding to determine the
aggregate Revolving Credit Loans outstanding.
(d) MINIMUM LOAN AMOUNT. Except for Loans which exhaust the full
remaining amount of the Aggregate Revolving Loan Commitment and conversions
which result in the conversion of all Loans subject to a particular interest
rate option, each of which may be in lesser amounts, (i) each LIBO Rate Loan
when made (and each conversion of Base Rate Loans into LIBO Rate Loans) shall
be in an amount at least equal to $3,000,000 or, if greater, then in such
minimum amount plus $100,000 multiples, and (ii) each Base Rate Loan when
made (and each conversion of LIBO Rate Loans into Base Rate Loans) shall be
in an amount at least equal to $150,000.
(e) PREPAYMENT AND REBORROWING. Prior to the Revolver Termination
Date and within the limits of the Aggregate Revolving Loan Commitment and the
Borrowing Base, Xxxxxx may
12
borrow, prepay and reborrow Revolving Credit Loans. All Revolving Credit
Loans shall mature and be due and payable on the Revolver Termination Date.
(f) LIMIT FOR CATEGORY B EQUIPMENT. Xxxxxx may have Revolving
Credit Loans outstanding at any time and from time to time in an aggregate
amount up to, but not exceeding $25,000,000 for the acquisition of Category B
Equipment. Any item of Category B Equipment which is a Stage III jet engine
shall be deducted from Category B Equipment and become part of Category A
Equipment upon the physical removal of that engine from its airframe,
provided that such Equipment otherwise qualifies as Category A Equipment.
(g) REVOLVING LOAN COMMITMENT PERCENTAGES. The obligation of
each Bank to make a Loan to Xxxxxx at any time shall be limited to its
percentage (the "REVOLVING LOAN COMMITMENT PERCENTAGE") as set forth opposite
its name on Exhibit A hereto multiplied by the aggregate principal amount of
the Loan requested. The principal amounts of the respective Loans made by
the Banks on the occasion of each Borrowing shall be pro rata in accordance
with their respective Revolving Loan Commitment Percentages. No Bank shall
be required or permitted to make any Loan if, immediately after giving effect
to such Loan, and the application of the proceeds of a Loan to the extent
applied to the repayment of the Loans, the sum of such Bank's Loans
outstanding would exceed such Bank's Revolving Loan Commitment.
(h) SEVERAL OBLIGATIONS. The failure of any one or more Banks to
make Loans in accordance with its or their obligations shall not relieve the
other Banks of their several obligations hereunder, but in no event shall the
aggregate amount at any one time outstanding which any Bank shall be required
to lend hereunder exceed its Revolving Loan Commitment.
(i) PAYMENT OF ADDITIONAL AMOUNT. If any principal of a LIBO
Rate Loan shall be repaid (whether upon prepayment, reduction of the
Aggregate Revolving Loan Commitment after acceleration or for any other
reason) or converted to a Base Rate Loan prior to the last day of the
Interest Period applicable to such LIBO Rate Loan or if Xxxxxx fails for any
reason to borrow a LIBO Rate Loan after giving irrevocable notice pursuant to
Section 2.4, it shall pay to each Bank, in addition to the principal and
interest then to be paid, such additional amounts as may be necessary to
compensate each Bank for all direct and indirect costs and losses (including
losses resulting from redeployment of prepaid or unborrowed funds at rates
lower than the cost of such funds to such Bank, and including lost profits
incurred or sustained by such Bank) as a result of such repayment or failure
to borrow (the "ADDITIONAL AMOUNT"). The Additional Amount (which each Bank
shall take reasonable measures to minimize) shall be specified in a written
notice or certificate delivered to Xxxxxx by First Union, as Agent, in the
form provided by each Bank sustaining such costs or losses. Such notice or
certificate shall contain a calculation in reasonable detail of the
Additional Amount to be compensated and shall be conclusive as to the facts
and the amounts stated therein, absent manifest error.
2.2. STANDBY LETTERS OF CREDIT. First Union, as Agent, under the
terms and subject to the conditions of this Agreement, on behalf of itself
and each other Bank in the same proportions as each Bank's Revolving Loan
Commitment bears to the Aggregate Revolving Loan Commitment, shall provide
Standby Letters of Credit to Xxxxxx, from time to time prior to the Revolver
Termination Date, as requested by Xxxxxx, provided that (A) the aggregate
amount of Standby Letters of Credit outstanding at any one time shall not
exceed $2,000,000 or such lesser amount, if any, as will, when added to the
amount of the Revolving Credit Loans then outstanding, aggregate more than
the Aggregate Revolving Loan Commitment (or such lesser amount as Xxxxxx is
entitled to borrow
13
hereunder at such time by reason of the limitation of the Borrowing Base or
otherwise), and (B) no Standby Letter of Credit shall be for a term longer
than one year.
Xxxxxx shall request a Standby Letter of Credit by delivering a
completed letter of credit application to First Union on such form as may be
specified by First Union not less than three Business Days prior to the date
specified by Xxxxxx as the date the Standby Letter of Credit is to be issued.
The standard form of First Union letter of credit application as currently
in effect shall be used.
Standby Letters of Credit shall not bear interest until drawn upon but
shall each be subject to an annual charge, payable in advance, as such may
exist from time to time, PROVIDED, HOWEVER, that at no time shall the annual
charge for any Standby Letter of Credit exceed 2.75%.
If any obligation of Xxxxxx to pay money in connection with any Standby
Letter of Credit is not met when requested by First Union, as Agent, as
permitted by the applicable letter of credit application and the
reimbursement agreement contained therein, the amount due shall be funded
automatically by a Revolving Credit Loan which Loan shall be made without
regard to any minimum borrowing requirement, condition precedent herein, or
Event of Default hereunder which would otherwise entitle any Bank or the
Banks not to provide such Revolving Credit Loan, and each Bank shall make its
proportionate share of such Revolving Credit Loan. Any obligation of Xxxxxx
to pay money in connection with any Standby Letter of Credit or the
application therefor shall be deemed secured as if made as a Loan hereunder.
In the event Xxxxxx shall terminate the Aggregate Revolving Loan Commitment
as provided in Section 2.6 and shall pay the outstanding principal amount of
the Revolving Credit Loans in full and with interest or the Revolver
Termination Date shall occur at a time when one or more Standby Letters of
Credit remain outstanding, then Xxxxxx shall furnish to First Union, as
Agent, within two Business Days such amount of cash, to be held as cash
collateral and invested in certificates of deposit of First Union with
interest payable to Xxxxxx, as will pay the maximum amount which may be drawn
by beneficiaries of Standby Letters of Credit outstanding at the date of such
termination or the Revolver Termination Date, as applicable.
2.3. THE NOTES. The Revolving Credit Loans made by each Bank shall be
evidenced by a single promissory note of Xxxxxx (each such promissory note as
it may be amended, extended, modified or renewed a "REVOLVING CREDIT NOTE" or
a "NOTE" and together the "REVOLVING CREDIT NOTES" or the "NOTES") in
principal face amount equal to such Bank's Revolving Loan Commitment, payable
to the order of such Bank and otherwise in the form attached hereto as
Exhibit B. The Revolving Credit Notes shall be dated the date of issuance,
shall bear interest at the rate per annum and be payable as to principal and
interest in accordance with the terms hereof. Each outstanding Revolving
Credit Loan shall be and payable as set forth in Section 2.1 hereof unless
the maturity of said Loans is accelerated as provided in Section 2.7 or
Section 8.1 hereof. Notwithstanding the stated amount of any Revolving
Credit Note, the liability of Xxxxxx under each Revolving Credit Note shall
be limited at all times to the outstanding principal amount of the Revolving
Credit Loans by each Bank evidenced thereby, plus all interest accrued
thereon and the amount of all costs and expenses then payable hereunder, as
established by each such Bank's books and records, which books and records
shall be conclusive absent manifest error.
2.4. FUNDING PROCEDURES.
(a) REQUEST FOR ADVANCE. Each request for a Revolving Credit Loan
or the conversion or renewal of an interest rate with respect to a Loan shall
be made not later than 2:00 p.m.
14
EST on a Business Day by delivery to First Union of a written request signed
by Xxxxxx or, in the alternative, a telephone request followed promptly by
written confirmation of the request (a "REQUEST FOR ADVANCE"), specifying
the date and amount of the Loan to be made, converted or renewed, selecting
the interest rate option applicable thereto, and in the case of LIBO Rate
Loans, specifying the Interest Period applicable to such Loans. The form of
request to be used in connection with the making, conversion or renewal of
Revolving Credit Loans shall be that form provided to Xxxxxx by First Union.
Each request shall be received not less than one Business Day prior to the
date of the proposed borrowing, conversion or renewal in the case of Base
Rate Loans, and three London Business Days prior to the date of the proposed
borrowing, conversion or renewal in the case of LIBO Rate Loans. No request
shall be effective until actually received in writing by First Union, as the
Agent. Xxxxxx may not request more than three advances per week. Each
request for advance shall be for Loans at a single interest rate option.
(b) ACTIONS BY AGENT Upon receipt of a Request for Advance and if
the conditions precedent provided herein shall be satisfied at the time of
such request, First Union promptly shall notify each Bank of such request and
of such Bank's ratable share of such Loan. Upon receipt by First Union of a
Request for Advance, the request shall not be revocable by Xxxxxx.
(c) AVAILABILITY OF FUNDS Not later than 1:00 p.m. EST on the
date of each Loan, each Bank shall make available (except as provided in
clause (d) below) its ratable share of such Loan, in immediately available
funds, to First Union at the address set forth opposite its name on the
signature page hereof or at such account in London as First Union shall
specify to Xxxxxx and the Banks. Unless First Union knows that any applicable
condition specified herein has not been satisfied, it will make the funds so
received from the Banks immediately available to Xxxxxx on the date of each
Loan by a credit to the account of Xxxxxx at First Union' aforesaid address.
(d) FUNDING ASSUMPTIONS Unless First Union shall have been
notified by any Bank at least one Business Day prior to the date of the
making, conversion or renewal of any LIBO Rate Loan, or by 3:00 P.M. on the
date a Base Rate Loan is requested, that such Bank does not intend to make
available to First Union, such Bank's portion of the total amount of the Loan
to be made, converted or renewed on such date, First Union may assume that
such Bank has made such amount available to First Union on the date of the
Loan and First Union may, in reliance upon such assumption, make available to
Xxxxxx a corresponding amount. If and to the extent such Bank shall not have
so made such funds available to First Union, such Bank agrees to repay First
Union forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to Xxxxxx
until the date such amount is repaid to First Union, at the Federal Funds
Rate plus 50 basis points for three Business Days, and thereafter at the Base
Rate. If such Bank shall repay to First Union such corresponding amount,
such amounts so repaid shall constitute such Bank's Loan for purposes of this
Agreement. If such Bank does not repay such corresponding amount forthwith
upon First Union's demand therefor, First Union shall promptly notify Xxxxxx,
and Xxxxxx shall immediately pay such corresponding amount to First Union,
without any prepayment penalty or premium, but with interest on the amount
repaid, for each day from the date such amount is made available to Xxxxxx
until the date such amount is repaid to First Union, at the rate of interest
applicable at the time to such Loan. Nothing herein shall be deemed to
relieve any Bank of its obligation to fulfill its Revolving Loan Commitment
hereunder or to prejudice any rights which Xxxxxx may have against any Bank
as a result of any default by such Bank hereunder.
15
(e) PROCEEDS OF LOAN BEING REPAID. If the Banks make a Loan on a
day on which all or any part of an outstanding Loan from the Banks is to be
repaid, each Bank shall apply the proceeds of its new Loan to make such
repayment and only an amount equal to the difference (if any) between the
amount being borrowed and the amount being repaid shall be made available by
such Bank to First Union as provided in clause (c).
2.5. INTEREST.
(a) BASE RATE LOANS. Each Base Rate Loan shall bear interest on the
unpaid principal balance thereof from day to day at a rate per annum which at
all times shall be equal to the Base Rate plus the Base Rate Margin.
Interest on Loans shall be computed on the basis of a year of 365 or 366
days, as applicable, if the Base Rate is equal to the prime rate of First
Union. Interest on Loans shall be computed on the basis of a year of 360
days, for the actual days elapsed, if the Base Rate is equal to the Federal
Funds Rate plus __% annum.*
(b) LIBO RATE LOANS. Each LIBO Rate Loan shall bear interest from its
effective date on the unpaid principal amount thereof at Adjusted LIBO Rate
plus the LIBO Rate Margin. Interest on LIBO Rate Loans shall be computed on
the basis of a year of 360 days, for the actual days elapsed, and shall be
payable on the last day of the applicable Interest Period.
(c) CONVERSION TO BASE RATE. Unless Xxxxxx shall have elected in
accordance with the provisions of Section 2.4 or this Section 2.5 that LIBO
Rate apply to the one, two or three month period immediately succeeding a
particular Interest Period, upon the termination of such Interest Period the
applicable Loan shall bear interest at the Base Rate plus the Base Rate
Margin until such time as Xxxxxx elects to request a new LIBO Rate Loan for a
subsequent Interest Period.
(d) RENEWALS AND CONVERSIONS. Xxxxxx shall have the right to convert
Base Rate Loans into LIBO Rate Loans, and vice versa, and to renew LIBO Rate
Loans from time to time, provided that: (i) Xxxxxx shall give First Union,
as Agent, notice of each permitted conversion or renewal; (ii) LIBO Rate
Loans may be converted or renewed only as of the last day of the applicable
Interest Period for such Loans; (iii) without the consent of the Required
Banks, no Base Rate Loan may be converted into a LIBO Rate Loan, and no
Interest Period may be renewed if on the proposed date of conversion an Event
of Default, or Potential Default exists or would thereby occur. First Union,
as Agent, shall use its best efforts to notify Xxxxxx of the effectiveness of
such conversion or renewal, and the new interest rate to which the converted
or renewed Loan is subject, as soon as practicable after the conversion;
provided, however, that any failure to give such notice shall not affect
Xxxxxx' obligations or the Banks' rights and remedies hereunder in any way
whatsoever.
(e) INTERIM PAYMENTS AT BASE RATE. If at any time Xxxxxx requests that
Adjusted LIBO Rate plus the LIBO Rate Margin be applicable to a Loan for a
particular Interest Period and a payment of principal is due within such
period (other than on the last day of such Interest Period), only that
_________________________
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately.
16
portion of that Loan equal to the outstanding principal amount of the Loan
less the principal installment due during such period shall bear interest at
Adjusted LIBO Rate plus the LIBO Rate Margin for such Interest Period. The
portion of that Loan equal to the principal installment due during such
period shall bear interest at the Base Rate plus the Base Rate Margin.
(f) REINSTATEMENTS(f) The liability of Xxxxxx under this Section 2.5
shall continue to be effective or be automatically reinstated, as the case
may be, if at any time payment, in whole or in part, of any of the payments
to the Banks is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of Xxxxxx
or any other Person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with
respect to Xxxxxx or any other Person or any substantial part of its
property, or otherwise, all as though such payment had not been made.
2.6. REVOLVING LOAN COMMITMENT FEE. Xxxxxx agrees to pay to First
Union, as Agent, for the account of each Bank as compensation for the
Aggregate Revolving Loan Commitment, a fee (the "REVOLVING LOAN COMMITMENT
FEE") computed as follows: (1) when the average daily balance of the
aggregate Loans outstanding under the Revolving Credit Notes (measured over
the previous calendar quarter or portion thereof, as applicable) is less than
__% of the Aggregate Revolving Loan Commitment, Xxxxxx shall pay a Revolving
Loan Commitment Fee equal to __% of the unused portion of the Aggregate
Revolving Loan Commitment, and (2) when the average daily balance of the
aggregate Loans outstanding under the Revolving Credit Notes (measured over
the previous calendar quarter or portion thereof, as applicable) is at least
__% of the Aggregate Revolving Loan Commitment, Xxxxxx shall pay a Revolving
Loan Commitment Fee equal to __% of the unused portion of the Aggregate
Revolving Loan Commitment. The Revolving Loan Commitment Fee shall be
payable in arrears on the first day of each January, April, July and October,
commencing July 1, 1997 (for the three month period or portion thereof ended
on the preceding day), and on the Revolver Termination Date. The Revolving
Loan Commitment Fee shall be calculated on the basis of a 360 day year.*
2.7. REDUCTION OR TERMINATION OF REVOLVING LOAN COMMITMENTS.
(a) VOLUNTARY. Xxxxxx may at any time, on not less than one Business
Days' written notice, terminate or permanently reduce the Aggregate Revolving
Loan Commitment pro rata among the Banks, provided that any reduction shall
be in the minimum amount of $150,000 or a multiple thereof and that no such
reduction shall cause the principal amount of Loans outstanding to exceed the
reduced Aggregate Revolving Loan Commitment or the Borrowing Base, whichever
is less.
(b) REVOLVING LOAN COMMITMENT TERMINATION. In the event the
Aggregate Revolving Loan Commitment is terminated, the Revolver Termination
Date shall be accelerated to the date of such termination and Xxxxxx shall,
simultaneously with such termination, repay the Revolving Credit Loans in
accordance with Section 2.9.
_________________________
* This redacted material has been omitted pursuant to a request for
confidential treatment and the material has been filed separately.
17
2.8. VOLUNTARY PREPAYMENTS.
(a) BASE RATE LOANS. On one Business Day's notice to First Union,
Xxxxxx may, without penalty, at its option, prepay any Base Rate Loan in
whole at any time or in part from time to time, provided that each partial
prepayment shall be in the minimum principal amount of $150,000 or, if
greater, then in multiples thereof and, if less than $150,000 shall be
outstanding, in principal amount equal to amount remaining outstanding.
Notwithstanding the foregoing, prepayments may be made in connection with the
release of collateral as provided in Section 9.3, which prepayments shall not
be subject to the requirements of the previous sentence.
(b) LIBO RATE LOANS. On three London Business Days' notice to First
Union, Xxxxxx may, without penalty, at its option, prepay any LIBO Rate Loan
in whole at any time or in part from time to time, provided that each partial
prepayment shall be in the minimum principal amount of $1,000,000 or, if
greater, then in multiples of $100,000 and, if less than $1,000,000 shall be
outstanding, in principal amount equal to amount remaining outstanding
provided that if it shall prepay a LIBO Rate Loan prior to the last day of
the applicable Interest Period, or shall fail to borrow any LIBO Rate Loan on
the date such Loan is to be made, it shall pay to each Bank, in addition to
the principal and interest then to be paid in the case of a prepayment, on
such date of prepayment, the Additional Amount incurred or sustained by such
Bank as a result of such prepayment or failure to borrow as provided in
Section 2.1.
2.9. PAYMENTS.
(a) ACCRUED INTEREST. Accrued interest on all Base Rate Loans shall be
due and payable on the first Business Day of each calendar month. Interest
on LIBO Rate Loans shall be payable on the last day of the applicable
Interest Period. Each Revolving Credit Loan shall mature as provided in
Section 2.1.
(b) FORM OF PAYMENTS, APPLICATION OF PAYMENTS, PAYMENT ADMINISTRATION,
ETC. All payments of principal, interest, fees, or other amounts payable by
Xxxxxx hereunder shall be applied to the Loans in such order and to such
extent as shall be specified by Xxxxxx by written notice to First Union at
the time of such payment or prepayment. Such payments shall be remitted to
First Union on behalf of the Banks at the address set forth opposite its name
on the signature page hereof or at such office or account as First Union
shall specify to Xxxxxx, in immediately available funds not later than 2:00
p.m. on the day when due. Whenever any payment is stated as due on a day
which is not a Business Day, the maturity of such payment shall, except as
otherwise provided in the definition of "Interest Period," be extended to the
next succeeding Business Day and interest and commitment fees shall continue
to accrue during such extension. Xxxxxx authorizes First Union to deduct from
any account of Xxxxxx maintained at First Union or over which First Union has
control any amount payable under this Agreement, the Notes or any other Loan
Document which is not paid in a timely manner. First Union's failure to
deliver any xxxx, statement or invoice with respect to amounts due under this
Section or under any Loan Document shall not affect Xxxxxx'x obligation to
pay any installment of principal, interest or any other amount under this
Agreement when due and payable.
(c) DEMAND DEPOSIT ACCOUNT. Xxxxxx shall maintain at least one demand
deposit account with First Union for purposes of this Agreement. Xxxxxx
authorizes First Union to deposit into said account all amounts to be
advanced to Xxxxxx hereunder. Further, Xxxxxx authorizes First Union (but
18
First Union shall not be obligated) to deduct from said account, or any other
account maintained by Xxxxxx at First Union National Bank, any amount payable
hereunder on or after the date upon which it is due and payable. Such
authorization shall include but not be limited to amounts payable with respect
to principal, interest, fees and expenses.
(d) NET PAYMENTS. All payments made to the Banks by Xxxxxx hereunder,
under any Note or under any other Loan Document will be made without set off,
counterclaim or other defense.
2.10. CHANGE IN CIRCUMSTANCES, YIELD PROTECTION.
(a) CERTAIN REGULATORY CHANGES. If any Regulatory Change or
compliance by any Bank with any request made after the date of this Agreement
by the Board of Governors of the Federal Reserve System or by any Federal
Reserve Bank or other central bank or fiscal, monetary or similar authority
(in each case whether or not having the force of law) shall (i) impose,
modify or make applicable any reserve, special deposit, Federal Deposit
Insurance Corporation premium or similar requirement or imposition against
assets held by, or deposits in or for the account of, or loans made by, or
any other acquisition of funds for loans or advances by, any Bank; (ii)
impose on any Bank any other condition regarding the Notes; (iii) subject any
Bank to, or cause the withdrawal or termination of any previously granted
exemption with respect to, any tax (including any withholding tax but not
including any income tax not currently causing any Bank to be subject to
withholding) or any other levy, impost, duty, charge, fee or deduction on or
from any payments due from Xxxxxx; or (iv) change the basis of taxation of
payments from Xxxxxx to any Bank (other than by reason of a change in the
method of taxation of any Bank's net income); and the result of any of the
foregoing events is to increase the cost to any Bank of making or maintaining
any Loan or to reduce the amount of principal, interest or fees to be
received by any Bank hereunder in respect of any Loan, First Union will
immediately so notify Xxxxxx. If any Bank determines in good faith that the
effects of the change resulting in such increased cost or reduced amount
cannot reasonably be avoided or the cost thereof mitigated, then upon notice
by First Union to Xxxxxx, Xxxxxx shall pay to such Bank on each interest
payment date of the Loan, such additional amount as shall be necessary to
compensate that Bank for such increased cost or reduced amount.
(b) CAPITAL ADEQUACY. If any Bank shall determine that any
Regulation regarding capital adequacy or the adoption of any Regulation
regarding capital adequacy, which Regulation is applicable to banks (or their
holding companies) generally and not such Bank (or its holding company)
specifically, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by such Bank (or its holding company) with any such request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has the effect of
reducing the rate of return on such Bank's capital as a consequence of its
obligations hereunder to a level below that which such Bank could have
achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, Xxxxxx shall promptly pay to First
Union for the account of such Bank, upon the demand of such Bank, such
additional amount or amounts as will compensate such Bank for such reduction.
(c) ABILITY TO DETERMINE LIBO RATE. If First Union shall determine
(which determination will be made after consultation with any Bank requesting
same and shall be, in the absence of fraud or manifest error, conclusive and
binding upon all parties hereto) that by reason of
19
abnormal circumstances affecting the interbank eurodollar or applicable
eurocurrency market adequate and reasonable means do not exist for
ascertaining the LIBO Rate to be applicable to the requested LIBO Rate Loan
or that eurodollar or eurocurrency funds in amounts sufficient to fund all
the LIBO Rate Loans are not obtainable on reasonable terms, First Union shall
give notice of such inability or determination by telephone to Xxxxxx and to
each Bank at least two Business Days prior to the date of the proposed Loan
and thereupon the obligations of the Banks to make, convert other Loans to,
or renew such LIBO Rate Loan shall be excused, subject, however, to the right
of Xxxxxx at any time thereafter to submit another request.
(d) YIELD PROTECTION. Determination by a Bank for purposes hereof
of the effect of any Regulatory Change or other change or circumstance
referred to above on its costs of making or maintaining Loans or on amounts
receivable by it in respect of the Loans and of the additional amounts
required to compensate such Bank in respect of any additional costs, shall be
made in good faith and shall be evidenced by a certificate, signed by an
officer of such Bank and delivered to Xxxxxx, as to the fact and amount of
the increased cost incurred by or the reduced amount accruing to such Bank
owing to such event or events. Such certificate shall be prepared in
reasonable detail and shall be conclusive as to the facts and amounts stated
therein, absent manifest error.
(e) NOTICE OF EVENTS. The affected Bank will notify Xxxxxx of any
event occurring after the date of this Agreement that will entitle such Bank to
compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation. Said
notice shall be in writing, shall specify the applicable Section or Sections of
this Agreement to which it relates and shall set forth the amount of amounts
then payable pursuant to this Section. Xxxxxx shall pay such Bank the amount
shown as due on such notice within 10 days after its receipt of the same.
2.11. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if the adoption of any applicable Regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank with any
request or directive (whether or not having the force of law) of any such
authority, central bank, or comparable agency shall make it unlawful or
impossible for any Bank to (1) maintain their Revolving Loan Commitments,
then upon notice to Xxxxxx by First Union, the Revolving Loan Commitments
shall terminate; or (2) maintain or fund their LIBO Rate Loans, then upon
notice to the Xxxxxx of such event, the Xxxxxx'x outstanding LIBO Rate Loans
shall be converted into Base Rate Loans.
2.12. DISCRETION OF EACH BANK AS TO MANNER OF FUNDING.
Notwithstanding any provision of this Agreement to the contrary, each Bank
shall be entitled to fund and maintain its funding of all or any part of its
Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if
each Bank had actually funded and maintained each LIBO Rate Loan during each
Interest Period for such Loan through the purchase of deposits in the
relevant interbank market having a maturity corresponding to such Interest
Period and bearing an interest rate equal to the LIBO Rate plus the LIBO Rate
Margin, for such Interest Period.
3. REPRESENTATIONS AND WARRANTIES.
Xxxxxx represents and warrants to the Banks that:
20
3.1. ORGANIZATION, STANDING. It (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, (ii) has the corporate power and authority necessary to
own its assets, carry on its business and enter into and perform its
obligations hereunder, and under each Loan Document to which it is a party,
and (iii) is qualified to do business and is in good standing in each
jurisdiction where the nature of its business or the ownership of its
properties requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect.
3.2. CORPORATE AUTHORITY, VALIDITY, ETC. The making and performance of
the Loan Documents to which it is a party are within its power and authority
and have been duly authorized by all necessary corporate action. The making
and performance of the Loan Documents do not and under present law will not
require any consent or approval not obtained of any of Xxxxxx'x shareholders,
or any other person, do not and under present law will not violate any law,
rule, regulation order, writ, judgment, injunction, decree, determination or
award, do not violate any provision of its charter or by-laws, do not and
will not result in any breach of any material agreement, lease or instrument
to which it is a party, by which it is bound or to which any of its assets
are or may be subject, and do not and will not give rise to any Lien upon any
of its assets. The number of shares and classes of the capital stock of
Xxxxxx and the ownership thereof are accurately set forth on Schedule 1
attached hereto; all such shares are validly issued, fully paid and
non-assessable, and the issuance and sale thereof are in compliance with all
applicable federal and state securities and other applicable laws. Further,
Xxxxxx is not in default under any such agreement, lease or instrument except
to the extent such default reasonably could not have a Material Adverse
Effect. No authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency are
necessary for the execution, delivery or performance by Xxxxxx of any Loan
Document to which it is a party or for the validity or enforceability
thereof, except any filings or registrations expressly contemplated by the
Loan Documents. Each Loan Document, when executed and delivered, will be the
legal, valid and binding obligation of Xxxxxx, enforceable against it in
accordance with its terms.
3.3. LITIGATION. Except as disclosed on Schedule 1, there are no
actions, suits or proceedings pending or, to Xxxxxx'x knowledge, threatened
against or affecting Xxxxxx or any of its assets before any court, government
agency, or other tribunal which if adversely determined reasonably could have
a Material Adverse Effect or upon the ability of Xxxxxx to perform under the
Loan Documents. If there is any disclosure on Schedule 1, the status
(including the tribunal, the nature of the claim and the amount in
controversy) of each such litigation matter as of the date of this Agreement
is set forth in Schedule 1.
3.4. ERISA. (a) Xxxxxx and each ERISA Affiliate are in compliance in all
material respects with all applicable provisions of ERISA and the regulations
promulgated thereunder; and, neither Xxxxxx, nor any ERISA Affiliate maintains
or contributes to or has maintained or contributed to any multiemployer plan
(as defined in Section 4001 of ERISA) under which Xxxxxx or any ERISA Affiliate
could have any withdrawal liability; (b) neither Xxxxxx nor any ERISA Affiliate,
sponsors or maintains any Plan under which there is an accumulated funding
deficiency within the meaning of Section 412 of the Code, whether or not waived;
(c) the aggregate liability for accrued benefits and other ancillary benefits
under each Plan that is or will be sponsored or maintained by Xxxxxx or any
ERISA Affiliate (determined on the basis of the actuarial assumptions prescribed
for valuing benefits under terminating single-employer defined benefit plans
under Title IV of ERISA) does not exceed the aggregate fair market value of the
assets under each such defined benefit pension Plan; (d) the aggregate
liability of
21
Xxxxxx and each ERISA Affiliate arising out of or relating to a failure of
any Plan to comply with the provisions of ERISA or the Code, will not have a
Material Adverse Effect; and (e) there does not exist any unfunded liability
(determined on the basis of actuarial assumptions utilized by the actuary for
the plan in preparing the most recent Annual Report) of Xxxxxx or any ERISA
Affiliate under any plan, program or arrangement providing post-retirement
life or health benefits.
3.5. FINANCIAL STATEMENTS. The consolidated financial statements of
Xxxxxx as of and for the Fiscal Years ending December 31, 1997 and December
31, 1996, consisting of a balance sheet, a statement of operations, a
statement of shareholders' equity, a statement of cash flows and accompanying
footnotes, and the interim consolidated and consolidating financial
statements of Xxxxxx as of March 31, 1998 furnished to the Banks in
connection herewith, present fairly, in all material respects, the financial
position, results of operations and operating statistics Xxxxxx as of the
dates and for the periods referred to, in conformity with GAAP. Except as
set forth on Schedule 1 hereto, there are no liabilities, fixed or
contingent, which are not reflected in such financial statements, other than
liabilities which are not required to be reflected in such balance sheets.
3.6. NOT IN DEFAULT, JUDGMENTS, ETC. No Event of Default or Potential
Default under any Loan Document has occurred and is continuing. Xxxxxx has
satisfied all judgments and is not in default with respect to any judgment,
writ, injunction, decree, rule, or regulation of any court, arbitrator, or
federal, state, municipal, or other governmental authority, commission, board
bureau, agency, or instrumentality, domestic or foreign.
3.7. TAXES. Xxxxxx has filed all federal, state, local and foreign tax
returns and reports which it is required by law to file and as to which its
failure to file would have a Material Adverse Effect, and has paid all taxes,
including wage taxes, assessments, withholdings and other governmental charges
which are presently due and payable, other than those being contested in good
faith by appropriate proceedings, if any, and disclosed on Schedule 1. The tax
charges, accruals and reserves on the books of Xxxxxx are adequate to pay all
such taxes that have accrued but are not presently due and payable.
3.8. PERMITS, LICENSES, ETC. Xxxxxx possesses all permits, licenses,
franchises, trademarks, trade names, copyrights and patents necessary to the
conduct of its business as presently conducted or as presently proposed to be
conducted, except where the failure to possess the same would not have a
Material Adverse Effect.
3.9. NO MATERIALLY ADVERSE CONTRACTS, ETC. To the best of its
knowledge, Xxxxxx is not subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of its directors or officers has or is expected in the future to
have a materially adverse effect on its operations, business, assets,
liabilities or upon its ability to perform under the Loan Documents. Xxxxxx
is not a party to any contract or agreement which in the judgment of its
directors or officers has or is expected to have any materially adverse
effect on its business, except as otherwise reflected in adequate reserves.
3.10. COMPLIANCE WITH LAWS, ETC.
(a) COMPLIANCE GENERALLY. Xxxxxx is in compliance in all material
respects with all Regulations applicable to its business (including obtaining
all authorizations, consents, approvals, orders, licenses, exemptions from,
and making all filings or registrations or qualifications with, any
22
court or governmental department, public body or authority, commission,
board, bureau, agency, or instrumentality), the noncompliance with which
reasonably could have a Material Adverse Effect.
(b) HAZARDOUS WASTES, SUBSTANCES AND PETROLEUM PRODUCTS. Xxxxxx
received all permits and filed all notifications necessary to carry on its
business; and is in compliance in all respects with all Environmental Control
Statutes. Xxxxxx has not given any written or oral notice, nor has it failed
to give required notice, to the Environmental Protection Agency ("EPA") or
any state or local agency with regard to any actual or imminently threatened
Release of Hazardous Substances on properties owned, leased or operated by it
or used in connection with the conduct of its business and operations.
Xxxxxx has not received notice that it is potentially responsible for costs
of clean-up or remediation of any actual or imminently threatened Release of
Hazardous Substances pursuant to any Environmental Control Statute. No real
property owned or leased by it is in violation of any Environmental Laws and
no Hazardous Substances are present on said real property in violation of
applicable law. Xxxxxx has not been identified in any litigation,
administrative proceedings or investigation as a potentially responsible
party for any liability under any Environmental Laws.
3.11. SOLVENCY. Xxxxxx is, and after giving effect to the transactions
contemplated hereby, will be, Solvent.
3.12. SUBSIDIARIES, ETC. Xxxxxx does not have any Subsidiaries, except
as set forth In Schedule 1 hereto. Set forth in Schedule 1 hereto is a
complete and correct list, as of the date of this Agreement, of all
Investments held by Xxxxxx in any joint venture or other Person.
3.13. TITLE TO PROPERTIES, LEASES. Xxxxxx has good and marketable
title to all assets and properties reflected as being owned by it in its
financial statements as well as to all assets and properties acquired since
said date (except property disposed of since said date in the ordinary course
of business). Except for the Liens set forth in Schedule 1 hereto and any
other Permitted Liens, there are no Liens on any of such assets or
properties. It has the right to, and does, enjoy peaceful and undisturbed
possession under all material leases under which it is leasing property as a
lessee. All such leases are valid, subsisting and in full force and effect,
and none of such leases is in default, except where such default, either
individually or in the aggregate, could not have a Material Adverse Effect.
3.14. PUBLIC UTILITY HOLDING COMPANY; INVESTMENT COMPANY. Xxxxxx is not
a "public utility company" or a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended; or a "public utility"
within the meaning of the Federal Power Act, as amended. Further, it is not
an "investment company" or an "affiliated person" of an "investment company"
or a company "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
3.15. MARGIN STOCK. Xxxxxx is not and will not be engaged principally
or as one of its important activities in the business of extending credit for
the purpose of purchasing or carrying or trading in any margin stocks or
margin securities (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System as amended from time to time).
Neither will it use or permit any proceeds of the Loans to be used, either
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stocks or margin securities.
23
3.16. USE OF PROCEEDS. Xxxxxx will use the proceeds of any Loan to
be made pursuant hereto for the purchase of Equipment as contemplated herein.
3.17. DEPRECIATION POLICIES. Xxxxxx'x depreciation policies are as
set forth on Exhibit F. These policies have been in effect without change
since January 1, 1997.
3.18. DISCLOSURE GENERALLY. The representations and statements made
by Xxxxxx or on its behalf in connection with this credit facility and the
Loans, including representations and statements in each of the Loan
Documents, do not and will not contain any untrue statement of a material
fact or omit to state a material fact or any fact necessary to make the
representations made not materially misleading. No written information,
exhibit, report, brochure or financial statement furnished by Xxxxxx to the
Banks in connection with this credit facility, the Loans, or any Loan
Document contains or will contain any material misstatement of fact or omit
to state a material fact or any fact necessary to make the statements
contained therein not misleading.
4. CONDITIONS PRECEDENT
4.1. ALL LOANS. The obligation of each Bank to make any Loan or First
Union, as Agent, to issue any Standby Letter of Credit, is conditioned upon
the following:
(a) REQUEST FOR ADVANCE. Xxxxxx shall have delivered and First Union
shall have received a Request for Advance in such form as First Union may
request from time to time.
(b) BORROWING BASE CERTIFICATE. Xxxxxx shall have delivered and the
Banks shall have received a Borrowing Base Certificate dated the date of the
Loan requested under this Agreement.
(c) COVENANTS; REPRESENTATIONS. Xxxxxx shall be in compliance with
all covenants, agreements and conditions in each Loan Document and each
representation and warranty contained in each Loan Document shall be true
with the same effect as if such representation or warranty had been made on
the date such Loan or Standby Letter of Credit, as applicable, is made or
issued.
(d) DEFAULTS. Immediately prior to and after giving effect to such
transaction, no Event of Default or Potential Default shall exist.
(e) MATERIAL ADVERSE CHANGE. Since March 31, 1998, there shall not
have been any Material Adverse Change with respect to Xxxxxx.
4.2. CONDITIONS TO FIRST LOAN. In addition to the conditions to all
Loans and Standby Letters of Credit as provided in Section 4.1, the
obligation of each Bank to make its first Loan is conditioned upon the
following:
(a) ARTICLES, BYLAWS. Each Bank shall have received copies of the
Articles or Certificate of Incorporation and Bylaws of Xxxxxx certified by
its Secretary or Assistant Secretary; together with Certificate of Good
Standing from any jurisdiction where the nature of its business or the
ownership of its properties requires such qualification except where the
failure to be so qualified would not have a Material Adverse Effect.
24
(b) EVIDENCE OF AUTHORIZATION. Each Bank shall have received copies
certified by the Secretary or Assistant Secretary of Xxxxxx or any other
appropriate official (in the case of a Person other than Xxxxxx) of all
corporate or other action taken by each Person other than the Banks who is a
party to any Loan Document to authorize its execution and delivery and
performance of the Loan Documents and to authorize the Loans, together with
such other related papers as First Union shall reasonably require.
(c) LEGAL OPINIONS. Each Bank shall have received a favorable written
opinion in form and substance satisfactory, and from counsel reasonably
acceptable, to the Banks which shall be addressed to the Banks.
(d) INCUMBENCY. First Union, as Agent, shall have received a
certificate signed by the secretary or assistant secretary of Xxxxxx,
together with the true signature of the officer or officers authorized to
execute and deliver the Loan Documents and certificates thereunder, upon
which the Banks shall be entitled to rely conclusively until it shall have
received a further certificate of the secretary or assistant secretary of
Xxxxxx amending the prior certificate and submitting the signature of the
officer or officers named in the new certificate as being authorized to
execute and deliver Loan Documents and certificates thereunder.
(e) NOTES. Each Bank shall have received its Revolving Credit Note
duly executed, completed and issued in accordance herewith.
(f) DOCUMENTS. First Union, as Agent, shall have received all
certificates, instruments and other documents then required to be delivered
pursuant to any Loan Documents, in each instance in form and substance
reasonably satisfactory to it.
(g) CONSENTS. Xxxxxx shall have provided to each Bank evidence
satisfactory to it that all governmental, shareholder and third party
consents and approvals necessary in connection with the transactions
contemplated hereby have been obtained and remain in effect.
(h) OTHER AGREEMENTS. Xxxxxx shall have executed and delivered each
other Loan Document required hereunder.
(i) FEES, EXPENSES. Xxxxxx shall simultaneously pay or shall have
paid all fees and expenses, if any, due hereunder or any other Loan Document.
5. AFFIRMATIVE COVENANTS.
Xxxxxx covenants and agrees that, without the prior written consent of
Required Banks, from and after the date hereof and so long as the Revolving
Loan Commitments are in effect or any Obligation remains unpaid or
outstanding, it will:
5.1. FINANCIAL STATEMENTS AND REPORTS. Furnish to the Banks the
following financial information:
(a) ANNUAL STATEMENTS. No later than one hundred and twenty (120)
days after the end of each Fiscal Year, the consolidated and consolidating
balance sheet of Xxxxxx as of the end of such year
25
and the prior year in comparative form, and related statements of operations,
shareholders' equity, and cash flows for the Fiscal Year and the prior Fiscal
Year in comparative form. The financial statements shall be in reasonable
detail with appropriate notes and be prepared in accordance with GAAP. The
consolidated annual financial statements shall be certified (without any
qualification or exception) by KPMG Peat Marwick LLP or other independent
public accountants reasonably acceptable to the Required Banks. Such
financial statements shall be accompanied by a report of such independent
certified public accountants stating that, in the opinion of such
accountants, such financial statements present fairly, in all material
respects, the financial position, and the results of operations and the cash
flows of Xxxxxx for the period then ended in conformity with GAAP, except for
inconsistencies resulting from changes in accounting principles and methods
agreed to by such accountants and specified in such report, and that, in the
case of such financial statements, the examination by such accountants of
such financial statements has been made in accordance with generally accepted
auditing standards and accordingly included examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements
and assessing the accounting principles used and significant estimates made,
as well as evaluating the overall financial statement presentation. Each
financial statement provided under this subsection (a) shall be accompanied
by a certificate signed by such accountants either stating that during the
course of their examination nothing came to their attention which would cause
them to believe that any event has occurred and is continuing which
constitutes an Event of Default or Potential Default, or describing each such
event. In addition to the annual financial statements, Xxxxxx shall, promptly
upon receipt thereof, furnish to the Banks copies of each other report
submitted to its board of directors by its independent accountants in
connection with any annual, interim or special audit made by them of the
financial records of Xxxxxx.
(b) QUARTERLY STATEMENTS. No later than forty-five (45) calendar
days after the end of each Fiscal Quarter of each Fiscal Year, the
consolidated and consolidating balance sheet and related statements of
operations, shareholders' equity and cash flows of Xxxxxx for such quarterly
period and for the period from the beginning of such fiscal year to the end
of such Fiscal Quarter and a corresponding financial statement for the same
periods in the preceding Fiscal Year certified by the chief financial officer
of Xxxxxx as having been prepared in accordance with GAAP (subject to changes
resulting from audits and year-end adjustments); provided, however, that if
the independent certified public accountants issue a review report on the
quarterly financial statements of Xxxxxx, the financial statements required
by this subsection (b) shall be accompanied by a certificate signed by such
accountants either stating that during the course of their examination
nothing came to their attention which would cause them to believe that any
event has occurred and is continuing which constitutes an Event of Default or
Potential Default, or describing each such event and the remedial steps being
taken by Xxxxxx. Such quarterly statement shall be accompanied by a
Compliance Certificate in the form attached hereto as Exhibit E or such other
form as the Required Banks shall reasonably request.
(c) NO DEFAULT. Within forty-five (45) calendar days after the end
of each of the first three Fiscal Quarters of each Fiscal Year and within one
hundred and twenty (120) calendar days after the end of each Fiscal Year, a
certificate signed by the chief financial officer of Xxxxxx certifying that,
to the best of such officer's knowledge, after due inquiry, (i) Xxxxxx each
has complied with all covenants, agreements and conditions in each Loan
Document and that each representation and warranty contained in each Loan
Document is true and correct with the same effect as though each such
representation and warranty had been made on the date of such certificate
(except to the extent such representation or warranty related to a specific
prior date), and (ii) no event has occurred and is continuing which
constitutes an Event of Default or Potential Default, or describing each such
event and the remedial steps being taken by Xxxxxx, as applicable.
26
(d) ERISA. All reports and forms filed with respect to all Plans,
except as filed in the normal course of business and that would not result in
an adverse action to be taken under ERISA, and details of related information
of a Reportable Event, promptly following each filing.
(e) MATERIAL CHANGES. Notification to First Union, as Agent, and
each other Bank, of any litigation, administrative proceeding, investigation,
business development, or change in financial condition which could reasonably
have a Material Adverse Effect, promptly following its discovery.
(f) OTHER INFORMATION. Promptly, upon request by First Union, as
Agent, and each other Bank, from time to time (which may be on a monthly or
other basis), Xxxxxx shall provide such other information and reports
regarding its operations, business affairs, prospects and financial condition
as First Union, as Agent, or any Bank may reasonably request.
(g) BORROWING BASE CERTIFICATES. In the event Xxxxxx shall not have
delivered a Borrowing Base Certificate to the Banks during any calendar
month, it will deliver to the Banks, no later than 15 days after the end of
such calendar month as of the last day of the preceding calendar month, a
Borrowing Base Certificate signed by the chief financial officer, treasurer
or controller of Xxxxxx.
(h) MONTHLY LEASE PORTFOLIO AND RECEIVABLES REPORT. As soon as
practicable and in any event within 15 days after the end of each calendar
month, Xxxxxx will deliver to the Banks a lease portfolio listing and lease
receivables aging report (in form and substance reasonably satisfactory to
the Banks).
(i) MAINTENANCE OF CURRENT DEPRECIATION POLICIES. Xxxxxx shall
maintain its method of depreciating its assets substantially consistent with
past practices as set forth in Exhibit F and will promptly notify the Banks
of any deviation from such practices.
(j) MONTHLY LEASE RECEIPTS REPORT. Within 15 days after the end of
each calendar month following the Revolver Termination Date and until the
Note is paid in full, Xxxxxx shall deliver to the Banks a report setting
forth the items of Collateral on lease and amounts received with respect to
each such item of Collateral.
5.2. CORPORATE EXISTENCE. Preserve its corporate existence and all
material franchises, licenses, patents, copyrights, trademarks and trade
names consistent with good business practice; and maintain, keep, and
preserve all of its properties (tangible and intangible) necessary or useful
in the conduct of its business in good working order and condition, ordinary
wear and tear excepted.
5.3. ERISA. Comply in all material respects with the provisions of
ERISA to the extent applicable to any Plan maintained for the employees of
Xxxxxx or any ERISA Affiliate; do or cause to be done all such acts and
things that are required to maintain the qualified status of each Plan and
tax exempt status of each trust forming part of such Plan; not incur any
material accumulated funding deficiency (within the meaning of ERISA and the
regulations promulgated thereunder), or any material liability to the PBGC
(as established by ERISA); not permit any event to occur as described in
Section 4042 of ERISA or which may result in the imposition of a lien on its
properties or assets; notify the Banks in writing promptly after it has come
to the attention of senior management of Xxxxxx of the assertion or threat of
any "reportable event" or other event described in Section 4042 of ERISA
(relating to the soundness of a Plan) or the PBGC's ability to assert a
material liability against it or impose a lien on its, or any
27
ERISA Affiliates', properties or assets; and refrain from engaging in any
Prohibited Transactions or actions causing possible liability under Section
5.02 of ERISA.
5.4. COMPLIANCE WITH REGULATIONS. Comply in all material respects with
all Regulations applicable to its business, the noncompliance with which
reasonably could have a Material Adverse Effect.
5.5. CONDUCT OF BUSINESS; PERMITS AND APPROVALS, COMPLIANCE WITH LAWS.
Continue to engage in an efficient and economical manner in a business of the
same general type as conducted by it on the date of this Agreement; maintain
in full force and effect, its franchises, and all licenses, patents,
trademarks, trade names, contracts, permits, approvals and other rights
necessary to the profitable conduct of its business.
5.6. MAINTENANCE OF PROPERTIES. Xxxxxx will maintain or cause to be
maintained in good repair, working order and condition all properties used or
useful in its business and make all reasonable and necessary renewals,
replacements, additions, betterments and improvements thereof and thereto, so
that the business carried on in connection therewith may be conducted in the
ordinary course at all times.
5.7. MAINTENANCE OF INSURANCE. Maintain insurance with financially
sound and reputable insurance companies or associations in such amounts and
covering such risks as are usually carried by companies engaged in the same
or a similar business and similarly situated, which insurance may provide for
reasonable deductibility from coverage thereof.
5.8. PAYMENT OF DEBT; PAYMENT OF TAXES, ETC. Where the amount involved
exceeds $250,000 or where the non-payment or non-discharge would otherwise
have a Material Adverse Effect on Xxxxxx or any of its assets: promptly pay
and discharge (a) all of its Debt in accordance with the terms thereof; (b)
all taxes, assessments, and governmental charges or levies imposed upon it or
upon its income and profits, upon any of its property, real, personal or
mixed, or upon any part thereof, before the same shall become in default; (c)
all lawful claims for labor, materials and supplies or otherwise, which, if
unpaid, might become a lien or charge upon such property or any part thereof;
provided, however, that so long as Xxxxxx first notifies First Union, as
Agent, of its intention to do so, Xxxxxx shall not be required to pay and
discharge any such Debt, tax, assessment, charge, levy or claim so long as
the failure to so pay or discharge does not constitute or result in an Event
of Default or a Potential Default hereunder and so long as no foreclosure or
other similar proceedings shall have been commenced against such property or
any part thereof and so long as the validity thereof shall be contested in
good faith by appropriate proceedings diligently pursued and it shall have
set aside on its books adequate reserves with respect thereto.
5.9. NOTICE OF EVENTS. Promptly upon discovery of any of the following
events, Xxxxxx shall provide telephone notice to the Banks (confirmed within
three (3) calendar days by written notice), describing the event and all
action Xxxxxx proposes to take with respect thereto:
(a) an Event of Default or Potential Default under this Agreement or
any other Loan Document;
(b) any default or event of default under a contract or contracts and
the default or event of default involves payments by Xxxxxx in an aggregate
amount equal to or in excess of $250,000;
28
(c) a default or event of default under or as defined in any evidence
of or agreements for Indebtedness for Borrowed Money under which Xxxxxx'x
liability is equal to or in excess of $250,000, singularly or in the
aggregate, whether or not an event of default thereunder has been declared by
any party to such agreement or any event which, upon the lapse of time or the
giving of notice or both, would become an event of default under any such
agreement or instrument or would permit any party to any such instrument or
agreement to terminate or suspend any commitment to lend to Xxxxxx or to
declare or to cause any such indebtedness to be accelerated or payable before
it would otherwise be due;
(d) the institution of, any material adverse determination in, or the
entry of any default judgment or order or stipulated judgment or order in,
any suit, action, arbitration, administrative proceeding, criminal
prosecution or governmental investigation against Xxxxxx in which the amount
in controversy is in excess of $250,000, singularly or in the aggregate; or
(e) any change in any Regulation, including, without limitation,
changes in tax laws and regulations, which would have a Material Adverse
Effect.
5.10. INSPECTION RIGHTS. At any time during the existence of an Event
of Default or Potential Default, during regular business hours and then as
often as requested of Xxxxxx, permit First Union, as Agent, or any authorized
officer, employee, agent, or representative of First Union to examine and
make abstracts from the records and books of account of Xxxxxx, wherever
located, and to visit the properties of Xxxxxx; and to discuss the affairs,
finances, and accounts of Xxxxxx with its Chairman, President, any executive
vice president, it chief financial officer, treasurer, controller or
independent accountants. If no Event of Default or Potential Default shall
be in existence, First Union shall limit such examination to once each
calendar year. Xxxxxx shall reimburse First Union up to $5,000 promptly
following the completion of each such examination. If the inspection shall be
made during the continuance of a Potential Default or an Event of Default,
Xxxxxx shall reimburse First Union for its reasonable out-of-pocket expense
of such inspection. At all times, it is understood and agreed by Xxxxxx that
all expenses in connection with any such inspection which may be incurred by
Xxxxxx, any officers and employees thereof and the attorneys and independent
certified public accountants therefor shall be expenses payable by Xxxxxx and
shall not be expenses of the Banks or any of them.
5.11. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Maintain books and
records at all times in accordance with Generally Accepted Accounting
Principles.
5.12. COMPLIANCE WITH MATERIAL CONTRACTS. Xxxxxx will comply in all
material respects with all obligations, terms, conditions and covenants, as
applicable, in all Debt applicable to it and all instruments and agreements
related thereto, and all other instruments and agreements to which it is a
party or by which it is bound or any of its properties is affected and in
respect of which the failure to comply reasonably could have a Material
Adverse Effect.
5.13. USE OF PROCEEDS. Xxxxxx will use the proceeds of each Loan made
pursuant hereto for the purchase or refinance of Equipment as provided herein
or general working capital purposes.
5.14. FURTHER ASSURANCES. Do such further acts and things and execute
and deliver to the Banks such additional assignments, agreements, powers and
instruments, as any Bank may reasonably require or reasonably deem advisable
to carry into effect the purposes of this Agreement or to better
29
assure and confirm unto each Bank its rights, powers and remedies hereunder.
6. NEGATIVE COVENANTS.
Xxxxxx covenants and agrees that, without the prior written consent of
the Required Banks, from and after the date hereof and so long as the
Revolving Loan Commitments are in effect or any Obligation remains unpaid or
outstanding, it will not:
6.1. CONSOLIDATION AND MERGER. Merge or consolidate with or into any
corporation except, if (1) no Potential Default or Event of Default shall
have occurred and be continuing either immediately prior to or upon the
consummation of such transaction, and (2) Xxxxxx is the surviving entity.
6.2. LIENS. Create, assume or permit to exist any Lien on any of its
property or assets, whether now owned or hereafter acquired, or upon any
income or profits therefrom, except Permitted Liens.
6.3. GUARANTEES. Guarantee or otherwise in any way become or be
responsible for indebtedness or obligations (including working capital
maintenance, take-or-pay contracts) of any unconsolidated Person,
contingently or otherwise. Notwithstanding the preceding sentence, Xxxxxx
may guarantee indebtedness or obligations of unconsolidated Affiliates in
amounts not to exceed $15,000,000 in the aggregate, in the ordinary course of
business with the prior written consent of the Required Banks, which consent
not to be unreasonably withheld.
6.4. MARGIN STOCK. Use or permit any proceeds of the Loans to be used,
either directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of buying or carrying margin stock within the meaning of
Regulation U of The Board of Governors of the Federal Reserve System, as
amended from time to time.
6.5. ACQUISITIONS AND INVESTMENTS. If an Event of Default or a
Potential Default exists or would exist immediately thereafter: purchase or
otherwise acquire (including without limitation by way of share exchange) any
part or amount of the capital stock or assets of, or make any Investments in
any other Person; or enter into any new business activities or ventures not
directly related to its present business; or create any Subsidiary, except
(a) it may acquire and hold stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to it,
and (b) it may make and own (i) Investments in certificates of deposit or
time deposits having maturities in each case not exceeding one year from the
date of issuance thereof and issued by any Bank, or any FDIC-insured
commercial bank incorporated in the United States or any state thereof having
a combined capital and surplus of not less than $150,000,000, (ii)
Investments in marketable direct obligations issued or unconditionally
guaranteed by the United States of America, any agency thereof, or backed by
the full faith and credit of the United States of America, in each case
maturing within one year from the date of issuance or acquisition thereof,
(iii) Investments in commercial paper issued by a corporation incorporated in
the United States or any State thereof maturing no more than one year from
the date of issuance thereof and, at the time of acquisition, having a rating
of A-1 (or better) by Standard & Poor's Corporation or P-1 (or better) by
Xxxxx'x Investors Service, Inc., and (iv) Investments in money market mutual
funds all of the assets of which are invested in cash or investments
described in the immediately preceding clauses (i), (ii) and (iii).
30
6.6. TRANSFER OF ASSETS; NATURE OF BUSINESS. Xxxxxx may not sell,
transfer, lease or dispose of assets constituting more than twenty percent
(20%) of its assets during any twelve month period without the written
consent of the Required Banks, such consent not to be unreasonably withheld.
Notwithstanding the above, (1) Xxxxxx may sell, transfer, pledge, assign,
re-lease or otherwise dispose of any equipment coming off lease if such sale
or disposition is in the ordinary course of its business, (2) Xxxxxx may sell
individual or small groups of leases and related equipment from time to time
and sell groups of leases and related equipment in securitization
transactions and (3) Xxxxxx may engage in the nonrecourse or partial recourse
financing of leases. Xxxxxx may not discontinue, liquidate or change in any
material respect any substantial part of its operations or business.
6.7. ACCOUNTING CHANGE. Without the prior written approval of the
Required Banks, make or permit any material change in financial accounting
policies or financial reporting practices, except as required by Generally
Accepted Accounting Principles or regulations of the Securities and Exchange
Commission, if applicable.
6.8. TRANSACTIONS WITH AFFILIATES. Enter into any material transaction
(including, without limitation, the purchase, sale or exchange of property,
the rendering of any services or the payment of management fees) with any
Affiliate, except transactions in the ordinary course of, and pursuant to the
reasonable requirements of, its business, and in good faith and upon
commercially reasonable terms.
6.9. RESTRICTION ON AMENDMENT OF THIS AGREEMENT. Enter into or
otherwise become subject to or suffer to exist any agreement which would
require it to obtain the consent of any other person as a condition to the
ability of the Banks and Xxxxxx to amend or otherwise modify this Agreement.
7. FINANCIAL COVENANTS.
Xxxxxx covenants and agrees that, without the prior written consent of
the Required Banks, from and after the date hereof and so long as the
Revolving Loan Commitments are in effect or any Obligation remains unpaid or
outstanding, that:
7.1. NO LOSSES. From and after April 1, 1997, Xxxxxx shall not at any
time suffer a net loss for the four (4) most recently ended consecutive
Fiscal Quarters.
7.2. MINIMUM TANGIBLE NET WORTH. Tangible Net Worth will not at any
time be less than $40,000,000.
7.3. DEBT TO TANGIBLE NET WORTH. From and after April 1, 1997, the
ratio of Debt (including, without limitation, Debt represented by the Note)
to Tangible Net Worth will not exceed 6.00:1 as at the end of any fiscal
quarter.
7.4. MINIMUM INTEREST EXPENSE COVERAGE. From and after April 1, 1997,
the ratio of EBIT to interest for the four (4) most recently ended
consecutive Fiscal Quarters will not be less than 1.25:1.
7.5. BORROWING BASE. The aggregate principal amount of Loans
outstanding shall not at any time exceed the Borrowing Base or the Aggregate
Revolving Loan Commitment, whichever is less; provided, however, that this
covenant shall not be deemed breached if, at the time such aggregate amount
exceeds said level, within four Business Days after the earlier of the date
Xxxxxx first has
31
knowledge of such excess or the date of the next Borrowing Base Certificate
disclosing the existence of such excess, a prepayment of Loans shall be made
in an amount sufficient to assure continued compliance with this covenant in
the future.
8. DEFAULT.
8.1. EVENTS OF DEFAULT. Xxxxxx shall be in default if any one or more of
the following events (each an "EVENT OF DEFAULT") occurs:
(a) PAYMENTS. Xxxxxx fails to pay the principal due on any Revolving
Credit Note when due and payable (whether at maturity, by notice of
intention to prepay, or otherwise); or Xxxxxx fails to pay interest or any
other amount payable hereunder or under any other Loan Document within
three Business Days after the date such interest or other amount is due
and payable.
(b) COVENANTS. Xxxxxx fails to observe or perform (1) within fifteen days
after receiving written notice from the Bank, any term, condition or
covenant set forth in Sections 5.1(a), 5.1(b), 5.1(c), 5.1(g), 5.1(h) or
5.1(i) herein, (2) any term, condition or covenant set forth in Section
5.2 , Sections 6.1 through 6.9 or Section 8.1(a) herein, as and when
required or (3) any term, condition or covenant contained in this
Agreement or any other Loan Document other than as set forth in (1) and
(2) above, as and when required and such failure shall continue for a
period of 10 Business Days or more.
(c) REPRESENTATIONS, WARRANTIES. Any representation or warranty made or
deemed to be made by Xxxxxx, as applicable, herein or in any Loan Document
or in any exhibit, schedule, report or certificate delivered pursuant
hereto or thereto shall prove to have been false, misleading or incorrect
in any material respect when made or deemed to have been made.
(d) BANKRUPTCY. Xxxxxx is dissolved or liquidated, makes an assignment
for the benefit of creditors, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions or applies to any tribunal for
any receiver or trustee, commences any proceeding relating to itself under
any bankruptcy, reorganization, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, has commenced against it
any such proceeding which remains undismissed for a period of thirty (60)
days, or indicates its consent to, approval of or acquiescence in any such
proceeding, or any receiver of or trustee for Xxxxxx or any substantial
part of the property of Xxxxxx is appointed, or if any such receivership
or trusteeship to continues undischarged for a period of thirty (60) days.
(e) CERTAIN OTHER DEFAULTS. Xxxxxx shall fail to pay when due any
Indebtedness for Borrowed Money which singularly or in the aggregate
exceeds $5,000,000, and such failure shall continue beyond any applicable
cure period, or Xxxxxx shall suffer to exist any default or event of
default in the performance or observance, subject to any applicable grace
period, of any agreement, term, condition or covenant with respect to any
agreement or document relating to Indebtedness for Borrowed Money if the
effect of such default is to permit, with the giving of notice or passage
of time or both, the holders thereof, or any trustee or agent for said
holders, to terminate or suspend any commitment (which is equal to or in
excess of $5,000,000) to lend money or to cause or declare any portion of
any borrowings thereunder to become due and payable prior to the date on
which it would otherwise be due and payable, provided that during
32
any applicable cure period the Bank's obligations hereunder to make further
Loans shall be suspended.
(f) JUDGMENTS. Any judgments against Xxxxxx or against its assets or
property for amounts in excess of $5,000,000 in the aggregate remain
unpaid, unstayed on appeal, undischarged, unbonded and undismissed for a
period of thirty (30) days.
(g) ATTACHMENTS. Any assets of Xxxxxx shall be subject to attachments,
levies, or garnishments for amounts in excess of $250,000 in the aggregate
which have not been dissolved or satisfied within twenty (20) days after
service of notice thereof to Xxxxxx.
(h) CHANGE IN CONTROL. Xxxxxxx X. Xxxxxx or the CFW Partners, L.P.
limited partnership, shall cease to be the record and beneficial owner of
at least 34% of the issued and outstanding voting and capital stock of
Xxxxxx.
(i) SECURITY INTERESTS. Any security interest created pursuant to any
Loan Document shall cease to be in full force and effect, or shall cease in
any material respect to give First Union, as Agent, the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a perfected security interest in, and Lien on, all of the
Collateral), superior to and prior to the rights of all third Persons, and
subject to no other Liens (except as permitted by Section 6.2).
(j) CHANGES IN SENIOR MANAGEMENT. Xxxxxxx X. Xxxxxx shall cease to be a
member of senior management or both Xxxxxx X. Xxxxxxxxx and Xxxxx XxXxxxx
shall cease to be members of senior management within any period of twelve
consecutive months.
THEN and in every such event other than that specified in Section 8.1.(d),
First Union, as Agent, may, or at the written request of the Required Banks
shall immediately terminate the Aggregate Revolving Loan Commitment by notice
in writing to Xxxxxx and immediately declare the Revolving Credit Notes,
including without limitation accrued interest, to be, and they shall
thereupon forthwith become due and payable without presentment, demand, or
notice of any kind, all of which are hereby expressly waived by Xxxxxx. Upon
the occurrence of any event specified in Section 8.1.(d), the Aggregate
Revolving Loan Commitment shall automatically terminate and the Revolving
Credit Notes, including without limitation accrued interest, shall
immediately be due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by Xxxxxx. Any
date on which the Notes and such other Obligations are declared due and
payable pursuant to this Section 8.1, shall be the Revolver Termination Date
for purposes of this Agreement. From and after the date an Event of Default
shall have occurred and for so long as an Event of Default shall be
continuing, the Loans shall bear interest at the Default Rate.
9. COLLATERAL.
9.1. COLLATERAL. Except as otherwise specifically set forth herein or in
any other Loan Document, any Loans made and outstanding and their repayment at
all times shall (i) in the case of Collateral (as defined in the Security
Agreement, hereinafter referred to as the "COLLATERAL") located in the United
States, be secured by a first priority perfected security interest and (ii) in
the case of Collateral located in jurisdictions outside the United States, be
secured by a security interest which adequately protects the first priority
security interest in favor of First Union, as Agent.
33
9.2. SECURITY AGREEMENT. As security for the punctual payment in full
of all Notes (including all payments of principal, and interest and other
costs contemplated hereby), Xxxxxx shall execute and deliver to First Union,
as Agent, the Security Agreement and such other documents as may be necessary
to constitute and evidence a security interest in the Collateral.
9.3. RELEASE OF COLLATERAL. Xxxxxx shall be entitled to remove any item of
Collateral at any time, PROVIDED, however, that at the time of such removal and
release (a) there is not then existing an Event of Default or Potential Default,
and (b) no Event of Default or Potential Default would exist immediately
following removal and release.
10. AGENT.
10.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints and authorizes First Union, as Agent, to take such action on its
behalf and to exercise such powers under this Agreement and the Loan
Documents as are specifically delegated to it as Agent by the terms hereof or
thereof, together with such other powers as are reasonably incidental
thereto. The relationship between First Union and each Bank has no fiduciary
aspects, and First Union' duties as Agent hereunder are acknowledged to be
only ministerial and not involving the exercise of discretion on its part.
Nothing in this Agreement or any Loan Document shall be construed to impose
on First Union any duties or responsibilities other than those for which
express provision is made herein or therein. In performing its duties and
functions under this Article 10, First Union does not assume and shall not be
deemed to have assumed, and hereby expressly disclaims, any obligation with
or for Xxxxxx. As to matters not expressly provided for in this Agreement or
any Loan Document, First Union shall not be required to exercise any
discretion or to take any action or communicate any notice, but shall be
fully protected in so acting or refraining from acting upon the instructions
of the Required Banks and their respective successors and assigns; provided,
however, that in no event shall First Union be required to take any action
which exposes it to personal liability or which is contrary to this
Agreement, any Loan Document or applicable law, and First Union shall be
fully justified in failing or refusing to take any action hereunder unless it
shall first be specifically indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by
reason of taking or omitting to take any such action. If an indemnity
furnished to First Union for any purpose shall, in its reasonable opinion, be
insufficient or become impaired, First Union may call for additional
indemnity from the Banks and not commence or cease to do the acts for which
such indemity is requested until such additional indemnity is furnished.
10.2. DUTIES AND OBLIGATIONS. In performing its functions and duties
hereunder on behalf of the Banks, First Union shall exercise the same care
and skill as it would exercise in dealing with loans for its own account.
Neither First Union nor any of its directors, officers, employees or other
agents shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or any Loan Document except
for its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, First Union (a) may consult with
legal counsel and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith and in accordance
with the advice of such experts; (b) makes no representation or warranty to
any Bank as to, and shall not be responsible to any Bank for, any recital,
statement, representation or warranty made in or in connection with this
Agreement, any Loan Document or in any written or oral statement (including a
financial or other such statement), instrument or other document delivered
34
in connection herewith or therewith or furnished to any Bank by or on behalf
of Xxxxxx; (c) shall have no duty to ascertain or inquire into Xxxxxx'x
performance or observance of any of the covenants or conditions contained
herein or to inspect any of the property (including the books and records) of
Xxxxxx or inquire into the use of the proceeds of the Revolving Credit Loans
or (unless the officers of First Union active in their capacity as officers
of First Union on Xxxxxx'x account have actual knowledge thereof or have been
notified in writing thereof) to inquire into the existence or possible
existence of any Event of Default or Potential Default; (d) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, effectiveness, genuineness, sufficiency, collectability or
value of this Agreement or any other Loan Document or any instrument or
document executed or issued pursuant hereto or in connection herwith, except
to the extent that such may be dependent on the due authorization and
execution by First Union itself; (e) except as expressly provided herein in
respect of information and data furnished to First Union for distribution to
the Banks, shall have no duty or responsibility, either initially or on a
continuing basis, to provide to any Bank any credit or other information with
respect to Xxxxxx, whether coming into its possession before the making of
the Loans or at any time or times thereafter; and (f) shall incur no
liability under or in respect of this Agreement or any other Loan Document
for, and shall be entitled to rely and act upon, any notice, consent,
certificate or other instrument or writing (which may be by facsimile
(telecopier), telegram, cable, or other electronic means) believed by it to
be genuine and correct and to have been signed or sent by the proper party or
parties.
10.3. FIRST UNION AS A BANK. With respect to its Revolving Loan
Commitment and the Loans made and to be made by it, First Union shall have
the same rights and powers under this Agreement and all other Loan Documents
as the other Banks and may exercise the same as if it were not the Agent.
The terms "Bank" and "Banks" as used herein shall, unless otherwise expressly
indicated, include First Union in its individual capacity. First Union and
any successor Agent which is a commercial bank, and their respective
affiliates, may accept deposits from, lend money to, act as trustee under
indentures of and generally engage in any kind of business with, Xxxxxx and
its affiliates from time to time, all as if such entity were not the Agent
hereunder and without any duty to account therefor to any Bank.
10.4. INDEPENDENT CREDIT DECISIONS. Each Bank acknowledges to First
Union that it has, independently and without reliance upon First Union or any
other Bank, and based upon such documents and information as it has deemed
appropriate, made its own independent credit analysis and decision to enter
into this Agreement. Each Bank also acknowledges that it will, independently
or through other advisers and representatives but without reliance upon First
Union or any other Bank, and based upon such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or refraining from taking any action under this Agreement or any
Loan Document.
10.5. INDEMNIFICATION. The Banks agree to indemnify First Union (to
the extent not previously reimbursed by Xxxxxx), ratably in proportion to
each Bank's Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against First Union in its capacity as
Agent in any way relating to or arising out of this Agreement or any Loan
Document or any action taken or omitted to be taken by First Union in its
capacity as Agent hereunder or under any Loan Document; provided that none of
the Banks shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from First Union' gross negligence or willful
35
misconduct. Without limiting the generality of the foregoing, each Bank
agrees to reimburse First Union, promptly on demand, for such Bank's ratable
share (based upon the aforesaid apportionment) of any out-of-pocket expenses
(including counsel fees and disbursements) incurred by First Union in
connection with the preparation, execution, administration or enforcement of,
or the preservation of any rights under, this Agreement and the Loan
Documents to the extent that First Union is not reimbursed for such expenses
by Xxxxxx.
10.6. SUCCESSOR AGENT. First Union may resign at any time by giving
written notice of such resignation to the Banks and Xxxxxx, such resignation
to be effective only upon the appointment of a successor Agent as hereinafter
provided. Upon any such notice of resignation, the Banks shall jointly
appoint a successor Agent upon written notice to Xxxxxx and First Union. If
no successor Agent shall have been jointly appointed by such Banks and shall
have accepted such appointment within thirty (30) days after First Union
shall have given notice of resignation, First Union may, upon notice to
Xxxxxx and the Banks, appoint a successor Agent. Upon its acceptance of any
appointment as Agent hereunder, the successor Agent shall succeed to and
become vested with all the rights, powers, privileges and duties of First
Union, and First Union shall be discharged from its duties and obligations as
Agent under this Agreement and the Loan Documents. After First Union'
resignation hereunder, the provisions hereof shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Agent under
this Agreement and the Loan Documents.
10.7. ALLOCATIONS MADE BY FIRST UNION. As between First Union, as
Agent, and the Banks, unless a Bank objecting to a determination or
allocation made by First Union pursuant to this Agreement delivers to First
Union written notice of such objection within one hundred twenty (120) days
after the date any distribution was made by First Union, such determination
or allocation shall be conclusive on such one hundred twentieth day and only
those items expressly objected to in such notice shall be deemed disputed by
such Bank. First Union shall not have any duty to inquire as to the
application by the Banks of any amounts distributed to them.
11. MISCELLANEOUS.
11.1. WAIVER. No failure or delay on the part of First Union or any
Bank or any holder of any Note in exercising any right, power or remedy under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under any Loan Document. The remedies provided under the Loan Documents are
cumulative and not exclusive of any remedies provided by law.
11.2. AMENDMENTS. No amendment, modification, termination or waiver of
any Loan Document or any provision thereof nor any consent to any departure
by Xxxxxx therefrom shall be effective unless the same shall have been
approved by the Required Banks, be in writing and be signed by First Union,
as Agent, and then any such waiver or consent shall be effective only in the
instance and for the specific purpose for which given. No notice to or
demand on the Xxxxxx shall entitle Xxxxxx to any other or further notice or
demand in similar or other circumstances.
11.3. GOVERNING LAW. The Loan Documents and all rights and obligations
of the parties thereunder shall be governed by and be construed and enforced
in accordance with the laws of the
36
Commonwealth of Pennsylvania without regard to Pennsylvania or federal
principles of conflict of laws.
11.4. PARTICIPATIONS AND ASSIGNMENTS. Xxxxxx hereby acknowledges and
agrees that any Bank may at any time, with the consent of Xxxxxx (which
consent shall not be unreasonably withheld): (a) grant participations in all
or any portion of its Revolving Loan Commitment or any portion of its Note or
of its right, title and interest therein or in or to this Agreement
(collectively, "PARTICIPATIONS") to any other lending office of such Bank or
to any other bank, lending institution or other entity which has the
requisite sophistication to evaluate the merits and risks of investments in
Participations ("PARTICIPANTS"); provided, however, that: (i) all amounts
payable by Xxxxxx hereunder shall be determined as if such Bank had not
granted such Participation; (ii) such Bank shall act as agent for all
Participants; and (iii) any agreement pursuant to which such Bank may grant a
Participation: (x) shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of Xxxxxx hereunder including,
without limitation, the right to approve any amendment, modification or
waiver of any provisions of this Agreement; (y) such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement without the consent of the Participant if such
modification, amendment or waiver would reduce the principal of or rate of
interest on any Loan or postpone the date fixed for any payment of principal
of or interest on any Loan; and (z) shall not relieve such Bank from its
obligations, which shall remain absolute, to make Loans hereunder; and (b)
assign any of its Loans and its Revolving Loan Commitment. Upon execution and
delivery by the assignee to Xxxxxx of an instrument in writing pursuant to
which such assignee agrees to become a "Bank" hereunder having the Revolving
Loan Commitment and Loans specified in such instrument, and upon consent
thereto by Xxxxxx, to the extent required above, the assignee shall have, to
the extent of such assignment (unless otherwise provided in such assignment
with the consent of the Xxxxxx), the obligations, rights and benefits of a
Bank hereunder holding the Revolving Loan Commitment and Loans (or portions
thereof) assigned to it, and such Bank shall, to the extent of such
assignment, be released from the Commitment (or portion(s) thereof) so
assigned.
11.5. CAPTIONS. Captions in the Loan Documents are included for
convenience of reference only and shall not constitute a part of any Loan
Document for any other purpose.
11.6. NOTICES. All notices, requests, demands, directions,
declarations and other communications between the Banks and the Xxxxxx
provided for in any Loan Document shall, except as otherwise expressly
provided, be mailed by registered or certified mail, return receipt
requested, or telegraphed, or faxed, or delivered in hand to the applicable
party at its address indicated opposite its name on the signature pages
hereto. The foregoing shall be effective and deemed received three days
after being deposited in the mails, postage prepaid, addressed as aforesaid
and shall whenever sent by telegram, telegraph or fax or delivered in hand be
effective when received. Any party may change its address by a communication
in accordance herewith.
11.7. SHARING OF COLLECTIONS, PROCEEDS AND SET-OFFS: APPLICATION OF
PAYMENTS.
(a) If any Bank, by exercising any right of set-off, counterclaim or
foreclosure against trade collateral or otherwise, receives payment of principal
or interest or other amount due on any Note which is greater than the percentage
share of such Bank (determined as set forth below), the Bank receiving such
proportionately greater payment shall purchase such participations in the Loans
held by the other Banks, and such other adjustments shall be made as may be
required, so that all such payments shall be shared by the Banks on the basis of
their percentage shares; provided that if all or
37
any portion of such proportionately greater payment of such indebtedness is
thereafter recovered from, or must otherwise be restored by, such purchasing
Bank, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest being paid by such purchasing
Bank. The percentage share of each Bank shall be based on the portion of the
outstanding Loans of such Bank (prior to receiving any payment for which an
adjustment must be made under this Section in relation to the aggregate
outstanding Loans of all the Banks. Xxxxxx agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a
participation in a Loan or reimbursement obligation, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of Xxxxxx in the
amount of such participation. If under any applicable bankruptcy, insolvency
or other similar law, any Bank receives a secured claim in lieu of a set-off
to which this Section would apply, such Bank shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Banks entitled under this Section to share
in the benefits of any recovery on such secured claim.
(b) If an Event of Default or Potential Default shall have occurred
and be continuing First Union, as Agent, and each Bank and Xxxxxx agree that
all payments on account of the Loans shall be applied by First Union, as
Agent, and the Banks as follows:
FIRST, to First Union, as Agent, for any Agent fees then due and payable
under this Agreement until such fees are paid in full;
SECOND, to First Union, as Agent, for any fees, costs or expenses
(including expenses described in Section 11.8) incurred by First Union, as
Agent, under any of the Loan Documents or this Agreement, then due and
payable and not reimbursed by Xxxxxx or the Banks until such fees, costs
and expenses are paid in full;
THIRD, to the Banks for their percentage shares of the Commitment Fee then
due and payable under this Agreement until such fee is paid in full;
FOURTH, to the Banks for their respective shares of all costs, expenses and
fees then due and payable from Xxxxxx until such costs, expenses and fees
are paid in full;
FIFTH, to the Banks for their percentage shares of all interest then due
and payable from Xxxxxx until such interest is paid in full, which
percentage shares shall be calculated by determining each Bank's percentage
share of the amounts allocated in (a) above determined as set forth in said
clause (a); and
SIXTH, to the Banks for their percentage shares of the principal amount of
the Loans then due and payable from Xxxxxx until such principal is paid in
full, which percentage shares shall be calculated by determining each
Bank's percentage share of the amounts allocated in (a) above determined as
set forth in said clause (a).
11.8. EXPENSES; INDEMNIFICATION. Xxxxxx will from time to time
reimburse First Union, as Agent, promptly following demand for all reasonable
out-of-pocket expenses (including the reasonable fees and expenses of its
legal counsel) in connection with (i) the preparation of the Loan Documents,
(ii) the making of any Loans, and (iii) the administration of the Loan
Documents. Xxxxxx also will from to time reimburse First Union, as Agent,
and each Bank for all out-of-pocket expenses (including
38
reasonable fees and expenses of legal counsel) in connection with the
enforcement of the Loan Documents. In addition to the payment of the
foregoing expenses, Xxxxxx hereby agrees to indemnify, protect and hold First
Union, as Agent, each Bank and any holder of any Note and the officers,
directors, employees, agents, affiliates and attorneys of First Union, as
Agent, each Bank and such holder (collectively, the "INDEMNITEES") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of
any kind or nature, including reasonable fees and expenses of legal counsel,
which may be imposed on, incurred by, or asserted against such Indemnitee by
Xxxxxx or other third parties and arise out of or relate to this Agreement or
the other Loan Documents or any other matter whatsoever related to the
transactions contemplated by or referred to in this Agreement or the other
Loan Documents; provided, however, that Xxxxxx shall have no obligation to an
Indemnitee hereunder to the extent that the liability incurred by such
Indemnitee has been determined by a court of competent jurisdiction to be the
result of gross negligence or willful misconduct of such Indemnitee.
11.9. SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS. All agreements,
representations and warranties expressly made herein shall survive the
execution and delivery of this Agreement, the making of the Loans hereunder
and the execution and delivery of the Note. Notwithstanding anything in this
Agreement or implied by law to the contrary, the agreements of Xxxxxx set
forth in Section 11.8 shall survive the payment of the Loans and the
termination of this Agreement. This Agreement shall remain in full force and
effect until the repayment in full of all amounts owed by Xxxxxx under the
Notes or any other Loan Document.
11.10. SEVERABILITY. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Agreement, the
Note or other Loan Documents shall not affect or impair the validity, legality
or enforceability of the remaining provisions or obligations under this
Agreement, the Notes or other Loan Documents or of such provision or obligation
in any other jurisdiction.
11.11. BANKS' OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF BANKS' RIGHTS.
The obligation of each Bank hereunder is several and not joint and no Bank
shall be the agent of any other (except to the extent the Agent is authorized
to act as such hereunder). No Bank shall be responsible for the obligation
or commitment of any other Bank hereunder. In the event that any Bank at any
time should fail to make a Loan as herein provided, the other Banks, or any
of them as may then be agreed upon, at their sole option, may make the Loan
that was to have been made by the Bank so failing to make such Loan. Nothing
contained in any Loan Document and no action taken by Agent or any Bank
pursuant hereto or thereto shall be deemed to constitute the Banks to be a
partnership, an association, a joint venture or any other kind of entity.
The amounts payable at any time hereunder to each Bank shall be a separate
and independent debt, and, subject to the terms of this Agreement, each Bank
shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Bank to be joined as an
additional party in any proceeding for such purpose.
11.12. NO FIDUCIARY RELATIONSHIP. No provision in this Agreement or in
any of the other Loan Documents and no course of dealing between the parties
shall be deemed to create any fiduciary duty by any Bank to Xxxxxx.
11.13. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. XXXXXX, FIRST
UNION AS AGENT AND THE BANKS, EACH HEREBY CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN THE EASTERN DISTRICT OF
39
PENNSYLVANIA AND IRREVOCABLY AGREES THAT, ANY ACTIONS OR PROCEEDINGS ARISING
OUT OF OR RELATING TO THE NOTE, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS
MAY BE LITIGATED IN SUCH COURTS. EACH PARTY TO THIS AGREEMENT ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE
OF FORUM NON CONVENIENT, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, ANY NOTE, OR SUCH OTHER
LOAN DOCUMENT.
11.14. WAIVER OF JURY TRIAL. XXXXXX, FIRST UNION AS AGENT AND THE
BANKS, EACH HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE
LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER
OF THIS AGREEMENT AND THE LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER
OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
XXXXXX, FIRST UNION AS AGENT AND THE BANKS, EACH ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO THE TRANSACTION, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. XXXXXX,
FIRST UNION AS AGENT AND THE BANKS, EACH FURTHER WARRANTS AND REPRESENTS THAT
EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, MODIFICATIONS, REPLACEMENTS OR
RESTATEMENTS TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
11.15. COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendment
hereto or waiver hereof may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement and any amendments
hereto or waivers hereof shall become effective when First Union, as Agent,
shall have received signed counterparts or notice by fax of the signature
page that the counterpart has been signed and is being delivered to it or
facsimile that such counterparts have been signed by all the parties hereto
or thereto.
11.16. USE OF DEFINED TERMS. All words used herein in the singular or
plural shall be deemed to have been used in the plural or singular where the
context or construction so requires. Any defined term used in the singular
preceded by "any" shall be taken to indicate any number of the members of the
relevant class.
40
11.17. OFFSETS. Nothing in this Agreement shall be deemed a waiver or
prohibition of any Bank's right of banker's lien or offset.
11.18. ENTIRE AGREEMENT. This Agreement, the Notes issued hereunder
and the other Loan Documents constitute the entire understanding of the
parties hereto as of the date hereof with respect to the subject matter
hereof and thereof and supersede any prior agreements, written or oral, with
respect hereto or thereto.
41
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed by their duly authorized representatives as of the date
first above written.
XXXXXX LEASE FINANCE CORPORATION
By /s/ Xxxxx X. XxXxxxx
______________________________________
Name: Xxxxx X. XxXxxxx
Title: Executive Vice President and
Chief Financial Officer
Notices To:
0000 Xxxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxx, XX. 00000.
FAX No. (000) 000-0000
ATT: General Counsel
FIRST UNION NATIONAL BANK
By /s/ Xxxx X. Xxxxxxxx
______________________________________
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Notices To:
Xxxx X. Xxxxxxxx
Vice President
First Union National Bank
Transportation and Leasing Division
FC 1-8-11-24
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
FAX No. (000) 000-0000
NATIONSBANK, N.A.
By /s/ Xxxxxxx X. XxXxxxxx
______________________________________
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
Notices To:
Xxxxxxx X. XxXxxxxx
Vice President
NationsBank, N.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
FAX No. (000) 000-0000
42
REFERENCE TABLE OF DEFINITIONS
DEFINITION PAGE DEFINED
Additional Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Aggregate Revolving Loan Commitment. . . . . . . . . . . . . . . . . . . . . .12
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Borrowing Base Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Capitalized Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Capitalized Lease Obligations. . . . . . . . . . . . . . . . . . . . . . . . . 3
Category A Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Category B Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Dollars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
EBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Eligible Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Environmental Control Statutes . . . . . . . . . . . . . . . . . . . . . . . . 5
Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ERISA Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Federal Funds Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
First Union. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Fiscal Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Generally Accepted Accounting Principles . . . . . . . . . . . . . . . . . . . 5
Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Indebtedness for Borrowed Money. . . . . . . . . . . . . . . . . . . . . . . . 5
Indemnitees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Intangible Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .00
Xxxxxx Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
43
Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Monthly Lease Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Multiemployer Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Potential Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Prime Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Prohibited Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Receivables Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regulation D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regulatory Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Reportable Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Request for Advance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Required Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Revolver Termination Date. . . . . . . . . . . . . . . . . . . . . . . . . . .10
Revolving Credit Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Revolving Credit Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Revolving Credit Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Revolving Loan Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . .11
Revolving Loan Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . .10
Revolving Loan Commitment Percentage . . . . . . . . . . . . . . . . . . . . .13
Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Solvent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Standby Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Termination Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Unfunded Pension Liabilities . . . . . . . . . . . . . . . . . . . . . . . . .11
Unrecognized Retiree Welfare Liability . . . . . . . . . . . . . . . . . . . .11
Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
44
