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EXHIBIT 10.1
CREDIT AGREEMENT
among
MAPLE LEAF AEROSPACE, INC.,
AEROSPACE ACQUISITION CORP.,
AEROSPACE MERGER SUB I, INC. (and TRI-STAR
AEROSPACE, INC. as its successor by merger),
TRI-STAR AEROSPACE CO.
VARIOUS LENDING INSTITUTIONS,
and
BANKERS TRUST COMPANY,
AS AGENT
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Dated as of September, 1996
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TABLE OF CONTENTS
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SECTION I. Amount and Terms of Credit. . . . . . . . . . . . . . . . . 1
1.01 Commitments . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Borrowing Amounts, etc. . . . . . . . . . . . . . . 4
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . 4
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . 5
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.06 Conversions . . . . . . . . . . . . . . . . . . . . . . . . 7
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . 8
1.08 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.09 Interest Periods. . . . . . . . . . . . . . . . . . . . . . 9
1.10 Increased Costs; Illegality; etc. . . . . . . . . . . . . . 10
1.11 Compensation. . . . . . . . . . . . . . . . . . . . . . . . 13
1.12 Change of Lending Office. . . . . . . . . . . . . . . . . . 13
1.13 Replacement of Banks. . . . . . . . . . . . . . . . . . . . 13
SECTION 2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . 15
2.01 Letters of Credit . . . . . . . . . . . . . . . . . . . . . 15
2.02 Letter of Credit Requests . . . . . . . . . . . . . . . . . 17
2.03 Letter of Credit Participations . . . . . . . . . . . . . . 17
2.04 Agreement to Repay Letter of Credit Drawings. . . . . . . . 20
2.05 Increased Costs . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3. Fees; Commitments . . . . . . . . . . . . . . . . . . . . . 21
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.02 Voluntary Termination or Reduction of Total Unutilized
Revolving Loan Commitment . . . . . . . . . . . . . . . . 23
3.03 Mandatory Reduction of Commitments. . . . . . . . . . . . . 24
SECTION 4. Payments. . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . 25
4.02 Mandatory Repayments and Commitment Reductions. . . . . . . 26
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . 31
4.04 Net Payments. . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5. Conditions Precedent. . . . . . . . . . . . . . . . . . . . 34
5.01 Execution of Agreement; Notes . . . . . . . . . . . . . . . 34
(i)
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5.02 Officer's Certificate . . . . . . . . . . . . . . . . . . . 34
5.03 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . 34
5.04 Corporate Documents; Proceedings. . . . . . . . . . . . . . 34
5.05 Adverse Change, etc.. . . . . . . . . . . . . . . . . . . . 35
5.06 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 35
5.07 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.08 Consummation of the Acquisition . . . . . . . . . . . . . . 36
5.09 Refinancing . . . . . . . . . . . . . . . . . . . . . . . . 37
5.10 Consummation of the Equity Financing. . . . . . . . . . . . 37
5.11 Security Documents; Etc.. . . . . . . . . . . . . . . . . . 38
5.12 Subsidiaries Guaranty . . . . . . . . . . . . . . . . . . . 39
5.13 Mortgages; Title Insurance. . . . . . . . . . . . . . . . . 39
5.14 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Employment Agreements;
Collective Bargaining Agreements; Existing Indebtedness
Agreements; Material Contracts; Tax Allocation
Agreements; Transaction Documents . . . . . . . . . . . . 40
5.15 Solvency Certificate; Insurance Certificates;
Environmental Assessments; Financial Statements . . . . . 42
5.16 Existing Indebtedness . . . . . . . . . . . . . . . . . . . 43
5.17 Pro Forma Balance Sheet; Projections. . . . . . . . . . . . 44
5.18 Payment of Fees . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6. Conditions Precedent to All Credit Events . . . . . . . . . 44
6.01 No Default; Representations and Warranties. . . . . . . . . 44
6.02 Adverse Change; etc.. . . . . . . . . . . . . . . . . . . . 45
6.03 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 45
6.04 Notice of Borrowing; Letter of Credit Request . . . . . . . 45
SECTION 7. Representations, Warranties and Agreements. . . . . . . . . 46
7.01 Corporate Status. . . . . . . . . . . . . . . . . . . . . . 46
7.02 Corporate Power and Authority . . . . . . . . . . . . . . . 46
7.03 No Violation. . . . . . . . . . . . . . . . . . . . . . . . 46
7.04 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 47
7.05 Use of Proceeds; Margin Regulations . . . . . . . . . . . . 47
7.06 Governmental Approvals. . . . . . . . . . . . . . . . . . . 47
7.07 Investment Company Act. . . . . . . . . . . . . . . . . . . 48
7.08 Public Utility Holding Company Act. . . . . . . . . . . . . 48
7.09 True and Complete Disclosure. . . . . . . . . . . . . . . . 48
7.10 Financial Condition; Financial Statements . . . . . . . . . 48
7.11 Security Interests. . . . . . . . . . . . . . . . . . . . . 50
(ii)
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7.12 Transaction . . . . . . . . . . . . . . . . . . . . . . . . 50
7.13 Compliance with ERISA . . . . . . . . . . . . . . . . . . . 50
7.14 Capitalization. . . . . . . . . . . . . . . . . . . . . . . 52
7.15 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 53
7.16 Intellectual Property, etc. . . . . . . . . . . . . . . . . 53
7.17 Compliance with Statutes, etc.. . . . . . . . . . . . . . . 53
7.18 Environmental Matters . . . . . . . . . . . . . . . . . . . 53
7.19 Properties. . . . . . . . . . . . . . . . . . . . . . . . . 54
7.20 Labor Relations . . . . . . . . . . . . . . . . . . . . . . 54
7.21 Tax Returns and Payments. . . . . . . . . . . . . . . . . . 55
7.22 Existing Indebtedness . . . . . . . . . . . . . . . . . . . 55
7.23 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.24 Representations and Warranties in Other Documents . . . . . 55
7.25 Special Purpose Corporations. . . . . . . . . . . . . . . . 56
SECTION 8. Affirmative Covenants . . . . . . . . . . . . . . . . . . . 56
8.01 Information Covenants . . . . . . . . . . . . . . . . . . . 57
8.02 Books, Records and Inspections. . . . . . . . . . . . . . . 61
8.03 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.04 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . 62
8.05 Corporate Franchises. . . . . . . . . . . . . . . . . . . . 62
8.06 Compliance with Statutes; etc.. . . . . . . . . . . . . . . 62
8.07 Compliance with Environmental Laws. . . . . . . . . . . . . 62
8.08 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.09 Good Repair . . . . . . . . . . . . . . . . . . . . . . . . 64
8.10 End of Fiscal Years; Fiscal Quarters. . . . . . . . . . . . 65
8.11 Additional Security; Further Assurances . . . . . . . . . . 65
8.12 Foreign Subsidiaries Security . . . . . . . . . . . . . . . 66
8.13 Ownership of Subsidiaries . . . . . . . . . . . . . . . . . 67
8.14 Permitted Acquisitions. . . . . . . . . . . . . . . . . . . 67
8.15 Maintenance of Corporate Separateness . . . . . . . . . . . 69
8.16 Performance of Obligations. . . . . . . . . . . . . . . . . 69
8.17 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 69
8.18 Interest Rate Protection. . . . . . . . . . . . . . . . . . 69
8.19 Contributions; Payments; etc. . . . . . . . . . . . . . . . 69
SECTION 9. Negative Covenants. . . . . . . . . . . . . . . . . . . . . 70
9.01 Changes in Business . . . . . . . . . . . . . . . . . . . . 70
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc. . . 70
9.03 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.04 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 75
(iii)
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9.05 Advances; investments; Loans. . . . . . . . . . . . . . . . 76
9.06 Dividends; etc. . . . . . . . . . . . . . . . . . . . . . . 78
9.07 Transactions with Affiliates. . . . . . . . . . . . . . . . 79
9.08 Capital Expenditures. . . . . . . . . . . . . . . . . . . . 79
9.09 Minimum Consolidated EBITDAR. . . . . . . . . . . . . . . . 80
9.10 Consolidated Interest Coverage Ratio. . . . . . . . . . . . 81
9.11 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . 82
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements;
Issuances of Capital Stock; etc.. . . . . . . . . . . . . 83
9.13 Limitation on Issuance of Capital Stock . . . . . . . . . . 83
9.14 Limitation on Certain Restrictions on Subsidiaries. . . . . 84
9.15 Limitation on the Creation of Subsidiaries and Joint
Ventures. . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 10. Events of Default . . . . . . . . . . . . . . . . . . . . . 85
10.01 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.02 Representations, etc. . . . . . . . . . . . . . . . . . . . 85
10.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 86
10.04 Default Under Other Agreements. . . . . . . . . . . . . . . 86
10.05 Bankruptcy, etc . . . . . . . . . . . . . . . . . . . . . . 86
10.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
10.07 Security Documents. . . . . . . . . . . . . . . . . . . . . 87
10.08 Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . 88
10.09 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . 88
10.10 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 11. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 12. The Agent . . . . . . . . . . . . . . . . . . . . . . . . . 116
12.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . 116
12.02 Delegation of Duties. . . . . . . . . . . . . . . . . . . . 117
12.03 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . 117
12.04 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . 118
12.05 Notice of Default . . . . . . . . . . . . . . . . . . . . . 118
12.06 Nonreliance on Agent and Other Banks. . . . . . . . . . . . 118
12.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . 119
12.08 Agent in its Individual Capacity. . . . . . . . . . . . . . 119
12.09 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 120
12.10 Resignation of the Agent. . . . . . . . . . . . . . . . . . 120
(iv)
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SECTION 13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 120
13.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . 120
13.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . 121
13.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 122
13.04 Benefit of Agreement. . . . . . . . . . . . . . . . . . . . 122
13.05 No Waiver; Remedies Cumulative. . . . . . . . . . . . . . . 124
13.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . 125
13.07 Calculations; Computations. . . . . . . . . . . . . . . . . 125
13.08 Governing Law; Submission to Jurisdiction; Venue. . . . . . 126
13.09 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 126
13.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . 127
13.11 Headings Descriptive. . . . . . . . . . . . . . . . . . . . 127
13.12 Amendment or Waiver; etc. . . . . . . . . . . . . . . . . . 127
13.13 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 128
13.14 Domicile of Loans and Commitments . . . . . . . . . . . . . 128
13.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 129
13.16 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . 129
13.17 Register. . . . . . . . . . . . . . . . . . . . . . . . . . 129
SECTION 14. Parent Guaranty . . . . . . . . . . . . . . . . . . . . . . 130
14.01 The Guaranty. . . . . . . . . . . . . . . . . . . . . . . . 130
14.02 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . 131
14.03 Nature of Liability . . . . . . . . . . . . . . . . . . . . 131
14.04 Independent Obligation. . . . . . . . . . . . . . . . . . . 131
14.05 Authorization . . . . . . . . . . . . . . . . . . . . . . . 131
14.06 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 132
14.07 Subordination . . . . . . . . . . . . . . . . . . . . . . . 133
14.08 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 133
14.09 Nature of Liability . . . . . . . . . . . . . . . . . . . . 135
ANNEX I List of Banks and Commitments
ANNEX II Bank Addresses
ANNEX III Real Properties
ANNEX IV Existing Indebtedness
ANNEX V Pension Plans
ANNEX VI Existing Investments
ANNEX VII Subsidiaries
ANNEX VIII Insurance
ANNEX IX Existing Liens
ANNEX X Exceptions to Tax Representations
(v)
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B-1 -- Form of Term Note
EXHIBIT B-2 -- Form of Revolving Note
EXHIBIT B-3 -- Form of Swing line Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT E -- Form of Opinion of Weil, Gotshal & Xxxxxx LLP, special
counsel to the Credit Parties
EXHIBIT F -- Form of Officers' Certificate
EXHIBIT G -- Form of Pledge Agreement
EXHIBIT H -- Form of Security Agreement
EXHIBIT I -- Form of Subsidiaries Guaranty
EXHIBIT J -- Form of Solvency Certificate
EXHIBIT K -- Form of Assignment and Assumption Agreement
EXHIBIT L -- Form of Intercompany Note
EXHIBIT M -- Form of Shareholder Subordinated Note
EXHIBIT N -- Form of Assumption Agreement
(vi)
CREDIT AGREEMENT, dated as of September 19, 1996, among MAPLE LEAF
AEROSPACE, INC., a Delaware corporation ("Parent"), AEROSPACE ACQUISITION
CORP., a Delaware corporation ("Holdings"), AEROSPACE MERGER SUB I, INC., a
Florida corporation (and TRI-STAR AEROSPACE, INC. as its successor by merger
after the consummation of the Merger as hereinafter defined), TRI-STAR
AEROSPACE CO., a Delaware corporation (the "Borrower"), the lenders from time
to time party hereto (each, a "Bank" and, collectively, the "Banks"), and
BANKERS TRUST COMPANY, as Agent (in such capacity, the "Agent"). Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 11 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Borrower the credit
facilities provided for herein; and
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 COMMITMENTS. (a) Subject to and upon the terms and conditions
set forth herein, each Bank with a Term Loan Commitment severally agrees to
make a term loan or term loans (each, a "Term Loan" and, collectively, the
"Term Loans") to the Borrower, which Term Loans:
(i) shall be incurred pursuant to a single drawing on the Initial
Borrowing Date;
(ii) shall be denominated in U.S. Dollars;
(iii) except as hereafter provided, shall, at the option of the
Borrower, be incurred and maintained as, and/or converted into, Base Rate
Loans or Eurodollar Loans, PROVIDED, that (x) all Term Loans made as part
of the same Borrowing shall, unless otherwise specifically provided herein,
consist of Term Loans of the same Type and (y) unless the Agent has
determined that the Syndication Date has occurred (at which time this
clause (y) shall no longer be applicable), no
Borrowings of Term Loans to be maintained as Eurodollar Loans may be
incurred prior to the 60th day after the initial Borrowing Date; and
(iv) shall not exceed for any Bank at the time of incurrence thereof
on the Initial Borrowing Date that aggregate principal amount as is equal
to the Term Loan Commitment of such Bank as in effect on the Initial
Borrowing Date (before giving effect to any reductions thereto on such date
pursuant to Section 3.03(b)(i) but after giving effect to any reductions
thereto prior to such date pursuant to Section 3.03(b)(ii)).
Once repaid, Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions herein set forth,
each RL Bank severally agrees, at any time and from time to time on and after
the Initial Borrowing Date and prior to the Revolving Loan Maturity Date, to
make a revolving loan or revolving loans (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans
(i) shall be denominated in U.S. Dollars, (ii) except as hereinafter
provided, shall, at the option of the Borrower, be incurred and maintained as
and/or converted into Base Rate Loans or Eurodollar Loans, PROVIDED, that (x)
all Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, consist of Revolving Loans of the
same Type and (y) unless the Agent has determined that the Syndication Date
has occurred (at which time this clause (y) shall no longer be applicable),
no Borrowings of Revolving Loans to be maintained as Eurodollar Loans may be
incurred prior to the 60th day after the Initial Borrowing Date, (iii) may be
repaid and reborrowed in accordance with the provisions hereof and (iv) shall
not exceed for any Bank at any time outstanding that aggregate principal
amount which, when combined with such Bank's Percentage of the Swingline
Loans then outstanding and the Letter of Credit Outstandings (exclusive of
Unpaid Drawings relating to Letters of Credit which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals the Revolving Loan
Commitment of such Bank at such time.
(c) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to make at any time and from time to
time on and after the Initial Borrowing Date and prior to the Swingline
Expiry Date, a loan or loans to the Borrower (each, a "Swingline Loan" and,
collectively, the "Swingline Loans"), which Swingline Loans (i) shall be made
and maintained as Base Rate Loans, (ii) shall be denominated in U.S. Dollars,
(iii) may be repaid and reborrowed in accordance with the provisions hereof,
(iv) shall not exceed in aggregate principal amount at any time outstanding,
when combined with the aggregate principal amount of all Revolving Loans then
outstanding and the Letter of Credit Outstandings (exclusive of Unpaid
Drawings relating to Letters of Credit which are repaid with the proceeds of,
and simultaneously with the incurrence of,
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the respective incurrence of Revolving Loans) at such time, an amount equal
to the Total Revolving Loan Commitment then in effect and (v) shall not
exceed in aggregate principal amount at any time outstanding the Maximum
Swingline Amount. BTCo shall not be obligated to make any Swingline Loans at
a time when a Bank Default exists unless BTCo has entered into arrangements
satisfactory to it and the Borrower to eliminate BTCo's risk with respect to
the Defaulting Bank's or Banks' participation in such Swingline Loans,
including by cash collateralizing such Defaulting Bank's or Banks' Percentage
of the outstanding Swingline Loans. BTCo will not make a Swingline Loan after
it has received written notice from the Borrower or the Required Banks
stating that a Default or an Event of Default exists until such time as BTCo
shall have received a written notice of (i) rescission of such notice from
the party or parties originally delivering. the same or (ii) a waiver of such
Default or Event of Default from the Required Banks.
(d) On any Business Day, BTCo may, in its sole discretion, give
notice to the XX Xxxxx that its outstanding Swingline Loans shall be funded
with a Borrowing of Revolving Loans (PROVIDED that each such notice shall be
deemed to have been automatically given upon the occurrence of a Default or
an Event of Default under Section 10.05 or upon the exercise of any of the
remedies provided in the last paragraph of Section 10), in which case a
Borrowing of Revolving Loans constituting Base Rate Loans (each such
Borrowing, a "Mandatory Borrowing") shall be made on the immediately
succeeding Business Day by all XX Xxxxx PRO RATA based on each RL Bank's
Percentage, and the proceeds thereof shall be applied directly to repay BTCo
for such outstanding Swingline Loans. Each RL Bank hereby irrevocably agrees
to make Base Rate Loans upon one Business Day's notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified in writing by BTCo
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether
any conditions specified in Section 5 or 6 are then satisfied, (iii) whether
a Default or an Event of Default has occurred and is continuing, (iv) the
date of such Mandatory Borrowing and (v) the amount of the Total Revolving
Loan Commitment at such time. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of the Borrower), each RL
Bank (other than BTCo) hereby agrees that it shall forthwith purchase from
BTCo (without recourse or warranty) such assignment of the outstanding
Swingline Loans as shall be necessary to cause the XX Xxxxx to share in such
Swingline Loans ratably based upon their respective Percentages (determined
before giving effect to any termination of the Revolving Loan Commitments
pursuant to the last paragraph of Section 10), PROVIDED that (x) all interest
payable on the Swingline Loans shall be for the account of BTCo until the
date the respective assignment is purchased and, to the extent attributable
to the purchased assignment, shall be payable to the RL Bank purchasing same
from and after such date of purchase and (y) at the time any purchase of
assignments pursuant to this sentence is actually made, the purchasing RL
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Bank shall be required to pay BTCo interest on the principal amount of
assignment purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date
of payment for such assignment, at the rate otherwise applicable to Revolving
Loans maintained as Base Rate Loans hereunder for each day thereafter.
1.02 MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount
of each Borrowing of Loans shall not be less than the Minimum Borrowing
Amount applicable to such Loans, PROVIDED that Mandatory Borrowings shall be
made in the amounts required by Section 1.01(d). More than one Borrowing may
be incurred on any day, PROVIDED, that at no time shall there be outstanding
more than eight Borrowings of Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to
make a Borrowing hereunder (excluding Borrowings of Swingline Loans and
Mandatory Borrowings), it shall give the Agent at its Notice Office, prior to
11:00 A.M. (New York time), at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing
of Eurodollar Loans and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Base
Rate Loans to be made hereunder. Each such notice (each, a "Notice of
Borrowing") shall, except as otherwise expressly provided in Section 1.10, be
irrevocable, and, in the case of each written notice and each confirmation of
telephonic notice, shall be in the form of Exhibit A, appropriately completed
to specify: (i) the aggregate principal amount of the Loans to be made
pursuant to such Borrowing, (ii) the date of such Borrowing (which shall be a
Business Day), (iii) whether the respective Borrowing shall consist of Term
Loans or Revolving Loans, (iv) whether the respective Borrowing shall consist
of Base Rate Loans or, to the extent permitted hereunder, Eurodollar Loans
and, if Eurodollar Loans, the Interest Period to be initially applicable
thereto and (v) in the case of a Borrowing of Revolving Loans the proceeds of
which are to be utilized to finance, in whole or in part, the purchase price
of a Permitted Acquisition, (x) a reference to the officer's certificate, if
any, delivered in accordance with Section 8.14, (y) the aggregate principal
amount of such Revolving Loans to be utilized in connection with such
Permitted Acquisition and (z) the aggregate principal amount of all Revolving
Loans relating to Permitted Acquisitions then outstanding after giving effect
to the incurrence of such Revolving Loans. The Agent shall promptly give each
Bank which is required to make Loans of the Tranche specified in the
respective Notice of Borrowing, written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such Bank's
proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, it shall give BTCo not later than 12:00 Noon (New York time) on
the day such Swingline
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Loan is to be made, written notice (or telephonic notice promptly confirmed
in writing) of each Swingline Loan to be made hereunder. Each such notice
shall be irrevocable and shall specify in each case (x) the date of such
Borrowing (which shall be a Business Day) and (y) the aggregate principal
amount of the Swingline Loan to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified
in Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence
of any Swingline Loan, to the making of Mandatory Borrowings as set forth in
such Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or BTCo (in the case of a Borrowing of Swingline Loans) or the Letter
of Credit Issuer (in the case of the issuance of Letters of Credit), as the
case may be, may prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice, believed by the Agent,
BTCo or the Letter of Credit Issuer, as the case may be, in good faith to be
from an Authorized Officer of the Borrower. in each such case, the Borrower
hereby waives the right to dispute the Agent's, BTCo's or the Letter of
Credit Issuer's record of the terms of such telephonic notice.
1.04 DISBURSEMENT OF FUNDS. (a) Not later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing (or (x) in the case
of Swingline Loans, not later than 2:00 P.M. (New York time) on the date
specified in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings,
not later than 12:00 Noon (New York time) oh the date specified in Section
1.01(d)), each Bank with a Commitment of the respective Tranche will make
available its PRO RATA share, if any, of each Borrowing requested to be made
on such date (or in the case of Swingline Loans, BTCo shall make available
the full amount thereof) in the manner provided below. All amounts shall be
made available to the Agent in U.S. Dollars and in immediately available
funds at the Payment Office and the Agent promptly will make available to the
Borrower by depositing to its account at the Payment Office the aggregate of
the amounts so made available in the type of funds received. Unless the Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to the Agent its portion of the
Borrowing or Borrowings to be made on such date, the Agent may assume that
such Bank has made such amount available to the Agent on such date of
Borrowing, and the Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Bank and the Agent has made available
same to the Borrower, the Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be
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entitled to recover on demand from such Bank or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the Agent, at
a rate per annum equal to (x) if paid by such Bank, the overnight Federal
Funds Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with Section 1.08.
(b) Nothing in this Agreement shall be deemed to relieve any Bank
from its obligation to fulfill its commitments hereunder or to prejudice any
rights which the Borrower may have against any Bank as a result of any
default by such Bank hereunder.
1.05 NOTES. (a) The Borrower's obligation to pay the principal
of, and interest on, all the Loans made to it by each Bank shall be evidenced
(i) if Term Loans, a promissory note substantially in the form of Exhibit B-1
with blanks appropriately completed in conformity herewith (each, a "Term
Note" and, collectively, the "Term Notes"), (ii) if Revolving Loans, by a
promissory note substantially in the form of Exhibit B-2 with blanks
appropriately completed in conformity herewith (each, a "Revolving Note" and,
collectively, the "Revolving Notes") and (iii) if Swingline Loans, by a
promissory note substantially in the form of Exhibit B-3 with blanks
appropriately completed in conformity herewith (the "Swingline Note").
(b) The Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to such Bank or its registered assigns and be dated
the Initial Borrowing Date, (iii) be in a stated principal amount equal to
the Term Loans made by such Bank and be payable in the principal amount of
Term Loans evidenced thereby, (iv) mature on the Final Maturity Date, (v)
bear interest as provided in the appropriate clause of Section I .08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary repayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Revolving Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to such Bank or its registered assigns and
be dated the Initial Borrowing Date, (iii) be in a stated principal amount
equal to the Revolving Loan Commitment of such Bank and be payable in the
principal amount of the outstanding Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in
the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01 and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
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(d) The Swingline Note issued to BTCo shall (i) be executed by
the Borrower, (ii) be payable to BTCo or its registered assigns and be dated
the Initial Borrowing Date, (iii) be in a stated principal amount equal to
the Maximum Swingline Amount and be payable in the principal amount of the
outstanding Swingline Loans evidenced thereby, (iv) mature on the Swingline
Expiry Date, (v) bear interest as provided in Section 1.08 in respect of the
Base Rate Loans evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01 and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(e) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation or any error in such notation shall not affect the Borrower's
obligations in respect of such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert on
any Business Day occurring on or after the Initial Borrowing Date, all or a
portion at least equal to the applicable Minimum Borrowing Amount of the
outstanding principal amount of Loans (other than Swingline Loans which shall
at all times be maintained as Base Rate Loans) made pursuant to one or more
Borrowings of one or more Types of Loans under a single Tranche into a
Borrowing or Borrowings of another Type of Loan under such Tranche; PROVIDED,
that (i) except as otherwise provided in Section 1.10(b), Eurodollar Loans
may be converted into Base Rate Loans only on the last day of an Interest
Period applicable to the Loans being converted and no partial conversion of a
Borrowing of Eurodollar Loans shall reduce the outstanding principal amount
of the Eurodollar Loans made pursuant to such Borrowing to less than the
Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be
converted into Eurodollar Loans if no Default or Event of Default is in
existence on the date of the conversion, (iii) unless the Agent has
determined that the Syndication Date has occurred (at which time this clause
(iii) shall no longer be applicable), conversions of Base Rate Loans into
Eurodollar Loans may not be made prior to the 60th day after the Initial
Borrowing Date and (iv) Borrowings of Eurodollar Loans resulting from this
Section 1.06 shall be limited in number as provided in Section 1.02. Each
such conversion shall be effected by the Borrower by giving the Agent at its
Notice Office, prior to 11:00 A.M. (New York time), at least three Business
Days' (or one Business Day's in the case of a conversion into Base Rate
Loans) prior written notice (or telephonic notice promptly confirmed in
writing) (each, a "Notice of Conversion") specifying the Loans to be so
converted, the Borrowing(s) pursuant to which the Loans were made and, if to
be converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall give each Bank prompt notice of
any such proposed conversion affecting any of its Loans. Upon any such
conversion, the proceeds thereof will be deemed to be applied directly on the
day of such conversion to prepay the outstanding principal amount of the
Loans being converted.
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1.07 PRO RATA BORROWINGS. All Borrowings of Term Loans and
Revolving Loans under this Agreement shall be incurred by the Borrower from
the Banks PRO RATA on the basis of their Term Loan Commitments or Revolving
Loan Commitments, as the case may be; PROVIDED that all Borrowings of
Revolving Loans made pursuant to a Mandatory Borrowing shall be incurred from
the Banks PRO RATA on the basis on their Percentages, It is understood that
no Bank shall be responsible for any default by any other Bank of its
obligation to make Loans hereunder and that each Bank shall be obligated to
make the Loans to be made by it hereunder, regardless of the failure of any
other Bank to fulfill its commitments hereunder.
1.08 INTEREST. (a) The unpaid principal amount of each Base Rate
Loan shall bear interest from the date of the Borrowing thereof until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such
Base Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06, at a rate per annum which shall at all times
be the relevant Applicable Base Rate Margin Plus the Base Rate in effect from
time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Section 1.06, 1.09 or 1.10(13), as applicable, at a rate per annum which
shall at all times be the relevant Applicable Eurodollar Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum
equal to the greater of (x) the rate which is 2 % in excess of the rate borne
by the respective such Loans immediately prior to the respective payment
default and (y) the rate which is 2% in excess of the rate otherwise
applicable to Base Rate Loans from time to time. Interest which accrues under
this Section 1.08(c) shall be payable on demand.
(d) interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on (x) the
date of any prepayment or repayment thereof (on the amount prepaid or
repaid), (y) the date of any conversion into a Base Rate Loan pursuant to
Section 1.06, 1.09 or 1.10(13), as applicable (on the amount convened) and
(z) the last day of each Interest Period applicable thereto and, in the case
of an Interest Period in excess of three months, on each date occurring at
three month intervals after the first day of such Interest Period and (iii)
in respect of each Loan, at maturity (whether by acceleration or otherwise)
and, after such maturity, on demand.
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(e) All computations of interest hereunder shall be made in
accordance with Section 13.07(13).
(f) Upon each Interest Determination Date, the Agent shall
determine the Eurodollar Rate for the respective Interest Period or Interest
Periods and shall promptly notify the Borrower and the Banks thereof. Each
such determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
1.09 INTEREST PERIODS. At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 11:00 A.M. (New York time) on the
third Business Day prior to the expiration of an Interest Period applicable
to a Borrowing of Eurodollar Loans (in the case of any subsequent Interest
Period), the Borrower shall have the right to elect by giving the Agent
written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower (but otherwise subject to clause (y) of the
proviso to Section 1 .01(a)(iii) and to clause (iii) of the proviso to
Section 1.06), be a one, two, three or six month period or, to the extent
approved by all Banks with a Commitment or outstanding Loans, as the case may
be, under the respective Tranche, a nine or twelve month period.
Notwithstanding anything to the contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period applicable thereto
expires;
(iii) if any Interest Period for any Borrowing of Eurodollar Loans
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, PROVIDED, that if any Interest Period for any
Borrowing of Eurodollar Loans would otherwise expire on a day which is not
a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
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(v) no interest Period for a Borrowing under a Tranche shall be
elected which would extend beyond the respective Maturity Date for such
Tranche;
(vi) no Interest Period may be elected at any time when a Default,
or any Event of Default, is then in existence;
(vii) no Interest Period in respect of any Borrowing of Revolving
Loans shall be elected which extends beyond any date upon which a Scheduled
Commitment Reduction will be required to be made under Section 3.03(c) if
the aggregate principal amount of such Revolving Loans which have Interest
Periods which will expire after such date, when added to the Stated Amount
of all Letters of Credit which by their terms expire after such date, will
be in excess of the Total Revolving Loan Commitment as same will be in
effect after giving effect to the respective Scheduled Commitment
Reduction; and
(viii) no interest Period in respect of any Borrowing of Term Loans
shall be elected which extends beyond any date upon which a Scheduled
Repayment will be required to be made under Section 4.02(b) if, after
giving effect to the election of such Interest Period, the aggregate
principal amount of such Term Loans which have Interest Periods which will
expire after such date will be in excess of the aggregate principal amount
of such Term Loans then outstanding less the aggregate amount of such
required Scheduled Repayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new interest Period to be applicable to the respective
Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed
to have elected to convert such Borrowing into a Borrowing of Base Rate Loans
effective as of the expiration date of such current Interest Period.
1.10 INCREASED COSTS; ILLEGALITY; ETC. (a) In the event that (x) in
the case of clause (i) below, the Agent or (y) in the case of clauses (ii)
and (iii) below, any Bank, shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto):
(i) on any Interest Determination Date, that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar
-10-
Loans because of (x) any change since the date of this Agreement in any
applicable law, governmental rule, regulation, guideline, order or request
(whether or not having the force of law), or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request (such as, for
example, but not limited to, (A) without duplication of any amounts payable
under Section 4.04(a) hereof, a change in the basis of taxation or payment
to any Bank of the principal of or interest on such Eurodollar Loans or any
other amounts payable hereunder (except for changes with respect to any tax
imposed on, or determined by reference to, the net income or net profits
of such Bank pursuant to the laws of the jurisdiction in which such Bank
is organized, or in which such Bank's principal office or applicable
lending office is located or any subdivision thereof or Therein), or (B)
a change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate and/or (y) other circumstances
affecting such Bank, the interbank Eurodollar market or the position of
such Bank in such market; or
(iii) at any time since the date of this Agreement, that the making or
continuance of any Eurodollar Loan has become unlawful by compliance by
such Bank with any law, governmental rule, regulation, guideline or order
(or would conflict with any governmental rule, regulation, guideline,
request or order not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith would not
be unlawful), or has become impracticable as a result of a contingency
occurring after the date of this Agreement which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent in the case of clause
(i) above) shall promptly give notice (by telephone confirmed in writing) to
the Borrower and (except in the case of clause (i)) to the Agent of such
determination (which notice the Agent shall promptly transmit to each of the
other Banks). Thereafter, (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by
the Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have
not yet been incurred (including by way of conversion) shall be deemed
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
agrees to pay to such Bank, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Bank, showing the basis for
the calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding upon all parties hereto,
although
-11-
the failure to give any such notice shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(a) upon the subsequent receipt of such notice) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(13) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected pursuant to Section
1.10(a)(iii) the Borrower shall) either (i) if the affected Eurodollar Loan
is then being made pursuant to a Borrowing, cancel said Borrowing by giving
the Agent telephonic notice (confirmed promptly in writing) thereof on the
same date that the Borrower was notified by a Bank pursuant to Section
1.10(a)(ii) or (iii)), or (ii) if the affected Eurodollar Loan is then
outstanding, upon at least three Business Days' notice to the Agent, require
the affected Bank to convert each such Eurodollar Loan into a Base Rate Loan;
PROVIDED, that if more than one Bank is affected at any time, then all
affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date hereof,
the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, 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 any corporation
controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing
the rate of return on such Bank's or such other corporation's capital or
assets as a consequence of such Bank's Commitment or Commitments hereunder or
its obligations hereunder to a level below that which such Bank or such other
corporation could have achieved but for such adoption, effectiveness, change
or compliance (taking into consideration such Bank's or such other
corporation's policies with respect to capital adequacy), then from time to
time, upon written demand by such Bank (with a copy to the Agent),
accompanied by the notice referred to in the last sentence of this clause
(c), the Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank or such other corporation for such reduction. Each
Bank, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower (a copy of which shall be sent by such Bank to the
Agent), which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
A Bank's reasonable good faith determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.
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1.11 COMPENSATION. The Borrower shall compensate each Bank, promptly
upon its written request (which request shall set forth the basis for
requesting such compensation), for all losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required
by such Bank to fund its Eurodollar Loans) which such Bank may sustain: (i)
if for any reason (other than a default by such Bank or the Agent) a
Borrowing of, or conversion from or into, Eurodollar Loans does not occur on
a date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 1.10(a)); (ii) if any repayment (including any repayment made
pursuant to Section 4.01 or 4.02 or as a result of an acceleration of the
Loans pursuant to Section 9 or as a result of the replacement of a Bank
pursuant to Section 1.13 or 13.12(b)) or conversion of any Eurodollar Loans
occurs on a date which is not the last day of an Interest Period applicable
thereto; (iii) if any prepayment of any Eurodollar Loans is not made on any
date specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Eurodollar
Loans when required by the terms of this Agreement or (y) an election made
pursuant to Section 1.10(b). A Bank's basis for requesting compensation
pursuant to this Section 1.11 and a Bank's calculation of the amount thereof,
shall, absent manifest error, be final and conclusive and binding on all
parties hereto.
1.12 CHANGE OF LENDING OFFICE. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii)
or (iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any
Loans or Letters of Credit affected by such event; PROVIDED, that such
designation is made on such terms that, in the sole judgment of such Bank,
such Bank and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequences of the event
giving rise to the operation of any such Section. Nothing in this Section
1.12 shall affect or postpone any of the obligations of the Borrower or the
right of any Bank provided in Section 1.10, 2.05 or 4.04.
1.13 REPLACEMENT OF BANKS. (x) If any Bank becomes a Defaulting Bank,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in a material amount in excess of those being generally
charged by the other Banks or (z) in the case of a refusal by a Bank to
consent to a proposed change, waiver, discharge or termination with respect
to this Agreement which has been approved by the Required Banks as provided
in Section 13.12(b), the Borrower shall have the right, in accordance with
Section 13.04(b), if no Default or Event of Default then exists or would
exist after giving effect to such replacement, to replace such Bank (the
"Replaced Bank") with one or more other Eligible Transferee or Transferees,
none of whom shall constitute a Defaulting Bank at the time of
-13-
such replacement (collectively, the "Replacement Bank") and each of whom
shall be reasonably acceptable to the Agent or, at the option of the
Borrower, to replace only (a) the Revolving Loan Commitment (and outstandings
pursuant thereto) of the Replaced Bank with an identical Revolving Loan
Commitment provided by the Replacement Bank or (b) in the case of a
replacement as provided in Section 13.12(b) where the consent of the
respective Bank is required with respect to less than all Tranches of its
Loans or Commitments, the Commitments and/or outstanding Loans of such Bank
in respect of each Tranche where the consent of such Bank would otherwise be
individually required, with identical Commitments and/or Loans of the
respective Tranche provided by the Replacement Bank; PROVIDED that:
(i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant
to said Section 13.04(b) to be paid by the Replacement Bank) pursuant to
which the Replacement Bank shall acquire all of the Commitments and
outstanding Loans (or, in the case of the replacement of only (a) the
Revolving Loan Commitment, the Revolving Loan Commitment and outstanding
Revolving Loans and participations in Letter of Credit Outstandings and/or
(b) Term Loans, the outstanding Term Loans) of, and in each case (except
for the replacement of only the outstanding Term Loans of the respective
Bank) participations in Letters of Credit by, the Replaced Bank and, in
connection therewith, shall pay to (x) the Replaced Bank in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and
all accrued interest on, all outstanding Loans (or, in the case of the
replacement of only (I) the Revolving Loan Commitment, the outstanding
Revolving Loans or (II) the Term Loans, the outstanding Term Loans) of the
Replaced Bank, (B) except in the case of the replacement of only the
outstanding Term Loans of a Replaced Bank, an amount equal to all Unpaid
Drawings that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such
time and (C) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank (but only with respect to the relevant Tranche,
in the case of the replacement of less than all Tranches of Loans then held
by the respective Replaced Bank) pursuant to Section 3.01, (y) except in
the case of the replacement of only the outstanding Term Loans of a
Replaced Bank, each Letter of Credit Issuer an amount equal to such
Replaced Bank's Percentage of any Unpaid Drawing relating to Letters of
Credit issued by such Letter of Credit Issuer (which at such time remains
an Unpaid Drawing) to the extent such amount was not theretofore funded by
such Replaced Bank and (z) in the case of any replacement of Revolving Loan
Commitments, BTCo an amount equal to such Replaced Bank's Percentage of any
Mandatory Borrowing to the extent such amount was not theretofore funded by
such Replaced Bank; and
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(ii) all obligations of the Borrower then owing to the Replaced Bank
(other than those (a) specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is concurrently being,
paid, but including all amounts, if any, owing under Section 1.11 or (b)
relating to any Tranche of Loans and/or Commitments of the respective
Replaced Bank which will remain outstanding after giving effect to the
respective replacement) shall be paid in full to such Replaced Bank
concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreements,
the payment of amounts referred to in clauses (i) and (ii) above, recordation
of the assignment on the Register by the Agent pursuant to Section 13.17 and,
if so requested by the Replacement Bank, delivery to the Replacement Bank of
the appropriate Note or Notes executed by the Borrower, (x) the Replacement
Bank shall become a Bank hereunder and, unless the respective Replaced Bank
continues to have outstanding Term Loans or a Revolving Loan Commitment
hereunder, the Replaced Bank shall cease to constitute a Bank hereunder,
except with respect to indemnification provisions under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and
13.06), which shall survive as to such Replaced Bank and (y) in the case of
the replacement of a Defaulting Bank with a Non-Defaulting Bank, the
Percentages of the Banks shall be automatically adjusted at such time to give
effect to such replacement.
SECTION 2. LETTERS OF CREDIT.
2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit
Issuer at any time and from time to time on or after the Initial Borrowing
Date and prior to the tenth Business Day (or the 30th day in the case of
trade Letters of Credit) preceding the Revolving Loan Maturity Date to issue,
for the account of the Borrower and in support of (x) trade obligations of
the Borrower or any of its Subsidiaries that arise in the ordinary course of
business and/or (y) on a standby basis, L/C Supportable Indebtedness of the
Borrower or any of its Subsidiaries to any other Person, irrevocable sight
letters of credit in such form as may be approved by such Letter of Credit
Issuer (each such letter of credit, a "Letter of Credit" and, collectively,
the "Letters of Credit"). Notwithstanding the foregoing, no Letter of Credit
Issuer shall be under any obligation to issue any Letter of Credit if at the
time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Letter of
Credit Issuer from issuing such Letter of Credit or any requirement of law
applicable to such Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental authority
with jurisdiction over such Letter of Credit
-15-
issuer shall prohibit, or request that such Letter of Credit Issuer
refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon such Letter of Credit Issuer
with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Letter of Credit Issuer is not
otherwise compensated) not in effect on the date hereof, or any
unreimbursed loss, cost or expense which was not applicable, in effect or
known to such Letter of Credit Issuer as of the date hereof and which such
Letter of Credit Issuer in good xxxxx xxxxx material to it; or
(ii) such Letter of Credit Issuer shall have received notice from the
Borrower or the Required Banks prior to the issuance of such Letter of
Credit of the type described in clause (vi) of Section 2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of,
and prior to the issuance of, the respective Letter of Credit) at such time,
would exceed either (x) $5,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans and Swingline Loans then outstanding,
the Total Revolving Loan Commitment at such time; (ii) (x) each standby
Letter of Credit shall have an expiry date occurring not later than one year
after such Letter of Credit's date of issuance, PROVIDED, that any such
Letter of Credit may be extendable for successive periods of up to one year,
but not beyond the tenth business day preceding the Revolving Loan Maturity
Date, on terms acceptable to the Letter of Credit Issuer and (y) each trade
Letter of Credit shall have an expiry date occurring not later than 180 days
after such Letter of Credit's date of issuance; (iii) (x) no standby Letter
of Credit shall have an expiry date occurring later than the tenth Business
Day preceding the Revolving Loan Maturity Date and (y) no trade Letter of
Credit shall have an expiry date occurring later than 30 days prior to the
Revolving Loan Maturity Date; (iv) each Letter of Credit shall be denominated
in U.S. Dollars; (v) the Stated Amount of each Letter of Credit shall not be
less than $100,000 or such lesser amount as is acceptable to the respective
Letter of Credit Issuer; and (vi) no Letter of Credit Issuer will issue any
Letter of Credit after it has received written notice from the Borrower or
the Required Banks stating that a Default or an Event of Default exists until
such time as such Letter of Credit Issuer shall have received a written
notice of (x) rescission of such notice from the party or parties originally
delivering the same or (y) a waiver of such Default or Event of Default by
the Required Banks.
(c) Notwithstanding the foregoing, in the event a Bank Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless the respective Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of
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Credit of the Defaulting Bank or Banks, including by cash collateralizing
such Defaulting Bank's or Banks' Percentage of the Letter of Credit
Outstandings, as the case may be.
2.02 LETTER OF CREDIT REQUESTS. (a) Whenever the Borrower desires that
a Letter of Credit be issued, the Borrower shall give the Agent and the
respective Letter of Credit Issuer written notice (or telephonic notice
confirmed in writing) thereof prior to 12:00 Noon (New York time) at least
five Business Days (or such shorter period as may be acceptable to the
respective Letter of Credit Issuer) prior to the proposed date of issuance
(which shall be a Business Day) which written notice shall be in the form of
Exhibit C (each, a "Letter of Credit Request"). Each Letter of Credit Request
shall include any other documents as such Letter of Credit Issuer customarily
requires in connection therewith.
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and it will not violate the requirements of,
Section 2.01(a). Unless the respective Letter of Credit Issuer has received
notice from the Required Banks before it issues a Letter of Credit that one
or more of the applicable conditions specified in Section 5 or 6, as the case
may be, are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 2.01(a), then such Letter of Credit Issuer may issue
the requested Letter of Credit for the account of the Borrower in accordance
with such Letter of Credit Issuer's usual and customary practice.
2.03 LETTER OF CREDIT PARTICINATIONS. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each other RL
Bank, and each such RL Bank (each, a "Participant") shall be deemed
irrevocably and unconditionally to have purchased and received from such
Letter of Credit Issuer, without recourse or warranty, an undivided interest
and participation, to the extent of such Participant's Percentage, in such
Letter of Credit, each substitute Letter of Credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with
respect thereto (although Letter of Credit Fees shall be payable directly to
the Agent for the account of the XX Xxxxx as provided in Section 3.01(b) and
the Participants shall have no right to receive any portion of any Facing
Fees with respect to such Letters of Credit) and any security therefor or
guaranty pertaining thereto. Upon any change in the Revolving Loan
Commitments of the XX Xxxxx pursuant to Section 1.13 or 13.04(b), it is
hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings with respect thereto, there shall be an automatic adjustment
to the participations pursuant to this Section 2.03 to reflect the new
Percentages of the assigning and assignee Bank.
(b) In determining whether to pay under any Letter of Credit, no Letter
of Credit Issuer shall have any obligation relative to the Participants other
than to determine
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that any documents required to be delivered under such Letter of Credit have
been delivered and that they appear to substantially comply on their face
with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Letter of Credit Issuer under or in connection with any
Letter of Credit issued by it if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Letter of Credit
Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to the Letter of Credit Issuer pursuant to
Section 2.04(a), such Letter of Credit Issuer shall promptly notify the
Agent, and the Agent shall promptly notify each Participant of such failure,
and each such Participant shall promptly and unconditionally pay to the Agent
for the account of such Letter of Credit Issuer, the amount of such
Participant's Percentage of such payment in U.S. Dollars and in same day
funds. If the Agent so notifies any Participant required to fund a payment
under a Letter of Credit prior to 11:00 A.M. (New York time) on any Business
Day, such Participant shall make available to the Agent at the Payment Office
for the account of the respective Letter of Credit Issuer such Participant's
Percentage of the amount of such payment on such Business Day in same day
funds (and, to the extent such notice is given after 11:00 A.M. (New York
time) on any Business Day, such Participant shall make such payment on the
immediately following Business Day). If and to the extent such Participant
shall not have so made its Percentage of the amount of such payment available
to the Agent for the account of the respective Letter of Credit Issuer, such
Participant agrees to pay to the Agent for the account of such Letter of
Credit Issuer, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to
the Agent for the account of the Letter of Credit Issuer at the overnight
Federal Funds Rate. The failure of any Participant to make available to the
Agent for the account of the respective Letter of Credit Issuer its
Percentage of any payment under any Letter of Credit issued by it shall not
relieve any other Participant of its obligation hereunder to make available
to the Agent for the account of such Letter of Credit Issuer its applicable
Percentage of any payment under any such Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Agent for the
account of such Letter of Credit Issuer such other Participant's Percentage
of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Agent has received for the account
of such Letter of Credit Issuer any payments from the Participants pursuant
to clause (c) above, such Letter of Credit Issuer shall pay to the Agent and
the Agent shall promptly pay to each Participant which has paid its
Percentage thereof, in U.S. Dollars and in same day funds, an amount equal to
such Participant's Percentage of the principal amount thereof and interest
thereon accruing after the purchase of the respective participations.
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(e) Each Letter of Credit Issuer shall, promptly after each issuance
of, or amendment or modification to, a standby Letter of Credit issued by it,
give the Agent, each Participant and the Borrower written notice of the
issuance of, or amendment or modification to, such Letter of Credit, which
notice shall be accompanied by a copy of the standby Letter of Credit or
standby Letters of Credit issued by it and each such amendment or
modification thereto.
(f) Each Letter of Credit Issuer (other than BTCo) shall deliver to the
Agent, promptly on the first Business Day of each week, by facsimile
transmission, the daily aggregate Stated Amount available to be drawn under
the outstanding trade Letters of Credit issued by such Letter of Credit
Issuer for the previous week. The Agent shall, within 10 days after the last
Business Day of each calendar month, deliver to each Participant a report
setting forth for such preceding calendar month the daily aggregate Stated
Amount available to be drawn under all outstanding trade Letters of Credit
during such calendar month.
(g) The obligations of the Participants to make payments to the Agent
for the account of the respective Letter of Credit Issuer with respect to
Letters of Credit issued by it shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, any Letter of Credit Issuer, any Bank, or other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower or any of its Subsidiaries and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
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(v) the occurrence of any Default or Event of Default.
2.04 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower
hereby agrees to reimburse each Letter of Credit Issuer, by making payment to
the Agent in immediately available funds at the Payment Office, for any
payment or disbursement made by such Letter of Credit issuer under any Letter
of Credit issued by it (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") no later than one Business Day following the
date of such payment or disbursement, with interest on the amount so paid or
disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior
to 1:00 P.M. (New York time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but not including the date
such Letter of Credit Issuer is reimbursed therefor at a rate per annum which
shall be the Base Rate plus the Applicable Base Rate Margin for Revolving
Loans maintained as Base Rate Loans as in effect from time to time (plus an
additional 2% per annum if not reimbursed by the third Business Day after the
date of such payment or disbursement), such interest also to be payable on
demand; PROVIDED, that it is understood and agreed, however, that the notices
referred to below in this clause (a) shall not be required to be given if a
Default or an Event of Default under Section 10.05 shall have occurred and be
continuing (in which case the Unpaid Drawings shall be due and payable
immediately without presentment, demand, protest or notice of any kind (all
of which are hereby waived by each Credit Party) and shall bear interest at a
rate per annum which shall be the Base Rate plus the Applicable Base Rate
Margin for Revolving Loans maintained as Base Rate Loans plus 2% on and after
the third Business Day following the respective Drawing). Each Letter of
Credit Issuer shall provide the Borrower prompt notice of any payment or
disbursement made by it under any Letter of Credit issued by it, although the
failure of, or delay in, giving any such notice shall not release or diminish
the obligations of the Borrower under this Section 2.04(a) or under any other
Section of this Agreement.
(b) The Borrower's obligation under this Section 2.04 to reimburse the
respective Letter of Credit issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower or any of its
Subsidiaries may have or have had against such Letter of Credit Issuer, the
Agent or any Bank, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit issued by it to conform to
the terms of the Letter of Credit or any nonapplication or misapplication by
the beneficiary of the proceeds of such drawing; PROVIDED, HOWEVER, that the
Borrower shall not be obligated to reimburse such Letter of Credit Issuer for
any wrongful payment made by such Letter of Credit Issuer under a Letter of
Credit issued by it as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter of Credit issuer as
determined by a court of competent jurisdiction.
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2.05 INCREASED COSTS. If after the date hereof, the adoption or
effectiveness of any applicable law, rule or regulation, order, guideline or
request 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 Letter of Credit Issuer or any Participant with any
request or directive (whether or not having the force of law) by any such
authority, central bank or comparable agency shall either (i) impose, modify
or make applicable any reserve, deposit, capital adequacy or similar
requirement against Letters of Credit issued by such Letter of Credit Issuer
or such Participant's participation therein, or (ii) impose on any Letter of
Credit Issuer or any Participant any other conditions directly or indirectly
affecting this Agreement, any Letter of Credit or such Participant's
participation therein; and the result of any of the foregoing is to increase
the cost to such Letter of Credit Issuer or such Participant of issuing,
maintaining or participating in any Letter of Credit, or to reduce the amount
of any sum received or receivable by such Letter of Credit Issuer or such
Participant hereunder or reduce the rate of return on its capital with
respect to Letters of Credit, then, upon written demand to the Borrower by
such Letter of Credit Issuer or such Participant (a copy of which notice
shall be sent by such Letter of Credit Issuer or such Participant to the
Agent), accompanied by the certificate described in the last sentence of this
Section 2.05, the Borrower shall pay to such Letter of Credit Issuer or such
Participant such additional amount or amounts as will compensate such Letter
of Credit Issuer or such Participant for such increased cost or reduction. A
certificate submitted to the Borrower by such Letter of Credit Issuer or such
Participant, as the case may be (a copy of which certificate shall be sent by
such Letter of Credit Issuer or such Participant to the Agent), setting forth
the basis for the determination of such additional amount or amounts
necessary to compensate such Letter of Credit Issuer or such Participant as
aforesaid shalt be final and conclusive and binding on the Borrower absent
manifest error, although the failure to deliver any such certificate shall
not release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 2.05 upon subsequent receipt of such certificate.
SECTION 3. FEES; COMMITMENTS.
3.01 FEES. (a) The Borrower shall pay to the Agent for distribution to
each Non-Defaulting Bank with a Revolving Loan Commitment a commitment fee
(the "Commitment Fee") for the period from the Effective Date to but not
including Revolving Loan Maturity Date (or such earlier date as the Total
Revolving Loan Commitment shall have been terminated), computed at a rate of
1/2 of 1% per annum on the daily average Unutilized Revolving Loan Commitment
of such Non-Defaulting Bank. Accrued Commitment Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the
Revolving Loan Maturity Date (or such earlier date upon which the Total
Revolving Loan Commitment is terminated).
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(b) The Borrower shall pay to the Agent for PRO RATA distribution to
each Non-Defaulting Bank with a Revolving Loan Commitment (based on their
respective Percentages), a fee in respect of each Letter of Credit (the
"Letter of Credit Fee") computed at a rate per annum equal to the Applicable
Eurodollar Margin then in effect on the daily Stated Amount of such Letter of
Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day on or after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(c) The Borrower shall pay to each Letter of Credit Issuer a fee in
respect of each Letter of Credit issued by such Letter of Credit Issuer (the
"Facing Fee") computed at the rate of 1/4 of 1% per annum on the daily Stated
Amount of such Letter of Credit; PROVIDED, that in no event shall the annual
Facing Fee with respect to each Letter of Credit be less than $500; it being
agreed that (x) on the date of issuance of any Letter of Credit and on each
anniversary thereof prior to the termination of such Letter of Credit, if
$500 will exceed the amount of Facing Fees that will accrue with respect to
such Letter of Credit for the immediately succeeding 12-month period, the
full $500 shall be payable on the date of issuance of such Letter of Credit
and on each such anniversary thereof prior to the termination of such Letter
of Credit and (y) if on the date of the termination of any Letter of Credit,
$500 actually exceeds the amount of Facing Fees paid or payable with respect
to such Letter of Credit for the period beginning on the date of the issuance
thereof (or if the respective Letter of Credit has been outstanding for more
than one year, the date of the last anniversary of the issuance thereof
occurring prior to the termination of such Letter of Credit) and ending on
the date of the termination thereof, an amount equal to such excess shall be
paid as additional Facing Fees with respect to such Letter of Credit on the
next date upon which Facing Fees are payable in accordance with the
immediately succeeding sentence. Except as provided in the immediately
preceding sentence, accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day on or after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(d) The Borrower shall pay directly to each Letter of Credit Issuer
upon each issuance of, payment under, and/or amendment of, a Letter of Credit
issued by such Letter of Credit Issuer such amount as shall at the time of
such issuance, payment or amendment be the administrative charge which such
Letter of Credit Issuer is customarily charging for issuances of, payments
under or amendments of, letters of credit issued by it, plus any expenses
relating to such transactions.
(e) The Borrower shall pay to the Agent, for its own account, such fees
as may be agreed to in writing from time to time between the Borrower and the
Agent, when and as due.
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(f) All computations of Fees shall be made in accordance with Section
13.07(b).
3.02 VOLUNTARY TERMINATION OR REDUCTION OF TOTAL UNUTILIZED REVOLVING
LOAN COMMITMENT. (a) Upon at least three Business Days' prior notice to the
Agent at its Notice Office (which notice the Agent shall promptly transmit to
each of the Banks), the Borrower shall have the right, without premium or
penalty, to terminate or partially reduce the Total Unutilized Revolving Loan
Commitment, PROVIDED that (v) any such termination or partial reduction shall
apply to proportionately and permanently reduce the Revolving Loan Commitment
of each of the XX Xxxxx, (w) any reduction to the Total Unutilized Revolving
Loan Commitment prior to the Initial Borrowing Date may only be made in
connection with a termination in full of the Total Revolving Loan Commitment,
(x) any partial reduction pursuant to this Section 3.02(a) shall be in
integral multiples of $1,000,000, (y) the reduction to the Total Unutilized
Revolving Loan Commitment shall in no case be in an amount which would cause
the Revolving Loan Commitment of any RL Bank to be reduced (as required by
the preceding clause (v)) by an amount which exceeds the remainder of (A) the
Unutilized Revolving Loan Commitment of such RL Bank as in effect immediately
before giving effect to such reduction minus (B) such RL Bank's Percentage
of the aggregate principal amount of Swingline Loans then outstanding and
(z) any partial reduction to Total Revolving Loan Commitment pursuant to this
Section 3.02(a) shall apply to reduce the remaining Scheduled Commitment
Reductions on a pro-rata basis (based upon the then remaining amount of each
such Scheduled Commitment Reduction).
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, Waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in
Section 13.12(b), the Borrower shall have the right, subject to obtaining the
consents required by Section 13.12(b), upon five Business Days' prior written
notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), to terminate the entire Revolving
Loan Commitment of such Bank, so long as all Loans, together with accrued and
unpaid interest, Fees and all other amounts, owing to such Bank (including
all amounts, if any, owing pursuant to Section 1.11 but excluding amounts
owing in respect of Term Loans maintained by such Bank, if such Term Loans
are not being repaid pursuant to Section 13.12(b)) are repaid concurrently
with the effectiveness of such termination (at which time Annex 1 shall be
deemed modified to reflect such changed amounts) and at such time, unless the
respective Bank continues to have outstanding Term Loans hereunder, such Bank
shall no longer constitute a "Bank" for purposes of this Agreement, except
with respect to indemnifications under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall
survive as to such repaid Bank. Unless otherwise specifically agreed in
writing by the Required Banks, any reduction to the Total Revolving Loan
Commitment pursuant to this Section 3.02(b) shall apply to reduce the
remaining Scheduled Commitment Reductions on a PRO RATA basis (based upon the
then
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remaining amount of each such Scheduled Commitment Reduction after giving
effect to all prior reductions thereto).
3.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total Commitment (and
the Term Loan Commitment and the Revolving Loan Commitment of each Bank)
shall terminate in its entirety on September 30, 1996 (or such earlier date
as the Borrower shall have notified the Agent in Writing that it has
terminated discussions regarding the Acquisition) unless the Initial
Borrowing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank) shall (i) terminate in its entirety on the Initial
Borrowing Date (after giving effect to the incurrence of Term Loans on such
date) and (ii) prior to the termination of the Total Term Loan Commitment as
provided in clause (i) above, be reduced from time to time to the extent
required by Section 4.02.
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date set forth below (each, a "Scheduled
Commitment Reduction Date"), the Total Revolving Loan Commitment shall be
permanently reduced by the amount set forth opposite such Scheduled
Commitment Reduction Date below (each such reduction, as the same may be
reduced as provided in Sections 3.02, 3.03(f) and 4.02(i), a "Scheduled
Commitment Reduction"):
Scheduled Commitment
Reduction Date Amount
-------------------- ------
September 19, 2000 $15 million
September 19, 2001 $15 million
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each RL Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be reduced
from time to time to the extent required by Section 4.02.
(f) Any amount required to be applied to reduce the Total Revolving
Loan Commitment pursuant to this Section 3.03 (or pursuant to Section 4.02)
shall be applied to reduce the then remaining Scheduled Commitment Reductions
PRO RATA based upon the then
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remaining amount of such Scheduled Commitment Reductions after giving effect
to all prior reductions thereto.
(g) Each reduction to the Total Term Loan Commitment or Total Revolving
Loan Commitment pursuant to this Section 3.03 (or pursuant to Section 4.02)
shall be applied proportionately to reduce the Term Loan Commitment or the
Revolving Loan Commitment, as the case may be, of each Bank with such a
Commitment.
SECTION 4. PAYMENTS.
4.01 VOLUNTARY PREPAYMENTS. (a) The Borrower shall have the right to
prepay the Loans, and the right to allocate such prepayments to Revolving
Loans, Swingline Loans and/or Term Loans as the Borrower elects, in whole or
in part, without premium or penalty except as otherwise provided in this
Agreement, from time to time on the following terms and conditions:
(i) the Borrower shall give the Agent at its Notice Office written
notice (or telephonic notice promptly confirmed in writing) of its intent
to prepay the Loans, whether such Loans are Term Loans, Revolving Loans or
Swingline Loans, the amount of such prepayment, the Type of Loans to be
repaid and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which made, which notice shall be given by the Borrower prior
to 12:00 Noon (New York time) (x) at least one Business Day prior to the
date of such prepayment in the case of Base Rate Loans, (y) on the date of
such prepayment in the case of Swingline Loans and (z) at least three
Business Days prior to the date of such prepayment in the case of
Eurodollar Loans, which notice shall, except in the case of Swingline
Loans, promptly be transmitted by the Agent to each of the Banks;
(ii) each prepayment (other than prepayments in full of (x) all
outstanding Base Rate Loans or (y) any outstanding Borrowing of Eurodollar
Loans) shall be in an aggregate principal amount of at least (x)
$1,000,000, in the case of Eurodollar Loans, (y) $500,000, in the case of
Revolving Loans and Term Loans maintained as Base Rate Loans and (z)
$100,000, in the case of Swingline Loans and, in each case, if greater, in
integral multiples of $100,000, PROVIDED, that no partial prepayment of
Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Eurodollar Loans outstanding pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto;
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(iii) at the time of any prepayment of Eurodollar Loans pursuant to
this Section 4.01 on any date other than the last day of the Interest
Period applicable thereto, the Borrower shall pay the amounts required
pursuant to Section 1.11;
(iv) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans, provided, that at the
Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01(a), such prepayment shall not be applied to
any Revolving Loans of a Defaulting Bank; and
(v) each prepayment of principal of Term Loans pursuant to this
Section 4.01(a) shall be applied to reduce the then remaining Scheduled
Repayments on a PRO RATA basis (based upon the then remaining amount of
each such Scheduled Repayment after giving affect to all prior reductions
thereto).
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
13.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), to repay all Loans of such Bank
(including all amounts, if any, owing pursuant to Section 1.11), together with
accrued and unpaid interest, Fees and all other amounts then owing to such Bank
(or owing to such Bank with respect to Tranche which gave rise to the need to
obtain such Bank's individual consent) in accordance with said Section 13.12(b),
so long as (A) in the case of the repayment of Revolving Loans of any Bank
pursuant to this clause (b), the Revolving Loan Commitment of such Bank is
terminated concurrently with such repayment (at which time Annex I shall be
deemed modified to reflect the changed Revolving Loan Commitments), and (B) the
consents required by Section 13.12(b) in connection with the repayment pursuant
to this clause (b) shall have been obtained.
4.02 MANDATORY REPAYMENTS AND COMMITMENT REDUCTIONS. (a) If on any
date the sum of (i) the aggregate outstanding principal amount of Revolving
Loans and Swing line Loans (after giving effect to all other repayments thereof
on such date) and (ii) the Letter of Credit Outstandings on such date exceeds
the Total Revolving Loan Commitment as then in effect, the Borrower shall repay
on such date the principal of Swingline Loans, and if no Swingline Loans are or
remain outstanding, Revolving Loans in an aggregate amount equal to such excess.
If, after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of Letter of Credit Outstandings exceeds
the Total Revolving Loan Commitment as then in effect, the Borrower shall pay to
the Agent on such date an amount in cash and/or Cash Equivalents equal to such
excess (up to the aggregate amount of Letter of Credit Outstandings at such
time) and the Agent shall hold such payment as security for the obligations of
the Borrower
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hereunder pursuant to a cash collateral agreement to be entered into in form
and substance satisfactory to the Agent.
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(i),
a "Scheduled Repayment"):
SCHEDULED REPAYMENT DATE AMOUNT
------------------------ ------
last Business Day in September 1997 $500,000
last Business Day in September 1998 $500,000
last Business Day in September 1999 $500,000
last Business Day in September 2000 $500,000
last Business Day in September 2001 $500,000
last Business Day in September 2002 $500,000
Final Maturity Date $47,000,000
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date upon which Parent or any of its Subsidiaries receives Net Sale Proceeds
from any Asset Sale, an amount equal to 100% of the Net Sale Proceeds from such
Asset Sale shall be applied as a mandatory repayment and/or commitment
reduction, as the case may be, of outstanding Term Loans and the Total Revolving
Loan Commitment in accordance with the requirements of Sections 4.02(i) and (j);
PROVIDED that during any fiscal year of the Borrower ending after September 30,
1996, up to $1,000,000 in aggregate Net Sale Proceeds received during such
fiscal year may be retained by Parent and its Subsidiaries without giving rise
to a mandatory repayment (and/or commitment reduction, as the case may be) to
the extent that no Default or Event of Default exists at the time such Net Sale
Proceeds are received, and PROVIDED FURTHER that (i) additional Net Sale
Proceeds of up to $250,000 in the aggregate received by Parent or its
Subsidiaries on or after the Effective Date shall not give rise to a mandatory
repayment (and/or commitment reduction, as the case may be) on such date to the
extent that no Default or Event of Default then exists and the Borrower delivers
a certificate to the Agent on or prior to such date stating that such Net Sale
Proceeds shall be used to purchase assets used or to be used in the businesses
permitted pursuant to Section 9.01 (including, without limitation (but only to
the extent permitted by Section 9.02), the purchase of the capital stock of a
Person engaged in such businesses) within one year following the date of receipt
of such Net Sale Proceeds from such Asset Sale (which certificate shall set
forth the estimates of the proceeds to be so expended) and (ii) that (x) if all
or any portion of such Net Sale Proceeds are not so used
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(or contractually committed to be used) within such one year period, such
remaining portion shall be applied on the last day of such period as a
mandatory repayment and/or commitment reduction, as the case may be, of
outstanding Term Loans and the Total Revolving Loan Commitment as provided
above and (y) if all or any portion of such Net Sale Proceeds are not so used
within such one year period referred to in clause (x) above because such
amount is contractually committed to be used and subsequent to such date such
contract is terminated or expires without such portion being so used, such
remaining portion shall be applied on the date of such termination or
expiration as a mandatory repayment and/or commitment reduction, as the case
may be, of outstanding Term Loans and the Total Revolving Loan Commitment as
provided above.
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date on which Parent or any of its Subsidiaries receives any cash proceeds from
any incurrence of Indebtedness (other than Indebtedness permitted to be incurred
pursuant to Section 9.04 as in effect on the Effective Date) by Parent or any of
its Subsidiaries, an amount equal to 100% of the cash proceeds (net of all
underwriting discounts, fees and commissions and other costs and expenses
associated therewith) of the respective incurrence of Indebtedness shall be
applied as a mandatory repayment and/or commitment reduction, as the case may
be, of outstanding Term Loans and the Total Revolving Loan Commitment in
accordance with the requirements of Sections 4.02(i) and (j).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date on which Parent or any of its Subsidiaries receives any cash proceeds from
any sale or issuance of preferred or common equity of (or cash capital
contributions to) Parent or any of its Subsidiaries (other than proceeds
received from (x) the Equity Financing (including up to $1,000,000 in proceeds
received within 90 days after the Initial Borrowing Date from certain Management
Participants, to the extent the amount of such proceeds are used within 120 days
of the Initial Borrowing Date to repay, in full or in part, the Odyssey
Convertible Note), (y) equity contributions to any Subsidiary of Parent made by
Parent or any other Subsidiary of Parent and (z) any employee, officer or
director, or from the exercise of options granted pursuant to the Stock Option
Plan, PROVIDED that this clause (z) shall apply only to the first $250,000 in
the aggregate of such proceeds received in any fiscal year of Parent, commencing
with the fiscal year beginning October 1, 1996), an amount equal to 25% of such
cash proceeds (net of all underwriting discounts, fees and commissions and other
costs and expenses associated therewith) of the respective equity issuance or
capital contribution shall be applied as a mandatory repayment and/or commitment
reduction, as the case may be, of outstanding Terms Loan and the Total Revolving
Loan Commitment in accordance with the requirements of Sections 4.02(i) and (j).
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(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date on
or after the Effective Date on which Parent or any of its Subsidiaries receives
any proceeds from any Recovery Event (other than proceeds from Recovery Events
in an amount less than $100,000 per Recovery Event), an amount equal to 100% of
the proceeds of such Recovery Event (net of reasonable costs including, without
limitation, legal costs and expenses, and taxes incurred in connection with such
Recovery Event) shall be applied as a mandatory repayment and/or commitment
reduction, as the case may be, of outstanding Term Loans and the Total Revolving
Loan Commitment in accordance with the requirements of Sections 4.02(i) and (j);
PROVIDED that (x) so long as no Default or Event of Default then exists and such
proceeds do not exceed $250,000, such proceeds shall not be required to be so
applied on such date to the extent that an Authorized Officer of the Borrower
has delivered a certificate to the Agent on or prior to such date stating that
such proceeds shall be used or shall be committed to be used to replace or
restore any properties or assets in respect of which such proceeds were paid
within one year following the date of such Recovery Event (which certificate
shall set forth the estimates of the proceeds to be so expended) and (y) so long
as no Default or Event of Default then exists and if (a) the amount of such
proceeds exceeds $250,000, (b) the amount of such proceeds, together with other
cash available to the Borrower and its Subsidiaries and permitted to be spent by
them on Capital Expenditures during the relevant period pursuant to Section
9.08, equals at least 100% of the cost of replacement or restoration of the
properties or assets in respect of which such proceeds were paid as determined
by the Borrower and as supported by such estimates or bids from contractors or
subcontractors or such other supporting information as the Agent may reasonably
request, (c) an Authorized Officer of the Borrower has delivered to the Agent a
certificate on or prior to the date the application would otherwise be required
pursuant to this Section 4.02(f) in the form described in clause (x) above and
also certifying its determination as required by preceding clause (b) and
certifying the sufficiency of business interruption insurance as required by
succeeding clause (d), and (d) an Authorized Officer of the Borrower has
delivered to the Agent such evidence as the Agent may reasonably request in form
and substance reasonably satisfactory to the Agent establishing that the
Borrower has sufficient business interruption insurance and that the Borrower
will receive payment thereunder in such amounts and at such times as are
necessary to satisfy all obligations and expenses of the Borrower (including,
without limitation, all debt service requirements, including pursuant to this
Agreement), without any delay or extension thereof, for the period from the date
of the respective casualty, condemnation or other event giving rise to the
Recovery Event and continuing through the completion of the replacement or
restoration of respective properties or assets, then the entire amount of the
proceeds of such Recovery Event and not just the portion in excess of $250,000
shall be deposited with the Agent pursuant to a cash collateral arrangement
reasonably satisfactory to the Agent whereby such proceeds shall be disbursed to
the Borrower from time to time as needed to pay actual costs incurred by them in
connection with the replacement or restoration of the respective properties or
assets (pursuant to such certification requirements as may be
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established by the Agent), PROVIDED FURTHER that at any time while an Event of
Default has occurred and is continuing, the Required Banks may direct the
Agent (in which case the Agent shall, and is hereby authorized by the Borrower
to, follow said directions) to apply any or all proceeds then on deposit in
such collateral account to the repayment of Obligations hereunder, and
PROVIDED FURTHER, that if all or any portion of such proceeds not required to
be applied as a mandatory repayment and/or commitment reduction pursuant to
the second preceding proviso (whether pursuant to clause (x) or (y) thereof)
are either (A) not so used or committed to be so used within one year after
the date of the respective Recovery Event or (B) if committed to be used
within one year after the date of receipt of such net proceeds and not so used
within 18 months after the date of respective Recovery Event then, in either
such case, such remaining portion not used or committed to be used in the case
of preceding clause (A) and not used in the case of preceding clause (B) shall
be applied on the date which is the first anniversary of the date of the
respective Recovery Event in the case of clause (A) above or the date
occurring 18 months after the date of the respective Recovery Event in the
case of clause (B) above as a mandatory repayment and/or commitment reduction,
as the case may be, of outstanding Terms Loans and the Total Revolving Loan
Commitment in accordance with the requirements of Sections 4.02(i) and (j).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each Excess Cash Payment Date, an
amount equal to the Applicable Excess Cash Flow Percentage of the Excess Cash
Flow for the relevant Excess Cash Flow Payment Period shall be applied as a
mandatory repayment and/or commitment reduction, as the case may be, of
outstanding Term Loans and the Total Revolving Loan Commitment in accordance
with the requirements of Sections 4.02(i) and (j).
(h) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, at such time as a final determination
is made with respect to both (i) the Merger Consideration Adjustment (as defined
in the Merger Agreement) and (ii) the amount of payments owing pursuant to
Section 3.3(c) of the Asset Purchase Agreement, the aggregate net amount (if
any) of proceeds received by Parent or any of its Subsidiaries pursuant thereto
shall be applied as a mandatory repayment and/or commitment reduction, as the
case may be, of outstanding Term Loans and the Total Revolving Loan Commitment
in accordance with the requirements of Section 4.02(i) and (j).
(i) Each amount required to be applied pursuant to Sections 4.02(c),
(d), (e), (f), (g) and (h) in accordance with this Section 4.02(i) shall be
applied (i) first, to repay the outstanding principal amount of Term Loans (or,
if prior to the Initial Borrowing Date, to reduce the Total Term Loan
Commitment) and (ii) second, to the extent in excess of the amounts required to
be applied pursuant to preceding clause (i), to reduce the Total
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Revolving Loan Commitment (it being understood and agreed that (i) the amount
of any reduction to the Total Revolving Loan Commitment (or the Total Term
Loan Commitment, as the case may be) as provided above in this Section 4.02(i)
shall be deemed to be an application of proceeds for purposes of this Section
4.02(i) even though cash is not actually applied and (ii) any cash received by
Parent or such Subsidiary will be retained by such Person except to the extent
that such cash is otherwise required to be applied as provided in Section
4.02(a) as a result of any reduction to the Total Revolving Loan Commitment).
All repayments or commitment reductions, as the case may be, of (x)
outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term Loan
Commitments), on the one hand and (y) Revolving Loan Commitments, on the other
hand, pursuant to Sections 4.02(c), (d), (e), (f), (g) and (h) shall be
applied to reduce the then remaining Scheduled Repayments (in the case of
preceding clause (x)) or Scheduled Commitment Reductions (in the case of
preceding clause (y)), PRO RATA based upon the then remaining Scheduled
Repayments or Scheduled Commitment Reductions, as the case may be, after
giving effect to all prior reductions thereto.
(j) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which made,
PROVIDED that: (i) repayments. of Eurodollar Loans pursuant to this Section 4.02
may only be made on the last day of an Interest Period applicable thereto unless
all Eurodollar Loans of the respective Tranche with Interest Periods ending on
such date of required repayment and all Base Rate Loans of the respective
Tranche have been paid in full; (ii) if any repayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto, such Borrowing shall be converted at the end of the
then current Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Tranche of Loans made pursuant to a Borrowing shall be applied
PRO RATA among such Tranche of Loans. In the absence of a designation by the
Borrower as described in the preceding sentence, the Agent shall, subject to the
above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 1.11.
(k) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all other then outstanding Loans shall be
repaid in full on the respective Maturity Date for such Loans.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Agent for the ramble account of the Bank or Banks entitled thereto not later
than 12:00 Noon (New York time) on the date when due and shall be made in
immediately available funds
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and in U.S. Dollars at the Payment Office. Any payments under this Agreement
or under any Note which are made later than 12:00 Noon (New York time) shall
be deemed to have been made on the next succeeding Business Day. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in
effect immediately prior to such extension.
4.04 NET PAYMENTS. (a) All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such nonexcluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). Except as provided in Sections 4.04(b) and 13.04(b), if any Taxes are
so levied or imposed, the Borrower agrees to pay the full amount of such Taxes,
and such additional amounts as may be necessary so that every payment of all
amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, the Borrower agrees to reimburse each
Bank, upon the written request of such Bank, for taxes imposed on or measured by
the net income or net profits of such Bank pursuant to the laws of the
jurisdiction in which such Bank is organized or in which the principal office or
applicable lending office of such Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which such
Bank is organized or in which the principal office or applicable lending office
of such Bank is located and for any withholding of taxes as such Bank shall
determine are payable by, or withheld from, such Bank in respect of such amounts
so paid to or on behalf of such Bank pursuant to the preceding sentence and in
respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence. The Borrower will furnish to the Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such Bank.
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(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S Federal income tax purposes
agrees to deliver to the Borrower and the Agent on or prior to the Effective
Date, or in the case of a Bank that is an assignee or transferee of an interest
under this Agreement pursuant to Section 1.13 or 13.04 (unless the respective
Bank was already a Bank hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Bank, (i) two
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Bank's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if the Bank is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver
either Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above,
(x) a certificate substantially in the form of Exhibit D (any such certificate,
a "Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, it will deliver to the Borrower and the Agent two new accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001,
or Form W-8 and a Section 4.04(b)(ii) Certificate, as the case may be, and such
other forms as may be required in order to confirm or establish the entitlement
of such Bank to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Borrower and the Agent of its inability to
deliver any such Form or Certificate in which case such Bank shall not be
required to deliver any such Form or Certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein) if
(I) such Bank has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section 4.04(b)
or (II) in the case of a payment, other than interest, to a Bank described in
clause (ii) above, to the extent that such Forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the
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preceding sentence or elsewhere in this Section 4.04 and except as set forth
in Section 13.04(b), the Borrower agrees to pay additional amounts and to
indemnify each Bank in the manner set forth in Section 4.04(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any Taxes deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Effective
Date in any applicable law, treaty, governmental rule, regulation, guideline
or order, or in the interpretation thereof, relating to the deducting or
withholding of such Taxes (or, if later, the date such Bank became party to
this Agreement).
SECTION 5. CONDITIONS PRECEDENT. The obligation of each Bank to make
each Loan to the Borrower hereunder, and the obligation of the Letter of Credit
Issuer to issue each Letter of Credit hereunder, is subject, at the time of the
making of such Loans or the Issuance of such Letters of Credit to the
satisfaction of the following conditions:
5.01 EXECUTION OF AGREEMENT: NOTES. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent for the account of each Bank the appropriate
Term Note and/or Revolving Note and to BTCo the Swingline Note, in each case
executed by the Borrower and in the amount, maturity and as otherwise provided
herein.
5.02 OFFICER'S CERTIFICATE. On the Initial Borrowing Date, the Agent
shall have received a certificate dated such date signed by an appropriate
officer of the Borrower stating that all of the applicable conditions set forth
in Sections 5.04 through 5.10, 5.16, 6.01, 6.02 and 6.03 have been satisfied on
such date.
5.03 OPINIONS OF COUNSEL. On the Initial Borrowing Date, the Agent
shall have received opinions, addressed to the Agent, the Collateral Agent and
each of the Banks and dated the Initial Borrowing Date, from (i) Weil, Gotshal &
Xxxxxx LLP, special counsel to the Credit Parties, which opinion shall cover the
matters contained in Exhibit E and such other matters incident to the
transactions contemplated herein as the Agent may reasonably request and (ii)
local and other counsel to the Credit Parties and/or the Agent reasonably
satisfactory to the Agent, which opinions shall cover such matters incident to
the transactions contemplated herein and in the other Credit Documents as the
Agent may reasonably request and shall be in form and substance satisfactory to
the Agent.
5.04 CORPORATE DOCUMENTS: PROCEEDINGS. (a) On the Initial Borrowing
Date, the Agent shall have received from each Credit Party a certificate, dated
the Initial Borrowing Date, signed by the chairman, a vice-chairman, the
president or any vice-president of such Credit Party, and attested to by the
secretary or any assistant secretary of such Credit Party, in the form of
Exhibit F with appropriate insertions, together with copies of the Certificate
of Incorporation and By-Laws of such Credit Party and the
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resolutions of such Credit Party referred to in such certificate and all of
the foregoing (including each such Certificate of Incorporation and By-Laws)
shall be reasonably satisfactory to the Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
reasonably satisfactory in form and substance to the Agent, and the Agent shall
have received all information and copies of all certificates, documents and
papers, including good standing certificates, bring-down certificates and any
other records of corporate proceedings and governmental approvals, if any, which
the Agent reasonably may have requested in connection therewith, such documents
and papers, where appropriate, to be certified by proper corporate or
governmental authorities.
(c) On the Initial Borrowing Date and after giving effect to the
Transaction, the capital structure (including, without limitation, the terms of
any capital stock, options, warrants or other securities issued by Parent or
any of its Subsidiaries) of Parent and each of its Subsidiaries shall be in form
and substance satisfactory to the Agent, and the management of Parent and its
Subsidiaries shall be satisfactory to the Agent.
5.05 ADVERSE CHANGE. ETC. (a) On or prior to the Initial Borrowing
Date, nothing shall have occurred since December 31, 1995 (and neither the Banks
nor the Agent shall have become aware of any facts or conditions not previously
known) which the Required Banks or the Agent shall determine has, or could
reasonably be expected to have (i) a material adverse effect on the rights or
remedies of the Banks or the Agent, or on the ability of any Credit Party to
perform its obligations to them hereunder or under any other Credit Document,
(ii) a material adverse effect on the Transaction, or (iii) a Material Adverse
Effect.
(b) On the Initial Borrowing Date, there shall not have occurred and
be continuing a material disruption or a material adverse change in financial,
banking or capital markets that would have a material adverse effect on the
syndication, in each case as determined by the Agent in its sole discretion.
5.06 LITIGATION. On the Initial Borrowing Date, there shall be no
actions, suits, proceedings or investigations pending or threatened (a) with
respect to this Agreement or any other Document or the Transaction or any
documentation executed in connection therewith or the transactions contemplated
thereby or with respect to any Existing Indebtedness or (b) which the Agent or
the Required Banks shall determine could reasonably be expected to (i) have a
Material Adverse Effect or (ii) have a material adverse effect on the
Transaction, the rights or remedies of the Banks or the Agent hereunder or under
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any other Credit Document or on the ability of any Credit Party to perform its
respective obligations to the Banks or the Agent hereunder or under any other
Credit Document.
5.07 APPROVALS. On or prior to the Initial Borrowing Date, (i) all
necessary governmental (domestic and foreign), regulatory and third party
approvals in connection with the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in full force and effect,
(ii) all necessary material governmental (domestic and foreign) and third party
approvals in connection with any Existing Indebtedness, the Transaction, the
transactions contemplated by the Transaction Documents and otherwise referred to
therein shall have been obtained and remain in full force and effect and
evidence thereof shall have been provided to the Agent, and (iii) all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the Transaction, the making of the Loans,
the issuance of Letters of Credit and the transactions contemplated by the
Documents or otherwise referred to herein or therein. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon, or materially
delaying, or making economically unfeasible, the consummation of the Transaction
or the making of the Loans, the issuance of Letters of Credit or the
transactions contemplated by the Documents.
5.08 CONSUMMATION OF THE ACQUISITION. (a) On or prior to the Initial
Borrowing Date, (i) all terms and conditions of the Acquisition Documents shall
be in form and substance satisfactory to the Agent and the Required Banks, (ii)
the Acquisition, including all of the terms and conditions thereof, shall have
been duly approved by the board of directors and (if required by applicable law)
the shareholders of Parent, Holdings, Tri-Star Holdings, the Borrower, Tri-Star
Aerospace and Aviall, and all Acquisition Documents shall have been duly
executed and delivered by the parties thereto and shall be in full force and
effect, (iii) the representations and warranties set forth in the Acquisition
Documents shall be true and correct in all material respects as if made on and
as of the Initial Borrowing Date, (iv) each of the conditions precedent to the
obligations of each of Tri-Star Holdings and the Borrower to consummate the
Acquisition as set forth in the Acquisition Documents shall have been satisfied
to the satisfaction of the Agent and the Required Banks or waived with the
consent of the Agent and the Required Banks, (v) the Acquisition shall have been
consummated in accordance with all applicable laws and the Acquisition Documents
and (vi) Tri-Star Aerospace, Inc., as the surviving corporation of the Merger,
shall have executed and delivered the Assumption Agreement. On the Initial
Borrowing Date, the assets comprising the Acquired Business shall be owned by
(i) in the case of assets held by Tri-Star Aerospace, Tri-Star Holdings and (ii)
in the case of assets formerly held by Aviall, the Borrower; in each case free
and clear of all Liens other than Permitted Liens.
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(b) The total consideration for the Acquisition, including all fees
and expenses owing in connection with the Transaction, shall not exceed
$81,000,000, of which (i) no more than $76,200,000 shall be paid in cash in
respect of the Acquisition and (ii) no more than $4,800,000 shall be paid in
cash in respect of fees.
5.09 REFINANCING. (a)(i) On the Initial Borrowing Date and
concurrently with the Credit Events then occurring, (x) all Indebtedness of Tri-
Star Aerospace and its Subsidiaries remaining outstanding pursuant to the
proviso contained in Section 4.12 of the Merger Agreement (the "Designated
Indebtedness") shall have been repaid in full, together with all accrued and
unpaid interest and fees thereon (and all other amounts then owing pursuant to
the documentation governing the Designated Indebtedness), (y) no more than
$22,000,000 shall have been paid to effect the Refinancing and (z) the Agent
shall have received evidence in form, scope and substance reasonably
satisfactory to it that the matters set forth in this Section 5.09(a)(i) have
been satisfied at such time.
(ii) On the Initial Borrowing Date and concurrently with the Credit
Events then occurring, all security interests in respect of, and Liens securing,
Designated Indebtedness shall have been terminated and released, and the Agent
shall have received all such releases as may have been requested by the Agent,
which releases shall be in form and substance reasonably satisfactory to the
Agent. Without limiting the foregoing, there shall have been delivered (w)
proper termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement Form UCC-1
or the appropriate equivalent was filed with respect to Tri-Star Aerospace,
Aviall and their respective Subsidiaries in connection with the security
interests created with respect to the Designated Indebtedness and the
documentation related thereto, (x) termination or reassignment of any security
interest in, or Lien on, any patents, trademarks, copyrights or similar
interests of Tri-Star Aerospace, Aviall and their respective Subsidiaries on
which filings have been made to secure obligations under the Designated
Indebtedness and (y) terminations of all mortgages, leasehold mortgages and
deeds of trusts created with respect to property of Tri-Star Aerospace, Aviall
and their respective Subsidiaries, in each case, to secure the obligations under
the Designated Indebtedness, all of which shall be in form and substance
satisfactory to the Agent and the Required Banks.
(b) All obligations of Tri-Star Aerospace and its Subsidiaries with
respect to the Designated Indebtedness being repaid or satisfied in connection
with the Refinancing shall be terminated to the satisfaction of the Agent. All
terms and conditions of the Refinancing and the documentation in connection
therewith shall be required to be satisfactory to the Agent.
5.10 CONSUMMATION OF THE EQUITY FINANCING. On the Initial Borrowing
Date, (i) Parent shall have received gross cash proceeds of at least $22,000,000
in
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connection with the Equity Financing, of which (x) not less than $17,000,000
shall have been contributed to Parent by Odyssey and its Affiliates, of which
$1,000,000 shall be in the form of a loan from Odyssey to Parent, which loan
shall be evidenced by the Odyssey Convertible Note and (y) not less than
$4,000,000 shall have been contributed to Parent by Bourjeaurd and the
Management Participants, (ii) Parent shall have contributed the full amount of
the gross cash proceeds received by it from the Equity Financing to the capital
of Holdings as a common equity contribution in exchange for common stock of
Holdings, (iii) Holdings shall have contributed the full amount received by it
pursuant to clause (ii) above to the capital of Tri-Star Holdings as a common
equity contribution in exchange for common stock of Tri-Star Holdings, (iv) Tri-
Star Holdings shall have contributed the full amount received by it pursuant to
clause (iii) above to the capital of the Borrower as a common equity
contribution in exchange for common stock of the Borrower and (v) the Borrower
shall have utilized the full amount of such cash contribution to make the
Intercompany Acquisition Loan (as herein defined) and payments owing in
connection with the Transaction prior to utilizing any proceeds of Loans for
such purpose, and (vi) after giving effect to the Equity Financing and the
contributions described in clauses (ii)-(iv) above, each of Parent, Holdings,
Tri-Star Holdings and the Borrower shall have stockholders' equity of at least
$22,000,000. All of the terms and conditions of the Equity Financing Documents
shall be reasonably satisfactory to the Agent and the Required Banks, and all
conditions precedent to the consummation of the Equity Financing as set forth in
the Equity Financing Documents shall have been satisfied, and not waived unless
consented to by the Agent and the Required Banks, to the reasonable satisfaction
of the Agent and the Required Banks. The Equity Financing shall have occurred in
accordance with the terms and conditions of the Equity Financing Documents and
all applicable law.
5.11 SECURITY DOCUMENTS: ETC. (a) On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered a Pledge
Agreement in the form of Exhibit G (as amended, modified or supplemented from
time to time in accordance with the terms thereof and hereof, the "Pledge
Agreement") and shall have delivered to the Collateral Agent, as pledgee
thereunder, all of the Pledged Securities referred to therein, endorsed in blank
in the case of promissory notes or accompanied by executed and undated stock
powers in the case of capital stock, along with evidence that all other actions
necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect the security interests purported to be created by the Pledge Agreement
have been taken and the Pledge Agreement shall be in full force and effect.
(b) On the Initial Borrowing Date, each Credit Party shall have duly
authorized, executed and delivered a Security Agreement in the form of Exhibit H
(as amended, modified or supplemented from time to time in accordance with the
terms thereof and hereof, the "Security Agreement") covering all of the Security
Agreement Collateral, together with:
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(A) executed copies of Financing Statements (Form UCC-1) or
appropriate local equivalent in appropriate form for filing under the UCC
or appropriate local equivalent of each jurisdiction as may be necessary
or, in the reasonable opinion of the Collateral Agent, desirable to perfect
the security interests purported to be created by the Security Agreement;
(B) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, each of a recent date listing all
effective financing statements that name Parent, Holdings, Tri-Star
Holdings, the Borrower or any of their respective Subsidiaries as debtor or
otherwise relate to the Acquired Business and that are filed in the
jurisdictions referred to in clause (A) above, together with copies of such
financing statements (none of which shall cover the Collateral except (x)
those with respect to which appropriate termination statements executed by
the secured lender thereunder have been delivered to the Agent and (y) to
the extent evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests purported to be created by the Security Agreement; and
(D) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable, to perfect the security
interests purported to be created by the Security Agreement have been
taken;
and the Security Agreement shall be in full force and effect.
5.12 SUBSIDIARIES GUARANTY. On the Initial Borrowing Date, each
Wholly-Owned Domestic Subsidiary of Tri-Star Holdings (other than the Borrower)
and/or of the Borrower shall have duly authorized, executed and delivered a
Subsidiaries Guaranty in the form of Exhibit I (as amended, modified or
supplemented from time to time in accordance with the terms thereof and hereof,
the "Subsidiaries Guaranty"), and the Subsidiaries Guaranty shall be in full
force and effect.
5.13 MORTGAGES; TITLE INSURANCE. (a) On the Initial Borrowing Date,
the Collateral Agent shall have received fully executed counterparts of deeds of
trust, mortgages and similar documents in each case in form and substance
satisfactory to the Collateral Agent (as amended, modified or supplemented from
time to time in accordance with the terms thereof and hereof, each a "Mortgage"
and, collectively, the "Mortgages") with respect to each of the Mortgaged
Properties, if any, and arrangements reasonably satisfactory to the Collateral
Agent shall be in place to provide that counterparts of such Mortgages shall be
recorded on the Initial Borrowing Date in all places to the extent
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necessary or desirable, in the judgment of the Collateral Agent, effectively
to create a valid and enforceable first priority mortgage Lien, subject only
to Permitted Encumbrances, on each such Mortgaged Property in favor of the
Collateral Agent (or such other trustee as may be required or desired under
local law) for the benefit of the Secured Creditors.
(b) On the Initial Borrowing Date, the Collateral Agent shall have
received mortgagee title insurance policies (or binding commitments to issue
such title insurance policies) issued by title insurers reasonably satisfactory
to the Collateral Agent (the "Mortgage Policies") in amounts reasonably
satisfactory to the Collateral Agent and assuring the Collateral Agent that the
Mortgages are valid and enforceable first priority mortgage Liens on the
respective Mortgaged Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances. Such Mortgage Policies shall be in form and
substance reasonably satisfactory to the Collateral Agent and (i) shall include
(to the extent available in the respective jurisdiction of each Mortgaged
Property) an endorsement for future advances under this Agreement, the Notes and
the Mortgages, and for such other matters that the Collateral Agent in its
discretion may reasonably request, (ii) shall not include an exception for
mechanics' liens, and (iii) shall provide for affirmative insurance and such
reinsurance (including direct access agreements) as the Collateral Agent in its
discretion may reasonably request.
(c) On the Initial Borrowing Date, the Collateral Agent shall have
received surveys in form and substance satisfactory to the Collateral Agent of
each Mortgaged Property, if any, designated as "Owned" on Annex III hereto,
dated a recent date acceptable to the Collateral Agent and certified in a manner
satisfactory to the Collateral Agent by a licensed professional surveyor
satisfactory to the Agent.
(d) On the Initial Borrowing Date, the Collateral Agent shall have
received duly authorized, fully executed, acknowledged and delivered
subordination, non-disturbance and attornment agreements, assignment of leases,
landlord consents, tenant estoppel certificates and such other documents
relating to the Mortgages that the Collateral Agent may request, and all the
foregoing shall be in form and substance reasonably satisfactory to the
Collateral Agent.
5.14 EMPLOYEE BENEFIT PLANS; SHAREHOLDERS' AGREEMENTS; MANAGEMENT
AGREEMENTS; EMPLOYMENT AGREEMENTS; COLLECTIVE BARGAINING AGREEMENTS; EXISTING
INDEBTEDNESS AGREEMENTS; MATERIAL CONTRACTS; TAX ALLOCATION AGREEMENTS;
TRANSACTION DOCUMENTS. On or prior to the Initial Borrowing Date, there shall
have been delivered to the Agent true and correct copies, certified as true and
complete by an appropriate officer of the Borrower of:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such
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report (including, to the extent required, the related financial and
actuarial statements and opinions and other supporting statements,
certifications, schedules and information), and for each Plan that is a
"single-employer plan," as defined in Section 4001(a)(15) of ERISA, the
most recently prepared actuarial valuation therefor) and any other
"employee benefit plans," as defined in Section 3(3) of ERISA, and any
other material agreements, plans or arrangements, with or for the benefit
of current or former employees of Parent or any of its Subsidiaries or any
ERISA Affiliate (provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in 4001(a)(3) of ERISA, only to the extent
that any document described therein is in the possession of Parent or any
Subsidiary of Parent or any ERISA Affiliate or reasonably available thereto
from the sponsor or trustee of any such plan) (collectively, the "Employee
Benefit Plans");
(ii) all agreements (including, without limitation, shareholders'
agreements, subscription agreements and registration rights agreements)
entered into by Parent or any of its Subsidiaries governing the terms and
relative rights of its capital stock and any agreements entered into by
shareholders relating to any such entity with respect to its capital stock,
in each case, that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Shareholders'
Agreements");
(iii) all material agreements with members of, or with respect to, the
management of Parent or any of its Subsidiaries that are to remain in
effect after giving effect to the consummation of the Transaction
(collectively, the "Management Agreements");
(iv) any material employment agreements entered into by Parent or any
of its Subsidiaries (collectively, the "Employment Agreements");
(v) all collective bargaining agreements applying or relating to any
employee of Parent or any of its Subsidiaries that are to remain in effect
after giving effect to the consummation of the Transaction (collectively,
the "Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Existing Indebtedness of
Parent that are to remain in effect after giving effect to the consummation
of the Transaction (collectively, the "Existing Indebtedness Agreements");
(vii) all other material contracts and licenses of Parent and any of
its Subsidiaries that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Material Contracts");
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(viii) any tax sharing or tax allocation agreements entered into by
Parent or any of its Subsidiaries (collectively, the "Tax Allocation
Agreements"); and
(ix) all Transaction Documents;
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Material Contracts, Tax Allocation Agreements and
Transaction Documents shall be in form and substance satisfactory to the Agent
and the Required Banks and shall be in full force and effect on the Initial
Borrowing Date.
5.15 SOLVENCY CERTIFICATE; INSURANCE CERTIFICATES; ENVIRONMENTAL
ASSESSMENTS; FINANCIAL STATEMENTS. On or before the Initial Borrowing Date, the
Agent shall have received:
(a) a solvency certificate in the form of Exhibit J from the chief
financial officer of Parent and dated the Initial Borrowing Date and
supporting the conclusions, that, after giving effect to the Transaction
and the incurrence of all financings contemplated herein, the Borrower and
each Parent Guarantor is not insolvent (taking into account all of its
assets (including capital stock and promissory notes) and liabilities) and
will not be rendered insolvent by the indebtedness incurred in connection
herewith, will not be left with unreasonably small capital with which to
engage in its respective business and will not have incurred debts beyond
its ability to pay such debts as they mature and become due;
(b) evidence of insurance complying with the requirements of Section
8.03 for the business and properties of Parent and its Subsidiaries, in
scope, form and substance reasonably satisfactory to the Agent and the
Required Banks and naming the Collateral Agent as an additional insured
and/or loss payee, and stating that such insurance shall not be cancelled
or revised without at least 30 days' prior written notice by the insurer to
the Collateral Agent;
(c) the annual audited consolidated financial statements for Tri-Star
Aerospace for the two most recently completed fiscal years, including
balance sheets and income statements and cash flow statements, and all of
the foregoing shall have been audited by independent public accountants of
recognized national standing and prepared in accordance with GAAP (and
containing an unqualified opinion of such accountants) and shall be in form
and substance satisfactory to the Agent and the Required Banks;
(d) the unaudited annual operating information relating to the Aviall
Business for each of the twelve month periods ended December 31, 1994 and
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December 31, 1995, and all of the foregoing shall be (i) derived from the
regularly kept books and records of the Aviall Business, (ii) prepared in
all material respects in accordance with the accounting principles,
policies and practices of the Aviall Business consistently applied,
excluding inventory obsolescence and inventory and fixed asset write-downs
resulting from the transactions contemplated hereby, (iii) representative
of the financial position of the Aviall Business with respect to the line
items presented for the periods indicated, (iv) included within the Annual
Reports on Form 10-K filed by Aviall for its fiscal years ended December
31, 1994 and December 31, 1995 excluding inventory and fixed asset
write-downs resulting from the transactions contemplated hereby; and (v) in
form and substance satisfactory to the Agent and the Required Banks;
(e) the unaudited income statements and consolidated balance sheet of
Tri-Star Aerospace for the fiscal quarters ending March 31, 1996 and June
30, 1996, and all of the foregoing shall be in form and substance
satisfactory to the Agent and the Required Banks; and
(f) the unaudited March 31, 1996 Net Assets Statement of the Aviall
Business, which has been prepared in accordance with the books and records
of the Aviall Business and in accordance with GAAP and which fairly
presents all of the assets and liabilities of the Aviall Business on the
date set forth therein, excluding any intercompany payables or intercompany
receivables, and the unaudited operating information relating to the Aviall
Business for the three month period ended March 31, 1996, and all of the
foregoing shall be (i) derived from the regularly kept books and records of
the Aviall Business, (ii) prepared in all material respects in accordance
with the accounting principles, policies and practices of the Aviall
Business consistently applied, excluding inventory obsolescence and
inventory and fixed asset write-downs resulting from the transactions
contemplated hereby, (iii) representative of the financial position of the
Aviall Business with respect to the line items presented for the periods
indicated, (iv) included within the Quarterly Report on Form 10-Q filed by
Aviall for its fiscal quarter ended March 31, 1996, excluding inventory and
fixed asset write-downs resulting from the transactions contemplated
hereby, and (v) in form and substance satisfactory to the Agent and the
Required Banks.
5.16 EXISTING INDEBTEDNESS. On the Initial Borrowing Date and after
giving effect to the Transaction and the Loans incurred on the Initial Borrowing
Date, neither Parent nor any of its Subsidiaries shall have any preferred stock
or Indebtedness outstanding except for (i) the Loans and (ii) certain
intercompany indebtedness and other indebtedness as is listed on Annex IV (with
the Indebtedness described in this clause (ii) being herein called "Existing
Indebtedness"). On and as of the Initial Borrowing Date, all of the Existing
Indebtedness shall remain outstanding after giving effect to the Transaction and
the
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other transactions contemplated hereby without any default or events of
default existing thereunder or arising as a result of the Transaction and the
other transactions contemplated hereby, and there shall not be any amendments
or modifications to the Existing Indebtedness Agreements other than as
requested or approved by the Agent or the Required Banks. On and as of the
Initial Borrowing Date, the Agent and the Required Banks shall be satisfied
with the amount of and the terms and conditions of all Existing Indebtedness.
5.17 PRO FORMA BALANCE SHEET; PROJECTIONS. (a) On or prior to the
Initial Borrowing Date, there shall have been delivered to the Agent an
unaudited PRO FORMA consolidated balance sheet of Parent and its Subsidiaries
and Tri-Star Holdings and its Subsidiaries after giving effect to the
Transaction and, the incurrence of all Indebtedness (including the Loans)
contemplated herein, together with a related funds flow statement, which PRO
FORMA balance sheet and funds flow statement shall (i) to the extent they are
not prepared in accordance with GAAP, fairly reflect the financial condition of
the Parent and its Subsidiaries, after giving effect to the Transaction and the
incurrence of Indebtedness (including the Loans) contemplated herein and (ii) be
reasonably satisfactory to the Agent and the Required Banks and
(b) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Agent detailed projected consolidated financial statements of
Parent and its Subsidiaries certified by the chief financial officer or
treasurer of Parent for the five fiscal years ended after the Initial Borrowing
Date (the "Projections"), which Projections (x) shall reflect the forecasted
consolidated financial conditions and income and expenses of Parent and its
Subsidiaries after giving effect to the Transaction and the related financing
thereof and the other transactions contemplated hereby and (y) shall be
satisfactory in form and substance to the Agent and the Required Banks.
5.18 PAYMENT OF FEES. On the Initial Borrowing Date, all costs, fees
and expenses, and all other compensation due to the Agent or the Banks
(including, without limitation, legal fees and expenses) shall have been paid to
the extent due.
SECTION 6. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation
of each Bank to make Loans (including Loans made on the Initial Borrowing Date
but excluding Mandatory Borrowings made thereafter, which shall be made as
provided in Section 1.01(d)), and the obligation of a Letter of Credit Issuer to
issue any Letter of Credit, is subject, at the time of each such Credit Event
(except as hereinafter indicated), to the satisfaction of the following
conditions:
6.01 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit
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Document shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the
date of the making of such Credit Event (it being understood and agreed that
any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date).
6.02 ADVERSE CHANGE; ETC. At the time of each such Credit Event and
also after giving effect thereto, nothing shall have occurred (and the Banks
shall have become aware of no facts or conditions not previously known) which
the Agent or the Required Banks shall determine (i) has, or could reasonably be
expected to have, a material adverse effect on the rights or remedies of the
Banks or the Agent, or on the ability of the Borrower or any other Credit Party
to perform its obligations to the Agent or the Banks under this Agreement or any
other Credit Document or (ii) has, or could reasonably be expected to have, a
Material Adverse Effect.
6.03 LITIGATION. At the time of each such Credit Event and also after
giving effect thereto, no litigation or investigation by any entity (private or
governmental) shall be pending or threatened in writing with respect to this
Agreement, any other Document or any documentation executed in connection
herewith or the transactions contemplated hereby or thereby, or which the Agent
or the Required Banks shall determine could reasonably be expected to have a
Material Adverse Effect.
6.04 NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. (a) Prior to the
making of each Loan (excluding Swingline Loans and Mandatory Borrowings), the
Agent shall have received a Notice of Borrowing meeting the requirements of
Section 1.03(a). Prior to the making of any Swingline Loan, BTCo shall have
received the notice required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Agent and the
respective Issuing Bank shall have received a Letter of Credit Request meeting
the requirements of Section 2.02(a).
The occurrence of the Initial Borrowing Date and the acceptance of the
benefits or proceeds of each Credit Event shall constitute a representation and
warranty by each of Parent and the Borrower to the Agent and each of the Banks
that all the conditions specified in Section 5 and in this Section 6 and
applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Agent at the Notice Office for the account of each of the Banks and,
except for the Notes, in sufficient counterparts or copies for each of the Banks
and shall be in form and substance satisfactory to the Banks.
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SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to
induce the Banks to enter into this Agreement and to make the Loans and issue
and/or participate in the Letters of Credit provided for herein, each Parent
Guarantor and the Borrower makes the following representations, warranties and
agreements with the Banks, in each case after giving effect to the Transaction,
all of which shall survive the execution and delivery of this Agreement, the
making of the Loans and the issuance of the Letters of Credit (with the
occurrence of each Credit Event being deemed to constitute a representation and
warranty that the matters specified in this Section 7 are true and correct in
all material respects on and as of the date of each such Credit Event, unless
stated to relate to a specific earlier date in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date):
7.01 CORPORATE STATUS. Each of Parent and each of its Subsidiaries (i)
is a duly organized and validly existing corporation in good standing under the
laws of the jurisdiction of its organization, (ii) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified and where the failure to be so qualified would
have a Material Adverse Effect.
7.02 CORPORATE POWER AND AUTHORITY. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
7.03 NO VIOLATION. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by any
Credit Party with the terms and provisions thereof, nor the consummation of the
transactions contemplated herein or therein, (i) will contravene any applicable
provision of any law, statute, rule or regulation, or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or (other
than pursuant to the Security Documents) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of Parent or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement or any
other material agreement or instrument to which Parent
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or any of its Subsidiaries is a party or by which it or any of its property
or assets are bound or to which it may be subject (including, without
limitation, the Existing Indebtedness) or (iii) will violate any provision of
the Certificate of Incorporation or By-Laws of Parent or any of its
Subsidiaries.
7.04 LITIGATION. There are no actions, suits, proceedings or
investigations pending or threatened, with respect to Parent or any of its
Subsidiaries (i) that are likely to have a Material Adverse Effect or (ii) that
could reasonably be expected to have a material adverse effect on the rights or
remedies of the Agent or the Banks or on the ability of any Credit Party to
perform its respective obligations to the Agent or the Banks hereunder and under
the other Credit Documents to which it is, or will be, a party. Additionally,
there does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the occurrence of any Credit Event.
7.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Term
Loans incurred on the Initial Borrowing Date shall be utilized to finance the
Transaction and to pay the fees and expenses incurred in connection therewith.
(b) The proceeds of all Revolving Loans and Swingline Loans shall be
utilized for the general corporate and working capital purposes of the Borrower
and its Subsidiaries (including to effect Permitted Acquisitions and make
Capital Expenditures, in each case to the extent permitted by this Agreement),
PROVIDED that (x) proceeds of Revolving Loans in an amount not to exceed
$7,000,000 may be used to finance the Transaction and to pay the fees and
expenses incurred in connection therewith and (y) the amount of outstanding
Revolving Loans incurred to effect Permitted Acquisitions shall not exceed
$15,000,000 at any time.
(c) Neither the making of any Loan, nor the use of the proceeds
thereof, nor the occurrence of any other Credit Event, will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System and no part of any Credit Event (or the
proceeds thereof) will be used to purchase or carry any Margin Stock or to
extend credit for the purpose of purchasing or carrying any Margin Stock.
7.06 GOVERNMENTAL APPROVALS. Except as may have been obtained or made
on or prior to the Initial Borrowing Date (and which remain in full force and
effect on the Initial Borrowing Date), no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Document or
(ii) the legality, validity, binding effect or enforceability of any Document.
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7.07 INVESTMENT COMPANY ACT. Neither Parent nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the investment Company Act of 1940,
as amended.
7.08 PUBLIC UTILITY HOLDING COMPANY ACT. Neither Parent nor any of
its Subsidiaries is 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," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7.09 TRUE AND COMPLETE DISCLOSURE. All factual information (excluding
the Projections, which are subject to Section 7.10(e)) (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of Parent or any of
its Subsidiaries in writing to the Agent or any Bank (including, without
limitation, all information contained in the Documents) for purposes of or in
connection with this Agreement or any transaction contemplated herein or therein
is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of any such Persons in writing to the Agent or any
Bank will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided.
7.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as of the
Initial Borrowing Date, on a PRO FORMA basis after giving effect to the
Transaction and all other transactions contemplated by the Documents and to all
Indebtedness incurred, and to be incurred, and Liens created, and to be created,
by each Credit Party in connection therewith, with respect to each of Parent,
Holdings, Tri-Star Holdings and the Borrower (x) the sum of the assets
(including capital stock and promissory notes), at a fair valuation, of each of
Parent and the Borrower will exceed its debts, (y) it has not incurred nor
intended to, nor believes that it will, incur debts beyond its ability to pay
such debts as such debts mature and (z) it will have sufficient capital with
which to conduct its business. For purposes of this Section 7.10(a), "debt"
means any liability on a claim, and "claim" means (i) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b) (i) The statements of financial condition of each of Tri-Star
Aerospace and the Aviall Business furnished to each Bank pursuant to Section
5.15(c) through (f), present fairly in all material respects the consolidated
financial condition of Tri-Star
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Aerospace and the condition of the Aviall Business at the dates of said
statements and the results for the periods covered thereby (subject, in the
case of unaudited financial statements, to normal year-end adjustments). All
such financial statements relating to Tri-Star Aerospace have been prepared
in accordance with GAAP consistently applied except to the extent provided in
the notes to said financial statements and subject, in the case of the
three-month and six-month statements, to normal year-end audit adjustments
and the absence of footnotes (all of which are of a recurring nature and none
of which, individually or in the aggregate, would be material). The March 31,
1996 Net Asset Statement of the Aviall Business furnished to the Banks has
been prepared in accordance with GAAP consistently applied, and all other
such financial statements relating to the Aviall Business (i) have been
derived from the regularly kept books and records of the Aviall Business,
(ii) have been prepared in all material respects in accordance with the
accounting principles, policies and practices of the Aviall Business
consistently applied, excluding inventory obsolescence and inventory and
fixed asset write-downs resulting from the transactions contemplated hereby,
(iii) are representative of the financial position of the Aviall Business
with respect to the line items presented for the periods indicated and (iv)
have been included within the Annual Reports on Form 10-K filed by Aviall for
its fiscal years ended December 31, 1994 and December 31, 1995, and in the
Quarterly Report on Form 10-Q filed by Aviall for its fiscal quarter ended
March 31, 1996, respectively, excluding Inventory and fixed asset write-downs
resulting from the transactions contemplated hereby.
(c) Since December 31, 1995 (but after giving effect to the
Transaction as if same had occurred prior thereto), nothing has occurred that
has had or could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described
in Section 7.10(b) and the Indebtedness incurred under this Agreement, (i) there
were as of the Initial Borrowing Date (and after giving effect to any Loans made
on such date), no liabilities or obligations (excluding current obligations
incurred in the ordinary course of business) with respect to Parent or any of
its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent
or otherwise and whether or not due) and (ii) neither Parent nor the Borrower
knows of any basis for the assertion against Parent or any of its Subsidiaries
of any such liability or obligation which as to clauses (i) and (ii) above,
either individually or in the aggregate, are or would be reasonably likely to
have, a Material Adverse Effect.
(e) The Projections have been prepared on a basis consistent with the
financial statements referred to in Section 7.10(b) (except as may otherwise be
indicated in the Projections), and are based on good faith estimates and
assumptions made by the management of Parent. On the Initial Borrowing Date,
such management believed that the Projections were reasonable and attainable.
There is no fact known to Parent or any of its Subsidiaries which could have a
Material Adverse Effect, which has not been disclosed
-49-
herein or in such other documents, certificates and statements furnished to
the Banks for use in connection with the transactions contemplated hereby.
7.11 SECURITY INTERESTS. On and after the Initial Borrowing Date,
each of the Security Documents creates (or after the execution and delivery
thereof will create), as security for the Obligations, a valid and enforceable
perfected security interest in and Lien on all of the Collateral subject
thereto, superior to and prior to the rights of all third Persons, and subject
to no other Liens (except that (i) the Security Agreement Collateral, the
Mortgaged Properties and any additional Mortgaged Properties may be subject to
Permitted Liens relating thereto and (ii) the Pledge Agreement Collateral may be
subject to the Liens described in clauses (a) and (e) of Section 9.03), in favor
of the Collateral Agent. No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings required in connection with any such Security Document
which shall have been made on or prior to the Initial Borrowing Date as
contemplated by Section 5.11(b) or 5.13 or on or prior to the execution and
delivery thereof as contemplated by Sections 8.11, 8.12 and 9.15.
7.12 TRANSACTION. At the time of consummation thereof the Transaction
shall have been consummated in accordance with the terms of the respective
Documents and all applicable laws. At the time of consummation thereof, all
consents and approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required to make or consummate the Transaction have been
obtained, given, filed or taken or waived and are or will be in full force and
effect (or effective judicial relief with respect thereto has been obtained).
All applicable waiting periods with respect thereto have or, prior to the time
when required, will have, expired without, in all such cases, any action being
taken by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Transaction. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Transaction, or the occurrence of any Credit Event or the
performance by Parent and its Subsidiaries of their obligations under the
Documents and all applicable laws. The Transaction has been consummated in
accordance with the respective Documents and all applicable laws.
7.13 COMPLIANCE WITH ERISA. (i) Annex V sets forth each Plan; each
Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including without
limitation ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has a material
Unfunded Current Liability; no Plan which is subject to Section 412 of the Code
or Section
-50-
302 of ERISA has an accumulated funding deficiency, within the meaning of
such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304
of ERISA; all contributions required to be made with respect to a Plan have
been timely made; neither Parent nor any Subsidiary of Parent nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur
any such liability under any of the foregoing sections with respect to any
Plan; no condition exists which presents a material risk to Parent or any
Subsidiary of Parent or any ERISA Affiliate of incurring a material liability
to or on account of a Plan pursuant to the foregoing provisions of ERISA and
the Code; no proceedings have been instituted to terminate or appoint a
trustee to administer any Plan which is subject to Title IV of ERISA; no
action, suit, proceeding, hearing, audit or investigation with respect to the
administration, operation or the investment of assets of any Plan (other than
routine claims for benefits) is pending, expected or threatened; using
actuarial assumptions and computation methods consistent with Part 1 of
subtitle E of Title IV of ERISA, the Parent and its Subsidiaries and its
ERISA Affiliates have no material liabilities to any Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event
of a complete withdrawal therefrom, as of the close of the most recent fiscal
year of each such Plan ended prior to the date of the most recent Credit
Event; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or
former employees of Parent, any Subsidiary of Parent or any ERISA Affiliate
has at all times been operated in substantial compliance with the provisions
of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code; no
lien imposed under the Code or ERISA on the assets of Parent or any
Subsidiary of Parent or any ERISA Affiliate exists or is likely to arise on
account of any Plan; and Parent and its Subsidiaries may cease contributions
to or terminate any employee benefit plan maintained by any of them without
incurring any material liability.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither Parent nor any of its Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Pension Plan, determined as of the end of the
Borrower's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
-51-
7.14 CAPITALIZATION. (a) On the Initial Borrowing Date and after
giving effect to the Transaction and the other transactions contemplated
hereby, the authorized capital stock of Parent shall consist of 200,000
shares of common stock, $.01 par value per share (the "Parent Common Stock"),
of which 95,682 shares shall be issued and outstanding and owned by the
Equity Investors. All such outstanding shares have been duly and validly
issued and are fully paid and nonassessable. On the Initial Borrowing Date,
except as provided in the Stock Option Plan or the Odyssey Convertible Note,
Parent does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for
or to purchase, or any options for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
(b) On the Initial Borrowing Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the authorized
capital stock of Holdings shall consist of 1,000 shares of common stock, $.01
par value per share, of which one share shall be issued and outstanding and
owned by Parent and pledged by it pursuant to the Pledge Agreement. All such
outstanding shares have been duly and validly issued and are fully paid and
nonassessable. Holdings does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
(c) On the Initial Borrowing Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the authorized
capital stock of Tri-Star Holdings shall consist of 1,000 shares of common
stock, $.01 par value per share, of which one share shall be issued and
outstanding and owned by Holdings and pledged by it pursuant to the Pledge
Agreement. All such outstanding shares have been duly and validly issued and are
fully paid and nonassessable. Tri-Star Holdings does not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
(d) On the Initial Borrowing Date and after giving effect to the
Transaction and the other transactions contemplated hereby, the authorized
capital stock of the Borrower shall consist of 1,000 shares of common stock,
$.01 par value per share, all of which shares shall be issued and outstanding
and owned by Tri-Star Holdings and pledged by it pursuant to the Pledge
Agreement. All such outstanding shares have been duly and validly issued and are
fully paid and nonassessable. The Borrower does not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement
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providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
7.15 SUBSIDIARIES. (a) Prior to the consummation of the Transaction,
(i) Parent has no Subsidiaries other than Holdings, Tri-Star Holdings, and the
Borrower and (ii) the Borrower has no Subsidiaries other than the Canadian
Subsidiary.
(b) On and as of the Initial Borrowing Date and after giving effect
to the consummation of the Transaction, Parent has no Subsidiaries other than
Holdings and its Subsidiaries, Holdings has no Subsidiaries other than Tri-Star
Holdings and its Subsidiaries and Tri-Star Holdings and the Borrower have no
Subsidiaries other than those Subsidiaries of Tri-Star Holdings or the Borrower,
as the case may be, listed on Annex VII. Annex VII correctly sets forth, as of
the Initial Borrowing Date and after giving effect to the Transaction, the
percentage ownership (direct and indirect) of Tri-Star Holdings and the Borrower
in each class of capital stock of each of its Subsidiaries and also identifies
the direct owner thereof. All outstanding shares of capital stock of each
Subsidiary of Tri-Star Holdings have been duly and validly issued, are fully
paid and non-assessable and have been issued free of preemptive rights. No
Subsidiary of Tri-Star Holdings has outstanding any securities convertible into
or exchangeable for its capital stock or outstanding any right to subscribe for
or to purchase, or any options or warrants for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of or any calls,
commitments or claims of any character relating to, its capital stock or any
stock appreciation or similar rights.
7.16 INTELLECTUAL PROPERTY, ETC. Each of Parent and each of its
Subsidiaries owns all patents, trademarks, permits, service marks, trade names,
technology copyrights, licenses, franchises and formulas, or other rights with
respect to the foregoing, and has obtained assignments of all leases and other
rights of whatever nature, and has in full force and effect all accreditations
and certifications, reasonably necessary for the conduct of its business,
without any known conflict with the rights of others which, or the failure to
obtain which, as the case may be, would result in a Material Adverse Effect.
7.17 COMPLIANCE WITH STATUTES. ETC. Each of Parent and each of its
Subsidiaries is in compliance with all applicable statutes, regulations, rules
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property, except such noncompliance as is not likely to,
individually or in the aggregate, have a Material Adverse Effect.
7.18 ENVIRONMENTAL MATTERS. (a) Each of Parent and each of its
Subsidiaries has complied with, and on the date of each Credit Event is in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such
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Environmental Laws and neither Parent nor any of its Subsidiaries is liable
for any material penalties, fines or forfeitures for failure to comply with
any of the foregoing. There are no pending or past or threatened
Environmental Claims against Parent or any of its Subsidiaries or any Real
Property owned or operated by Parent or any of its Subsidiaries. There are no
facts, circumstances, conditions or occurrences on any Real Property owned or
operated by Parent or any of its Subsidiaries or on any property adjoining or
in the vicinity of any such Real Property that would reasonably be expected
(i) to form the basis of an Environmental Claim against Parent or any of its
Subsidiaries or any such Real Property or (ii) to cause any such Real
Property to be subject to any restrictions on the ownership, occupancy, use
or transferability of such Real Property by Parent or any of its Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Parent or any of its Subsidiaries except in compliance with all
applicable Environmental Laws and reasonably required in connection with the
operation, use and maintenance of such Real Property by Parent's or such
Subsidiary's business. Hazardous Materials have not at any time been Released on
or from any Real Property owned or operated by Parent or any of its
Subsidiaries. There are not now any underground storage tanks located on any
Real Property owned or operated by Parent or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.18,
the representations made in this Section 7.18 shall only be untrue if the
aggregate effect of all conditions, failures, noncompliances, Environmental
Claims, Releases and presence of underground storage tanks, in each case of the
types described above, would reasonably be expected to have a Material Adverse
Effect.
7.19 PROPERTIES. All Real Property owned by Parent or any of its
Subsidiaries and all material Leaseholds leased by Parent or any of its
Subsidiaries, in each case as of the Initial Borrowing Date and after giving
effect to the Transaction, and the nature of the interest therein, is correctly
set forth in Annex III. Each of Parent and each of its Subsidiaries has good and
marketable title to, or a validly subsisting leasehold interest in, all material
properties owned or leased by it, including all Real Property reflected in Annex
III or in the financial statements referred to in Section 7.10(b) or in the pro
forma balance sheet referred to in Section 5.17(a), free and clear of all Liens,
other than Permitted Liens.
7.20 LABOR RELATIONS. Neither Parent nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint pending
against Parent or any of its Subsidiaries or threatened against any of them,
before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under any collective bargaining
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agreement is so pending against Parent or any of its Subsidiaries or
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against Parent or any of its Subsidiaries or threatened
against Parent or any of its Subsidiaries and (iii) no union representation
question existing with respect to the employees of Parent or any of its
Subsidiaries and no union organizing activities are taking place, except
(with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as is not reasonably likely to
have a Material Adverse Effect.
7.21 TAX RETURNS AND PAYMENTS. Each of Parent and each of its
Subsidiaries has filed all federal income tax returns and all other material
tax returns, domestic and foreign, required to be filed by it and has paid
all material taxes and assessments payable by it which have become due,
except for those contested in good faith and adequately disclosed and fully
provided for on the financial statements of Parent and its Subsidiaries in
accordance with generally accepted accounting principles. Each of Parent and
each of its Subsidiaries has at all times paid, or has provided adequate
reserves (in the good faith judgment of the management of Parent) for the
payment of, all federal, state and foreign income taxes applicable for all
prior fiscal years and for the current fiscal year to date. Except as set
forth on Annex X, there is no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of Parent or
any of its Subsidiaries, threatened by any authority regarding any taxes
relating to Parent or any of its Subsidiaries. As of the Initial Borrowing
Date, neither Parent nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of Parent or any of its Subsidiaries, or is aware of any circumstances
that would cause the taxable years or other taxable periods of Parent or any
of its Subsidiaries not to be subject to the normally applicable statute of
limitations.
7.22 EXISTING INDEBTEDNESS. Annex IV sets forth a true and complete
list of all Indebtedness of Parent and its Subsidiaries as of the Initial
Borrowing Date and which is to remain outstanding after giving effect to the
Transaction and the incurrence of Loans on such date, in each case showing the
aggregate principal amount thereof and the name of the respective borrower and
any other entity which directly or indirectly guaranteed such debt.
7.23 INSURANCE. Set forth on Annex VIII hereto is a true, correct and
complete summary of all insurance carried by each Credit Party on and as of the
Initial Borrowing Date, with the amounts insured set forth therein.
7.24 REPRESENTATIONS AND WARRANTIES IN OTHER DOCUMENTS. All
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and shall be true and correct in all
material respects as of the Initial Borrowing Date
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as if such representations or warranties were made on and as of such date,
unless stated to relate to a specific earlier date, in which case such
representations or warranties shall be true and correct in all material
respects as of such earlier date.
7.25 SPECIAL PURPOSE CORPORATIONS. (a) Parent, Holdings, Tri-Star
Holdings and the Borrower were formed to effect the Transaction. Prior to the
consummation of the Transaction, (i) Parent had no significant assets (other
than the capital stock of Holdings) or liabilities (other than those liabilities
under the Acquisition Documents), (ii) Holdings had no significant assets (other
than the capital stock of Tri-Star Holdings) or liabilities (other than those
liabilities under the Acquisition Documents), (iii) Tri-Star Holdings had no
significant assets (other than the capital stock of the Borrower) or liabilities
(other than those liabilities under the Acquisition Documents) and (iv) the
Borrower had no significant assets (other than the capital stock of the Canadian
Subsidiary) or liabilities (other than those liabilities under the Acquisition
Documents).
(b) After the consummation of the Transaction, (i) Parent has no
significant assets (other than the capital stock of Holdings and immaterial
assets used for the performance of those activities permitted to be performed by
Parent pursuant to Section 9.01(b)(i)) or liabilities (other than under this
Agreement and the other Documents to which it is a party and those liabilities
permitted to be incurred by Parent pursuant to Section 9.01(b)(i)), (ii)
Holdings has no significant assets (other than the capital stock of Tri-Star
Holdings and immaterial assets used for the performance of those activities
permitted to be performed by Holdings pursuant to Section 9.01(b)(i)) or
liabilities (other than under this Agreement and the other Documents to which it
is a party and those liabilities permitted to be incurred by Holdings pursuant
to Section 9.01(b)(i)) and (iii) Tri-Star Holdings has no significant assets
(other than the capital stock of the Borrower and those permitted to be held by
it under Section 9.01(b)(ii)) or liabilities (other than under this Agreement
and the other Documents to which it is a party and those liabilities permitted
to be incurred by Tri-Star Holdings pursuant to Section 9.01(b)(ii)).
(c) Tri-Star Inventory Management Service, Inc. does not own any
significant assets.
SECTION 8. AFFIRMATIVE COVENANTS. Each Parent Guarantor and the
Borrower hereby covenant and agree that as of the Effective Date and thereafter
for so long as this Agreement is in effect and until the Total Commitment has
terminated, no Letters of Credit or Notes are outstanding and the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations (other
than any indemnities described in Section 13.13 which are not then due and
payable) incurred hereunder, are paid in full:
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8.01 INFORMATION COVENANTS. Parent will furnish, or will cause to be
furnished, to each Bank:
(a) MONTHLY REPORTS. Within 30 days after the end of each fiscal
month of Parent, the consolidated balance sheet of Parent and its
Subsidiaries as at the end of such fiscal month and the related
consolidated statements of income and retained earnings of cash flows for
such fiscal month and for the elapsed portion of the fiscal year ended with
the last day of such fiscal month, in each case setting forth comparative
figures for the corresponding fiscal month in the prior fiscal year and
comparable budgeted figures for such fiscal month as set forth in the
respective budget delivered pursuant to Section 8.01(d), all of which shall
be certified by the chief financial officer or other Authorized Officer of
Parent, subject to normal year-end audit adjustments and the absence of
footnotes; PROVIDED that for the fiscal months of September, October and
November 1996 such monthly reports may be furnished consistent in form with
those historically prepared, prior to the consummation of the Acquisition,
by Tri-Star Aerospace and with respect to the Aviall Business.
(b) QUARTERLY FINANCIAL STATEMENTS. Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of Parent,
(i) the consolidated balance sheet of Parent and its Subsidiaries as at the
end of such quarterly accounting period and the related consolidated
statements of income and retained earnings and of cash flows for such
quarterly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period and the
budgeted figures for such quarterly period as set forth in the respective
budget delivered pursuant to Section 8.01(d) and (ii) management's
discussion and analysis of the most important operational and financial
developments during such quarterly period, all of which shall be in
reasonable detail and certified by the chief financial officer or other
Authorized Officer of Parent that they fairly present in all material
respects the financial condition of Parent and its Subsidiaries as of the
dates indicated and the results of their operations and changes in their
cash flows for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes.
(c) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the close of
each fiscal year of Parent, beginning with the fiscal year ending September
30, 1997, the consolidated balance sheet of Parent and its Subsidiaries as
at the end of such fiscal year and the related consolidated statements of
income and retained earnings and of cash flows for such fiscal year and
setting forth comparative consolidated figures for the preceding fiscal
year and comparable budgeted figures for such fiscal year as set forth in
the respective budget delivered pursuant to Section 8.01(d) and (except for
such comparable budgeted figures) certified by Xxxxxx Xxxxxxxx or such
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other independent certified public accountants of recognized national
standing as shall be reasonably acceptable to the Agent, in each case to
the effect that such statements fairly present in all material respects the
financial condition of Parent and its Subsidiaries as of the dates
indicated and the results of their operations and changes in its financial
position for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years, together with a certificate of such
accounting firm stating that in the course of its regular audit of the
business of Parent and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, no Default or Event
of Default which has occurred and is continuing has come to their attention
or, if such a Default or an Event of Default has come to their attention a
statement as to the nature thereof.
(d) CLOSING DATE NET ASSET STATEMENT, ETC. At such time as the
Closing Date Net Asset Statement (as defined in the Asset Purchase
Agreement) has been prepared and audited by Price Waterhouse LLP, a true
and correct copy thereof, as well as copies of all other post-closing
financial statements and notices provided to or by any of the Credit
Parties pursuant to the Acquisition Documents.
(e) BUDGETS, ETC. Not more than 30 days after the commencement of
each fiscal year of Parent beginning with the fiscal year commencing on
October 1, 1997, a budget of Parent and its Subsidiaries (x) in reasonable
detail for each of the twelve months of such fiscal year and (y) in summary
form for each of the four fiscal years immediately following such fiscal
year, in each case as customarily prepared by management for its internal
use setting forth, with appropriate discussion, the principal assumptions
upon which such budgets are based. Together with each delivery of financial
statements pursuant to Sections 8.01(a), (b) and (c), a comparison of the
current year to date financial results (other than in respect of the
balance sheets included therein) against the budgets required to be
submitted pursuant to this clause (e) shall be presented.
(f) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Sections 8.01(a), (b) and (c), a
certificate of the chief financial officer or other Authorized Officer of
Parent to the effect that no Default or Event of Default exists or, if any
Default or Event of Default does exist, specifying the nature and extent
thereof, which certificate shall, if delivered in connection with the
financial statements in respect of a period ending on the last day of a
fiscal quarter or fiscal year of Parent, set forth the calculations
required to establish whether Parent and its Subsidiaries were in
compliance with the provisions of Sections 3.03, 4.02, 8.14, 9.02, 9.04,
9.05 and 9.08 through and including 9.11, as at the end of such fiscal
quarter or year, as the case may be. In addition, at the time of the
delivery of the financial statements provided for in Section 8.01(c), a
certificate of the chief financial officer or other Authorized Officer of
Parent setting
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forth (in reasonable detail) the amount of, and calculations required to
establish the amount of, Excess Cash Flow for the Excess Cash Flow Payment
Period ending on the last day of the respective fiscal year.
(g) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event
within three Business Days after an officer of Parent or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or an Event of Default, which notice
shall specify the nature and period of existence thereof and what action
Parent or the Borrower proposes to take with respect thereto, (ii) any
litigation or proceeding pending or threatened (x) against Parent or any of
its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect, (y) with respect to any material Indebtedness of Parent or
any of its Subsidiaries or (z) with respect to any Document, (iii) any
material governmental investigation pending or threatened against Parent or
any of its Subsidiaries and (iv) any other event which could reasonably be
expected to have a Material Adverse Effect.
(h) AUDITORS' REPORTS. Promptly upon receipt thereof, a copy of each
report or "management letter" submitted to Parent or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of Parent or any of its
Subsidiaries and the management's non-privileged responses thereto.
(i) ENVIRONMENTAL MATTERS. Promptly after obtaining knowledge of any
of the following (but only to the extent that any of the following could
reasonably be expected to (x) have a Material Adverse Effect, either
individually or in the aggregate, or (y) result in a remedial cost to
Parent or any of its Subsidiaries in excess of $200,000), written notice
of:
(i) any pending or threatened Environmental Claim against Parent
or any of its Subsidiaries or any Real Property owned or operated by
Parent or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned or
operated by Parent or any of its Subsidiaries that (x) results in
noncompliance by Parent or any of its Subsidiaries with any applicable
Environmental Law or (y) could reasonably be anticipated to form the
basis of an Environmental Claim against Parent or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by Parent or any of its Subsidiaries that could reasonably be
antici-
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pated to cause such Real Property to be subject to any restrictions
on the ownership, occupancy, use or transferability by Parent or its
Subsidiary, as the case may be, of its interest in such Real Property
under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by Parent or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and Parent' or the Borrower's response or proposed response thereto. In
addition, Parent agrees to provide the Banks with copies of all material
communications by Parent or any of its Subsidiaries with any Person,
government or governmental agency relating to any of the matters set forth
in clauses (i)-(iv) above, and such detailed reports relating to any of the
matters set forth in clauses (i)-(iv) above as may reasonably be requested
by the Agent or the Required Banks.
(j) ANNUAL MEETINGS WITH BANKS. At the request of the Agent, Parent
shall within 120 days after the close of each of its fiscal years, hold a
meeting (at a mutually agreeable location and time) with all of the Banks
at which meeting shall be reviewed the financial results of the previous
fiscal year and the financial condition of Parent and its Subsidiaries and
the budgets presented for the current fiscal year of Parent and its
Subsidiaries.
(k) NOTICE OF COMMITMENT REDUCTIONS AND MANDATORY REPAYMENTS. On or
prior to the date of any reduction to the Total Commitment or any mandatory
repayment of outstanding Term Loans pursuant to any of Sections 4.02(c)
through (h), inclusive, the Borrower shall provide written notice of the
amount of the respective reduction or repayment, as the case may be, to
each of the Total Revolving Loan Commitment or the outstanding Term Loans,
as applicable, and the calculation thereof (in reasonable detail).
(l) OTHER INFORMATION. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the SEC by Parent or
any of its Subsidiaries and copies of all financial statements, proxy
statements, notices and reports as Parent or any of its Subsidiaries shall
send generally to analysts and the holders of their capital stock in their
capacity as such holders (to the extent not theretofore delivered to the
Banks pursuant to this Agreement) and, with reasonable promptness, such
other information or documents (financial or otherwise) as the Agent on its
own behalf or on behalf of the Required Banks may reasonably request from
time to time.
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8.02 BOOKS, RECORDS AND INSPECTIONS. Each Parent Guarantor and the
Borrower will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries in conformity with
GAAP and all requirements of law shall be made of all dealings and transactions
in relation to its business and activities. Each Parent Guarantor and the
Borrower will, and will cause each of its Subsidiaries to, permit, upon notice
to the chief financial officer or other Authorized Officer of the Borrower,
officers and designated representatives of the Agent or the Required Banks to
visit and inspect any of the properties or assets of Parent and any of its
Subsidiaries in whomsoever's possession, and to examine the books of account of
Parent and any of its Subsidiaries and discuss the affairs, finances and
accounts of Parent and of any of its Subsidiaries with, and be advised as to the
same by, their officers and independent accountants, all at such reasonable
times and intervals and to such reasonable extent as the Agent or the Required
Banks may desire.
8.03 INSURANCE. (a) Each Parent Guarantor and the Borrower will, and
will cause each of its Subsidiaries to (i) maintain, with financially sound and
reputable insurance companies, insurance on all its property in at least such
amounts and against at least such risks as is consistent and in accordance with
industry practice and (ii) furnish to the Agent and each of the Banks, upon
request, full information as to the insurance carried. In addition to the
requirements of the immediately preceding sentence, each Parent Guarantor and
the Borrower will at all times cause insurance of the types described in Annex
VIII to be maintained (with the same scope of coverage as that described in
Annex VIII) at levels which are at least as great as the respective amount
described opposite the respective type of insurance on Annex VIII. Such
insurance shall include physical damage insurance on all real and personal
property (whether now owned or hereafter acquired) on an all risk basis,
covering the full repair and replacement costs of all such property and business
interruption insurance for the actual loss sustained. The provisions of this
Section 8.03 shall be deemed supplemental to, but not duplicative of, the
provisions of any Security Documents that require the maintenance of insurance.
(b) Each Parent Guarantor and the Borrower will, and will cause each
of its Subsidiaries to, at all times keep the respective property of Parent and
its Subsidiaries insured in favor of the Collateral Agent, and all policies
(including Mortgage Policies) or certificates with respect to such insurance
(and any other insurance maintained by, or on behalf of, Parent or any
Subsidiary of Parent) (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as certificate holder, mortgagee and
loss payee with respect to real property, certificate holder and loss payee with
respect to personal property, additional insured with respect to general
liability and umbrella liability coverage and certificate holder with respect to
workers' compensation insurance), (ii) shall state that such insurance policies
shall not be cancelled or materially changed without at least 30 days' prior
written
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notice thereof by the respective insurer to the Collateral Agent and (iii)
shall be deposited with the Collateral Agent.
(c) If Parent or any of its Subsidiaries shall fail to maintain all
insurance in accordance with this Section 8.03, or if Parent or any of its
Subsidiaries shall fail to so name the Collateral Agent as an additional
insured, mortgagee or loss payee, as the case may be, or so deposit all
certificates with respect thereto, the Agent and/or the Collateral Agent shall
have the right (but shall be under no obligation) to procure such insurance, and
the Credit Parties agree to jointly and severally reimburse the Agent or the
Collateral Agent, as the case may be, for all costs and expenses of procuring
such insurance.
8.04 PAYMENT OF TAXES. Each Parent Guarantor and the Borrower will
pay and discharge, and will cause each of its Subsidiaries to pay and
discharge, all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits, or upon any properties belonging to
it, prior to the date on which penalties attach thereto, and all lawful
claims for sums that have become due and payable which, if unpaid, might
become a Lien not otherwise permitted under Section 9.03(a); PROVIDED, that
neither Parent nor any of its Subsidiaries shall be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by proper proceedings if it has maintained adequate reserves with respect
thereto in accordance with GAAP.
8.05 CORPORATE FRANCHISES. Each Parent Guarantor and the Borrower will
do, and will cause each of its Subsidiaries to do, or cause to be done, all
things necessary to preserve and keep in full force and effect its existence and
its material rights, franchises, authority to do business, licenses,
certifications, accreditations and patents; PROVIDED, HOWEVER, that any
transaction permitted by Section 9.02 will not constitute a breach of this
Section 8.05.
8.06 COMPLIANCE WITH STATUTES; ETC. Each Parent Guarantor and the
Borrower will, and will cause each of its Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
except for such noncompliance as would not have a Material Adverse Effect or
a material adverse effect on the ability of any Credit Party to perform its
obligations under any Credit Document to which it is a party.
8.07 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) (i) Each Parent Guarantor
and the Borrower will comply, and will cause each of its Subsidiaries to comply,
in all material respects with all Environmental Laws applicable to the ownership
or use of its Real Property now or hereafter owned or operated by Parent or any
of its Subsidiaries, will promptly pay or cause to be paid all costs and
expenses incurred in connection with such compliance, and will keep or cause to
be kept all such Real Property free and clear of any
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Liens imposed pursuant to such Environmental Laws and (ii) neither Parent nor
any of its Subsidiaries will generate, use, treat, store, Release or dispose
of, or permit the generation, use, treatment, storage, release or disposal
of, Hazardous Materials on any Real Property owned or operated by Parent or
any of its Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property, unless the failure to
comply with the requirements specified in clause (i) or (ii) above, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. If Parent or any of its Subsidiaries, or any tenant
or occupant of any Real Property owned or operated by Parent or any of its
Subsidiaries, cause or permit any intentional or unintentional act or
omission resulting in the presence or Release of any Hazardous Material
(except in compliance with applicable Environmental Laws), each Parent
Guarantor and the Borrower agrees to undertake, and/or to cause any of its
Subsidiaries, tenants or occupants to undertake, at their sole expense, any
clean up, removal, remedial or other action required pursuant to
Environmental Laws to remove and clean up any Hazardous Materials from any
Real Property except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect; PROVIDED that neither Parent nor
any of its Subsidiaries shall be required to comply with any such order or
directive which is being contested in good faith and by proper proceedings so
long as it has maintained adequate reserves with respect to such compliance
to the extent required in accordance with GAAP.
(b) At the written request of the Agent or the Required Banks, which
request shall specify in reasonable detail the basis therefor, at any time and
from time to time, the Borrower will provide, at its sole cost and expense, an
environmental site assessment report concerning any Real Property now or
hereafter owned or operated by Parent or any of its Subsidiaries, prepared by an
environmental consulting firm approved by the Agent, which approval shall not be
unreasonably withheld, addressing the matters in clause (i), (ii) or (iii) below
which gives rise to such request (or, in the case of a request pursuant to
following clause (i), addressing such matter as may be requested by the Agent or
the Required Banks) and estimating the range of the potential costs of any
removal, remedial or other corrective action in connection with any such matter,
provided that in no event shall such request be made unless (i) an Event of
Default has occurred and is continuing, (ii) the Banks receive notice under
Section 8.01(i) for any event for which notice is required to be delivered for
any such Real Property or (iii) the Agent or the Required Banks reasonably
believe that there was a breach of any representation, warranty or covenant
contained in Section 7.18 or 8.07(a). If Parent fails to provide the same within
60 days after such request was made, the Agent may order the same, and Parent
shall grant and hereby grants, to the Agent and the Banks and their agents
access to such Real Property and specifically grants, the Agent and the Banks
and their agents an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at Parent's expense.
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8.08 ERISA. As soon as possible and, in any event, within fifteen days
after Parent, any Subsidiary of Parent or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following, Parent will deliver,
or cause to be delivered, to each of the Banks a certificate of the chief
financial officer of Parent setting forth the full details as to such occurrence
and the action, if any, that Parent, Borrower, such Subsidiary or such ERISA
Affiliate is required or proposes to take, together with any notices required or
proposed to be given to or filed with or by Parent, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency, within the meaning of Section 412 of the Code or Section 302 of
ERISA, has been incurred or an application may be or has been made for a
waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period
under Section 412 of the Code or Section 303 or 304 of ERISA with respect to
a Plan; that any contribution required to be made with respect to a Plan or
Foreign Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has a material Unfunded Current Liability; that
proceedings may be or have been instituted to terminate or appoint a trustee
to administer a Plan which is subject to Title IV of ERISA; that a proceeding
has been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that Parent, any Subsidiary of Parent or any ERISA
Affiliate will or may incur any material liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975
or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or with
respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that
Parent or any Subsidiary of Parent may incur any material liability pursuant
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
that provides benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or any Plan or any Foreign Pension
Plan. Parent will deliver to each of the Banks a complete copy of the annual
report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, copies of annual reports and any
material notices received by Parent, any Subsidiary of Parent or any ERISA
Affiliate with respect to any Plan or Foreign Pension Plan shall be delivered
to the Banks no later than fifteen days after the date such report has been
filed with the Internal Revenue Service or such notice has been received by
Parent, such Subsidiary or such ERISA Affiliate, as applicable.
8.09 GOOD REPAIR. Each Parent Guarantor and the Borrower will, and
will cause each of its Subsidiaries to, ensure that its material properties and
equipment used in
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its business are kept in good repair, working order and condition, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner useful or customary
for companies in similar businesses.
8.10 END OF FISCAL YEARS: FISCAL QUARTERS. Parent will, for financial
reporting purposes, cause (i) each of its, and each of its Subsidiaries', fiscal
years to end on September 30 of each year and (ii) each of its, and each of its
Subsidiaries', fiscal quarters to end on December 31, March 31, June 30 and
September 30 of each year.
8.11 ADDITIONAL SECURITY: FURTHER ASSURANCES. (a) Parent will, and
will cause each of its Domestic Subsidiaries (and to the extent Section 8.12 is
operative, each of its Foreign Subsidiaries) to, grant to the Collateral Agent
security interests and mortgages in such assets and real property (it being
understood that Real Property having a fair market value of less than $500,000
shall not be subject to this Section 8.11(a)) of Parent and its Subsidiaries as
are not covered by the original Security Documents, and as may be requested from
time to time by the Agent or the Required Banks (collectively, the "Additional
Security Documents"). All such security interests and mortgages shall be
granted (i) in the case of Real Property, pursuant to the documentation and
applicable terms set forth in Section 5.13 and (ii) in the case of other assets,
pursuant to documentation reasonably satisfactory in form and substance to the
Agent; in each case constituting valid and enforceable perfected security
interests and/or mortgages superior to and prior to the rights of all third
Persons and subject to no other Liens except for Permitted Liens. The
Additional Security Documents or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall have
been paid in full.
(b) Parent will, and will cause each of its Subsidiaries to, at the
expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require. Furthermore, Parent shall cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other related
documents as may be reasonably requested by the Agent to assure themselves that
this Section 8.11 has been complied with.
(c) If the Agent or the Required Banks determine that they are
required by law or regulation to have appraisals prepared in respect of the Real
Property of Parent
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and its Subsidiaries constituting Collateral, Parent shall provide to the
Agent appraisals which satisfy the applicable requirements of the Real Estate
Appraisal Reform Amendments of the Financial Institution Reform, Recovery and
Enforcement Act of 1989 and which shall be in form and substance reasonably
satisfactory to the Agent.
(d) Each of the Credit Parties agrees that each action required above
by this Section 8.11 shall be completed as soon as possible, but in no event
later than 90 days after such action is either requested to be taken by the
Agent or the Required Banks or required to be taken by Parent and its
Subsidiaries pursuant to the terms of this Section 8.11.
8.12 FOREIGN SUBSIDIARIES SECURITY. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Agent does not within 30 days after a
request from the Agent or the Required Banks deliver evidence, in form and
substance mutually satisfactory to the Agent and the Borrower, with respect to
any Foreign Subsidiary of Parent which has not already had all of its stock
pledged pursuant to the Pledge Agreement that (i) a pledge (x) of 66-2/3% or
more of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, and (y) of any promissory note issued by
such Foreign Subsidiary to Parent or any of its Domestic Subsidiaries, (ii) the
entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement and (iii) the entering into by
such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiaries Guaranty, in any such case could reasonably be expected to cause
(I) any undistributed earnings of such Foreign Subsidiary as determined for
Federal income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes or (II) other
Federal income tax consequences to the Credit Parties having a Material Adverse
Effect, then in the case of a failure to deliver the evidence described in
clause (i) above, that portion of such Foreign Subsidiary's outstanding capital
stock or any promissory notes so issued by such Foreign Subsidiary, in each case
not theretofore pledged pursuant to the Pledge Agreement shall be pledged to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement (or another pledge agreement in substantially similar form, if
needed), and in the case of a failure to deliver the evidence described in
clause (ii) above, such Foreign Subsidiary shall execute and deliver the
Security Agreement (or another security agreement in substantially similar form,
if needed), granting the Secured Creditors a security interest in all of such
Foreign Subsidiary's assets and securing the Obligations of the Borrower under
the Credit Documents and under any Interest Rate Protection Agreement or Other
Hedging Agreement and, in the event the Subsidiaries Guaranty shall have been
executed by such Foreign Subsidiary, the obligations of such Foreign Subsidiary
thereunder, and in the case of a failure to deliver the evidence described in
clause (iii) above, such Foreign Subsidiary shall execute and deliver the
Subsidiaries Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of the Borrower under the Credit Documents
and
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under any Interest Rate Protection Aagreement or Other Hedging Agreement, in
each case to the extent that the entering into such Security Agreement or
Subsidiaries Guaranty is permitted by the laws of the respective foreign
jurisdiction and with all documents delivered pursuant to this Section 8.12 to
be in form and substance reasonably satisfactory to the Agent.
8.13 OWNERSHIP OF SUBSIDIARIES. Except to the extent otherwise
expressly consented in writing by the Required Banks, the Credit Parties shall
directly or indirectly own 100% of the capital stock or partnership interests of
each of their Subsidiaries.
8.14 PERMITTED ACQUISITIONS. (a) Subject to the provisions of this
Section 8.14 and the requirements contained in the definition of Permitted
Acquisition, the Borrower may from time to time after December 31, 1996 effect
Permitted Acquisitions, so long as (in each case except to the extent the
Required Banks otherwise specifically agree in writing in the case of a specific
Permitted Acquisition): (i) no Default or Event of Default shall be in existence
at the time of the consummation of the proposed Permitted Acquisition or
immediately after giving effect thereto; (ii) the Borrower shall have given the
Agent and the Banks at least 10 Business Days' prior written notice of any
Permitted Acquisition; (iii) calculations are made by the Borrower of compliance
with the covenants contained in Sections 9.09, 9.10 and 9.11 for the Test Period
(taken as one accounting period) most recently ended prior to the date of such
Permitted Acquisition (each, a "Calculation Period"), on a PRO FORMA Basis as if
the respective Permitted Acquisition (as well as all other Permitted
Acquisitions theretofore consummated after the first day of such Calculation
Period) had occurred on the first day of such Calculation Period, and such
recalculations shall show that such financial covenants would have been complied
with if the Permitted Acquisition had occurred on the first day of such
Calculation Period; (iv) based on good faith projections prepared by the
Borrower for the period from the date of the consummation of the Permitted
Acquisition to the date which is one year thereafter, the level of financial
performance measured by the covenants set forth in Sections 9.09, 9.10 and 9.11
shall be better than or equal to such level as would be required to provide that
no Default or Event of Default would exist under the financial covenants
contained in Sections 9.09, 9.10 and 9.11 of this Agreement as compliance with
such covenants would be required through the date which is one year from the
date of the consummation of the respective Permitted Acquisition; (v) the
Borrower shall certify, and the Agent shall have been satisfied in its
reasonable discretion, that the proposed Permitted Acquisition could not
reasonably be expected to result in materially increased tax, ERISA,
environmental or other contingent liabilities with respect to Parent or any of
its Subsidiaries; (vi) all representations and warranties contained herein and
in the other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of such Permitted Acquisition (both before and after
giving effect thereto), unless stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct in all
material respects as of such
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earlier date; (vii) the Borrower provides to the Agent and the Banks as soon
as available but not later than 5 Business Days after the execution thereof, a
copy of any executed purchase agreement or similar agreement with respect to
such Permitted Acquisition; (viii) the aggregate consideration (including,
without limitation, (I) the aggregate principal amount of any Indebtedness
assumed or issued in connection therewith, (II) the greater of the aggregate
liquidation preference and the fair market value (as determined in good faith
by the Board of Directors of Parent) of any stock issued (other than common
stock of Parent, provided that no Default or Event of Default under Section
10.10 exists or would result therefrom) as part of the purchase price therefor
and (III) the aggregate amount paid and to be paid pursuant to any earn-out,
non-compete or deferred compensation or purchase price arrangements, but
excluding common stock of the Parent referenced in the immediately preceding
parenthetical, for (x) any such proposed Permitted Acquisition shall not
exceed $5,000,000 and (y) any such proposed Permitted Acquisition and all
other Permitted Acquisitions consummated prior to such Permitted Acquisition
shall not exceed $15,000,000; (ix) after giving effect to each Permitted
Acquisition (and all payments to be made in connection therewith), the Total
Unutilized Revolving Loan Commitment shall equal or exceed $15,000,000; and
(x) the Borrower shall have delivered to the Agent an officer's certificate
executed by an Authorized Officer of the Borrower, certifying to the best of
his knowledge, compliance with the requirements of preceding clauses (i)
through (vi), inclusive, (viii) and (ix) and containing the calculations
required by the preceding clauses (iii), (iv), (viii) and (ix).
(b) At the time of each Permitted Acquisition involving the creation
or acquisition of a Subsidiary, or the acquisition of capital stock or other
equity interest of any Person, all capital stock or other equity interests
thereof created or acquired in connection with such Permitted Acquisition shall
be pledged for the benefit of the Secured Creditors pursuant to the Pledge
Agreement.
(c) Parent shall cause each Subsidiary which is formed to effect, or
is acquired pursuant to, a Permitted Acquisition to comply with, and to execute
and deliver, all of the documentation required by, Sections 8.11 and 9.15, to
the satisfaction of the Agent.
(d) The consummation of each Permitted Acquisition shall be deemed to
be a representation and warranty by each Parent Guarantor and the Borrower that
the certifications by the Borrower (or by one or more of its Authorized
Officers) pursuant to Section 8.14(a) are true and correct and that all
conditions thereto have been satisfied and that same is permitted in accordance
with the terms of this Agreement, which representation and warranty shall be
deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 6 and 10.
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8.15 MAINTENANCE OF CORPORATE SEPARATENESS. Each Parent Guarantor and
the Borrower will, and will cause each of its Subsidiaries to, satisfy customary
corporate formalities, including the holding of regular board of directors' and
shareholders' meetings or action by directors or shareholders without a meeting
and the maintenance of corporate offices and records. Neither Parent nor any of
its Subsidiaries shall take any action, or conduct its affairs in a manner,
which is likely to result in the corporate existence of Parent or any of its
Subsidiaries being ignored, or in the assets and liabilities of Parent or any of
its Subsidiaries being substantively consolidated with those of any other such
Person in a bankruptcy, reorganization or other insolvency proceeding.
8.16 PERFORMANCE OF OBLIGATIONS. Each Parent Guarantor and the
Borrower will, and will cause each of its Subsidiaries to, perform all of its
obligations under the terms of each mortgage, deed of trust, indenture, loan
agreement or credit agreement and each other material agreement, contract or
instrument by which it is bound, except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
8.17 USE OF PROCEEDS. All proceeds of the Loans shall be used as
provided in Section 7.05.
8.18 INTEREST RATE PROTECTION. No later than 90 days following the
Initial Borrowing Date, the Borrower shall enter into Interest Rate Protection
Agreement, satisfactory to the Borrower and the Agent.
8.19 CONTRIBUTIONS: PAYMENTS: ETC. (a) Parent, Holdings and Tri-Star
Holdings will contribute, directly in the case of Tri-Star Holdings, or by way
of downstream contributions in the case of Parent and Holdings, as an equity
contribution to the capital of the Borrower upon its receipt thereof, any cash
proceeds received by Parent (other than proceeds received from Management
Participants which are used to repay the Odyssey Convertible Note), Holdings, or
Tri-Star Holdings from any asset sale, any incurrence of Indebtedness, any
Recovery Event, any sale or issuance of its preferred or common equity or any
cash capital contributions received by Parent.
(b) The Borrower will use the proceeds of all equity contributions
received by it from Parent, Holdings and/or Tri-Star Holdings as provided in
clause (a) above toward the repayment of Term Loans (or the reduction of the
Total Revolving Loan Commitment) to the extent required by Section 4.02.
8.20 CORPORATE NAMES. On the Initial Borrowing Date, and after giving
effect to the Acquisition, Parent shall be named "Maple Leaf Aerospace, Inc.",
Holdings shall be named "Aerospace Acquisition Corp.", Tri-Star Holdings shall
be named "Tri-Star Aerospace, Inc.", and the Borrower shall be named "Tri-Star
Aerospace Co.".
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SECTION 9. NEGATIVE COVENANTS. Parent and the Borrower hereby covenant
and agree that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Total Commitment has terminated, no Letters
of Credit or Notes are outstanding and the Loans, together with interest, Fees
and all other Obligations (other than any indemnities described in Section 13.13
which are not then due and payable) incurred hereunder, are paid in full:
9.01 CHANGES IN BUSINESS. (a) Parent and its Subsidiaries will not
engage in any business other than the businesses in which the Acquired Business
is engaged in as of the Effective Date and activities directly related thereto,
and similar or related businesses.
(b) Notwithstanding the foregoing, (i) neither Parent nor Holdings
will engage in any business other than its ownership of the capital stock of
Holdings or Tri-Star Holdings, respectively, and those obligations of officers
and employees of Parent permitted by Section 9.05(h) and having those
liabilities which it is responsible for (or permitted to incur) under this
Agreement and the other Documents to which it is a party and (ii) Tri-Star
Holdings will not engage in any business other than (x) its ownership of the
capital stock of the Borrower, (y) the operation of the business acquired by it
on the Initial Borrowing Date and (z) having those liabilities for which it is
responsible (or permitted to incur) under this Agreement or the other Documents
to which it is a party; provided that each of Parent, Holdings and Tri-Star
Holdings may engage in those activities that are incidental to (1) the
maintenance of its corporate existence in compliance with applicable law, (2)
legal, tax and accounting matters in connection with any of the foregoing
activities and (3) the entering into, and performance of its obligations under,
this Agreement and the other Documents to which it is a party.
9.02 CONSOLIDATION: MERGER: SALE OR PURCHASE OF ASSETS: ETC. Parent
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of all or any part of its property
or assets (other than inventory in the ordinary course of business), or enter
into any partnerships, joint ventures or sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions)
any part of the property or assets (other than purchases or other acquisitions
of inventory, materials and equipment in the ordinary course of business) of
any Person or agree to do any of the foregoing at any future time, except
that the following shall be permitted:
(a) the Borrower and its Subsidiaries may, as lessee, enter into
operating leases in the ordinary course of business with respect to real or
personal property to the extent permitted by Section 9.04;
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(b) Capital Expenditures by the Borrower and its Subsidiaries to the
extent not in violation of Section 9.08;
(c) the advances, investments and loans permitted pursuant to Section
9.05;
(d) the Borrower and any of its Subsidiaries may sell or otherwise
dispose of assets (excluding capital stock of Subsidiaries) which, in the
reasonable opinion of such Person, are obsolete, uneconomic or no longer
useful in the conduct of such Person's business, PROVIDED that (w) each
such sale or disposition shall be for an amount at least equal to the fair
market value thereof (as determined in good faith by senior management of
the Borrower), (x) each such sale results in consideration at least 80% of
which (taking the amount of cash, the principal amount of any promissory
notes and the fair market value, as determined by the Borrower in good
faith, of any other consideration) shall be in the form of cash and (y) the
aggregate Net Sale Proceeds of all assets sold or otherwise disposed of
pursuant to this clause (d) shall be applied, to the extent required or
permitted under Section 4.02(c), to repay Term Loans (or reduce the Total
Revolving Loan Commitment) or make reinvestments in assets;
(e) any Subsidiary of the Borrower may transfer assets (other than
accounts receivable and inventory) to the Borrower or to any other Wholly-
Owned Subsidiary of the Borrower which is a Subsidiary Guarantor, so long
as the security interests granted to the Collateral Agent for the benefit
of the Secured Creditors pursuant to the Security Documents in the assets
so transferred shall remain in full force and effect and perfected (to at
least the same extent as in effect immediately prior to such transfer);
(f) any Subsidiary of the Borrower may merge with and into, or be
dissolved or liquidated into, the Borrower, so long as (i) the Borrower is
the surviving corporation of any such merger, dissolution or liquidation
and (ii) the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets of such Subsidiary shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior to
such merger, dissolution or liquidation);
(g) any Subsidiary of the Borrower may merge with and into, or be
dissolved or liquidated into, any Wholly-Owned Domestic Subsidiary of the
Borrower, so long as (i) such Wholly-Owned Domestic Subsidiary is the
surviving corporation of any such merger, dissolution or liquidation and
(ii) the security interests granted to the Collateral Agent for the benefit
of the Secured Creditors pursuant to the Security Documents in the assets
of such Subsidiary shall remain in full force
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and effect and perfected (to at least the same extent as in effect
immediately prior to such merger, dissolution or liquidation);
(h) the Borrower and its Subsidiaries may sell or exchange specific
items of equipment, so long as the purpose of each such sale or exchange is
to acquire (and results within 90 days of such sale or exchange in the
acquisition of) replacement items of equipment which are the functional
equivalent of the item of equipment so sold or exchanged;
(i) the Borrower shall be permitted to make Permitted Acquisitions,
so long as such Permitted Acquisitions are effected in accordance with the
requirements of Section 8.14;
(j) the Acquisition shall be permitted in accordance with the
requirements of Section 5.08 and the component definitions contained
therein;
(k) sales of Excess Inventory (whether or not in the ordinary course
of business) shall be permitted for cash at fair market value (as
determined in good faith by the Borrower); and
(l) Tri-Star Holdings may contribute assets to the Borrower from time
to time (each a "Tri-Star Holdings Asset Contribution") in satisfaction, to
the extent of the value of the assets received, of the Intercompany Note
representing the Intercompany Acquisition Loans and/or as a contribution to
the capital of the Borrower.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 9.02, such Collateral
(unless transferred to the Borrower or a Subsidiary thereof) shall be sold or
otherwise disposed of free and clear of the Liens created by the Security
Documents and the Agent shall take such actions (including, without limitation,
directing the Collateral Agent to take such actions) as are appropriate in
connection therewith.
9.03 LIENS. Parent will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of Parent or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable or notes with recourse to Parent or any
of its Subsidiaries) or assign any right to receive income, except for the
following (collectively, the "Permitted Liens"):
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(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens arising in the ordinary course of
business, and which either (x) do not in the aggregate materially detract
from the value of such property or assets or materially impair the use
thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the Security
Documents;
(d) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Annex IX, without
giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 10.09,
PROVIDED that no cash or other property shall be pledged by Parent or any
of its Subsidiaries as security therefor;
(f) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business of the Borrower and its
Subsidiaries in connection with workers' compensation, unemployment
insurance and other types of social security, (y) to secure the performance
by the Borrower and its Subsidiaries of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds,
statutory bonds, bids, leases, government contracts, trade contracts;
performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (z) to
secure the performance by the Borrower and its Subsidiaries of leases of
Real Property, to the extent incurred or made in the ordinary course of
business consistent with past practices, PROVIDED that the aggregate amount
of deposits at any time pursuant to sub-clause (y) and sub-clause (z) shall
not exceed $250,000 in the aggregate;
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(g) licenses, leases or subleases granted to third Persons in the
ordinary course of business not interfering in any material respect with
the business of the Borrower or any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances, in each
case not securing Indebtedness and not interfering in any material respect
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(j) Liens created pursuant to Capital Leases permitted pursuant to
Section 9.04(d), PROVIDED that (x) such Liens only serve to secure the
payment of Indebtedness arising under such Capitalized Lease Obligation and
(y) the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of the Borrower or any of its
Subsidiaries;
(k) Permitted Encumbrances;
(l) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 30 days after the respective
purchase) of assets acquired after the Initial Borrowing Date, PROVIDED
that (i) any such Liens attach only to the assets so purchased, (ii) the
Indebtedness secured by any such Lien does not exceed 100%, nor is less
than 80%, of the lesser of the fair market value or the purchase price of
the property being purchased at the time of the incurrence of such
Indebtedness and (iii) the Indebtedness secured thereby is permitted to be
incurred pursuant to Section 9.04(d);
(m) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, PROVIDED that (i) any Indebtedness that is secured by such
Liens is permitted to exist under Section 9.04(f), and (ii) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries;
(n) restrictions imposed in the ordinary course of business and
consistent with past practices on the sale or distribution' of designated
inventory pursuant to agreements with customers under which such inventory
is consigned by the customer or such inventory is designated for sale to
one or more customers; and
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(o) liens on common stock of Parent or options to purchase common
stock of Parent securing Shareholder Subordinated Notes, as provided
pursuant to clause (i) of Section 9.16.
9.04 INDEBTEDNESS. Parent will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Annex IV, without giving effect to any subsequent extension,
renewal or refinancing thereof;
(c) Indebtedness under Interest Rate Protection Agreements entered
into to protect the Borrower against fluctuations in interest rates in
respect of the Obligations otherwise permitted under this Agreement;
(d) Capitalized Lease Obligations and Indebtedness of the Borrower
and its Subsidiaries representing purchase money Indebtedness secured by
Liens permitted pursuant to Section 9.03(1), PROVIDED, that (i) all such
Capitalized Lease Obligations are permitted under Section 9.08, and (ii)
the sum of (x) the aggregate Capitalized Lease Obligations outstanding at
any time plus (y) the aggregate principal amount of such purchase money
Indebtedness outstanding at such time shall not exceed $750,000;
(e) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05(f), and Indebtedness of Tri-Star Holdings
constituting Intercompany Acquisition Loans to the extent permitted by
Section 9.05(1);
(f) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition
of an asset securing such Indebtedness) (the "Permitted Acquired Debt");
PROVIDED that such Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition;
(g) Indebtedness of the Parent under Shareholder Subordinated Notes
issued pursuant to the Management Stockholders' and Optionholders'
Agreement and permitted under Section 9.16, and the odyssey Convertible
Note; provided that the indebtedness pursuant to the Odyssey Convertible
Note shall not be permitted beyond the 90th day following the Initial
Borrowing Date; and
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(h) additional Indebtedness of the Borrower and its Subsidiaries not
otherwise permitted hereunder not exceeding $100,000 in aggregate principal
amount at any time outstanding.
9.05 ADVANCES; INVESTMENTS; LOANS. Parent will not, and will not permit
any of its Subsidiaries to, lend money or extend credit or make advances to
any Person, or purchase or acquire any stock, obligations or securities of,
or any other interest in, or make any capital contribution to, any Person, or
purchase or own a futures contract or otherwise become liable for the
purchase or sale of currency or other commodities at a future date in the
nature of a futures contract, or hold any cash or Cash Equivalents, except:
(a) Parent and its Subsidiaries may hold or invest in cash and Cash
Equivalents, PROVIDED that during any time that Revolving Loans or
Swingline Loans are outstanding the aggregate amount of cash and Cash
Equivalents held by Parent and its Subsidiaries shall not exceed $1,500,000
for any period of three consecutive Business Days;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms (including the dating of receivables) of the Borrower or such
Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, Customers and suppliers arising in
the ordinary course of business;
(d) interest Rate Protection Agreements entered into in compliance
with Section 9.04(c) shall be permitted;
(e) advances, loans and investments in existence on the Initial
Borrowing Date and listed on Annex VI shall be permitted, without giving
effect to any additions thereto or replacements thereof;
(f)(i) the Borrower may make intercompany loans and advances to any
Subsidiary Guarantor, (ii) any Subsidiary Guarantor may make intercompany
loans and advances to the Borrower or any other Subsidiary Guarantor and
(iii) the Borrower may make intercompany loans to the Parent for the
purpose of making payments permitted pursuant to Section 9.06(ii) (loans
pursuant to clauses (i) (ii) and (iii) of this clause (f) collectively,
"Intercompany Loans"), PROVIDED, that (x) each Intercompany Loan shall be
evidenced by an Intercompany Note and (y) each
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such Intercompany Note shall be pledged to the Collateral Agent pursuant
to the Pledge Agreement;
(g) loans and advances by the Borrower and its Subsidiaries to
employees of Parent and its Subsidiaries for moving and travel expenses and
other similar expenses, in each case incurred in the ordinary course of
business, in an aggregate outstanding principal amount not to exceed
$500,000 at any time (determined without regard to any write-downs or
write-offs of such loans and advances), shall be permitted; PROVIDED that
up to $300,000 at any time of such outstanding principal amount may
constitute loans to employees for purposes of exercising rights to purchase
common stock of Parent and/or to make payments with respect to any tax
liabilities.
(h) Parent may acquire and hold obligations of one or more officers
or other employees of Parent or its Subsidiaries in connection with such
officers' or employees' acquisition of shares of Parent Common Stock, so
long as no cash is actually advanced by Parent or any of its Subsidiaries
to such officers or employees in connection with the acquisition of any
such obligations;
(i) (x) Parent, Holdings, and Tri-Star Holdings may make equity
contributions, directly in the case of Tri-Star Holdings, or by way of
downstream contributions in the case of Parent and or Holdings to the
capital of the Borrower and (y) Tri-Star Holdings may make Tri-Star
Holdings Asset Contributions;
(j) the Borrower may make Permitted Acquisitions in accordance with
the relevant requirements of Section 8.14 and the component definitions as
used therein;
(k) Parent and its Subsidiaries may own the capital stock of their
respective Subsidiaries created or acquired in accordance with the terms of
this Agreement;
(l) the Borrower may make intercompany loans (collectively, the
"Intercompany Acquisition Loans") to enable Tri-Star Holdings to pay the
merger consideration owing pursuant to the Merger Agreement, so long as (x)
Tri-Star Holdings utilizes all of the proceeds of such loans to consummate
the merger pursuant to the Merger Agreement and (y) such loans are
extinguished, to the extent of the value of the assets contributed,
immediately following any Tri-Star Holdings Asset Contribution;
(m) the Borrower may make investments in Wholly Owned Foreign
Subsidiaries which are not Subsidiary Guarantors not to exceed $10,000,000
in the aggregate, net of any repayments to the Borrower; and
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(n) in addition to investments permitted by clauses (a) through (m)
of this Section 9.05, the Borrower and its Subsidiaries may make additional
loans, advances and investments to or in a Person not an Affiliate in an
aggregate amount for all loans, advances and investments made pursuant to
this clause (n) (determined without regard to any write-downs or write-offs
thereof), net of cash repayments of principal in the case of loans and cash
equity returns (whether as a dividend or redemption) in the case of equity
investments, not to exceed $100,000.
9.06 DIVIDENDS: ETC. Parent will not, and will not permit any of its
Subsidiaries to, declare or pay any dividends (other than dividends payable
solely in common stock of Parent or any such Subsidiary, as the case may be)
or return any capital to, its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders as
such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital
stock, now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or set aside any funds
for any of the foregoing purposes, and Parent will not permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of Parent or any other Subsidiary, as the case
may be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends to the Borrower
or any Wholly-Owned Subsidiary of the Borrower;
(ii) Parent may redeem or purchase shares of Parent Common Stock or
options to purchase Parent Common Stock, as the case may be, held by former
employees of Parent or any of its Subsidiaries (or corporations owned by
former employees) following the termination of their employment, provided
that (w) the only consideration paid by Parent in respect of such
redemptions and/or purchases shall be cash and Shareholder Subordinated
Notes, (x) the sum of (A) the aggregate amount paid by Parent in cash in
respect of all such redemptions and/or purchases plus (B) the aggregate
amount of all cash payments made on Shareholder Subordinated Notes shall
not exceed $150,000 in any fiscal year of Parent, and (y) at the time of
any cash payment permitted to be made pursuant to this Section 9.06(ii),
including any cash payment under a Shareholder Subordinated Note, no
Default or Event of Default shall then exist or result therefrom;
(iii) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may pay cash Dividends to Tri-Star Holdings,
which in turn shall pay such amounts to Holdings, which in turn shall pay
such amounts to
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Parent, so long as the cash proceeds thereof are promptly used by Parent
for the purposes described in clause (ii) or (v) of this Section 9.06;
(iv) cash Dividends may be paid to Tri-Star Holdings, Holdings and/or
Parent so long as the cash proceeds thereof are promptly used by the
ultimate recipient thereof to pay operating expenses in the ordinary course
of business (including, without limitation, professional fees and expenses)
and other similar corporate overhead costs and expenses, PROVIDED, that the
aggregate amount of cash Dividends paid pursuant to this clause (iv)
(calculated without duplication in the case of amounts not Dividended to
Holdings or the Parent) shall at no time during any fiscal year of the
Borrower exceed $200,000; and
(v) cash Dividends may be paid to Parent, Holdings and Tri-Star
Holdings in the amounts and at the times of any payment by the ultimate
such recipient in respect of its taxes (or taxes of the consolidated group
of which it is Parent), PROVIDED, that (x) the amount of cash Dividends
paid pursuant to this clause (v) to enable Parent, Holdings or Tri-Star
Holdings to pay taxes at any time shall not exceed the amount of such taxes
owing by the ultimate such recipient at such time for the respective period
and (y) any refunds received by Parent, Holdings or Tri-Star Holdings shall
promptly be returned by such Person to the Borrower.
9.07 TRANSACTIONS WITH AFFILIATES. Parent will not, and will not permit
any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate other than on terms and conditions
substantially as favorable to Parent or such Subsidiary as would be
reasonably expected to be obtainable by Parent or such Subsidiary at the time
in a comparable arm's-length transaction with a Person other than an
Affiliate; PROVIDED, that the following shall in any event be permitted: (i)
the Transaction; (ii) intercompany transactions among Parent and its
Subsidiaries to the extent expressly permitted by Sections 8.19, 9.02, 9.04,
9.05 and 9.06; (iii) the Employment Agreements, (iv) the Maple Leaf Aerospace
Bonus Plan and (v) so long as no Default or Event of Default exists or would
result therefrom, Odyssey may be paid a management fee of up to $250,000 per
fiscal year of the Borrower, beginning with the fiscal year commencing
October 1, 1997. In no event shall any management, consulting or similar fee
be paid or payable by Parent or any of its Subsidiaries to any Affiliate
(other than the Borrower) except as specifically provided in clause (v) of
this Section 9.07.
9.08 CAPITAL EXPENDITURES. (a) (i) Parent will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures, except that during
any fiscal year of the Borrower beginning on or after October 1, 1996 (taken
as one accounting period), the Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of such Capital Expenditures
does not exceed $2,000,000 for any such fiscal year and (ii) in addition to
Capital Expenditures made pursuant to clause (i) above, during the
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period commencing on the initial Borrowing Date through and including the
Final Maturity Date, the Borrower and its Subsidiaries may make additional
Capital Expenditures not to exceed, in the aggregate, $1,000,000.
(b) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make additional Capital Expenditures (which Capital Expenditures will not
be included in any determination under Section 9.08(a)) with the Net Sale
Proceeds of Asset Sales to the extent such proceeds are not required to be
applied to repay Term Loans (or reduce the Total Revolving Loan Commitment)
pursuant to the second proviso to Section 4.02(c) and such proceeds are
reinvested as required by Section 4.02(c).
(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make additional Capital Expenditures (which Capital Expenditures will not
be included in any determination under Section 9.08(a)) with the insurance
proceeds received by the Borrower or any of its Subsidiaries from any
Recovery Event so long as such Capital Expenditures are to replace or restore
any properties or assets in respect of which such proceeds were paid within
one year following the date of the receipt of such insurance proceeds to the
extent such insurance proceeds are not required to be applied to repay Term
Loans (or reduce the Total Revolving Loan Commitment) pursuant to Section
4.02(f).
(d) Notwithstanding the foregoing, the Borrower may make additional
Capital Expenditures (which Capital Expenditures will not be included in any
determination under Section 9.08(a)) constituting Permitted Acquisitions
effected in accordance with the requirements of Section 8.14.
9.09 MINIMUM CONSOLIDATED EBITDAR. Parent will not permit Consolidated
EBITDAR for any Test Period ended on the last day of a fiscal quarter
described below to be less than the respective amount set forth opposite such
period below:
FISCAL
QUARTER ENDED
CLOSEST TO AMOUNT
------------- ------
March 31, 1997 $12,900,000
June 30, 1997 $14,000,000
September 30, 1997 $15,500,000
December 31, 1997 $17,400,000
March 31, 1998 $18,400,000
June 30, 1998 $19,500,000
September 30, 1998 $20,700,000
December 31, 1998 $22,100,000
March 31, 1999 $23,200,000
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June 30, 1999 $24,400,000
September 30, 1999 $25,600,000
December 31, 1999 $26,800,000
March 31, 2000 $28,200,000
June 30, 2000 $29,600,000
September 30, 2000 $30,900,000
December 31, 2000 $32,300,000
March 31, 2001 $33,800,000
June 30, 2001 $35,400,000
September 30, 2001 $36,900,000
December 31, 2001 $38,500,000
March 31, 2002 $38,500,000
June 30, 2002 $38,500,000
September 30, 2002 $38,500,000
December 31, 2002 $38,500,000
and the last day of each fiscal
quarter ended thereafter
9.10 CONSOLIDATED INTEREST COVERAGE RATIO. Parent will not permit the
Consolidated Interest Coverage Ratio for any Test Period ending on the last
day of a fiscal quarter described below to be less than the ratio set forth
opposite such period below:
FISCAL PERIOD
ENDED CLOSEST TO RATIO
---------------- -----
March 31, 1997 2.60:1.00
June 30, 1997 2.80:1.00
September 30, 1997 2.90:1.00
December 31, 1997 3.10:1.00
March 31, 1998 3.30:1.00
June 30, 1998 3.50:1.00
September 30, 1998 3.50:1.00
December 31, 1998 3.50:1.00
March 31, 1999 3.50:1.00
June 30, 1999 3.50:1.00
September 30, 1999 3.50:1.00
December 31, 1999 3.50:1.00
March 31, 2000 3.50:1.00
June 30, 2000 3.50:1.00
September 30, 2000 3.50:1.00
December 31, 2000 3.50:1.00
March 31, 2001 3.50:1.00
June 30, 2001 3.50:1.00
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September 30, 2001 3.50:1.00
December 31, 2001 3.50:1.00
March 31, 2002 3.50:1.00
June 30, 2002 3.50:1.00
September 30, 2002 3.50:1.00
December 31, 2002 3.50:1.00
and the last day of each
fiscal quarter ended
thereafter
9.11 LEVERAGE RATIO. Parent will not permit the Leverage Ratio at any
date specified below to exceed the respective ratio set forth opposite such
date below:
DATE RATIO
---- -----
March 31, 1997 4.375:1.00
June 30, 1997 4.375:1.00
September 30, 1997 4.20:1.00
December 31, 1997 4.00:1.00
March 31, 1998 4.00:1.00
June 30, 1998 3.80:1.00
September 30, 1998 3.60:1.00
December 31, 1998 3.60:1.00
March 31, 1999 3.40:1.00
June 30, 1999 3.20:1.00
September 30, 1999 3.10:1.00
December 31, 1999 2.90:1.00
March 31, 2000 2.80:1.00
June 30, 2000 2.70:1.00
September 30, 2000 2.5:1.00
December 31, 2000 2.5:1.00
March 31, 2001 2.5:1.00
June 30, 2001 2.5:1.00
September 30, 2001 2.5:1.00
December 31, 2001 2.5:1.00
March 31, 2002 2.5:1.00
June 30, 2002 2.5:1.00
September 30, 2002 2.5:1.00
December 31, 2002 2.5:1.00
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by the Pledge Agreement, be delivered to the Collateral Agent for pledge
pursuant to the Pledge Agreement.
9.14 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. Parent will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective, any
encumbrance or restriction on the ability of any such Subsidiary to (x) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Parent or any Subsidiary of
Parent, or pay any Indebtedness owed to Parent or a Subsidiary of Parent, (y)
make loans or advances to Parent or any Subsidiary of Parent or (z) transfer
any of its properties or assets to Parent or any of its Subsidiaries, except
for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii) the
provisions contained in the Existing Indebtedness, (iv) customary provisions
restricting subletting or assignment of any lease governing a leasehold
interest of the Borrower or a Subsidiary of the Borrower and (v) customary
provisions restricting assignment of any licensing agreement entered into by
the Borrower or any Subsidiary of the Borrower in the ordinary course of
business.
9.15 LIMITATION ON THE CREATION OF SUBSIDIARIES AND JOINT VENTURES. (a)
Notwithstanding anything to the contrary contained in this Agreement, Parent
will not, and will not permit any of its Subsidiaries to, establish, create
or acquire after the Effective Date any Subsidiary; PROVIDED that, the (A)
Borrower and its Wholly-Owned Subsidiaries shall be permitted to establish or
create Wholly-Owned Subsidiaries so long as, in each case, (i) at least 15
days' prior written notice thereof is given to the Agent (or such shorter
period of time as is acceptable to the Agent), (ii) the capital stock of such
new Subsidiary is promptly pledged pursuant to, and to the extent required
by, this Agreement and the Pledge Agreement and the certificates, if any,
representing such stock, together with stock powers duly executed in blank,
are delivered to the Collateral Agent, (iii) such new Subsidiary (other than
a Foreign Subsidiary except to the extent otherwise required pursuant to
Section 8.12) promptly executes a counterpart of the Subsidiaries Guaranty,
the Pledge Agreement and the Security Agreement, and (iv) to the extent
requested by the Agent or the Required Banks, takes all actions required
pursuant to Section 8.11, (B) Subsidiaries may be acquired pursuant to
Permitted Acquisitions so long as, in each such case (i) with respect to each
Wholly-Owned Subsidiary acquired pursuant to a Permitted Acquisition, the
actions specified in preceding clause (A) shall be taken and (ii) with
respect to each Subsidiary which is not a Wholly-Owned Subsidiary and is
acquired pursuant to a Permitted Acquisition, all capital stock thereof owned
by any Credit Party shall be pledged pursuant to the Pledge Agreement and (c)
the Borrower may acquire Subsidiaries from Tri-Star Holdings as a result of
Tri-Star Holdings Asset Contributions. In addition, each new Subsidiary that
is required to execute any Credit Document shall execute and deliver, or
cause to be executed and delivered, all other relevant documentation of the
type described
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9.12 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS; MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND
CERTAIN OTHER AGREEMENTS; ISSUANCES OF CAPITAL STOCK; ETC. Parent will not,
and will not permit any of its Subsidiaries to:
(i) amend or modify, or permit the amendment or modification of, any
provision of the Existing Indebtedness (other than Intercompany Loans, it
being understood that no changes may be made to the terms and conditions of
any Intercompany Note without the consent of the Required Banks) or of any
agreement (including, without limitation, any purchase agreement,
indenture, loan agreement, or security agreement) relating thereto;
(ii) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption, repurchase or acquisition
for value of any of the Existing Indebtedness (other than Intercompany
Loans); or
(iii) amend, modify or change in any way adverse to the interests of
the Bank any Tax Allocation Agreement, any Management Agreement, any Equity
Financing Document, any Acquisition Document, its Certificate of
Incorporation (including, without limitation, by the filing or modification
of any certificate of designation), By-Laws, or any agreement entered into
by it, with respect to its capital stock (including any Shareholders'
Agreement), or enter into any new Tax Allocation Agreement, Management
Agreement or agreement with respect to its capita! stock (other than the
Stock Option Plan) which could in any way be adverse (or in the case of
Management Agreements, materially adverse) to the interests of the Banks.
9.13 LIMITATION ON ISSUANCE OF CAPITAL STOCK. (a) Parent will not, and
will not permit any of its Subsidiaries to, issue (i) any preferred stock (or
any options, warrants or rights to purchase preferred stock) or (ii) any
redeemable common stock unless, in either case, the issuance thereof is, and
all terms thereof are, satisfactory to the Required Banks in their sole
discretion.
(b) Parent shall not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital
stock, (ii) for stock splits, stock dividends and additional issuances which
do not decrease the percentage ownership of Parent or any of its Subsidiaries
in any class of the capital stock of such Subsidiaries, (iii) to qualify
directors to the extent required by applicable law and (iv) Subsidiaries
formed after the Effective Date pursuant to Section 9.15 may issue capital
stock in accordance with the requirements of Section 9.15. All capital stock
issued in accordance with this Section 9.13(b) shall, to the extent required
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in Section 5 as such new Subsidiary would have had to deliver if such new
Subsidiary were a Credit Party on the Initial Borrowing Date.
(b) Parent will not, and will not permit any of its Subsidiaries to,
enter into any partnerships or joint ventures.
9.16 SHAREHOLDER SUBORDINATED NOTES; ODYSSEY CONVERTIBLE NOTE. (a)
Parent will not, and will not permit any of its Subsidiaries, to issue any
Shareholder Subordinated Note except in payment for purchases of common stock
or options to purchase common stock of the Parent pursuant to the Management
Stockholders' and Optionholders' Agreement, in each case in accordance with
the provisions of Section 4.2 thereof. In connection with repurchases
pursuant to said Section 4.2 of the Management Stockholders' and
Optionholders' Agreement, except as permitted by Section 9.06(ii), no portion
of the purchase price shall be paid in cash and the entire portion not so
paid in cash shall be paid through the issuance of one or more Shareholder
Subordinated Notes of the Parent. In connection with the issuance of such
Shareholder Subordinated Notes, it is understood and agreed that,
notwithstanding anything to the contrary contained in this Agreement, (i) the
respective Shareholder Subordinated Note may be secured by (and only by) a
pledge of the repurchased shares of common stock of the Parent, (ii) no
acceleration of any payments owing pursuant to any Shareholder Subordinated
Note shall be permitted so long as the covenants contained in this Section 9
remain in effect as provided in the introductory paragraph of Section 9 and
(iii) all cash payments with respect to the Shareholder Subordinated Notes
(including without limitation cash payments of principal and interest) shall
be limited to the amounts permitted to be paid pursuant to the provisions of
clause (ii) of Section 9.06 of this Agreement.
(b) The Odyssey Subordinated Note shall not be amended and all payments
thereon shall be limited in form and amount to those permitted under the
proviso to the definition thereof.
SECTION 10. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each, an "Event of Default"):
10.01 PAYMENTS. The Borrower shall (i) default in the payment when due
of any principal of the Loans or (ii) default, and such default shall
continue for three or more days, in the payment when due of any Unpaid
Drawing, any interest on the Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document; or
10.02 REPRESENTATIONS. ETC. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
statement or certificate delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed
made; or
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10.03 COVENANTS. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained
in Sections 8.01(f)(i), 8.10, 8.13, 8.14 or 9, or (b) default in the due
performance or observance by it of any term, covenant or agreement (other
than those referred to in Section 10.01, 10.02 or clause (a) of this Section
10.03) contained in this Agreement and such default shall continue unremedied
for a period of at least 30 days after notice to the defaulting party by the
Agent or the Required Banks; or
10.04 DEFAULT UNDER OTHER AGREEMENTS. (a) Parent or any of its
Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which Indebtedness was created
or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity; or (b) any
Indebtedness (other than the Obligations) of Parent or any of its
Subsidiaries shall be declared to be due and payable, or shall be required to
be prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment (unless such required prepayment or mandatory prepayment
results from a default thereunder or an event of the type that constitutes an
Event of Default), prior to the stated maturity thereof; PROVIDED, that it
shall not constitute an Event of Default pursuant to clause (a) or (b) of
this Section 10.04 unless the principal amount of any one issue of such
Indebtedness, or the aggregate amount of all such Indebtedness referred to in
clauses (a) and (b) above, exceeds $500,000 at any one time; or
10.05 BANKRUPTCY, ETC, Parent or any of its Subsidiaries shall commence
a voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
Parent or any of its Subsidiaries and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case;
or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of Parent or any of its
Subsidiaries; or Parent or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Parent or any of
its Subsidiaries; or there is commenced against Parent or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or Parent or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Parent or any of
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its Subsidiaries suffers any appointment of any custodian or the like for it
or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or Parent or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by
Parent or any of its Subsidiaries for the purpose of effecting any of the
foregoing; or
10.06 ERISA. (a) (i) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, (ii) any
Plan which is subject to Title IV of ERISA shall have had or is likely to
have a trustee appointed to administer such Plan, any Plan which is subject
to Title IV of ERISA is, shall have been or is likely to be terminated or to
be the subject of termination proceedings under ERISA, (iii) any Plan shall
have an Unfunded Current Liability, (iv) a contribution required to be made
with respect to a Plan or a Foreign Pension Plan has not been timely made,
(v) Parent or any Subsidiary of Parent or any ERISA Affiliate has incurred or
is likely to incur any liability to or on account of a Plan under Section
409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA
or Section 401(a)(29), 4971 or 4975 of the Code or on account of a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) under Section 4980B of the Code, or (vi) Parent or any Subsidiary
of Parent has incurred or is likely to incur liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1) of ERISA)
that provide benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or Plans or Foreign Pension Plans;
(b) there shall result from any such event or events as described in
subsection (a) of this section the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a
liability; and (c) such lien, security interest or liability, individually,
and/or in the aggregate, in the opinion of the Required Banks, has had, or
could reasonably be expected to have, a Material Adverse Effect; or
10.07 SECURITY DOCUMENTS. (a) Except in each case to the extent
resulting from the failure of the Collateral Agent to retain possession of
the applicable Pledged Securities, any Security Document shall cease to be in
full force and effect, or shall cease to give the Collateral Agent the Liens,
rights, powers and privileges purported to be created thereby in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.03), and subject to no other Liens (except
as permitted by Section 9.03), or (b) any Credit Party shall default in the
due performance or observance of any term, covenant or agreement on its part
to be performed or observed pursuant to any such Security Document and such
default shall continue beyond any cure or grace period specifically
applicable thereto pursuant to the terms of any such Security Document; or
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10.08 GUARANTIES. The Guaranties or any provision thereof shall cease to
be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under any Guaranty or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any Guaranty; or
10.09 JUDGMENTS. One or more judgments or decrees shall be entered
against Parent or any of its Subsidiaries involving a liability (to the
extent not paid or not fully covered by insurance) in excess of $500,000 for
all such judgments and decrees and all such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
10.10 OWNERSHIP. A Change of Control Event shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent shall, upon the written request
of the Required Banks, by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of the Agent or any
Bank to enforce its claims against any Guarantor or the Borrower, except as
otherwise specifically provided for in this Agreement (PROVIDED, that if an
Event of Default specified in Section 10.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by
the Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Bank shall forthwith
terminate immediately and any Commitment Fees shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and all Obligations owing
hereunder (including Unpaid Drawings) to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any
or all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; (v) direct the Borrower to pay (and the Borrower
hereby agrees upon receipt of such notice, or upon the occurrence of any
Event of Default specified in Section 10.05, to pay) to the Collateral Agent
at the Payment Office such additional amounts of cash, to be held as security
for the Borrower's reimbursement obligations in respect of Letters of Credit
then outstanding, equal to the aggregate Stated Amount of all Letters of
Credit then outstanding; and (vi) apply any cash collateral as provided in
Section 4.02.
SECTION 11. DEFINITIONS. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms in this Agreement shall include in the singular number the plural and
in the plural the singular:
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"Acquired Business" shall mean all of the businesses acquired by
Tri-Star Holdings and its Subsidiaries from the former shareholders of
Tri-Star Aerospace and its Subsidiaries and Aviall and Aviall Canada pursuant
to the Acquisition Documents.
"Acquisition" shall mean (i) the acquisition by Tri-Star Holdings of
100% of the equity interests in Tri-Star Aerospace as a result of the merger
pursuant to the Merger Agreement and (ii) the acquisition by the Borrower of
certain assets and liabilities of Aviall and Aviall Canada, in each case
pursuant to, and in accordance with the terms of, the Acquisition Documents.
"Acquisition Agreements" shall mean, collectively, (i) the Asset
Purchase Agreement and (ii) the Merger Agreement.
"Acquisition Documents" shall mean the Acquisition Agreements and all
other agreements and documents relating to the Acquisition.
"Additional Security Documents" shall have the meaning provided in
Section 8.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market
as published in the most recent Federal Reserve System publication entitled
"Select Interest Rates," published weekly on Form H.15 as of the date hereof,
or if such publication or a substitute containing the foregoing rate
information shall not be published by the Federal Reserve System for any
week, the weekly average offering rate determined by the Agent on the basis
of quotations for such certificates received by it from three certificate of
deposit dealers in New York of recognized standing or, if such quotations are
unavailable, then on the basis of other sources reasonably selected by the
Agent, by (y) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily
net annual assessment rate as estimated by the Agent for determining the
current annual assessment payable by BTCo to the Federal Deposit Insurance
Corporation for insuring three month certificates of deposit.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all Excess Inventory)
less Consolidated Current Liabilities.
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"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person; PROVIDED, HOWEVER, that for
purposes of Section 9.07, an Affiliate of the Borrower shall include any
Person that directly or indirectly owns more than 5% of any class of the
capital stock of the Borrower and any officer or director of the Borrower or
any such Person.
"Agent" shall have the meaning provided in the first paragraph of this
Agreement and shall include any successor to the Agent appointed pursuant to
Section 12.10.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"Applicable Excess Cash Flow Percentage" shall mean, with respect to any
Excess Cash Flow Payment Date, the percentage set forth below opposite the
Leverage Ratio as determined on the last day of the respective Excess Cash
Flow Payment Period:
Applicable Excess Cash
Leverage Ratio Flow Percentage
-------------- ----------------------
Greater than 3.0:1.0 75%
Greater than 2.5:1.0 50%
but less than or equal to 3.0:1.0
Greater than 2.0:1.0 25%
but less than or equal to 2.5:1.0
Less than or equal to 2.0:1.0 0%
; provided, that the Leverage Ratio shall be determined for the relevant
Excess Cash Flow Payment Period by delivery of an officer's certificate of
the Borrower to the Banks, which certificate shall be signed by an Authorized
Officer of the Borrower and set forth the calculations required to establish
the Leverage Ratio. Notwithstanding anything to the contrary contained
above, the Applicable Excess Cash Flow Percentage shall be 75% (i) if no
officer's certificate has been delivered to the Banks on or prior to the
respective Excess Cash Flow Payment Date as required by this definition and
(ii) at all times when there shall exist a Default under Section 10.01 or
10.05 or any Event of Default.
"Applicable Margin" shall mean a percentage per annum equal to (i) in
the case of Revolving Loans (x) maintained as Base Rate Loans, 1.50% and (y)
maintained as Eurodollar Loans, 2.50% and (ii) in the case of Term Loans (x)
maintained as Base Rate Loans, 2.00% and (y) maintained as Eurodollar Loans,
3.00%.
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"Asset Purchase Agreement" shall mean the Asset Purchase Agreement,
dated September 5, 1996, among Parent, Aviall Canada and Aviall, as the same
may be amended, modified or supplemented from time to time in accordance with
the terms hereof and thereof.
"Asset Sale" shall mean any sale, transfer or other disposition by
Parent or any of its Subsidiaries to any Person other than Parent or any
Wholly Owned Subsidiary of Parent of any asset (including, without
limitation, any capital stock or other securities of another Person, but
excluding the sale by such Person of its own capital stock) of Parent or such
Subsidiary other than (i) sales, transfers or other dispositions of inventory
made in the ordinary course of business, (ii) sales of assets pursuant to
Section 9.02(h) and (iii) sales of Excess Inventory pursuant to Section
9.02(k).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Assumption Agreement" shall mean the Assumption Agreement, in the form
of Exhibit N, to be executed by Tri-Star Aerospace, Inc. on the Initial
Borrowing Date after the consummation of the Merger.
"Authorized Officer" shall mean, with respect to (i) delivering Notices
of Borrowing, Notices of Conversion, Letter of Credit Requests and similar
notices, and delivering financial information and officer's certificates
pursuant to this Agreement, any treasurer or other financial officer of the
Borrower and (ii) any other matter in connection with this Agreement or any
other Credit Document, any officer (or a person or persons so designated by
any two officers) of Parent or the Borrower, in each case to the extent
reasonably acceptable to the Agent.
"Aviall" shall mean Aviall Services Inc., a Delaware corporation.
"Aviall Business" shall mean the Aviall business unit (including assets,
liabilities and personnel) acquired or to be acquired pursuant to the Asset
Purchase Agreement.
"Aviall Canada" shall mean Aviall (Canada) Ltd., a Canadian corporation
and a Wholly-Owned Subsidiary of Aviall.
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Bank Default" shall mean (i) the refusal (which has not been retracted)
of a Bank to make available its portion of any Borrowing (including any
Mandatory
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Borrowing) or to fund its portion of any unreimbursed payment under Section
2.03 or (ii) a Bank having notified the Agent and/or the Borrower that it
does not intend to comply with the obligations under Section 1.01(b), 1.01(d)
or 2.03, in the case of either clause (i) or (ii) above as a result of the
appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the highest of (x) the rate which is
1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate, (y) the rate
which is 1/2 of 1% in excess of the Federal Funds Rate and (z) the Prime
Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean and include (i) the borrowing of Swingline Loans
from BTCo on a given date and (ii) the borrowing of one Type of Loan pursuant
to a single Tranche by the Borrower from all of the Banks having Commitments
with respect to such Tranche on a PRO RATA basis on a given date (or
resulting from conversions on a given date), having in the case of Eurodollar
Loans the same Interest Period; PROVIDED, that Base Rate Loans incurred
pursuant to Section 1.10(b) shall be considered part of any related Borrowing
of Eurodollar Loans.
"Bourjeaurd" shall mean Xx. Xxxxxxx Xxxxxxxxxx, the President of Parent
and, prior to the Initial Borrowing Date, the general manager of the Aviall
Business.
"BTCo" shall mean Bankers Trust Company, in its individual capacity, and
any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by
and between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Calculation Period" shall have the meaning provided in Section 8.14.
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"Canadian Subsidiary" shall mean Tri-Star Aerospace (Canada) Ltd., an
Ontario corporation and Wholly Owned Subsidiary of the Borrower.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
GAAP, including all such expenditures with respect to fixed or capital assets
(including, without limitation, expenditures for maintenance and repairs
which should be capitalized in accordance with GAAP) and the amount of all
Capitalized Lease Obligations incurred by such Person.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"Capitalized Lease Obligations" shall mean, with respect to any Person,
all obligations under Capital Leases of such Person and or any of its
Subsidiaries in each case taken at the amount thereof accounted for as
liabilities in accordance with GAAP.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (PROVIDED that the full faith and credit of
the United States is pledged in support thereof) having maturities of not
more than six months from the date of acquisition, (ii) time deposits,
certificates of deposit and bankers' acceptances of any Bank or any
commercial bank having, or which is the principal banking subsidiary of a
bank holding company organized under the laws of the United States, any State
thereof, the District of Columbia or any foreign jurisdiction having capital,
surplus and undivided profits aggregating in excess of $500,000,000 and
having a long-term unsecured debt rating of at least "A" or the equivalent
thereof from S&P's or "A2" or the equivalent thereof from Xxxxx'x, with
maturities of not more than six months from the date of acquisition by such
Person, (iii) repurchase agreements with a term of not more than 30 days,
involving securities of the types described in preceding clause (i), and
entered into with commercial banks meeting the requirements of preceding
clause (ii), (iv) commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by S&P's or at
least P-1 or the equivalent thereof by Xxxxx'x and in each case maturing not
more than six months after the date of acquisition by such Person, (v)
investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (iv)
above and (vi) demand deposit accounts maintained in the ordinary course of
business.
"Change of Control Event" shall mean, at any time and for any reason
whatsoever, (a) Parent shall cease to own directly 100% on a fully diluted
basis of the economic and voting interest in Holdings' capital stock or (b)
Holdings shall cease to own directly 100% on a fully diluted basis of the
economic and voting interest in Tri-Star
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Holdings' capital stock or (c) Tri-Star Holdings shall cease to own directly
100% on a fully diluted basis of the economic and voting interest in the
Borrower's capital stock or (d) Odyssey and its Affiliates shall cease to own
on a fully diluted basis in the aggregate at least 30% of the economic and
voting interest in Parent's capital stock or (e) Odyssey and its Affiliates
and the Management Participants shall cease collectively to own on a fully
diluted basis in the aggregate at least 51% of the economic and voting
interest in Parent's capital stock or (f) any Person or "group" (within the
meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
as in effect on the Effective Date, other than Odyssey and its Affiliates and
the Management Participants, shall (A) have acquired beneficial ownership of
20% or more on a fully diluted basis of the voting and/or economic interest
in Parent's capital stock or (B) obtained the power (whether or not
exercised) to elect a majority of Parent's directors or (g) the Board of
Directors of Parent shall cease to consist of a majority of Continuing
Directors or (h) a "change of control" or similar event shall occur as
provided in any Existing Indebtedness Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of
this Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of the
Security Documents.
"Collateral Agent" shall mean the Agent acting as collateral agent for
the Secured Creditors.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.14.
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
"Consolidated Current Assets" shall mean, at any time, the current
assets (other than cash, Cash Equivalents and deferred income taxes to the
extent included in current assets) of Parent and its Subsidiaries at such
time determined on a consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time, the current
liabilities of Parent and its Subsidiaries determined on a consolidated
basis, but excluding deferred income taxes, restructuring costs or reserves,
litigation costs or reserves and the current portion of and accrued but
unpaid interest on any Indebtedness under this
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Agreement and any other long-term Indebtedness which would otherwise be
included therein.
"Consolidated Debt" shall mean, at any time, the sum of (without
duplication) (i) all Indebtedness of Parent and its Subsidiaries as would be
required to be reflected on the liability side of a balance sheet of such
Person in accordance with GAAP as determined on a consolidated basis, (ii)
all Indebtedness of Parent and its Subsidiaries of the type described in
clause (iii) of the definition of Indebtedness and (iii) all Contingent
Obligations of Parent and its Subsidiaries in respect of Indebtedness of
other Persons of the type referred to in preceding clauses (i) and (ii) of
this definition; PROVIDED, that for purposes of this definition, (i) the
amount of Indebtedness in respect of Interest Rate Protection Agreements
shall be at any time the unrealized net loss position, if any, of Parent
and/or its Subsidiaries thereunder on a marked-to market basis determined no
more than one month prior to such time and (ii) any preferred stock of Parent
or any of its Subsidiaries shall be treated as Indebtedness, with an amount
equal to the greater of the liquidation preference or the maximum fixed
repurchase price of any such outstanding preferred stock deemed to be a
component of Consolidated Debt.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of Tri-Star Holdings and its Subsidiaries, determined on a
consolidated basis, before Consolidated Interest Expense (to the extent
deducted in arriving at Consolidated Net Income) and provision for taxes
based on income or gains or losses from sales of assets other than inventory
sold in the ordinary course of business, in each case that were included in
arriving at Consolidated Net Income.
"Consolidated EBITDAR" shall mean, for any period, Consolidated EBIT,
adjusted by (i) adding thereto the amount of all amortization and
depreciation, in each case that were deducted in arriving at Consolidated
EBIT for such period and (ii) excluding therefrom the effects of any increase
or decrease in inventory reserves to the extent such respective change to
inventory reserves decreased or increased, as the case may be, Consolidated
EBIT for the respective period. To the extent Excess Inventory is sold for
cash at any time prior to September 30, 1999, an amount equal to 15% of the
cash proceeds so received from such sales of Excess Inventory shall be added
to Consolidated EBITDAR for the fiscal quarter in which the respective sale
occurs; provided that in no event shall the amount added to Consolidated
EBITDAR in any fiscal quarter pursuant to this sentence exceed $250,000 and,
to the extent the amount that would be added to Consolidated EBITDAR for any
fiscal quarter would exceed $250,000 in the absence of this proviso, such
excess amount may be carried forward to successive fiscal quarters ended on
or prior to September 30, 1999, so long as the maximum amount added to
Consolidated EBITDAR for any such fiscal quarter pursuant to this sentence
does not exceed $250,000; provided further that no amounts shall be added to
Consolidated EBITDAR pursuant to this sentence for any fiscal quarter ended
after September 30, 1999.
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"Consolidated Interest Coverage Ratio" for any period shall mean the
ratio of Consolidated EBITDAR to Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of Parent and its Subsidiaries for such period
(calculated without regard to any limitations on the payment thereof) plus,
without duplication, that portion of Capitalized Lease Obligations of Parent and
its Subsidiaries representing the interest factor for such period, and
capitalized interest expense, plus the amount of all cash Dividend requirements
(whether or not declared or paid) on preferred stock paid or accrued or
scheduled to be paid or accrued during such period, but excluding the
amortization of any deferred financing costs or of any costs in respect of any
Interest Rate Protection Agreement.
"Consolidated Net Income" shall mean, for any period, the net after
tax income of Parent and its Subsidiaries determined on a consolidated basis,
without giving effect to any extraordinary non-cash gains or non-cash losses,
any other non-cash expenses incurred or payments made in connection with the
Transaction, and without giving effect to net gains and losses from the sale or
disposition of assets (other than sales or dispositions of inventory, equipment,
raw materials and supplies) or Excess Inventory by the Borrower and its
Subsidiaries.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y)to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection or standard contractual indemnities entered into, in each
case in the ordinary course of business. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
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"Continuing Directors" shall mean the directors of Parent on the
Effective Date and each other director if such director's nomination for the
election to the Board of Directors of Parent is recommended by a majority of the
then Continuing Directors.
"Credit Documents" shall mean this Agreement, the Notes, the
Guaranties, each Security Document and the Assumption Agreement.
"Credit Event" shall mean the making of a Loan (other than a Revolving
Loan made pursuant to a Mandatory Borrowing) or the issuance of a Letter of
Credit.
"Credit Party" shall mean Parent, Holdings, Tri-Star Holdings,
Tri-Star Inventory Management Service, Inc., the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Designated Indebtedness" shall have the meaning provided in Section
5.09.
"Dividend" shall have the meaning provided in Section 9.06.
"Documents" shall mean the Credit Documents, the Acquisition
Documents, the Refinancing Documents and the Equity Financing Documents.
"Domestic Subsidiary" shall mean each Subsidiary of Parent
incorporated or organized in the United States or any State or territory
thereof.
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act).
"Employee Benefit Plans" shall have the meaning set forth in Section
5.14.
"Employment Agreements" shall have the meaning set forth in Section
5.14.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any violation (or alleged violation) by Parent or any of its
Subsidiaries under any Environmental Law (hereafter
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"Claims") or any permit issued to Parent or any of its Subsidiaries under any
such law, including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable federal, state or local
statute, law, rule, regulation, ordinance, code or rule of common law now or
hereafter in effect and in each case as amended, and any legally binding
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment (for purposes of this
definition (collectively, "Laws")), relating to the environment, or Hazardous
Materials or health and safety to the extent such health and safety issues
relate to the occupational exposure to Hazardous Materials, or any such similar
Laws.
"Equity Financing" shall mean the issuance by Parent of Parent Common
Stock to the Equity Investors on the Initial Borrowing Date, or in the case of
certain Management Participants (or Odyssey, in connection with the conversion
of the Odyssey Convertible Note), within 90 days thereafter.
"Equity Financing Documents" shall mean all of the agreements
governing, or relating to, the Equity Financing.
"Equity Investors" shall mean and include (i) Odyssey and its
Affiliates, (ii) Bourjeaurd (iii) the Management Participants and (iv) BT
Investment Partners, Inc.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Parent or a Subsidiary of the Parent would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of Parent or a Subsidiary of Parent
being or having been a general partner of such person.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
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"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/100 of
1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by BTCo for U.S. dollar deposits of amounts in same day funds comparable
to the outstanding principal amount of the Eurodollar Loan of BTCo for which an
interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such Eurodollar Loan, determined as of 10:00
A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
the sum of (i) Consolidated Net Income for such period, and (ii) the decrease,
if any, in Adjusted Consolidated Working Capital from the first day to the last
day of such period, minus (b) the sum of (i) the amount of Capital Expenditures
made by the Borrower and its Subsidiaries on a consolidated basis during such
period pursuant to and in accordance with Sections 9.08(a) and (d), except to
the extent financed with the proceeds of Indebtedness or pursuant to Capitalized
Lease Obligations, (ii) the aggregate amount of permanent principal payments of
Indebtedness for borrowed money of the Borrower and its Subsidiaries and the
permanent repayment of the principal component of Capitalized Lease Obligations
of the Borrower and its Subsidiaries (excluding (1) payments with proceeds of
asset sales, (2) payments with the proceeds of Indebtedness or equity and (3)
payments of Loans or other Obligations, PROVIDED that repayments of Loans shall
be deducted in determining Excess Cash Flow if such repayments were (x)
required as a result of a Scheduled Commitment Reduction under Section 3.03 or a
Scheduled Repayment under Section 4.02 or (y) made as a voluntary prepayment
pursuant to Section 4.01 with internally generated funds (but in the case of a
voluntary prepayment of Revolving Loans, only to the extent accompanied by a
voluntary reduction to the Total Revolving Loan Commitment)) during such period,
(iii) the increase, if any, in Adjusted Consolidated Working Capital from the
first day to the last day of such period and (iv) for purposes of calculating
Excess Cash Flow for the fiscal year ending September 30, 1998 (and only for
such fiscal year), $5,000,000.
"Excess Cash Flow Payment Date" shall mean the date occurring 120 days
after the last day of a fiscal year of Parent (in either case beginning with the
fiscal year ending on September 30, 1998).
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"Excess Cash Flow Payment Period" shall mean, with respect to each
Excess Cash Payment Date, the immediately preceding fiscal year of Parent.
"Excess Inventory" shall mean the Targeted Inventory, as defined in
the Maple Leaf Aerospace Bonus Plan.
"Existing Indebtedness" shall have the meaning provided in Section
5.16.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.14.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"Final Maturity Date" shall mean September 30, 2003.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Parent or any one or more of
its Subsidiaries primarily for the benefit of employees of Parent or such
Subsidiaries residing outside the United States of America, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of Parent other than a
Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that deter-
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minations in accordance with GAAP for purposes of Section 9, including
defined terms as used therein, are subject (to the extent provided therein)
to Section 13.07(a).
"Guaranteed Creditors" shall mean and include each of the Agent, the
Collateral Agent, the Banks and each party (other than any Credit Party) party
to an Interest Rate Protection Agreement or Other Hedging Agreement to the
extent that such party constitutes a Secured Creditor under the Security
Documents.
"Guaranteed Obligations" shall mean (i) the principal and interest on
each Note issued by the Borrower to each Bank, and Loans made, under this
Agreement and all reimbursement obligations and Unpaid Drawings with respect to
Letters of Credit, together with all the other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of the Borrower to such
Bank, the Agent and the Collateral Agent now existing or hereafter incurred
under, arising out of or in connection with this Agreement or any other Credit
Document and the due performance and compliance with all the terms, conditions
and agreements contained in the Credit Documents by the Borrower and (ii) all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the
Borrower or any of its Subsidiaries owing under any Interest Rate Protection
Agreement or Other Hedging Agreement entered into by the Borrower or any of its
Subsidiaries with any Bank or any affiliate thereof (even if such Bank
subsequently ceases to be a Bank under this Agreement for any reason) so long as
such Bank or affiliate participate in such Interest Rate Protection Agreement or
Other Hedging Agreement, and their subsequent assigns, if any, whether now in
existence or hereafter arising, and the due performance and compliance with all
terms, conditions and agreements contained therein.
"Guarantor" shall mean each Parent Guarantor and each Subsidiary
Guarantor.
"Guaranty" shall mean and include each of the Parent Guaranty and the
Subsidiary Guaranty.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials friable asbestos, urea formaldehyde foam
insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; and (b) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "restricted
hazardous materials," "extremely hazardous wastes," "restrictive hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar meaning and regulatory effect where the
relevant
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Governmental authority has jurisdiction over the operations of Parent or any of
its Subsidiaries.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to the sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person but excluding deferred rent as determined in
accordance with GAAP, (iii) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, I.E., take-or-pay and similar
obligations, (vii) all obligations under Interest Rate Protection Agreements and
Other Hedging Agreements and (viii) all Contingent Obligations of such Person,
PROVIDED, that Indebtedness shall not include trade payables and accrued
expenses, in each case arising in the ordinary course of business.
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.
"Intercompany Acquisition Loans" shall have the meaning provided in
Section 9.05(l).
"Intercompany Loan" shall have the meaning provided in Section
9.05(f).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit L, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period," with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
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"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or its Wholly-Owned Subsidiaries incurred in the ordinary course of
business with respect to insurance obligations and workers' compensation, surety
bonds and other similar statutory obligations and (ii) such other obligations of
the Borrower or any of its Wholly-Owned Subsidiaries as are reasonably
acceptable to the Agent and the Letter of Credit Issuer and otherwise permitted
to exist pursuant to the terms of this Agreement,
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fees" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo and any other Bank which, at
the request of the Borrower and with the consent of the Agent, agrees in such
Bank's sole discretion to become a Letter of Credit Issuer for purposes of
issuing Letters of Credit pursuant to Section 2. The sole Letter of Credit
Issuer on the Initial Borrowing Date is BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"Leverage Ratio" shall mean on any date the ratio of (i) Consolidated
Debt on such date to (ii) Consolidated EBITDAR for the Test Period most recently
ended on or prior to such date, in each case taken as one accounting period.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each Term Loan, each Revolving Loan and each
Swingline Loan.
"Management Agreements" shall have the meaning provided in Section
5.14.
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"Management Participants" shall mean certain members of the management
of Tri-Star Aerospace and the Aviall Business or corporations owned by such
individuals, acceptable to the Agent.
"Management Stockholders' and Optionholders' Agreement" shall mean the
Management Stockholders' and Optionholders' Agreement dated as of September 19,
1996, by and among Parent, Odyssey, any Affiliate (as defined therein) of
Odyssey which is or becomes a stockholder, BT Investment Partners, Inc. and the
parties identified as the Management Stockholders on the signature pages
thereto.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(d).
"Maple Leaf Aerospace Bonus Plan" shall mean the Maple Leaf Aerospace,
Inc. Annual Bonus Plan to the extent such plan is in effect pursuant to terms
substantially similar to those contained in the Maple Leaf Aerospace, Inc.
Annual Bonus Plan summary of terms and conditions provided to the Agent prior to
the Initial Borrowing Date.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise) or
prospects of Parent, Holdings, Tri-Star Holdings, the Borrower, the Borrower and
its Subsidiaries taken as a whole, Tri-Star Holdings and its Subsidiaries taken
as a whole, Holdings and its Subsidiaries taken as a whole or Parent and its
Subsidiaries taken as a whole; provided that for purposes of satisfying the
conditions precedent to the extensions of credit on Initial Borrowing Date and
the representations and warranties made pursuant to the Credit Documents on the
Initial Borrowing Date, it shall also constitute a Material Adverse Effect if
there has been a material adverse effect on the business, properties, assets,
liabilities, condition (financial or otherwise) or prospects of either Tri-Star
Aerospace or the Aviall Business.
"Material Contracts" shall have the meaning provided in Section 5.14.
"Maturity Date", with respect to any Tranche of Loans, shall mean the
Final Maturity Date or the Revolving Loan Maturity Date, as the case may be.
"Maximum Swingline Amount" shall mean $3,000,000.
"Merger Agreement" shall mean the Agreement and Plan of Merger dated
as of August 28, 1996, by and among Parent, Holdings, Tri-Star Holdings,
Tri-Star Aerospace and the Shareholders of Tri-Star Aerospace party thereto,
as the same may be
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amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000, (ii) for Term Loans, $5,000,000, and (iii) for Swingline Loans,
$100,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage" shall have the meaning provided in Section 5.13(a).
"Mortgage Policies" shall have the meaning provided in Section
5.13(b).
"Mortgaged Properties" shall mean and include the Real Properties
owned or leased by the Borrower and its Domestic Subsidiaries to the extent
designated as such on Annex III.
"Net Cash Proceeds" shall mean for any event requiring a reduction of
the Total Revolving Loan Commitment and/or repayment of Term Loans pursuant to
Section 3.03 or 4.02, as the case may be, the gross cash proceeds (including any
cash received by way of deferred payment pursuant to a promissory note,
receivable or otherwise, but only as and when received) received from such
event, net of reasonable transaction costs (including, as applicable, any
underwriting, brokerage or other customary commissions and reasonable legal,
advisory and other fees and expenses associated therewith) received from any
such event.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith) and payments of
unassumed liabilities relating to the assets sold at the time of, or within 30
days after, the date of such sale, the amount of such gross cash proceeds
required to be used to repay any Indebtedness (other than Indebtedness of the
Banks pursuant to this Agreement) which is secured by the respective assets
which were sold, and the estimated marginal increase in income and sales taxes
which will be payable by Parent's consolidated group with respect to the fiscal
year in which the sale occurs as a result of such sale; but excluding any
portion of any such gross cash proceeds which the Borrower determines in good
faith should be reserved for post-closing adjustments (to the extent the
Borrower delivers to the Banks a certificate signed by its chief financial
officer or treasurer, controller or chief accounting officer as to such
determination), it being understood and agreed that on the day that all such
post-closing adjustments have been determined (which shall not be
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later than six months following the date of the respective asset sale), the
amount (if any) by which the reserved amount in respect of such sale or
disposition exceeds the actual post-closing adjustments payable by Parent or
any of its Subsidiaries shall constitute Net Sale Proceeds on such date
received by Parent and/or any of its Subsidiaries from such sale, lease,
transfer or other disposition.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Note" shall mean each Term Note, each Revolving Note and the
Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Agent
may designate to the Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Agent, the Collateral Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Odyssey" shall mean Odyssey Partners, L.P., a Delaware limited
partnership.
"Odyssey Convertible Note" shall mean an unsecured junior subordinated
note issued by Parent (and not guaranteed or supported in any way by Holdings or
any of its Subsidiaries), which note shall evidence a loan, in a maximum total
amount of $1,000,000, from Odyssey to Parent and shall mature not later than the
90th day following the Initial Borrowing Date; PROVIDED that such note shall not
bear interest and may only be repaid with either (i) cash proceeds provided to
Parent by the Management Participants in exchange for an amount of common stock
of Parent which is of equal value, or (ii) common stock of Parent equal in value
to any remaining balance on the note after taking account of all payments made
pursuant to clause (i) above.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against fluctuations in currency values.
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"Parent" shall have the meaning provided in the first paragraph of
this Agreement.
"Parent Common Stock" shall have the meaning provided in Section
7.14(a).
"Parent Guarantors" shall have the meaning provided in Section 14.01.
"Parent Guaranty" shall mean the guaranty of Parent pursuant to
Section 14.
"Participant" shall have the meaning provided in Section 2.03(a).
"Payment Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Agent
may designate to the Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean, at any time for each Bank, the percentage
obtained by dividing such Bank's Revolving Loan Commitment at such time by the
Total Revolving Loan Commitment then in effect, PROVIDED, that if the Total
Revolving Loan Commitment has been terminated, the Percentage of each Bank shall
be determined by dividing such Bank's Revolving Loan Commitment as in effect
immediately prior to such termination by the Total Revolving Loan Commitment as
in effect immediately prior to such termination.
"Permitted Acquired Debt" shall have the meaning set forth in Section
9.04(f).
"Permitted Acquisition" shall mean the acquisition by the Borrower of
assets constituting a business, division or product line of any Person not
already a Subsidiary of the Borrower or of 100% of the capital stock of any such
Person, which Person shall, as a result of such acquisition, become a Domestic
Subsidiary of the Borrower, PROVIDED that (A) the consideration paid by the
Borrower consists solely of cash (including proceeds of Revolving Loans), the
issuance of Indebtedness otherwise permitted in Section 9.04, the issuance of
Common Stock of Parent to the extent no Default or Event of Default exists
pursuant to Section 10.10 or would result therefrom and the
assumption/acquisition of any Permitted Acquired Debt (calculated at face value)
relating to such business, division, product line or Person which is permitted
to remain outstanding in accordance with the requirements of Section 9.04, (B)
in the case of the acquisition of 100% of the capital stock of any Person, such
Person shall own no capital stock of any other Person unless either (x) such
Person owns 100% of the capital stock of such other Person or (y) (1) such
Person and/or its Wholly-Owned Subsidiaries own at least 80% of the consolidated
assets of such
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Person and its Subsidiaries and (2) any non-Wholly Owned Subsidiary of such
Person was non-Wholly Owned prior to the date of such Permitted Acquisition
of such Person, (C) substantially all of the business, division or product
line acquired pursuant to the respective Permitted Acquisition, or the
business of the Person acquired pursuant to the respective Permitted
Acquisition and its Subsidiaries taken as a whole, is in the United States
and (D) all applicable requirements of Sections 8.14 and 9.02 applicable to
Permitted Acquisitions are satisfied. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, an acquisition
which does not otherwise meet the requirements set forth above in the
definition of "Permitted Acquisition" shall constitute a Permitted
Acquisition if, and to the extent, the Required Banks agree in writing that
such acquisition shall constitute a Permitted Acquisition for purposes of
this Agreement.
"Permitted Encumbrances" shall mean (i) those liens, encumbrances and
other matters affecting title to any Mortgaged Property listed in the Mortgage
Policies in respect thereof and found reasonably acceptable by the Agent, (ii)
as to any particular Mortgaged Property at any time, such easements,
encroachments, covenants, rights of way, minor defects, irregularities or
encumbrances on title which do not, in the reasonable opinion of the Agent,
materially impair such Mortgaged Property for the purpose for which it is held
by the mortgagor thereof, or the lien held by the Collateral Agent, (iii) zoning
and other municipal ordinances which are not violated in any material respect by
the existing improvements and the present use made by the mortgagor thereof of
the Premises (as defined in the respective Mortgage), (iv) general real estate
taxes and assessments not yet delinquent, and (v) such other similar items as
the Agent may consent to (such consent not to be unreasonably withheld).
"Permitted Liens" shall have the meaning provided in Section 9.03.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Parent or a Subsidiary of Parent or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which Parent, or a Subsidiary of Parent or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.11(a).
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
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"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"PRO FORMA Basis" shall mean, in connection with any calculation of
compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a PRO FORMA basis to (x) the incurrence of any
Indebtedness (other than revolving Indebtedness, except to the extent same is
incurred to finance the Transaction, to refinance other outstanding Indebtedness
or to finance Permitted Acquisitions) after the first day of the relevant
Calculation Period as if such Indebtedness had been incurred (and the proceeds
thereof applied) on the first day of the relevant Calculation Period, (y) the
permanent repayment of any Indebtedness (other than revolving Indebtedness)
after the first day of the relevant Calculation Period as if such Indebtedness
had been retired or redeemed on the first day of the relevant Calculation Period
and (z) the Permitted Acquisition, if any, then being consummated as well as any
other Permitted Acquisition consummated after the first day of the relevant
Calculation Period and on or prior to the date of the respective Permitted
Acquisition then being effected, with the following rules to apply in connection
therewith:
(i) all Indebtedness (x) (other than revolving Indebtedness, except
to the extent same is incurred to finance the Transaction, to refinance
other outstanding Indebtedness, or to finance Permitted Acquisitions)
incurred or issued after the first day of the relevant Calculation Period
(whether incurred to finance a Permitted Acquisition, to refinance
Indebtedness or otherwise) shall be deemed to have been incurred or issued
(and the proceeds thereof applied) on the first day of the respective
Calculation Period and remain outstanding through the date of determination
(and thereafter in the case of projections pursuant to Section 8.14(a)(iv))
and (y) (other than revolving Indebtedness) permanently retired or redeemed
after the first day of the relevant Calculation Period shall be deemed to
have been retired or redeemed on the first day of the respective
Calculation Period and remain retired through the date of determination
(and thereafter in the case of projections pursuant to Section
8.14(a)(iv));
(ii) all Indebtedness assumed to be outstanding pursuant to preceding
clause (i) shall be deemed to have borne interest at (x) the rate
applicable thereto, in the case of fixed rate indebtedness or (y) the rates
which would have been appli-
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cable thereto during the respective period when same was deemed
outstanding, in the case of floating rate Indebtedness (although interest
expense with respect to any Indebtedness for periods while same was
actually outstanding during the respective period shall be calculated using
the actual rates applicable thereto while same was actually outstanding);
provided that for purposes of calculations pursuant to Section 8.14(a)(iv),
all Indebtedness (whether actually outstanding or deemed outstanding)
bearing interest at a floating rate of interest shall be tested on the
basis of the rates applicable at the time the determination is made
pursuant to said provisions; and
(iii) in making any determination of Consolidated EBITDAR, PRO FORMA
effect shall be given to the Transaction and any Permitted Acquisition for
the periods described above, taking into account, in the case of any
Permitted Acquisition, cost savings and expenses which would otherwise be
accounted for as an adjustment pursuant to Article 11 of Regulation S-X
under the Securities Act, as if such cost savings or expenses were realized
on the first day of the respective period.
"Projections" shall have the meaning provided in Section 5.17.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Parent or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by reason of
theft, physical destruction or damage or any other similar event with respect to
any properties or assets of Parent or any of its Subsidiaries, (ii) by reason of
any condemnation, taking, seizing or similar event with respect to any
properties or assets of Parent or any of its Subsidiaries and (iii) under any
policy of insurance required to be maintained under Section 8.03.
"Refinancing" shall mean the refinancing of the Designated
Indebtedness in connection with the Acquisition in accordance with the
requirements of Section 5.09.
"Refinancing Documents" shall mean each of the agreements, documents
and instruments entered into in connection with the Refinancing.
"Register" shall have the meaning provided in Section 13.17.
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"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from to time in effect and any successor to all or
any portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.13, .14, .16, .18, .19 or .20 of PBGC Regulation Section 2615.
"Required Banks" shall mean collectively (and not individually)
Non-Defaulting Banks the sum of whose outstanding Term Loans and Revolving
Loan Commitments (or, if after the Total Revolving Loan Commitment has been
terminated, outstanding Revolving Loans and Percentages of outstanding
Swingline Loans and Letter of Credit Outstandings) constitute greater than
50% of the sum of (i) the total outstanding Term Loans of Non-Defaulting
Banks and (ii) the Total Revolving Loan Commitment less the aggregate
Revolving Loan Commitments of Defaulting Banks (or, if after the Total
Revolving Loan Commitment has been terminated, the total outstanding
Revolving Loans
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of Non-Defaulting Banks and the aggregate Percentages of all Non-Defaulting
Banks of the total outstanding Swingline Loans and Letter of Credit
Outstandings at such time).
"Returns" shall have the meaning provided in Section 7.21.
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Loan Commitment" shall mean, with respect to each RL Bank,
the amount set forth opposite such Bank's name in Annex I directly below the
column entitled "Revolving Loan Commitment," as the same may be reduced from
time to time pursuant to Sections 3.02, 3.03, 4.02 and/or Section 10
"Revolving Loan Maturity Date" shall mean the fifth anniversary of the
Initial Borrowing Date.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Bank" shall mean at any time each Bank with a Revolving Loan
Commitment or with outstanding Revolving Loans.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
McGraw Hill, Inc.
"Scheduled Commitment Reduction" shall have the meaning provided in
Section 3.03(c).
"Scheduled Commitment Reduction Date" shall have the meaning provided
in Section 3.03(c).
"Scheduled Repayment" shall have the meaning provided in Section
4.02(b).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4. 04(b)(ii).
"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Security Agreement" shall have the meaning provided in Section
5.11(b).
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"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean and include the Security Agreement,
the Pledge Agreement, each Mortgage and each Additional Security Document, if
any.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Parent (and not guaranteed or supported in any way
by Holdings or any of its Subsidiaries), which note shall be in the form of
Exhibit M, provided that additional provisions may be included so long as such
provisions do not adversely affect the interests of the Banks and are not in
conflict with the provisions of this Agreement or any other Credit Document.
"Shareholders' Agreements" shall have the meaning provided in Section
5.14.
"Stated Amount" of each Letter of Credit shall mean the maximum amount
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Stock Option Plan" shall mean the Maple Leaf Aerospace, Inc. Stock
Option Plan, to the extent such plan is in effect pursuant to terms
substantially similar to those contained in the Maple Leaf Aerospace, Inc. Stock
Option Plan summary of terms and conditions provided to the Agent prior to the
Initial Borrowing Date.
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.12.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity (other than a corporation) in which such Person directly
or indirectly through Subsidiaries, has more than a 50% equity interest at the
time.
"Subsidiary Guarantor" shall mean each Subsidiary of Tri-Star Holdings
and/or of the Borrower that is or becomes a party to the Subsidiaries Guaranty.
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Revolving Loan Maturity Date.
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"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Date" shall mean that date upon which the Agent
determines (and notifies the Borrower and the Banks) that the primary
syndication (and resultant addition of Persons as Banks pursuant to Section
13.04(b)) has been completed.
"Tax Allocation Agreements" shall have the meaning provided in Section
5.14.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall have the-meaning provided in Section I.01(a).
"Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Annex I directly below the column
entitled "Term Loan Commitment," as the same may be terminated pursuant to
Sections 3.03, 4.02 and/or Section 9.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Period" shall mean each period of four consecutive fiscal
quarters (or, if shorter, the period beginning on October 1, 1996 and ending on
the last day of such fiscal quarter) then last ended, in each case taken as one
accounting period, with the first Test Period to end on the last day of the
fiscal quarter ending March 31, 1997; PROVIDED that for purposes of calculating
compliance with Sections 9.09 and 9.11, for (i) the Test Period ending Xxxxx 00,
0000, XXXXXXX shall be EBITDAR as calculated for such Test Period multiplied by
two, and (ii) the Test Period ending June 30, 1997, EBITDAR shall be EBITDAR as
calculated for such Test period multiplied by 1.333.
"Total Commitment" shall mean the sum of the Total Term Loan
Commitment and the Total Revolving Loan Commitment.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean the sum of the Term Loan
Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) the sum of the
aggregate
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principal amount of all Revolving Loans and Swingline Loans outstanding at
such time plus the Letter of Credit Outstandings at such time.
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being two separate Tranches, I.E., Term
Leans and Revolving Loans.
"Transaction" shall mean, collectively, (i) the consummation of the
Acquisition, (ii) the consummation of the Equity Financing, (iii) the
consummation of the Refinancing, (iv) the entering into of the Credit Documents
and the incurrence of all Loans and issuance of all Letters of Credit on the
Initial Borrowing Date and (v) the payment of fees and expenses in connection
with the foregoing.
"Transaction Documents" shall mean the Acquisition Documents, the
Equity Financing Documents, the Refinancing Documents and all other documents,
agreements and instruments (other than the Credit Documents) executed in
connection with the Transaction.
"Tri-Star Aerospace" shall mean Tri-Star Aerospace, Inc., a Florida
corporation as such entity exists prior to the effectiveness of the Merger
Agreement.
"Tri-Star Business" shall mean the business, assets, liabilities and
personnel of Tri-Star Aerospace acquired pursuant to the Merger Agreement.
"Tri-Star Holdings" shall mean (x) prior to the consummation of the
Merger, Aerospace Merger Sub I, Inc., a Florida corporation and (y) from and
after the consummation of the Merger, Tri-Star Aerospace, Inc., a Florida
corporation, as successor by merger to Aerospace Merger Sub I, Inc.
"Tri-Star Holdings Asset Contribution" shall have the meaning provided
in Section 9.02(1).
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto I E., a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards
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No. 87, based upon the actuarial assumptions used by the Plan's actuary in
the most recent annual valuation of tire Plan.
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
"Unutilized Revolving Loan Commitment" with respect to any RL Bank at
any time shall mean such RL Bank's Revolving Loan Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such RL Bank and (ii) such RL Bank's Percentage of the Letter of Credit
Outstandings at such time.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Written" (whether lower or upper case) or in writing" shall mean any
form of written communication or a communication by means of telex, facsimile
device, telegraph or cable.
SECTION 12. THE AGENT.
12.01 APPOINTMENT. Each Bank hereby irrevocably designates and
appoints BTCo as Agent of such Bank (such term to include for purposes of this
Section 12, BTCo acting as Collateral Agent) to act as specified herein and in
the other Credit Documents, and each such Bank hereby irrevocably authorizes
BTCo as the Agent to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Credit Documents, together with such other
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powers as are reasonably incidental thereto. The Agent agrees to act as such
upon the express conditions contained in this Section 12. Notwithstanding any
provision to the contrary elsewhere in this Agreement or in any other Credit
Document, the Agent shall not have any duties or responsibilities, except
those expressly set forth herein or in the other Credit Documents, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent. The provisions of this
Section 12 are solely for the benefit of the Agent and the Banks, and neither
Parent nor any of its Subsidiaries shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, the Agent shall act solely as agent of the Banks
and the Agent does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for Parent or any of
its Subsidiaries.
12.02 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
12.03 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person in its capacity as Agent under or in connection with this Agreement or
the other Credit Documents (except for its or such Person's own gross negligence
or willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by Parent, any of
its Subsidiaries or any of their respective officers contained in this Agreement
or the other Credit Documents, any other Document or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Document or for
any failure of Parent or any of its Subsidiaries or any of their respective
officers to perform its obligations hereunder or thereunder. The Agent shall not
be under any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or the other Documents, or to inspect the properties, books
or records of Parent or any of its Subsidiaries. The Agent shall not be
responsible to any Bank for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement or any other
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Agent to the Banks
or by or on behalf of Parent or any of its Subsidiaries to the Agent or any Bank
or be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained
herein or therein or as to the use of the
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proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default.
12.04 RELIANCE BY AGENT. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex
or teletype message, statement, order or other document or conversation
reasonably believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Parent or any of its
Subsidiaries), independent accountants and other experts selected by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Credit Document unless it shall first receive
such advice or concurrence of the Required Banks as it deems appropriate or it
shall first be 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
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Banks, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Banks.
12.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent has actually received notice from a Bank, Parent or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the Banks.
The Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Banks; PROVIDED, that,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action,. with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Banks.
12.06 NONRELIANCE ON AGENT AND OTHER BANKS. Each Bank expressly
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower or any of its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Acquired
Business, Parent, the Borrower or their respective Subsidiaries and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Bank
also represents that it will, independently and without reli-
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ance upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, assets, operations, property, financial and
other condition, prospects and creditworthiness of the Acquired Business,
Parent, the Borrower or their respective Subsidiaries. The Agent shall not
have any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, assets, property, financial
and other condition, prospects or credit-worthiness of the Acquired Business,
Parent, the Borrower or their respective Subsidiaries which may come into the
possession of the Agent or any of its officers, directors, employees, agents
PARA attorneys-in-fact or affiliates.
12.07 INDEMNIFICATION. The Banks agree to indemnify the Agent in its
capacity as such ratably according to their respective "percentages" as used in
determining the Required Banks at such time or, if the Commitments have
terminated and all Loans have been repaid in full, as determined immediately
prior to such termination and repayment (with such "percentages" to be
determined as if there are no Defaulting Banks), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or omitted to be taken
by the Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by Parent or any of its
Subsidiaries; PROVIDED, that no Bank shall be liable to the Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section 12.07
shall survive the payment of all Obligations.
12.08 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with Parent and its Subsidiaries as though the Agent were not the Agent
hereunder. With respect to the Loans made by it and all Obligations owing to
it, the Agent shall have the same rights and powers under this Agreement as any
Bank and may exercise the same as though it were not the Agent and the terms
"Bank" and "Banks" shall include the Agent in its individual capacity.
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12.09 HOLDERS. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
12.10 RESIGNATION OF THE AGENT. (a) The Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 30 Business Days' prior written notice to
the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Agent hereunder or thereunder who shall be a commercial bank
or trust company reasonably acceptable to the Borrower.
(c) If a successor Agent shall not have been so appointed within such
30 Business Day period, the Agent, with the consent of the Borrower (which
consent shall not be unreasonably withheld or delayed), shall then appoint a
successor Agent who shall serve as Agent hereunder or thereunder until such
time, if any, as the Required Banks appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) or
(c) above by the 30th Business Day after the date such notice of resignation was
given by the Agent, the Agent's resignation shall become effective and the
Required Banks shall thereafter perform all the duties of the Agent hereunder
and/or under any other Credit Document until such time, if any, as the Banks
appoint a successor Agent as provided above.
SECTION 13. MISCELLANEOUS.
13.01 PAYMENT OF EXPENSES. ETC. The Borrower agrees to: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agent (including, without limitation,
the reasonable fees and disbursements of White & Case and local counsel) in
connection with the negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto and in connection with the Agent's
syndication efforts with respect to this Agreement; (ii) pay all reasonable
out-of-pocket costs and expenses of the Agent, each Letter of Credit Issuer and
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each of the Banks in connection with the enforcement of the Credit Documents and
the documents and instruments referred to therein and, after an Event of Default
shall have occurred and be continuing, the protection of the rights of the
Agent, each Letter of Credit Issuer and each of the Banks thereunder (including,
without limitation, the reasonable fees and disbursements of counsel (including
in-house counsel) for the Agent, for each Letter of Credit Issuer and for each
of the Banks); (iii) pay and hold each of the Banks harmless from and against
any and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iv)
indemnify the Agent, the Collateral Agent, each Letter of Credit Issuer and each
Bank, their respective officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them (but excluding
any such losses, liabilities, claims, damages or expenses to the extent incurred
by reason of the gross negligence or willful misconduct of the Person to be
indemnified), as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
the Agent, the Collateral Agent, any Letter of Credit Issuer or any Bank is a
party thereto and whether or not any such investigation, litigation or other
proceeding is between or among the Agent, the Collateral Agent, any Letter of
Credit Issuer, any Bank, any Credit Party or any third Person or otherwise)
related to the entering into and/or performance of this Agreement or any other
Document or the use of the proceeds of any Loans hereunder or the Transaction or
the consummation of any other transactions contemplated in any Document or (b)
the actual or alleged presence of Hazardous Materials in the air, surface water
or groundwater or on the surface or subsurface of any Real Property or any
Environmental Claim, in each case, including, without limitation, the reasonable
fees and disbursements of counsel and independent consultants incurred in
connection with any such investigation, litigation or other proceeding.
Notwithstanding the foregoing, neither Parent nor any of its Subsidiaries shall
be liable to any Indemnified Party hereunder with respect to any Hazardous
Materials that are first manufactured, emitted, generated, treated, released,
stored or disposed of on the Real Property, and any violation of Environmental
Laws that first occurs on or with respect to the Real Property, after the Real
Property is transferred to Lender or its successor by foreclosure sale, deed in
lieu of foreclosure, or similar transfer, except to the extent such manufacture,
emission, release, generation, treatment, storage or disposal or violation is
actually caused by Parent or any Subsidiary.
13.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, the Agent, each Letter
of Credit Issuer and each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to Parent
or any of its Subsidiaries or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and
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apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by the Agent, such Letter of Credit Issuer or such
Bank (including, without limitation, by branches and agencies of the Agent,
such Letter of Credit Issuer and such Bank wherever located) to or for the
credit or the account of Parent or any of its Subsidiaries against and on
account of the Obligations of the Borrower or any of its Subsidiaries to the
Agent, such Letter of Credit Issuer or such Bank under this Agreement or
under any of the other Credit Documents, including, without limitation, all
interests in Obligations of the Borrower or any of its Subsidiaries purchased
by such Bank pursuant to Section 13.06(b), and all other claims of any nature
or description arising out of or connected with this Agreement or any other
Credit Document, irrespective of whether or not the Agent, such Letter of
Credit Issuer or such Bank shall have made any demand hereunder and although
said Obligations shall be contingent or unmatured. Notwithstanding anything
to the contrary contained in this Section 13.02, no Bank shall exercise any
such right of set-off without the prior consent of the Agent or the Required
Banks if, and so long as, the Obligations shall be secured by any Real
Property located in the State of California, it being understood and agreed,
however, that this sentence is for the sole benefit of the Letter of Credit
Issuers and the Banks and may be amended, modified or waived in any respect
by the Required Banks without the requirement of prior notice to or consent
by any Credit Party and does not constitute a waiver of any rights against
any Credit Party or against any Collateral.
13.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its address specified
for such Bank on Annex II; or, at such other address as shall be designated by
any party in a written notice to the other parties hereto. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied or cabled or
sent by overnight courier, and shall be effective when received.
13.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; PROVIDED, HOWEVER, the Borrower may not assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of the Banks and, PROVIDED
FURTHER, that, although any Bank may transfer, assign or grant participations in
its rights hereunder, such Bank shall remain a "Bank" for all purposes hereunder
(and may not transfer or assign all or any portion of its Commitments hereunder
except as provided in Section 13.04(b)) and the transferee, assignee or
participant, as the case may be, shall not constitute a "Bank" hereunder and,
PROVIDED FURTHER, that no Bank shall transfer or grant any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or
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any other Credit Document except to the extent such amendment or waiver would
(i) extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the relevant Maturity
Date) in which such participant is participating, or reduce the rate or
extend the time of payment of interest or Fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest
rates) or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan shall
be permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the
other Credit Documents (the participant's rights against such Bank in respect
of such participation to be those set forth in the agreement executed by such
Bank in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term Loan
Commitments) to its parent company and/or any affiliate of such Bank which is at
least 50% owned by such Bank or its parent company or to one or more Banks or
(y) assign all, or if less than all, a portion equal to at least $5,000,000 in
the aggregate for the assigning Bank or assigning Banks, of such Revolving Loan
Commitments (and related outstanding Obligations hereunder) and/or outstanding
principal amount of Term Loans (or, if prior to the Initial Borrowing Date, Term
Loan Commitments) to one or more Eligible Transferees, each of which assignees
shall become a party to this Agreement as a Bank by execution of an Assignment
and Assumption Agreement, PROVIDED that (i) at such time Annex I shall be deemed
modified to reflect the Commitments (and/or outstanding Term Loans, as the case
may be) of such new Bank and of the existing Banks, (ii) upon surrender of the
old Notes (or the furnishing of a standard indemnity letter from the respective
assigning Bank in respect of any lost Notes), new Notes will be issued, at the
Borrower's expense, to such new Bank and to the assigning Bank, such new Notes
to be in conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments (and/or
outstanding Term Loans, as the case may be), (iii) the consent of the Agent
shall be required in connection with any such assignment pursuant to clause (y)
of this Section 13.04(b) (which consent shall not be unreasonably withheld),
(iv) the consent of the
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Borrower, BTCo and the each Letter of Credit Issuer shall be required in
connection with any assignment of Revolving Loan Commitments pursuant to this
Section 13.04(b) (which consent shall not be unreasonably withheld or
delayed) and (v) the Agent shall receive at the time of each assignment, from
the assigning or assignee Bank, the payment of a non-refundable assignment
fee of $3,500 and, PROVIDED FURTHER, that such transfer or assignment will
not be effective until recorded by the Agent on the Register pursuant to
Section 13.17. To the extent of any assignment pursuant to this Section
13.04(b), the assigning Bank shall be relieved of its obligations hereunder
with respect to its assigned Commitments. At the time of each assignment
pursuant to this Section 13.04(b) to a Person which is not already a Bank
hereunder and which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax~purposes, the
respective assignee Bank shall provide to the Borrower and the Agent the
appropriate Internal Revenue Service Forms (and, if applicable a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Bank's Commitment and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b)
would, at the time of such assignment, result in increased costs under
Section 1.10, 1.11, 2.05 or 4.04 from those being charged by the respective
assigning Bank prior to such assignment, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower shall be
obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
Notwithstanding anything to the contrary contained above, at any time after
the termination of the Total Revolving Loan Commitment, if any Revolving
Loans or Letters of Credit remain outstanding, assignments may be made as
provided above, except that the respective assignment shall be of a portion
of the outstanding Revolving Loans of the respective RL Bank and its
participation in Letters of Credit and its obligation to make Mandatory
Borrowings, although any such assignment effected after the termination of
the Total Revolving Loan Commitment shall not release the assigning RL Bank
from its obligations as a Participant with respect to outstanding Letters of
Credit or to fund its share of any Mandatory Borrowing (although the
respective assignee may agree, as between itself and the respective assigning
RL Bank, that it shall be responsible for such amounts).
(c) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Bank from such Federal Reserve Bank.
13.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of the Agent or any Bank in exercising any right, power or privilege hereunder
or under any other Credit Document and no course of dealing between any Credit
Party and the Agent or any Bank shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies herein expressly provided are cumulative
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and not exclusive of any rights or remedies which the Agent or any Bank would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Agent or
the Banks to any other or further action in any circumstances without notice
or demand.
13.06 PAYMENTS PRO RATA. (a) The Agent agrees that promptly after its
receipt of each payment from or on behalf of any Credit Party in respect of any
Obligations of such Credit Party, it shall, except as otherwise provided in this
Agreement, distribute such payment to the Banks (other than any Bank that has
consented in writing to waive its PRO RATA share of such payment) PRO RATA based
upon their respective shares, if any, of the Obligations with respect to which
such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all of the Banks in such amount; PROVIDED, that if
all or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
13.07 CALCULATIONS: COMPUTATIONS. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved (except as set
forth in the notes thereto or as otherwise disclosed in writing by Parent or the
Borrower to the Banks); PROVIDED, that except for the election of the LIFO
inventory price index computation method of computing inventory (and cost of
goods sold) as referenced below, and as otherwise specifically provided herein,
all computations determining compliance with Sections 4.02, 8.14 and 9,
including definitions used therein shall, in each case, utilize accounting
principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the December 31, 1995 financial
statements of Tri-Star Aerospace delivered to the Banks pursuant to Section
7.10(b); PROVIDED FURTHER, that (i) to the extent expressly required pursuant to
the provisions of this Agreement, certain calculations shall be made on a PRO
FORMA Basis and (ii) Borrower shall utilize the LIFO
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inventory price index computation method of calculating inventory (and cost
of goods sold) for purposes of determining compliance with Sections 4.02(g),
9.09, 9.10 and 9.11.
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Credit Party hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Credit Party hereby further irrevocably waives any claim that any
such courts lack jurisdiction over such Credit Party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or any
other Credit Document brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such Credit Party. Each Credit Party further
irrevocably consents to the service of process in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such Credit Party, at its address for notices pursuant to Section
13.03, such service to become effective 30 days after such mailing. Each Credit
Party hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other Credit Document that service
of process was in any way invalid or ineffective. Nothing herein shall affect
the right of the Agent, any Bank or the holder of any Note to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Credit Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
13.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts executed by all the parties hereto shall be lodged with Parent, the
Borrower and the Agent.
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13.10 EFFECTIVENESS. This Agreement shall become effective on the date
(the "Effective Date") on which Parent, the Borrower, the Agent and each of the
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at the Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written, telex or facsimile notice (actually received)
at such office that the same has been signed and mailed to it. The Agent will
give Parent, the Borrower and each Bank prompt written notice of the occurrence
of the Effective Date.
13.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
sub-sections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Agreement
13.12 AMENDMENT OR WAIVER; ETC. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, PROVIDED that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected thereby in the case of the following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note or extend the
stated maturity of any Letter of Credit beyond the Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement shall not constitute
a reduction in any rate of interest or fees for purposes of this clause (i)),
(ii) release all or substantially all of the Collateral (except as expressly
provided in the Security Documents) under all the Security Documents, (iii)
amend, modify or waive any provision of this Section 13.12, (iv)
reduce the percentage specified in the definition of Required Banks (it being
understood that, with the consent of the Required Banks, additional extensions
of credit pursuant to this Agreement may be included in the determination of the
Required Banks on substantially the same basis as the extensions of Term Loans
and Revolving Loan Commitments are included on the Effective Date) or (v)
consent to the assignment or transfer by The Borrower of any of its rights and
obligations under this Agreement; PROVIDED FURTHER, that no such change, waiver,
discharge or termination shall (w) increase the Commitments of any Bank over the
amount thereof then in effect without the consent of such Bank (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total
Commitment shall not constitute an increase of the Commitment of any Bank, and
that an increase in the available portion of any Commitment of any Bank shall
not constitute an increase in the Commitment of such Bank), (x) without the
consent of each Letter of Credit Issuer or BTCo as the case may be, amend,
modify or waive any provision of Section 2 or alter its rights or obligations
with respect to Letters of Credit or Swingline Loans, (y) without the consent of
the Agent, amend, modify or waive
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any provision of Section 12 as same applies to the Agent or any other
provision as same relates to the rights or obligations of the Agent and (z)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all nonconsenting Banks whose individual
consent is required are treated as described in either clause (A) or (B) below,
to either (A) replace each such nonconsenting Bank or Banks (or, at the option
of the Borrower if the respective Bank's consent is required with respect to
less than all Tranches of Loans (or related Commitments), to replace only the
respective Tranche of Commitments and/or Loans of the respective non.consenting
Bank which gave rise to the need to obtain such Bank's individual consent) with
one or more Replacement Banks pursuant to Section 1.13 so long as at the time of
such replacement, each such Replacement Bank consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Bank's
Revolving Loan Commitment (if such Bank's consent is required as a result of its
Revolving Loan Commitment) and/or repay each Tranche of outstanding Loans of
such Bank which gave rise to the need to obtain such Bank's consent and/or cash
collateralize its applicable Percentage of the Letter of Credit of Outstandings,
in accordance with Sections 3.02(b) and/or 4.01(b), PROVIDED that, unless the
Commitments which are terminated and Loans which are repaid pursuant to
preceding clause (B) are immediately replaced in full at such time through the
addition of new Banks or the increase of the Commitments and/or outstanding
Loans of existing Banks (who in each case must specifically consent thereto),
then in the case of any action pursuant to preceding clause (B) the Required
Banks (determined after giving effect to the proposed action) shall specifically
consent thereto, PROVIDED FURTHER, that the Borrower shall not have the right to
replace a Bank, terminate its Commitments or repay its Loans solely as a result
of the exercise of such Bank's rights (and the withholding of any required
consent by such Bank) pursuant to the second proviso to Section 13.12(a).
13.13 SURVIVAL. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 2.05, 4.04, 12.07 or 13.01, shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
13.14 DOMICILE OF LOANS AND COMMITMENTS. Each Bank may transfer and
carry its Loans and/or Commitments at, to or for the account of any branch
office, subsidiary or affiliate of such Bank; PROVIDED, that the Borrower shall
not be responsible for costs arising under Section 1.10, 1.11, 2.05 or 4.04
resulting from any such transfer
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(other than a transfer pursuant to Section 1.12) to the extent such costs
would not otherwise be applicable to such Bank in the absence of such
transfer.
13.15 CONFIDENTIALITY. (a) Each of the Banks agrees that it will use
its reasonable efforts not to disclose without the prior consent of the Borrower
(other than to its directors, employees, auditors, counsel or other professional
advisors, to affiliates or to another Bank if the Bank or such Bank's holding or
parent company in its sole discretion determines that any such party should have
access to such information) any information with respect to Parent or any of its
Subsidiaries which is furnished pursuant to this Agreement; PROVIDED, that any
Bank may disclose any such information (a) as has become generally available to
the public, (b) as may be required or appropriate (x) in any report, statement
or testimony submitted to any municipal, state or Federal regulatory body having
or claiming to have jurisdiction over such Bank or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States or elsewhere) or their successors or (y) in connection with
any request or requirement of any such regulatory body, (c) as may be required
or appropriate in response to any summons or subpoena or in connection with any
litigation, (d) to comply with any law, order, regulation or ruling applicable
to such Bank, and (e) to any prospective transferee in connection with any
contemplated transfer of any of the Notes or any interest therein by such Bank;
PROVIDED, that such prospective transferee agrees to be bound by this Section
13.15 to the same extent as such Bank.
(b) Each of Parent and the Borrower hereby acknowledges and agrees
that each Bank may share with any of its affiliates any information related to
Parent or any of its Subsidiaries (including, without limitation, any nonpublic
customer information regarding the creditworthiness of Parent and its
Subsidiaries), PROVIDED that such Persons shall be subject to the provisions of
this Section 13.15 to the same extent as such Bank.
13.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.17 REGISTER. The Borrower hereby designates the Agent to serve as
the Borrower's agent, solely for purposes of this Section 13.17, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
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effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of such Commitment and Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitment
and Loans shall remain owing to the transferor. The registration of assignment
or transfer of all or part of any Commitment and Loans shall be recorded by the
Agent on the Register only upon the acceptance by the Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on. asserted against or
incurred by the Agent in performing its duties under this Section 13.17.
SECTION 14. PARENT GUARANTY.
14.01 THE GUARANTY. In order to induce the Banks to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Parent, Holdings and Tri-Star Holdings (each a
"Parent Guarantor" and collectively, the "Parent Guarantors") from the proceeds
of the Loans and the issuance of the Letters of Credit, each Parent Guarantor
hereby agrees with the Banks as follows: each Parent Guarantor hereby jointly
and severally unconditionally and irrevocably guarantees, as primary obligor and
not merely as surety the full and prompt payment when due, whether upon
maturity, acceleration or otherwise, of any and all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors. If any or all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors becomes due
and payable hereunder, each Parent Guarantor unconditionally promises to pay
such indebtedness to the Guaranteed Creditors, or order, on demand, together
with any and all expenses which may be incurred by the Guaranteed Creditors in
collecting any of the Guaranteed Obligations. If claim is ever made upon any
Guaranteed Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the Guaranteed Obligations and any of the
aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event each Parent Guarantor agrees
that any such judgment, decree, order, settlement or compromise shall be binding
upon each Parent Guarantor, notwithstanding any revocation of this Guaranty or
any other instrument evidencing any liability of the Borrower, and each Parent
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or
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recovered to the same extent as if such amount had never originally been
received by any such payee.
14.02 BANKRUPTCY. Additionally, each Parent Guarantor unconditionally
and irrevocably guarantees the payment of any and all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors whether or not due or
payable by the Borrower upon the occurrence of any of the events specified in
Section 10.05, and unconditionally promises to pay such indebtedness to the
Guaranteed Creditors, or order, on demand, in lawful money of the United States.
14.03 NATURE OF LIABILITY. The liability of each Parent Guarantor
hereunder is exclusive and independent of any security for or other guaranty of
the Guaranteed Obligations of the Borrower whether executed by such Parent
Guarantor, any other guarantor or by any other party, and the liability of each
Parent Guarantor hereunder is not affected or impaired by (a) any direction as
to application of payment by the Borrower or by any other party, or (b) any
other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the Guaranteed Obligations of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Guaranteed
Creditors on the Guaranteed Obligations which any such Guaranteed Creditor
repays to the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Parent Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
14.04 INDEPENDENT OBLIGATION. The obligations of each Parent Guarantor
hereunder are independent of the obligations of any other guarantor, any other
party or the Borrower, and a separate action or actions may be brought and
prosecuted against each Parent Guarantor whether or not action is brought
against any other guarantor, any other party or the Borrower and whether or not
any other guarantor, any other party or the Borrower be joined in any such
action or actions. Each Parent Guarantor waives, to the full extent permitted by
law, the benefit of any statute of limitations affecting its liability hereunder
or the enforcement thereof. Any payment by the Borrower or other circumstance
which operates to toll any statute of limitations as to the Borrower shall
operate to toll the statute of limitations as to each Parent Guarantor.
14.05 AUTHORIZATION. Each Parent Guarantor authorizes the Guaranteed
Creditors without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
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(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
Guaranteed Obligations (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors. the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of the Borrower to its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors regardless
of what liability or liabilities of the Borrower remain unpaid:
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit Document or any of such
other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of any
Parent Guarantor from its liabilities under this Guaranty.
14.06 RELIANCE. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents
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acting or purporting to act on their behalf, and any Guaranteed Obligations
made or created in reliance upon the professed exercise of such powers shall
be guaranteed hereunder.
14.07 SUBORDINATION. Any of the indebtedness of the Borrower now or
hereafter owing to any Parent Guarantor is hereby subordinated to the Guaranteed
Obligations of the Borrower owing to the Guaranteed Creditors; and if the Agent
so requests at a time when an Event of Default exists, all such indebtedness of
the Borrower to any Parent Guarantor shall be collected, enforced and received
by such Parent Guarantor for the benefit of the Guaranteed Creditors and be paid
over to the Agent on behalf of the Guaranteed Creditors on account of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors, but without
affecting or impairing in any manner the liability of such Parent Guarantor
under the other provisions of this Guaranty. Prior to the transfer by any
Parent Guarantor of any note or negotiable instrument evidencing any of the
indebtedness of the Borrower to such Parent Guarantor, such Parent Guarantor
shall xxxx such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the
foregoing, each Parent Guarantor hereby agrees with the Guaranteed Creditors
that it will not exercise any right of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
14.08 WAIVER. (a) Each Parent Guarantor waives any right (except as
shall be required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against the Borrower, any other guarantor
or any other party, (ii) proceed against or exhaust any security held from
the Borrower, any other guarantor or any other party or (iii) pursue any
other remedy in any Guaranteed Creditor's power whatsoever. Each Parent
Guarantor waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party, other than payment in full
of the Guaranteed Obligations, based on or arising out of the disability of
the Borrower, any other guarantor or any other party, or the unenforceability
of the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower other than payment
in full of the Guaranteed Obligations. The Guaranteed Creditors may, at their
election, foreclose on any security held by the Agent, the Collateral Agent
or any other Guaranteed Creditor by one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or
exercise any other right or remedy the Guaranteed Creditors may have against
the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Parent Guarantor hereunder except
to the extent the Guaranteed Obligations have been paid. Each Parent
Guarantor waives any defense arising out of any such election by the
Guaranteed Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other
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right or remedy of such Parent Guarantor against the Borrower or any other
party or any security.
(b) Each Parent Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Each Parent Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which such Parent Guarantor assumes and incurs hereunder, and agrees that
the Guaranteed Creditors shall have no duty to advise any Parent Guarantor of
information known to them regarding such circumstances or risks.
(c) Each Parent Guarantor understands, is aware and hereby
acknowledges that if at any time the Guaranteed Obligations are secured by real
property located in the State of California, such Parent Guarantor shall be
liable for the full amount of its liability hereunder notwithstanding
foreclosure on such real property by trustee sale or any other reason impairing
such Parent Guarantor's or any Guaranteed Creditor's right to proceed against
any Credit Party. Each Parent Guarantor hereby waives, to the fullest extent
permitted by law, all rights and benefits under Section 2809 of the California
Civil Code purporting to reduce a guarantor's obligation in proportion to the
principal obligation. Each Parent Guarantor hereby waives all rights and
benefits under Section 580a of the California Code of Civil Procedure purporting
to limit the amount of any deficiency judgment which might be recoverable
following the occurrence of a trustee's sale under a deed of trust and all
rights and benefits under Section 580b of the California Code of Civil Procedure
stating that no deficiency may be recovered on a real property purchase money
obligation. Each Parent Guarantor further understands, is aware and hereby
acknowledges that if the Guaranteed Creditors elect to nonjudicially foreclose
on any real property security located in the State of California any right of
subrogation of such Parent Guarantor against the Guaranteed Creditors may be
impaired or extinguished and that as a result of such impairment or
extinguishment of subrogation rights, such Parent Guarantor may have a defense
to a deficiency judgment arising out of the operation of (i) Section 580d of the
California Code of Civil Procedure which states that no deficiency may be
recovered on a note secured by a deed of trust on real property in case such
real property is sold under the power of sale contained in such deed of trust,
and (ii) related principles of estoppel. To the fullest extent permitted by law,
each Parent Guarantor waives all rights and benefits and any defense arising out
of the operation of Section 580d of the California Code of Civil Procedure and
related principles of estoppel, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
such Parent Guarantor against any Credit Party or any other party or any
security. In addition, each Parent Guarantor hereby waives, to the fullest
extent permitted by applicable law,
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without limiting the generality of the foregoing or any other provision
hereof, all rights and benefits which might otherwise be available to such
Parent Guarantor under Section 726 of the California Code of Civil Procedure
and all rights and benefits which might otherwise be available to such Parent
Guarantor under California Civil Code Sections 2809, 2810, 2815, 2819, 2821,
2839, 2845, 2848, 2849, 2850, 2899 and 3433.
(d) Each Parent Guarantor hereby further waives (to the fullest
extent permitted by applicable law): (1) all rights and defenses arising out of
an election of remedies by the Guaranteed Creditors, even though that election
of remedies, such as a nonjudicial foreclosure with respect to security for a
Guaranteed Obligation, has destroyed such Parent Guarantor's rights of
subrogation and reimbursement against the principal by the operation of Section
580d of the California Code of Civil Procedure or otherwise; (2) such Parent
Guarantor's rights of subrogation and reimbursement and any other rights and
defenses available to such Parent Guarantor by reason of the California Civil
Code Sections 2787 to 2855, inclusive. including, without limitation, (i) any
defenses such Parent Guarantor may have to the Guaranteed Obligations by reason
of an election of remedies by the Guaranteed Creditors and (ii) any rights or
defenses such Parent Guarantor may have by reason of protection afforded to the
principal borrower with respect to the obligation so guaranteed pursuant to the
antideficiency or other laws of the State of California limiting or discharging
the borrower's indebtedness, including, without limitation, California Code of
Civil Procedure Sections 580a, 580b, 580d or 726.
14.09 NATURE OF LIABILITY. It is the desire and intent of each Parent
Guarantor and the Guaranteed Creditors that this Guaranty shall be enforced
against each Parent Guarantor to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
If, however, and to the extent that, the obligations of any Parent Guarantor
under this Guaranty shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers), then the amount of
the Guaranteed Obligations of such Parent Guarantor shall be deemed to be
reduced and such Parent Guarantor shall pay the maximum amount of the Guaranteed
Obligations which would be permissible under applicable law.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
ADDRESS:
MAPLE LEAF AEROSPACE, INC.
00000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000 By /s/ Xxxxxxxx Xxxxx
Attention: Xxxxxxx X. Small ------------------------------------
Title: Vice President
AEROSPACE ACQUISITION CORP.
By /s/ Xxxxxxxx Xxxxx
------------------------------------
Title: Vice President
AEROSPACE MERGER SUB I, INC.
(and TRI-STAR AEROSPACE, INC.
as its successor by merger)
By /s/ Xxxxxxxx Xxxxx
------------------------------------
Title: Vice President
TRI-STAR AEROSPACE CO.
By /s/ Xxxxxxxx Xxxxx
------------------------------------
Title: Vice President
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ Xxxx Xxx Xxxxx
------------------------------------
Title: Managing Director
ANNEX I
LIST OF BANKS AND COMMITMENTS
-----------------------------
Term Loan Revolving Loan
Bank Commitment Commitment
---- ---------- --------------
Bankers Trust Company $50,000,000 $30,000,000
----------- -----------
----------- -----------
----------- -----------
Total $50,000,000 $30,000,000
