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Exhibit 10.3
AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
XXXXXX LEASE FINANCE CORPORATION
AND
CERTAIN BANKING INSTITUTIONS NAMED HEREIN
WITH
FIRST UNION NATIONAL BANK
(successor by merger to CoreStates Bank, N.A.)
AS AGENT
dated
JUNE 2, 1998
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AMENDED AND RESTATED
CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated June 2, 1998 (the
"AGREEMENT"), is entered into by and between XXXXXX LEASE FINANCE CORPORATION, a
California corporation ("XXXXXX"), the banking institutions signatories hereto
and named in Exhibit A attached hereto and such other institutions that
hereafter become a "Bank" pursuant to Section 10.4 hereof (collectively the
"BANKS" and individually a "BANK") and FIRST UNION NATIONAL BANK, a national
banking association, as agent for the Banks under this Agreement ("FIRST UNION",
which shall mean in its capacity as agent unless specifically stated otherwise).
This Agreement amends and restates in its entirety the Credit Agreement, dated
June 12, 1997, between Xxxxxx and CoreStates Bank, N.A. (now First Union
National Bank by reason of the merger of CoreStates Bank, N.A. with and into
First Union National Bank on May 15, 1998), as said Credit Agreement was amended
through the date hereof.
PRELIMINARY STATEMENT
WHEREAS, Xxxxxx desires to have available to it a revolving credit facility
which will be used for the purchase or refinance of Equipment (as defined
herein) most of which will be held for sale or for lease to unaffiliated
persons, said Equipment and related leases to constitute part of the Collateral
(as defined herein) and for general working capital purposes.
WHEREAS, the Banks are willing to establish such revolving credit facility
and make loans to Xxxxxx under the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and promises hereinafter
set forth and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Certain Definitions.
1.1. DEFINITIONS.
"ADJUSTED LIBO RATE" shall mean, for any Interest Period, the rate per
annum (rounded upwards, if necessary to the next 1/16 of 1%)
determined pursuant to the following formula:
Adjusted LIBO Rate = LIBO RATE
--------------------------------
1 -Reserve Percentage
"AFFILIATE" shall mean any Person: (1) which directly or indirectly
controls, or is controlled by, or is under common control with
Xxxxxx; (2) which directly or indirectly beneficially owns or holds
ten percent (10%) or more of any class of voting stock of Xxxxxx; or
(3) ten percent (10%) or more of whose voting stock of which is
directly or indirectly beneficially owned or held by Xxxxxx. The term
"control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract, or otherwise.
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"AGGREGATE REVOLVING LOAN COMMITMENT" shall have the meaning set forth
in Section 2.1(a).
"AGREEMENT" shall mean this Credit Agreement, as amended,
supplemented, modified, replaced, substituted for or restated from
time to time and all exhibits and schedules attached hereto.
"BASE RATE" shall mean (i) the rate of interest for commercial loans
established and publicly announced by First Union from time to time as
its prime rate, or, if higher, (ii) the Federal Funds Rate plus 1/2 of
1% per annum. Any change in such interest rate due to a change in the
Base Rate shall be effective on the date of such change.
"BASE RATE LOAN" shall mean a Loan, or any portion thereof, made at
the Base Rate pursuant to a request for advance made under Section 2.4
herein or as otherwise provided in Section 2.5 or in any other
provision hereof or in any other Loan Document.
"BASE RATE MARGIN" shall mean the percentage listed in the following
table:
LEVERAGE RATIO BASE RATE MARGIN
--------------- -----------------
Less than 2.00 - 0.25%
Equal to or greater than 2.00 but less than 3.00 - 0.25%
Equal to or greater than 3.00 but less than 4.00 0.00%
Equal to or greater than 4.00 but less than 5.00 0.25%
Equal to or greater than 5.00 0.50%
"BORROWING BASE" shall mean 85% of Xxxxxx'x acquisition cost of
Equipment included in the Collateral, PROVIDED, HOWEVER, that on June
30 and December 31 of each year a review of the Collateral shall be
made to determine whether the net book value of each piece of
Equipment has declined by more than 3% from the acquisition cost. In
each such case where the net book value has decreased by more than 3%
from the acquisition cost, the Borrowing Base shall mean 85% of the
net book value of such Equipment. No item of Category A Equipment
shall be included in the Borrowing Base unless either (1) it shall be
the subject of an Eligible Lease which is also included in the
Collateral or (2) it was purchased by Xxxxxx for the purpose of sale
or lease to an unaffiliated Person and the purchase date is not later
than nine months previous. No item of Category B(1) Equipment shall
be included in the Borrowing Base if it was purchased by Xxxxxx more
than nine months prior to the date of determination of the Borrowing
Base. No item of Category B(2) Equipment shall be included in the
Borrowing Base unless it shall be the subject of an Eligible Lease
which is also included in the Collateral.
"BORROWING BASE CERTIFICATE" shall mean a certificate in substantially
the form attached hereto as Exhibit C hereto which shall be signed by
the chief financial officer or chief executive officer of Xxxxxx.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks in Philadelphia or San Francisco
are authorized or required to close under the laws of the Commonwealth
of Pennsylvania and, if the applicable day relates to a LIBO Rate
Loan, or notice with respect to a LIBO Rate Loan, a day on which
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dealings in Dollar deposits are also carried on in the London interbank
market and banks are open for business in London ("London Business Day").
"CAPITALIZED LEASE" shall mean all lease obligations of any Person for
any property (whether real, personal or mixed) which have been or
should be capitalized on the books of the lessee in accordance with
Generally Accepted Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" with respect to any Person, shall mean
the aggregate amount which, in accordance with GAAP, is required to be
reported as a liability on the balance sheet of such Person at such
time in respect of such Person's interest as lessee under a Capital
Lease.
"CATEGORY A EQUIPMENT" shall mean equipment purchased by Xxxxxx from
unaffiliated Persons and which is either (1) the subject of an
Eligible Lease or (2) held for sale or lease to unaffiliated Persons.
Category A Equipment shall be composed of Stage III compliant jet
engines which are less than 15 years from the date of manufacture and
are suitable for use in major aircraft manufactured by The Boeing Co.,
XxXxxxxxx Xxxxxxx Corp. or Airbus Industrie. Category A Equipment
also shall include two de Havilland Dash 8-103 turbo prop aircraft,
four Xxxxx & Whitney Model PW121 engines and four Xxxxxxxx Standard
Model 14 SF-7 propellers, each as more fully described in Exhibit G
attached hereto which have been or will be purchased from de Havilland
Corporation and leased to Aloha Islandair, Inc.
"CATEGORY B EQUIPMENT" shall mean equipment purchased by Xxxxxx from
unaffiliated Persons which is either (1) Stage II or III engines or
aircraft acquired for the purpose of salvaging and/or retrofitting, or
(2) traceable spare parts the purchase price of which was in excess of
$3,000 in each case, are the subject of Eligible Leases and have discrete
serial and part numbers or other identifying numbers acceptable to the
Required Banks.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and all rules and regulations with respect thereto in
effect from time to time.
"COLLATERAL" shall have the meaning set forth in Section 9.1.
"COMPLIANCE CERTIFICATE" shall mean a certificate in substantially the
form attached hereto as Exhibit E which shall be signed by the chief
financial officer, treasurer or controller of Xxxxxx.
"DEBT" shall mean, as of any date of determination with respect to
Xxxxxx, without duplication and determined on a consolidated basis,
(i) all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a
balance sheet of Xxxxxx as of the date on which Debt is to be
determined, (ii) all indebtedness of others with respect to which
Xxxxxx has become liable by way of a guarantee or endorsement (other
than for collection or deposit in the ordinary course of business),
(iii) all contingent liabilities of Xxxxxx, (iv) lease obligations
that, in conformity with GAAP, have been capitalized on Xxxxxx'
balance sheet, and (v) the present value of any outstanding Operating
Lease payments (discounted at a rate of 10%), LESS (1)
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maintenance reserves and security deposits that are cash backed, and (2)
liabilities of Unrestricted Subsidiaries.
"DEBT SERVICE" shall mean actual payments of principal on Debt and
Capitalized Lease Obligations (including any Debt or Capital Lease
Obligations paid from the sale of equipment during the period), plus
interest expense incurred during the period.
"DEFAULT RATE" on any Loan shall mean two percent (2.0%) per annum
above the rate then applicable to each Loan or portion thereof.
"DOLLARS" shall mean the lawful currency of the United States of
America.
"EBIT" shall mean the sum of (i) Net Income, plus (ii) amounts
deducted for interest and income taxes.
"ELIGIBLE LEASE" shall mean a lease for Equipment to an unaffiliated
Person in which (i) Xxxxxx or its trustee is the sole lessor (ii) the
lease arose in the ordinary course of business of Xxxxxx, (iii) the
Equipment has been delivered to the lessee and is currently subject to
the lease, (iv) neither the lease nor the Equipment is subject to any
currently outstanding assignment, claim, lien, security interest or
other limitation on the absolute title of Xxxxxx or its trustee
thereto, (v) the lease payments are not more than 90 days past due
with respect to any payment required thereby (based on the original
contractual term and not including any amendment or modification
thereof, unless the Required Banks have specifically consented thereto
in writing), (vi) the lease is freely assignable (with any notices or
consents required in connection therewith having been previously
obtained), (vii) the lease is dated and has been in effect for not
more than 45 days prior to the date the lease was assigned to First
Union, as Agent, and included in the Collateral in the case of leases
entered into subsequent to the date hereof; or the lease was assigned
to First Union, as Agent, and included in the Collateral within 45
days immediately following the date hereof, in the case of leases
existing at the date hereof without regard to the date of the lease;
or the lease was assigned to First Union, as Agent, and included in
the Collateral within 45 days immediately following the date of
acquisition of said lease by Xxxxxx, in the case of leases purchased
from unaffiliated persons, (viii) the lease has not been included in
the Collateral for a period of more than twenty-four months, (ix) the
lease and the Equipment being leased constitute Collateral, (x) the
remaining lease term at the time of assignment to First Union, as
Agent, is for a period of ten years or less in the case of Category A
Equipment and Category B(2) Equipment, (xi) the lease is a
noncancellable, triple net lease in which the lessee may not assert,
as an offset, any defenses or claims against the lessor arising from
the condition or the intended use of the subject matter, except in the
case of leases with terms of less than 6 months in which Xxxxxx may be
responsible for maintenance and (xii) the lessee is not a resident of,
and the Equipment will not be used in any foreign jurisdiction in
which the ability of First Union, as Agent, to perfect a first
priority security interest in the Equipment is unsatisfactory or the
ability of First Union, as Agent, to foreclose upon the Equipment and
receive possession to or sell said Equipment is unsatisfactory.
"ENVIRONMENTAL CONTROL STATUTES" shall mean each and every applicable
federal, state, county or municipal environmental statute, ordinance,
rule, regulation, order, directive or requirement, together with all
successor statutes, ordinances, rules, regulations, orders,
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directives or requirements, of any Governmental Authority, including
without limitation laws in any way related to Hazardous Substances.
"EQUIPMENT" shall mean Category A Equipment and Category B Equipment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
"ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as Xxxxxx within the meaning of
Section 414(b) of the Code, or any trade or business which is under
common control with Xxxxxx within the meaning of Section 414(c) of the
Code.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 8.1.
"FEDERAL FUNDS RATE" shall mean the daily rate of interest announced
from time to time by the Board of Governors of the Federal Reserve
System in publication H. 15 as the "Federal Funds Rate," or if such
publication is unavailable, such rate as is available to First Union
on such day.
"FISCAL QUARTER" shall mean a fiscal quarter of Xxxxxx, which shall be
any quarterly period ending on March 31, June 30, September 30 or
December 31 of any year.
"FISCAL YEAR" shall mean a fiscal year of Xxxxxx, which shall end on
the last day of December.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" OR "GAAP" shall mean
generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean the federal, state, county or
municipal government, or any department, agency, bureau or other
similar type body obtaining authority therefrom or created pursuant to
any laws, including without limitation Environmental Control Statutes.
"HAZARDOUS SUBSTANCES" shall mean without limitation, any regulated
substance, toxic substance, hazardous substance, hazardous waste,
pollution, pollutant or contaminant, as defined or referred to in the
Resource Conservation and Recovery Act, as amended, 15 U.S.C., Section
2601 ET SEG.; the Comprehensive Environmental Response, Compensation
and Liability Act, 33 U.S.C. Section 1251 ET SEG.; the federal
underground storage tank law, Subtitle I of the Resource Conservation
and Recovery Act, as amended, P.L. 98-616, 42 U.S.C. Section 6901 ET
SEG.; together with any amendments thereto, regulations promulgated
thereunder and all substitutions thereof, as well as words of similar
purport or meaning referred to in any other federal, state, county or
municipal environmental statute, ordinance, rule or regulation.
"INDEBTEDNESS FOR BORROWED MONEY" shall mean (i) all indebtedness,
liabilities, and obligations, now existing or hereafter arising, for
money borrowed by Xxxxxx, whether or not evidenced by any note,
indenture, or agreement (including, without limitation, the Note and
any indebtedness for money borrowed from an Affiliate) and (ii) all
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indebtedness of others for money borrowed (including indebtedness of an
Affiliate) with respect to which Xxxxxx has become liable by way of a
guarantee or indemnity.
"INTANGIBLE ASSETS" shall mean all assets which would be classified as
intangible assets under GAAP consistently applied, including, without
limitation, goodwill (whether representing the excess of cost over
book value of assets acquired or otherwise), patents, trademarks,
trade names, copyrights, franchises, and deferred charges (including,
without limitation, unamortized debt discount and expense,
organization costs, and research and development costs). For purposes
of this definition, prepayments of taxes, license fees and other
expenses shall not be deemed Intangible Assets.
"INTEREST PERIOD" shall mean a period commencing on the date of a LIBO
Rate Loan or with respect to a Loan being renewed, the last day of the
next preceding Interest Period and ending one, two or three months
thereafter, as requested by Xxxxxx at the time of its Request for
Advance; provided also that (i) an Interest Period which would
otherwise expire on a day which is not a London Business Day shall be
extended to the next succeeding London Business Day unless such London
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding London Business Day,
(ii) any Interest Period which begins on the last London Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to the next succeeding clause, end on the last
London Business Day of a calendar month; and (iii) no Interest Period
shall end later than the Revolver Termination Date.
"INVESTMENT" in any Person shall mean (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or
other securities of such Person; (b) any deposit with, or advance,
loan or other extension of credit to, such Person (other than any such
deposit, advance, loan or extension of credit having a term not
exceeding 90 days in the case of unaffiliated Persons and 120 days in
the case of Affiliates representing the purchase price of inventory or
supplies purchased in the ordinary course of business) or guarantee or
assumption of, or other contingent obligation with respect to,
Indebtedness for Borrowed Money or other liability of such Person; and
(c) (without duplication of the amounts included in (a) and (b)) any
amount that may, pursuant to the terms of such investment, be required
to be paid, deposited, advanced, lent or extended to or guaranteed or
assumed on behalf of such Person.
"LEVERAGE RATIO" shall mean the ratio of the Debt of Xxxxxx to its
Tangible Net Worth calculated based on the most recent financial
statements furnished to the Banks in accordance herewith.
"LIBO RATE" shall mean the arithmetic average of the rates of interest
per annum (rounded upwards, if necessary to the next 1/16 of 1%) at
which First Union National Bank, individually, is offered deposits of
United States Dollars by leading banks in the interbank eurodollar or
eurocurrency market on or about eleven o'clock (11:00) a.m. London
time two London Business Days prior to the commencement of the
requested Interest Period in an amount substantially equal to the
outstanding principal amount of the LIBO Rate Loan requested for a
maturity of comparable duration to the Interest Period.
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"LIBO RATE LOAN" shall mean a Loan made at Adjusted LIBO Rate plus the
LIBO Rate Margin, pursuant to a request for advance made under Section
2.4 herein.
"LIBO RATE MARGIN" shall mean the percentage listed in the following
table.
LEVERAGE RATIO LIBO RATE MARGIN
Less than 2.00 1.625%
Equal to or greater than 2.00 but less than 3.00 1.750%
Equal to or greater than 3.00 but less than 4.00 2.000%
Equal to or greater than 4.00 but less than 5.00 2.250%
Equal to or greater than 5.00 2.500%
"LIEN" shall mean any lien, mortgage, security interest, chattel
mortgage, pledge or other encumbrance (statutory or otherwise) of any
kind securing satisfaction of an Obligation, including any agreement
to give any of the foregoing, any conditional sales or other title
retention agreement, any lease in the nature thereof, and the filing
of or the agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction or similar evidence of any
encumbrance, whether within or outside the United States.
"LOAN" or "LOANS" shall mean LIBO Rate or Base Rate Revolving Credit
Loan or Loans.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Security
Agreement, and all other documents directly related or incidental to
said documents, the Loans or the Collateral.
"MATERIAL ADVERSE CHANGE" shall mean any event or condition which, in
the reasonable determination of the Required Banks, could result in a
material adverse change in the financial condition, business,
properties or profits of Xxxxxx or which gives reasonable grounds to
conclude that Xxxxxx, may not or will not be able to perform or
observe (in the normal course) its obligations under the Loan
Documents to which it is a party, including but not limited to the
Notes.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect (i) on
the financial condition, business, properties, or profits of Xxxxxx,
(ii) the ability of Xxxxxx to perform its obligations under this
Agreement, the Notes and the other Loan Documents, or (iii) the
legality, validity or enforceability of this Agreement or the Notes or
the rights and remedies of the holders of the Loans.
"MONTHLY LEASE PORTFOLIO AND RECEIVABLES REPORT" shall mean a report
in summary form of the status of accounts receivable in respect of all
leases which are part of the Collateral in form and substance
reasonably satisfactory to First Union, as Agent.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
ERISA Section 4001(a)(3), which covers employees of Xxxxxx or any
ERISA Affiliate.
"NET INCOME" shall mean net income after income taxes as shown on the
Statement of Income.
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"NET WORTH" shall mean the sum of capital stock, plus paid-in capital,
plus retained earnings, minus treasury stock and minus the net worth
of any Unrestricted Subsidiaries.
"NOTE" or "NOTES" shall have the meaning set forth in Section 2.3.
"OBLIGATIONS" shall mean all now existing or hereafter arising debts,
obligations, covenants, and duties of payment or performance of every
kind, matured or unmatured, direct or contingent, owing, arising, due,
or payable to the Banks or First Union, as Agent, by or from Xxxxxx
arising out of this Agreement or any other Loan Document, including,
without limitation, all obligations to repay principal of and interest
on the Loans, and to pay interest, fees, costs, charges, expenses,
professional fees, and all sums chargeable to Xxxxxx or for which
Xxxxxx is liable as indemnitor under the Loan Documents, whether or
not evidenced by any note or other instrument.
"OPERATING LEASE" shall mean, with respect to any Person, the
aggregate amount which, in accordance with GAAP, is not required to be
reported as a liability on the balance sheet of such Person at such
time in respect of such Person's interest as lessee under an Operating
Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"PENSION PLAN" shall mean, at any time, any Plan (including a
Multiemployer Plan), the funding requirements of which (under ERISA
Section 302 or Code Section 412) are, or at any time within the six
years immediately preceding the time in question, were in whole or in
part, the responsibility of Xxxxxx or any ERISA Affiliate.
"PERMITTED LIENS" shall mean (a) any Liens for current taxes,
assessments and other governmental charges not yet due and payable or
being contested in good faith by Xxxxxx by appropriate proceedings and
for which adequate reserves have been established by Xxxxxx as
reflected in Xxxxxx'x financial statements; (b) any mechanic's,
materialman's, carrier's, warehousemen's or similar Liens for sums not
yet due or being contested in good faith by Xxxxxx by appropriate
proceedings and for which adequate reserves have been established by
Xxxxxx as reflected in Xxxxxx'x financial statements; (c) easements,
rights-of-way, restrictions and other similar encumbrances on the real
property or fixtures of Xxxxxx incurred in the ordinary course of
business which individually or in the aggregate are not substantial in
amount and which do not in any case materially detract from the value
or marketability of the property subject thereto or interfere with the
ordinary conduct of the business of Xxxxxx; (d) Liens (other than
Liens imposed on any property of Xxxxxx pursuant to ERISA or Section
412 of the Code) incurred or deposits made in the ordinary course of
business, including Liens in connection with workers' compensation,
unemployment insurance and other types of social security and Liens to
secure performance of tenders, statutory obligations, surety and
appeal bonds (in the case of appeal bonds such Lien shall not secure
any reimbursement or indemnity obligation in an amount greater than
$2,500,000), bids, leases that are not Capitalized Leases, performance
bonds, sales contracts and other similar obligations, in each case,
not incurred in connection with the obtaining of credit or the payment
of a deferred purchase price, and which do not, in the aggregate,
result in a Material Adverse Effect; and (e) Liens, if any, existing
on the date hereof and listed in Schedule 1 hereto other than Liens
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of the character referred to in clause (g); (f) Liens in favor of First
Union, as Agent, in the Collateral as contemplated by this Agreement and
the other Loan Documents; (g) Liens on specific assets purchased which are
not included in the Collateral and whether such assets are purchased before
or after the date hereof and any revenue stream directly attributable
thereto provided that such liens are limited to the equipment so purchased
and the revenue stream generated therefrom.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, association, company, business trust or entity, or other
entity of whatever nature.
"PLAN" shall mean an employee benefit plan as defined in Section 3(3)
of ERISA, other than a Multiemployer Plan, whether formal or informal
and whether legally binding or not.
"POTENTIAL DEFAULT" shall mean an event, condition or circumstance
that with the giving of notice or lapse of time or both would become
an Event of Default.
"PRIME RATE" shall mean, for any day, the prime commercial lending
rate of First Union National Bank, as announced from time to time at
its head office, calculated on the basis of 30 day months and a year
of 360 days.
"PROHIBITED TRANSACTION" shall mean a transaction that is prohibited
under Code Section 4975 or ERISA Section 406 and not exempt under Code
Section 4975 or ERISA Section 408.
"REGULATION" shall mean any statute, law, ordinance, regulation, order
or rule of any United States or foreign, federal, state, local or
other government or governmental body, including, without limitation,
those covering or related to banking, financial transactions,
securities, public utilities, environmental control, energy, safety,
health, transportation, bribery, record keeping, zoning,
antidiscrimination, antitrust, wages and hours, employee benefits, and
price and wage control matters.
"REGULATION D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as it may be amended from time to time.
"REGULATORY CHANGE" shall mean any change after the date of this
Agreement in any Regulation (including Regulation D) or the adoption
or making after such date of any interpretations, directives or
requests of or under any Regulation (whether or not having the force
of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof applying to a class
of banks including any one of the Banks but excluding any foreign
office of any Bank.
"RELEASE" shall mean without limitation, the presence, leaking,
leaching, pouring, emptying, discharging, spilling, using, generating,
manufacturing, refining, transporting, treating, or storing of
Hazardous Substances at, into, onto, from or about the property or the
threat thereof, regardless of whether the result of an intentional or
unintentional action or omission, and which is in violation of
applicable law.
"REPORTABLE EVENT" shall mean, with respect to a Pension Plan: (a) Any
of the events set forth in ERISA Sections 4043(b) (other than a
reportable event as to which the provision of 30 days' notice to the
PBGC is waived under applicable regulations) or 4063(a) or the
regulations thereunder, (b) an event requiring any Xxxxxx or any ERISA
Affiliate to
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provide security to a Pension Plan under Code Section 401(a)(29) and (c)
any failure by any Xxxxxx or any ERISA Affiliate to make payments required
by Code Section 412(m).
"REQUEST FOR ADVANCE" shall have the meaning set forth in Section 2.4.
"REQUIRED BANKS" at any time shall mean Banks whose Revolving Loan
Commitments equal or exceed 66 2/3% of the total of such Revolving
Loan Commitments if no Loans are outstanding or, if Loans are
outstanding, Banks whose outstanding Loans equal or exceed 66 2/3% of
the Loans.
"RESERVE PERCENTAGE" shall mean, for any LIBO Rate Loan for any
Interest Period, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves (including any marginal,
supplemental, or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by the Bank against
"Eurocurrency liabilities" (as such term is used in Regulation D) but
without benefit of credit proration, exemptions, or offsets that might
otherwise be available to the Bank from time to time under Regulation
D. Without limiting the effect of the foregoing, the Reserve
Percentage shall reflect any other reserves required to be maintained
by the Bank against (1) any category of liabilities which includes
deposits by reference to which the rate for LIBO Rate Loans is to be
determined; or (2) any category of extension of credit or other assets
which include LIBO Rate Loans. The Adjusted LIBO Rate shall be
adjusted on and as of the effective day of any change in the Reserve
Percentage.
"REVOLVER TERMINATION DATE" shall have the meaning set forth in
Section 2.1.
"REVOLVING CREDIT LOAN" shall have the meaning set forth in Section
2.1.
"REVOLVING CREDIT NOTE" shall have the meaning set for in Section 2.2.
"REVOLVING LOAN COMMITMENT" shall have the meaning set forth in
Section 2.1.
"REVOLVING LOAN COMMITMENT FEE" shall have the meaning set forth in
Section 2.6.
"REVOLVING LOAN COMMITMENT PERCENTAGE" shall mean with respect to each
Bank the percentage set forth opposite its name in Exhibit A hereto.
"SECURITY AGREEMENT" shall mean the Mortgage and Security Agreement in
the form and substance attached hereto as Exhibit D.
"SOLVENT" shall mean, with respect to any Person, that the aggregate
present fair saleable value of such Person's assets is in excess of
the total amount of its probable liabilities on its existing debts as
they become absolute and matured, such Person has not incurred debts
beyond its foreseeable ability to pay such debts as they mature, and
such Person has capital adequate to conduct the business it is
presently engaged in or is about to engage in.
"STANDBY LETTER OF CREDIT" shall mean only those standby letters of
credit issued pursuant to a completed application on the form of
letter of credit application required by First Union at the time of
the request for each Standby Letter of Credit.
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"SUBSIDIARY" shall mean a corporation or other entity the shares of
stock or other equity interests of which having ordinary voting power
(other than stock or other equity interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries or both, by
Xxxxxx.
"TANGIBLE NET WORTH" shall mean Net Worth, minus Intangible Assets.
"TERMINATION EVENT" shall mean, with respect to a Pension Plan: (a) a
Reportable Event, (b) the termination of a Pension Plan, or the filing
of a notice of intent to terminate a Pension Plan, or the treatment of
a Pension Plan amendment as a termination under ERISA Section 4041(c),
(c) the institution of proceedings to terminate a Pension Plan under
ERISA Section 4042 or (d) the appointment of a trustee to administer
any Pension Plan under ERISA Section 4042.
"UNFUNDED PENSION LIABILITIES" shall mean, with respect to any Pension
Plan at any time, the amount determined by taking the accumulated
benefit obligation, as disclosed in accordance with Statement of
Accounting Standards No. 87, over the fair market value of Pension
Plan assets.
"UNRECOGNIZED RETIREE WELFARE LIABILITY" shall mean, with respect to
any Plan that provides post-retirement benefits other than pension
benefits, the amount of the accumulated post-retirement benefit
obligation, as determined in accordance with Statement of Financial
Accounting Standards No. 106, as of the most recent valuation date.
Prior to the date such statement is applicable to any Xxxxxx, such
amount of the obligation shall be based on an estimate made in good
faith.
"UNRESTRICTED SUBSIDIARY" shall mean WLFC Funding Corporation, T-5,
Inc., T-7, Inc., T-10, Inc., T-12, Inc. and any additional subsidiary
named by Xxxxxx after the date hereof with the written consent of the
Required Banks.
1.2. ACCOUNTING TERMS.. All accounting terms not specifically defined
herein shall be construed in accordance with Generally Accepted Accounting
Principles consistent with those applied in the preparation of the financial
statements referred to in Section 3.5, and all financial data submitted pursuant
to this Agreement shall be prepared in accordance with such principles.
2.0 THE CREDIT
2.1. THE LOANS..
(a) REVOLVING CREDIT LOANS; COMMITMENT. Subject to the terms and
conditions herein set forth and in reliance upon the representations, warranties
and covenants contained herein, each Bank agrees, severally and not jointly, to
make revolving credit loans (collectively, the "REVOLVING CREDIT LOANS" or the
"LOANS", and individually a "REVOLVING CREDIT LOAN" or a "LOAN") to Xxxxxx
during the period beginning on the date hereof and ending on July 31, 1998 or on
the earlier date of termination in full, pursuant to Section 2.7 or Section 8.1
hereof, of the obligations of such Bank under this Section 2.1 (July 31, 1998 or
such earlier date of termination being herein called the "REVOLVER TERMINATION
DATE") in amounts not to exceed at any time outstanding, in the aggregate, the
commitment amount set forth
11
opposite the name of such Bank on Exhibit A hereto (each such amount, as the
same may be reduced pursuant to Section 2.7 hereof being hereinafter called such
Bank's "REVOLVING LOAN COMMITMENT"). The Banks' collective commitment to make
Loans shall be the "AGGREGATE REVOLVING LOAN COMMITMENT". All Loans shall be
made by the Banks simultaneously and PRO RATA in accordance with their
respective Revolving Loan Commitments. All Loans shall be made to Xxxxxx at the
main office of First Union, Xxxxx xxx Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000.
(b) INTEREST RATE OPTIONS. Revolving Credit Loans shall bear
interest at (i) the Base Rate plus the Base Rate Margin, (ii) Adjusted LIBO Rate
plus the LIBO Rate Margin or (iii) some combination of the foregoing, as
requested by Xxxxxx, subject to the terms and conditions hereof including the
requirements concerning minimum Loan requests and the requirements that (i) no
request may be made which would require more than one interest rate option or
more than one Interest Period to apply to Loans made on any single date, and
(ii), in the case of LIBO Rate Loans, (a) not more than five such Loans may be
outstanding at any one time, and (b) no LIBO Rate Loan may have an Interest
Period extending beyond the Revolver Termination Date.
(c) MAXIMUM LOANS OUTSTANDING. Xxxxxx shall not be entitled to any
new Revolving Credit Loan if, after giving effect to such Loan, the unpaid
amount of the then outstanding Loans would exceed the lesser of (i) the
Aggregate Revolving Loan Commitment or (ii) the then current Borrowing Base, as
stated in the most recent Borrowing Base Certificate furnished to the Banks as
provided herein. For purposes of determining the amount of Revolving Credit
Loans outstanding, the Standby Letters of Credit issued pursuant to Section 2.2
hereof shall be deemed Revolving Credit Loans and shall be added to the
Revolving Credit Loans outstanding to determine the aggregate Revolving Credit
Loans outstanding.
(d) MINIMUM LOAN AMOUNT. Except for Loans which exhaust the full
remaining amount of the Aggregate Revolving Loan Commitment and conversions
which result in the conversion of all Loans subject to a particular interest
rate option, each of which may be in lesser amounts, (i) each LIBO Rate Loan
when made (and each conversion of Base Rate Loans into LIBO Rate Loans) shall be
in an amount at least equal to $3,000,000 or, if greater, then in such minimum
amount plus $100,000 multiples, and (ii) each Base Rate Loan when made (and each
conversion of LIBO Rate Loans into Base Rate Loans) shall be in an amount at
least equal to $150,000.
(e) PREPAYMENT AND REBORROWING. Prior to the Revolver Termination
Date and within the limits of the Aggregate Revolving Loan Commitment and the
Borrowing Base, Xxxxxx may borrow, prepay and reborrow Revolving Credit Loans.
All Revolving Credit Loans shall mature and be due and payable on the Revolver
Termination Date.
(f) LIMIT FOR CATEGORY B EQUIPMENT. Xxxxxx may have Revolving Credit
Loans outstanding at any time and from time to time in an aggregate amount up
to, but not exceeding $25,000,000 for the acquisition of Category B Equipment.
Any item of Category B Equipment which is a Stage III jet engine shall be
deducted from Category B Equipment and become part of Category A Equipment upon
the physical removal of that engine from its airframe, provided that such
Equipment otherwise qualifies as Category A Equipment.
(g) REVOLVING LOAN COMMITMENT PERCENTAGES. The obligation of each
Bank to make a Loan to Xxxxxx at any time shall be limited to its percentage
(the "Revolving Loan Commitment Percentage") as set forth opposite its name on
Exhibit A hereto multiplied by the aggregate principal amount of the Loan
requested. The principal amounts of the respective Loans made by the Banks on
the
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occasion of each Borrowing shall be pro rata in accordance with their respective
Revolving Loan Commitment Percentages. No Bank shall be required or permitted
to make any Loan if, immediately after giving effect to such Loan, and the
application of the proceeds of a Loan to the extent applied to the repayment of
the Loans, the sum of such Bank's Loans outstanding would exceed such Bank's
Revolving Loan Commitment.
(h) SEVERAL OBLIGATIONS. The failure of any one or more Banks to
make Loans in accordance with its or their obligations shall not relieve the
other Banks of their several obligations hereunder, but in no event shall the
aggregate amount at any one time outstanding which any Bank shall be required to
lend hereunder exceed its Revolving Loan Commitment.
(i) PAYMENT OF ADDITIONAL AMOUNT. If any principal of a LIBO Rate
Loan shall be repaid (whether upon prepayment, reduction of the Aggregate
Revolving Loan Commitment after acceleration or for any other reason) or
converted to a Base Rate Loan prior to the last day of the Interest Period
applicable to such LIBO Rate Loan or if Xxxxxx fails for any reason to borrow a
LIBO Rate Loan after giving irrevocable notice pursuant to Section 2.4, it shall
pay to each Bank, in addition to the principal and interest then to be paid,
such additional amounts as may be necessary to compensate each Bank for all
direct and indirect costs and losses (including losses resulting from
redeployment of prepaid or unborrowed funds at rates lower than the cost of such
funds to such Bank, and including lost profits incurred or sustained by such
Bank) as a result of such repayment or failure to borrow (the "ADDITIONAL
AMOUNT"). The Additional Amount (which each Bank shall take reasonable measures
to minimize) shall be specified in a written notice or certificate delivered to
Xxxxxx by First Union, as Agent, in the form provided by each Bank sustaining
such costs or losses. Such notice or certificate shall contain a calculation in
reasonable detail of the Additional Amount to be compensated and shall be
conclusive as to the facts and the amounts stated therein, absent manifest
error.
2.2. STANDBY LETTERS OF CREDIT. First Union, as Agent, under the terms and
subject to the conditions of this Agreement, on behalf of itself and each other
Bank in the same proportions as each Bank's Revolving Loan Commitment bears to
the Aggregate Revolving Loan Commitment, shall provide Standby Letters of Credit
to Xxxxxx, from time to time prior to the Revolver Termination Date, as
requested by Xxxxxx, provided that (A) the aggregate amount of Standby Letters
of Credit outstanding at any one time shall not exceed $2,000,000 or such lesser
amount, if any, as will, when added to the amount of the Revolving Credit Loans
then outstanding, aggregate more than the Aggregate Revolving Loan Commitment
(or such lesser amount as Xxxxxx is entitled to borrow hereunder at such time by
reason of the limitation of the Borrowing Base or otherwise), and (B) no Standby
Letter of Credit shall be for a term longer than one year.
Xxxxxx shall request a Standby Letter of Credit by delivering a completed
letter of credit application to First Union on such form as may be specified by
First Union not less than three Business Days prior to the date specified by
Xxxxxx as the date the Standby Letter of Credit is to be issued. The standard
form of First Union letter of credit application as currently in effect shall be
used.
Standby Letters of Credit shall not bear interest until drawn upon but
shall each be subject to an annual charge, payable in advance, as such may exist
from time to time, PROVIDED, HOWEVER, that at no time shall the annual charge
for any Standby Letter of Credit exceed 2.75%.
If any obligation of Xxxxxx to pay money in connection with any Standby
Letter of Credit is not met when requested by First Union, as Agent, as
permitted by the applicable letter of credit application and the reimbursement
agreement contained therein, the amount due shall be funded automatically by a
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Revolving Credit Loan which Loan shall be made without regard to any minimum
borrowing requirement, condition precedent herein, or Event of Default hereunder
which would otherwise entitle any Bank or the Banks not to provide such
Revolving Credit Loan, and each Bank shall make its proportionate share of such
Revolving Credit Loan. Any obligation of Xxxxxx to pay money in connection with
any Standby Letter of Credit or the application therefor shall be deemed secured
as if made as a Loan hereunder. In the event Xxxxxx shall terminate the
Aggregate Revolving Loan Commitment as provided in Section 2.6 and shall pay the
outstanding principal amount of the Revolving Credit Loans in full and with
interest or the Revolver Termination Date shall occur at a time when one or more
Standby Letters of Credit remain outstanding, then Xxxxxx shall furnish to First
Union, as Agent, within two Business Days such amount of cash, to be held as
cash collateral and invested in certificates of deposit of First Union with
interest payable to Xxxxxx, as will pay the maximum amount which may be drawn by
beneficiaries of Standby Letters of Credit outstanding at the date of such
termination or the Revolver Termination Date, as applicable.
2.3. THE NOTES. The Revolving Credit Loans made by each Bank shall be
evidenced by a single promissory note of Xxxxxx (each such promissory note as it
may be amended, extended, modified or renewed a "REVOLVING CREDIT NOTE" or a
"NOTE" and together the "REVOLVING CREDIT NOTES" or the "NOTES") in principal
face amount equal to such Bank's Revolving Loan Commitment, payable to the order
of such Bank and otherwise in the form attached hereto as Exhibit B. The
Revolving Credit Notes shall be dated the date of issuance, shall bear interest
at the rate per annum and be payable as to principal and interest in accordance
with the terms hereof. Each outstanding Revolving Credit Loan shall be and
payable as set forth in Section 2.1 hereof unless the maturity of said Loans is
accelerated as provided in Section 2.7 or Section 8.1 hereof. Notwithstanding
the stated amount of any Revolving Credit Note, the liability of Xxxxxx under
each Revolving Credit Note shall be limited at all times to the outstanding
principal amount of the Revolving Credit Loans by each Bank evidenced thereby,
plus all interest accrued thereon and the amount of all costs and expenses then
payable hereunder, as established by each such Bank's books and records, which
books and records shall be conclusive absent manifest error.
2.4. FUNDING PROCEDURES.
(a) REQUEST FOR ADVANCE. Each request for a Revolving Credit Loan or
the conversion or renewal of an interest rate with respect to a Loan shall be
made not later than 2:00 p.m. EST on a Business Day by delivery to First Union
of a written request signed by Xxxxxx or, in the alternative, a telephone
request followed promptly by written confirmation of the request (a "REQUEST FOR
ADVANCE"), specifying the date and amount of the Loan to be made, converted or
renewed, selecting the interest rate option applicable thereto, and in the case
of LIBO Rate Loans, specifying the Interest Period applicable to such Loans.
The form of request to be used in connection with the making, conversion or
renewal of Revolving Credit Loans shall be that form provided to Xxxxxx by First
Union. Each request shall be received not less than one Business Day prior to
the date of the proposed borrowing, conversion or renewal in the case of Base
Rate Loans, and three London Business Days prior to the date of the proposed
borrowing, conversion or renewal in the case of LIBO Rate Loans. No request
shall be effective until actually received in writing by First Union, as the
Agent. Xxxxxx may not request more than three advances per week. Each request
for advance shall be for Loans at a single interest rate option.
(b) ACTIONS BY AGENT. Upon receipt of a Request for Advance and if
the conditions precedent provided herein shall be satisfied at the time of such
request, First Union promptly shall notify each Bank of such request and of such
Bank's ratable share of such Loan. Upon receipt by First Union of a Request for
Advance, the request shall not be revocable by Xxxxxx.
14
(c) AVAILABILITY OF FUNDS. Not later than 1:00 p.m. EST on the date
of each Loan, each Bank shall make available (except as provided in clause (d)
below) its ratable share of such Loan, in immediately available funds, to First
Union at the address set forth opposite its name on the signature page hereof or
at such account in London as First Union shall specify to Xxxxxx and the Banks.
Unless First Union knows that any applicable condition specified herein has not
been satisfied, it will make the funds so received from the Banks immediately
available to Xxxxxx on the date of each Loan by a credit to the account of
Xxxxxx at First Union' aforesaid address.
(d) FUNDING ASSUMPTIONS. Unless First Union shall have been notified
by any Bank at least one Business Day prior to the date of the making,
conversion or renewal of any LIBO Rate Loan, or by 3:00 P.M. on the date a Base
Rate Loan is requested, that such Bank does not intend to make available to
First Union, such Bank's portion of the total amount of the Loan to be made,
converted or renewed on such date, First Union may assume that such Bank has
made such amount available to First Union on the date of the Loan and First
Union may, in reliance upon such assumption, make available to Xxxxxx a
corresponding amount. If and to the extent such Bank shall not have so made
such funds available to First Union, such Bank agrees to repay First Union
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to Xxxxxx until the
date such amount is repaid to First Union, at the Federal Funds Rate plus 50
basis points for three Business Days, and thereafter at the Base Rate. If such
Bank shall repay to First Union such corresponding amount, such amounts so
repaid shall constitute such Bank's Loan for purposes of this Agreement. If
such Bank does not repay such corresponding amount forthwith upon First Union's
demand therefor, First Union shall promptly notify Xxxxxx, and Xxxxxx shall
immediately pay such corresponding amount to First Union, without any prepayment
penalty or premium, but with interest on the amount repaid, for each day from
the date such amount is made available to Xxxxxx until the date such amount is
repaid to First Union, at the rate of interest applicable at the time to such
Loan. Nothing herein shall be deemed to relieve any Bank of its obligation to
fulfill its Revolving Loan Commitment hereunder or to prejudice any rights which
Xxxxxx may have against any Bank as a result of any default by such Bank
hereunder.
(e) PROCEEDS OF LOAN BEING REPAID. If the Banks make a Loan on a day
on which all or any part of an outstanding Loan from the Banks is to be repaid,
each Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
First Union as provided in clause (c).
2.5. INTEREST.
(a) BASE RATE LOANS. Each Base Rate Loan shall bear interest on the
unpaid principal balance thereof from day to day at a rate per annum which at
all times shall be equal to the Base Rate plus the Base Rate Margin. Interest
on Loans shall be computed on the basis of a year of 365 or 366 days, as
applicable, if the Base Rate is equal to the prime rate of First Union.
Interest on Loans shall be computed on the basis of a year of 360 days, for the
actual days elapsed, if the Base Rate is equal to the Federal Funds Rate plus
1/2 of 1% annum.
(b) LIBO RATE LOANS. Each LIBO Rate Loan shall bear interest from
its effective date on the unpaid principal amount thereof at Adjusted LIBO Rate
plus the LIBO Rate Margin. Interest on LIBO Rate Loans shall be computed on the
basis of a year of 360 days, for the actual days elapsed, and shall be payable
on the last day of the applicable Interest Period.
15
(c) CONVERSION TO BASE RATE. Unless Xxxxxx shall have elected in
accordance with the provisions of Section 2.4 or this Section 2.5 that LIBO Rate
apply to the one, two or three month period immediately succeeding a particular
Interest Period, upon the termination of such Interest Period the applicable
Loan shall bear interest at the Base Rate plus the Base Rate Margin until such
time as Xxxxxx elects to request a new LIBO Rate Loan for a subsequent Interest
Period.
(d) RENEWALS AND CONVERSIONS. Xxxxxx shall have the right to convert
Base Rate Loans into LIBO Rate Loans, and vice versa, and to renew LIBO Rate
Loans from time to time, provided that: (i) Xxxxxx shall give First Union, as
Agent, notice of each permitted conversion or renewal; (ii) LIBO Rate Loans may
be converted or renewed only as of the last day of the applicable Interest
Period for such Loans; (iii) without the consent of the Required Banks, no Base
Rate Loan may be converted into a LIBO Rate Loan, and no Interest Period may be
renewed if on the proposed date of conversion an Event of Default, or Potential
Default exists or would thereby occur. First Union, as Agent, shall use its
best efforts to notify Xxxxxx of the effectiveness of such conversion or
renewal, and the new interest rate to which the converted or renewed Loan is
subject, as soon as practicable after the conversion; provided, however, that
any failure to give such notice shall not affect Xxxxxx' obligations or the
Banks' rights and remedies hereunder in any way whatsoever.
(e) INTERIM PAYMENTS AT BASE RATE. If at any time Xxxxxx requests
that Adjusted LIBO Rate plus the LIBO Rate Margin be applicable to a Loan for a
particular Interest Period and a payment of principal is due within such period
(other than on the last day of such Interest Period), only that portion of that
Loan equal to the outstanding principal amount of the Loan less the principal
installment due during such period shall bear interest at Adjusted LIBO Rate
plus the LIBO Rate Margin for such Interest Period. The portion of that Loan
equal to the principal installment due during such period shall bear interest at
the Base Rate plus the Base Rate Margin.
(f) REINSTATEMENTS. The liability of Xxxxxx under this Section 2.5
shall continue to be effective or be automatically reinstated, as the case may
be, if at any time payment, in whole or in part, of any of the payments to the
Banks is rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of Xxxxxx or
any other Person, or upon or as a result of the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to Xxxxxx or
any other Person or any substantial part of its property, or otherwise, all as
though such payment had not been made.
2.6. REVOLVING LOAN COMMITMENT FEE. Xxxxxx agrees to pay to First Union,
as Agent, for the account of each Bank as compensation for the Aggregate
Revolving Loan Commitment, a fee (the "Revolving Loan Commitment Fee") computed
as follows: (1) when the average daily balance of the aggregate Loans
outstanding under the Revolving Credit Notes (measured over the previous
calendar quarter or portion thereof, as applicable) is less than 50% of the
Aggregate Revolving Loan Commitment, Xxxxxx shall pay a Revolving Loan
Commitment Fee equal to 3/8 of 1% of the unused portion of the Aggregate
Revolving Loan Commitment, and (2) when the average daily balance of the
aggregate Loans outstanding under the Revolving Credit Notes (measured over the
previous calendar quarter or portion thereof, as applicable) is at least 50% of
the Aggregate Revolving Loan Commitment, Xxxxxx shall pay a Revolving Loan
Commitment Fee equal to 1/4 of 1% of the unused portion of the Aggregate
Revolving Loan Commitment. The Revolving Loan Commitment Fee shall be payable
in arrears on the first day of each January, April, July and October, commencing
July 1, 1997 (for the three month period or portion thereof ended on the
preceding day), and on the Revolver Termination Date. The Revolving Loan
Commitment Fee shall be calculated on the basis of a 360 day year.
16
2.7. REDUCTION OR TERMINATION OF REVOLVING LOAN COMMITMENTS.
(a) VOLUNTARY Xxxxxx may at any time, on not less than one Business
Days' written notice, terminate or permanently reduce the Aggregate Revolving
Loan Commitment pro rata among the Banks, provided that any reduction shall be
in the minimum amount of $150,000 or a multiple thereof and that no such
reduction shall cause the principal amount of Loans outstanding to exceed the
reduced Aggregate Revolving Loan Commitment or the Borrowing Base, whichever is
less.
(b) REVOLVING LOAN COMMITMENT TERMINATION. In the event the
Aggregate Revolving Loan Commitment is terminated, the Revolver Termination Date
shall be accelerated to the date of such termination and Xxxxxx shall,
simultaneously with such termination, repay the Revolving Credit Loans in
accordance with Section 2.9.
2.8. VOLUNTARY PREPAYMENTS.
(a) BASE RATE LOANS. On one Business Day's notice to First Union,
Xxxxxx may, without penalty, at its option, prepay any Base Rate Loan in whole
at any time or in part from time to time, provided that each partial prepayment
shall be in the minimum principal amount of $150,000 or, if greater, then in
multiples thereof and, if less than $150,000 shall be outstanding, in principal
amount equal to amount remaining outstanding. Notwithstanding the foregoing,
prepayments may be made in connection with the release of collateral as provided
in Section 9.3, which prepayments shall not be subject to the requirements of
the previous sentence.
(b) LIBO RATE LOANS. On three London Business Days' notice to First
Union, Xxxxxx may, without penalty, at its option, prepay any LIBO Rate Loan in
whole at any time or in part from time to time, provided that each partial
prepayment shall be in the minimum principal amount of $1,000,000 or, if
greater, then in multiples of $100,000 and, if less than $1,000,000 shall be
outstanding, in principal amount equal to amount remaining outstanding provided
that if it shall prepay a LIBO Rate Loan prior to the last day of the applicable
Interest Period, or shall fail to borrow any LIBO Rate Loan on the date such
Loan is to be made, it shall pay to each Bank, in addition to the principal and
interest then to be paid in the case of a prepayment, on such date of
prepayment, the Additional Amount incurred or sustained by such Bank as a result
of such prepayment or failure to borrow as provided in Section 2.1.
2.9. PAYMENTS.
(a) ACCRUED INTEREST. Accrued interest on all Base Rate Loans shall
be due and payable on the first Business Day of each calendar month. Interest
on LIBO Rate Loans shall be payable on the last day of the applicable Interest
Period. Each Revolving Credit Loan shall mature as provided in Section 2.1.
(b) FORM OF PAYMENTS, APPLICATION OF PAYMENTS, PAYMENT
ADMINISTRATION, ETC. All payments of principal, interest, fees, or other
amounts payable by Xxxxxx hereunder shall be applied to the Loans in such order
and to such extent as shall be specified by Xxxxxx by written notice to First
Union at the time of such payment or prepayment. Such payments shall be
remitted to First Union on behalf of the Banks at the address set forth opposite
its name on the signature page hereof or at such office or account as First
Union shall specify to Xxxxxx, in immediately available funds not later than
2:00 p.m. on the day when due. Whenever any payment is stated as due on a day
which is not a Business Day, the maturity of such payment shall, except as
otherwise provided in the definition of "Interest Period," be extended to the
next succeeding Business Day and interest and commitment fees shall continue to
accrue
17
during such extension. Xxxxxx authorizes First Union to deduct from any account
of Xxxxxx maintained at First Union or over which First Union has control any
amount payable under this Agreement, the Notes or any other Loan Document which
is not paid in a timely manner. First Union's failure to deliver any xxxx,
statement or invoice with respect to amounts due under this Section or under any
Loan Document shall not affect Xxxxxx'x obligation to pay any installment of
principal, interest or any other amount under this Agreement when due and
payable.
(c) DEMAND DEPOSIT ACCOUNT. Xxxxxx shall maintain at least one
demand deposit account with First Union for purposes of this Agreement. Xxxxxx
authorizes First Union to deposit into said account all amounts to be advanced
to Xxxxxx hereunder. Further, Xxxxxx authorizes First Union (but First Union
shall not be obligated) to deduct from said account, or any other account
maintained by Xxxxxx at First Union National Bank, any amount payable hereunder
on or after the date upon which it is due and payable. Such authorization shall
include but not be limited to amounts payable with respect to principal,
interest, fees and expenses.
(d) NET PAYMENTS. All payments made to the Banks by Xxxxxx
hereunder, under any Note or under any other Loan Document will be made without
set off, counterclaim or other defense.
2.10. CHANGE IN CIRCUMSTANCES, YIELD PROTECTION.
(a) CERTAIN REGULATORY CHANGES. If any Regulatory Change or
compliance by any Bank with any request made after the date of this Agreement by
the Board of Governors of the Federal Reserve System or by any Federal Reserve
Bank or other central bank or fiscal, monetary or similar authority (in each
case whether or not having the force of law) shall (i) impose, modify or make
applicable any reserve, special deposit, Federal Deposit Insurance Corporation
premium or similar requirement or imposition against assets held by, or deposits
in or for the account of, or loans made by, or any other acquisition of funds
for loans or advances by, any Bank; (ii) impose on any Bank any other condition
regarding the Notes; (iii) subject any Bank to, or cause the withdrawal or
termination of any previously granted exemption with respect to, any tax
(including any withholding tax but not including any income tax not currently
causing any Bank to be subject to withholding) or any other levy, impost, duty,
charge, fee or deduction on or from any payments due from Xxxxxx; or (iv) change
the basis of taxation of payments from Xxxxxx to any Bank (other than by reason
of a change in the method of taxation of any Bank's net income); and the result
of any of the foregoing events is to increase the cost to any Bank of making or
maintaining any Loan or to reduce the amount of principal, interest or fees to
be received by any Bank hereunder in respect of any Loan, First Union will
immediately so notify Xxxxxx. If any Bank determines in good faith that the
effects of the change resulting in such increased cost or reduced amount cannot
reasonably be avoided or the cost thereof mitigated, then upon notice by First
Union to Xxxxxx, Xxxxxx shall pay to such Bank on each interest payment date of
the Loan, such additional amount as shall be necessary to compensate that Bank
for such increased cost or reduced amount.
(b) CAPITAL ADEQUACY. If any Bank shall determine that any
Regulation regarding capital adequacy or the adoption of any Regulation
regarding capital adequacy, which Regulation is applicable to banks (or their
holding companies) generally and not such Bank (or its holding company)
specifically, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank (or its holding company) with any such request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has the effect of reducing the
rate of return on such Bank's capital as a consequence of its obligations
hereunder to a level below that which such Bank could have achieved
18
but for such adoption, change or compliance (taking into consideration such
Bank's policies with respect to capital adequacy) by an amount deemed by such
Bank to be material, Xxxxxx shall promptly pay to First Union for the account of
such Bank, upon the demand of such Bank, such additional amount or amounts as
will compensate such Bank for such reduction.
(c) ABILITY TO DETERMINE LIBO RATE. If First Union shall determine
(which determination will be made after consultation with any Bank requesting
same and shall be, in the absence of fraud or manifest error, conclusive and
binding upon all parties hereto) that by reason of abnormal circumstances
affecting the interbank eurodollar or applicable eurocurrency market adequate
and reasonable means do not exist for ascertaining the LIBO Rate to be
applicable to the requested LIBO Rate Loan or that eurodollar or eurocurrency
funds in amounts sufficient to fund all the LIBO Rate Loans are not obtainable
on reasonable terms, First Union shall give notice of such inability or
determination by telephone to Xxxxxx and to each Bank at least two Business Days
prior to the date of the proposed Loan and thereupon the obligations of the
Banks to make, convert other Loans to, or renew such LIBO Rate Loan shall be
excused, subject, however, to the right of Xxxxxx at any time thereafter to
submit another request.
(d) YIELD PROTECTION. Determination by a Bank for purposes hereof of
the effect of any Regulatory Change or other change or circumstance referred to
above on its costs of making or maintaining Loans or on amounts receivable by it
in respect of the Loans and of the additional amounts required to compensate
such Bank in respect of any additional costs, shall be made in good faith and
shall be evidenced by a certificate, signed by an officer of such Bank and
delivered to Xxxxxx, as to the fact and amount of the increased cost incurred by
or the reduced amount accruing to such Bank owing to such event or events. Such
certificate shall be prepared in reasonable detail and shall be conclusive as to
the facts and amounts stated therein, absent manifest error.
(e) NOTICE OF EVENTS. The affected Bank will notify Xxxxxx of any
event occurring after the date of this Agreement that will entitle such Bank to
compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation. Said
notice shall be in writing, shall specify the applicable Section or Sections of
this Agreement to which it relates and shall set forth the amount of amounts
then payable pursuant to this Section. Xxxxxx shall pay such Bank the amount
shown as due on such notice within 10 days after its receipt of the same.
2.11. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if the adoption of any applicable Regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank with any
request or directive (whether or not having the force of law) of any such
authority, central bank, or comparable agency shall make it unlawful or
impossible for any Bank to (1) maintain their Revolving Loan Commitments, then
upon notice to Xxxxxx by First Union, the Revolving Loan Commitments shall
terminate; or (2) maintain or fund their LIBO Rate Loans, then upon notice to
the Xxxxxx of such event, the Xxxxxx'x outstanding LIBO Rate Loans shall be
converted into Base Rate Loans.
2.12. DISCRETION OF EACH BANK AS TO MANNER OF FUNDING. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Bank had actually funded and
maintained each LIBO Rate Loan during each Interest Period for such Loan through
the purchase of
19
deposits in the relevant interbank market having a maturity corresponding to
such Interest Period and bearing an interest rate equal to the LIBO Rate plus
the LIBO Rate Margin, for such Interest Period.
3. REPRESENTATIONS AND WARRANTIES.
Xxxxxx represents and warrants to the Banks that:
3.1. ORGANIZATION, STANDING. It (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the corporate power and authority necessary to own its
assets, carry on its business and enter into and perform its obligations
hereunder, and under each Loan Document to which it is a party, and (iii) is
qualified to do business and is in good standing in each jurisdiction where the
nature of its business or the ownership of its properties requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect.
3.2. CORPORATE AUTHORITY, VALIDITY, ETC. The making and performance of the
Loan Documents to which it is a party are within its power and authority and
have been duly authorized by all necessary corporate action. The making and
performance of the Loan Documents do not and under present law will not require
any consent or approval not obtained of any of Xxxxxx'x shareholders, or any
other person, do not and under present law will not violate any law, rule,
regulation order, writ, judgment, injunction, decree, determination or award, do
not violate any provision of its charter or by-laws, do not and will not result
in any breach of any material agreement, lease or instrument to which it is a
party, by which it is bound or to which any of its assets are or may be subject,
and do not and will not give rise to any Lien upon any of its assets. The
number of shares and classes of the capital stock of Xxxxxx and the ownership
thereof are accurately set forth on Schedule 1 attached hereto; all such shares
are validly issued, fully paid and non-assessable, and the issuance and sale
thereof are in compliance with all applicable federal and state securities and
other applicable laws. Further, Xxxxxx is not in default under any such
agreement, lease or instrument except to the extent such default reasonably
could not have a Material Adverse Effect. No authorizations, approvals or
consents of, and no filings or registrations with, any governmental or
regulatory authority or agency are necessary for the execution, delivery or
performance by Xxxxxx of any Loan Document to which it is a party or for the
validity or enforceability thereof, except any filings or registrations
expressly contemplated by the Loan Documents. Each Loan Document, when executed
and delivered, will be the legal, valid and binding obligation of Xxxxxx,
enforceable against it in accordance with its terms.
3.3. LITIGATION. Except as disclosed on Schedule 1, there are no actions,
suits or proceedings pending or, to Xxxxxx'x knowledge, threatened against or
affecting Xxxxxx or any of its assets before any court, government agency, or
other tribunal which if adversely determined reasonably could have a Material
Adverse Effect or upon the ability of Xxxxxx to perform under the Loan
Documents. If there is any disclosure on Schedule 1, the status (including the
tribunal, the nature of the claim and the amount in controversy) of each such
litigation matter as of the date of this Agreement is set forth in Schedule 1.
3.4. ERISA. (a) Xxxxxx and each ERISA Affiliate are in compliance in all
material respects with all applicable provisions of ERISA and the regulations
promulgated thereunder; and, neither Xxxxxx, nor any ERISA Affiliate maintains
or contributes to or has maintained or contributed to any multiemployer plan (as
defined in Section 4001 of ERISA) under which Xxxxxx or any ERISA Affiliate
could have any withdrawal liability; (b) neither Xxxxxx nor any ERISA Affiliate,
sponsors or maintains any Plan under which there is an accumulated funding
deficiency within the meaning of Section 412 of the Code, whether or not waived;
(c) the aggregate liability for accrued benefits and other ancillary benefits
under each Plan
20
that is or will be sponsored or maintained by Xxxxxx or any ERISA Affiliate
(determined on the basis of the actuarial assumptions prescribed for valuing
benefits under terminating single-employer defined benefit plans under Title IV
of ERISA) does not exceed the aggregate fair market value of the assets under
each such defined benefit pension Plan; (d) the aggregate liability of Xxxxxx
and each ERISA Affiliate arising out of or relating to a failure of any Plan to
comply with the provisions of ERISA or the Code, will not have a Material
Adverse Effect; and (e) there does not exist any unfunded liability (determined
on the basis of actuarial assumptions utilized by the actuary for the plan in
preparing the most recent Annual Report) of Xxxxxx or any ERISA Affiliate under
any plan, program or arrangement providing post-retirement life or health
benefits.
3.5. FINANCIAL STATEMENTS. The consolidated financial statements of Xxxxxx
as of and for the Fiscal Years ending December 31, 1997 and December 31, 1996,
consisting of a balance sheet, a statement of operations, a statement of
shareholders' equity, a statement of cash flows and accompanying footnotes, and
the interim consolidated and consolidating financial statements of Xxxxxx as of
March 31, 1998 furnished to the Banks in connection herewith, present fairly, in
all material respects, the financial position, results of operations and
operating statistics Xxxxxx as of the dates and for the periods referred to, in
conformity with GAAP. Except as set forth on Schedule 1 hereto, there are no
liabilities, fixed or contingent, which are not reflected in such financial
statements, other than liabilities which are not required to be reflected in
such balance sheets.
3.6. NOT IN DEFAULT, JUDGMENTS, ETC. No Event of Default or Potential
Default under any Loan Document has occurred and is continuing. Xxxxxx has
satisfied all judgments and is not in default with respect to any judgment,
writ, injunction, decree, rule, or regulation of any court, arbitrator, or
federal, state, municipal, or other governmental authority, commission, board
bureau, agency, or instrumentality, domestic or foreign.
3.7. TAXES. Xxxxxx has filed all federal, state, local and foreign tax
returns and reports which it is required by law to file and as to which its
failure to file would have a Material Adverse Effect, and has paid all taxes,
including wage taxes, assessments, withholdings and other governmental charges
which are presently due and payable, other than those being contested in good
faith by appropriate proceedings, if any, and disclosed on Schedule 1. The tax
charges, accruals and reserves on the books of Xxxxxx are adequate to pay all
such taxes that have accrued but are not presently due and payable.
3.8. PERMITS, LICENSES, ETC. Xxxxxx possesses all permits, licenses,
franchises, trademarks, trade names, copyrights and patents necessary to the
conduct of its business as presently conducted or as presently proposed to be
conducted, except where the failure to possess the same would not have a
Material Adverse Effect.
3.9. NO MATERIALLY ADVERSE CONTRACTS, ETC. To the best of its knowledge,
Xxxxxx is not subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of its
directors or officers has or is expected in the future to have a materially
adverse effect on its operations, business, assets, liabilities or upon its
ability to perform under the Loan Documents. Xxxxxx is not a party to any
contract or agreement which in the judgment of its directors or officers has or
is expected to have any materially adverse effect on its business, except as
otherwise reflected in adequate reserves.
3.10. COMPLIANCE WITH LAWS, ETC.
21
(a) COMPLIANCE GENERALLY. Xxxxxx is in compliance in all material
respects with all Regulations applicable to its business (including obtaining
all authorizations, consents, approvals, orders, licenses, exemptions from, and
making all filings or registrations or qualifications with, any court or
governmental department, public body or authority, commission, board, bureau,
agency, or instrumentality), the noncompliance with which reasonably could have
a Material Adverse Effect.
(b) HAZARDOUS WASTES, SUBSTANCES AND PETROLEUM PRODUCTS. Xxxxxx
received all permits and filed all notifications necessary to carry on its
business; and is in compliance in all respects with all Environmental Control
Statutes. Xxxxxx has not given any written or oral notice, nor has it failed to
give required notice, to the Environmental Protection Agency ("EPA") or any
state or local agency with regard to any actual or imminently threatened Release
of Hazardous Substances on properties owned, leased or operated by it or used in
connection with the conduct of its business and operations. Xxxxxx has not
received notice that it is potentially responsible for costs of clean-up or
remediation of any actual or imminently threatened Release of Hazardous
Substances pursuant to any Environmental Control Statute. No real property
owned or leased by it is in violation of any Environmental Laws and no Hazardous
Substances are present on said real property in violation of applicable law.
Xxxxxx has not been identified in any litigation, administrative proceedings or
investigation as a potentially responsible party for any liability under any
Environmental Laws.
3.11. SOLVENCY. Xxxxxx is, and after giving effect to the transactions
contemplated hereby, will be, Solvent.
3.12. SUBSIDIARIES, ETC. Xxxxxx does not have any Subsidiaries, except
as set forth In Schedule 1 hereto. Set forth in Schedule 1 hereto is a complete
and correct list, as of the date of this Agreement, of all Investments held by
Xxxxxx in any joint venture or other Person.
3.13. TITLE TO PROPERTIES, LEASES. Xxxxxx has good and marketable
title to all assets and properties reflected as being owned by it in its
financial statements as well as to all assets and properties acquired since said
date (except property disposed of since said date in the ordinary course of
business). Except for the Liens set forth in Schedule 1 hereto and any other
Permitted Liens, there are no Liens on any of such assets or properties. It has
the right to, and does, enjoy peaceful and undisturbed possession under all
material leases under which it is leasing property as a lessee. All such leases
are valid, subsisting and in full force and effect, and none of such leases is
in default, except where such default, either individually or in the aggregate,
could not have a Material Adverse Effect.
3.14. PUBLIC UTILITY HOLDING COMPANY; INVESTMENT COMPANY. Xxxxxx is
not a "public utility company" or a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended; or a "public utility"
within the meaning of the Federal Power Act, as amended. Further, it is not an
"investment company" or an "affiliated person" of an "investment company" or a
company "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
3.15. MARGIN STOCK. Xxxxxx is not and will not be engaged principally
or as one of its important activities in the business of extending credit for
the purpose of purchasing or carrying or trading in any margin stocks or margin
securities (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System as amended from time to time). Neither will it use or
permit any proceeds of the Loans to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of buying or carrying
margin stocks or margin securities.
22
3.16. USE OF PROCEEDS. Xxxxxx will use the proceeds of any Loan to be
made pursuant hereto for the purchase of Equipment as contemplated herein.
3.17. DEPRECIATION POLICIES. Xxxxxx'x depreciation policies are as set
forth on Exhibit F. These policies have been in effect without change since
January 1, 1997.
3.18. DISCLOSURE GENERALLY. The representations and statements made by
Xxxxxx or on its behalf in connection with this credit facility and the Loans,
including representations and statements in each of the Loan Documents, do not
and will not contain any untrue statement of a material fact or omit to state a
material fact or any fact necessary to make the representations made not
materially misleading. No written information, exhibit, report, brochure or
financial statement furnished by Xxxxxx to the Banks in connection with this
credit facility, the Loans, or any Loan Document contains or will contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
4. CONDITIONS PRECEDENT.
4.1. ALL LOANS. The obligation of each Bank to make any Loan or First
Union, as Agent, to issue any Standby Letter of Credit, is conditioned upon the
following:
(a) REQUEST FOR ADVANCE. Xxxxxx shall have delivered and First Union
shall have received a Request for Advance in such form as First Union may
request from time to time.
(b) BORROWING BASE CERTIFICATE. Xxxxxx shall have delivered and the
Banks shall have received a Borrowing Base Certificate dated the date of the
Loan requested under this Agreement.
(c) COVENANTS; REPRESENTATIONS. Xxxxxx shall be in compliance with
all covenants, agreements and conditions in each Loan Document and each
representation and warranty contained in each Loan Document shall be true with
the same effect as if such representation or warranty had been made on the date
such Loan or Standby Letter of Credit, as applicable, is made or issued.
(d) DEFAULTS. Immediately prior to and after giving effect to such
transaction, no Event of Default or Potential Default shall exist.
(e) MATERIAL ADVERSE CHANGE. Since March 31, 1998, there shall not
have been any Material Adverse Change with respect to Xxxxxx.
4.2. CONDITIONS TO FIRST LOAN. In addition to the conditions to all Loans
and Standby Letters of Credit as provided in Section 4.1, the obligation of each
Bank to make its first Loan is conditioned upon the following:
(a) ARTICLES, BYLAWS. Each Bank shall have received copies of the
Articles or Certificate of Incorporation and Bylaws of Xxxxxx certified by its
Secretary or Assistant Secretary; together with Certificate of Good Standing
from any jurisdiction where the nature of its business or the ownership of its
properties requires such qualification except where the failure to be so
qualified would not have a Material Adverse Effect.
(b) EVIDENCE OF AUTHORIZATION. Each Bank shall have received copies
certified by the Secretary or Assistant Secretary of Xxxxxx or any other
appropriate official (in the case of a Person other than Xxxxxx) of all
corporate or other action taken by each Person other than the Banks who is a
23
party to any Loan Document to authorize its execution and delivery and
performance of the Loan Documents and to authorize the Loans, together with such
other related papers as First Union shall reasonably require.
(c) LEGAL OPINIONS. Each Bank shall have received a favorable
written opinion in form and substance satisfactory, and from counsel reasonably
acceptable, to the Banks which shall be addressed to the Banks.
(d) INCUMBENCY. First Union, as Agent, shall have received a
certificate signed by the secretary or assistant secretary of Xxxxxx, together
with the true signature of the officer or officers authorized to execute and
deliver the Loan Documents and certificates thereunder, upon which the Banks
shall be entitled to rely conclusively until it shall have received a further
certificate of the secretary or assistant secretary of Xxxxxx amending the
prior certificate and submitting the signature of the officer or officers named
in the new certificate as being authorized to execute and deliver Loan Documents
and certificates thereunder.
(e) NOTES. Each Bank shall have received its Revolving Credit Note
duly executed, completed and issued in accordance herewith.
(f) DOCUMENTS. First Union, as Agent, shall have received all
certificates, instruments and other documents then required to be delivered
pursuant to any Loan Documents, in each instance in form and substance
reasonably satisfactory to it.
(g) CONSENTSWillis shall have provided to each Bank evidence
satisfactory to it that all governmental, shareholder and third party consents
and approvals necessary in connection with the transactions contemplated hereby
have been obtained and remain in effect.
(h) OTHER AGREEMENTSWillis shall have executed and delivered each
other Loan Document required hereunder.
(i) FEES, EXPENSESWillis shall simultaneously pay or shall have paid
all fees and expenses, if any, due hereunder or any other Loan Document.
5. AFFIRMATIVE COVENANTS.
Xxxxxx covenants and agrees that, without the prior written consent of
Required Banks, from and after the date hereof and so long as the Revolving Loan
Commitments are in effect or any Obligation remains unpaid or outstanding, it
will:
5.1. FINANCIAL STATEMENTS AND REPORTS. Furnish to the Banks the following
financial information:
(a) ANNUAL STATEMENTS. No later than one hundred and twenty (120)
days after the end of each Fiscal Year, the consolidated and consolidating
balance sheet of Xxxxxx as of the end of such year and the prior year in
comparative form, and related statements of operations, shareholders' equity,
and cash flows for the Fiscal Year and the prior Fiscal Year in comparative
form. The financial statements shall be in reasonable detail with appropriate
notes and be prepared in accordance with GAAP. The consolidated annual
financial statements shall be certified (without any qualification or exception)
by KPMG Peat Marwick LLP or other independent public accountants reasonably
acceptable to the Required Banks. Such financial statements shall be
accompanied by a report of such independent
24
certified public accountants stating that, in the opinion of such accountants,
such financial statements present fairly, in all material respects, the
financial position, and the results of operations and the cash flows of Xxxxxx
for the period then ended in conformity with GAAP, except for inconsistencies
resulting from changes in accounting principles and methods agreed to by such
accountants and specified in such report, and that, in the case of such
financial statements, the examination by such accountants of such financial
statements has been made in accordance with generally accepted auditing
standards and accordingly included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and assessing
the accounting principles used and significant estimates made, as well as
evaluating the overall financial statement presentation. Each financial
statement provided under this subsection (a) shall be accompanied by a
certificate signed by such accountants either stating that during the course of
their examination nothing came to their attention which would cause them to
believe that any event has occurred and is continuing which constitutes an Event
of Default or Potential Default, or describing each such event. n addition to
the annual financial statements, Xxxxxx shall, promptly upon receipt thereof,
furnish to the Banks copies of each other report submitted to its board of
directors by its independent accountants in connection with any annual, interim
or special audit made by them of the financial records of Xxxxxx.
(b) QUARTERLY STATEMENTS. No later than forty-five (45) calendar
days after the end of each Fiscal Quarter of each Fiscal Year, the consolidated
and consolidating balance sheet and related statements of operations,
shareholders' equity and cash flows of Xxxxxx for such quarterly period and for
the period from the beginning of such fiscal year to the end of such Fiscal
Quarter and a corresponding financial statement for the same periods in the
preceding Fiscal Year certified by the chief financial officer of Xxxxxx as
having been prepared in accordance with GAAP (subject to changes resulting from
audits and year-end adjustments); provided, however, that if the independent
certified public accountants issue a review report on the quarterly financial
statements of Xxxxxx, the financial statements required by this subsection (b)
shall be accompanied by a certificate signed by such accountants either stating
that during the course of their examination nothing came to their attention
which would cause them to believe that any event has occurred and is continuing
which constitutes an Event of Default or Potential Default, or describing each
such event and the remedial steps being taken by Xxxxxx. Such quarterly
statement shall be accompanied by a Compliance Certificate in the form attached
hereto as Exhibit E or such other form as the Required Banks shall reasonably
request.
(c) NO DEFAULT. Within forty-five (45) calendar days after the end
of each of the first three Fiscal Quarters of each Fiscal Year and within one
hundred and twenty (120) calendar days after the end of each Fiscal Year, a
certificate signed by the chief financial officer of Xxxxxx certifying that, to
the best of such officer's knowledge, after due inquiry, (i) Xxxxxx each has
complied with all covenants, agreements and conditions in each Loan Document and
that each representation and warranty contained in each Loan Document is true
and correct with the same effect as though each such representation and warranty
had been made on the date of such certificate (except to the extent such
representation or warranty related to a specific prior date), and (ii) no event
has occurred and is continuing which constitutes an Event of Default or
Potential Default, or describing each such event and the remedial steps being
taken by Xxxxxx, as applicable.
(d) ERISA. All reports and forms filed with respect to all Plans,
except as filed in the normal course of business and that would not result in an
adverse action to be taken under ERISA, and details of related information of a
Reportable Event, promptly following each filing.
25
(e) MATERIAL CHANGES. Notification to First Union, as Agent, and
each other Bank, of any litigation, administrative proceeding, investigation,
business development, or change in financial condition which could reasonably
have a Material Adverse Effect, promptly following its discovery.
(f) OTHER INFORMATION. Promptly, upon request by First Union, as
Agent, and each other Bank, from time to time (which may be on a monthly or
other basis), Xxxxxx shall provide such other information and reports regarding
its operations, business affairs, prospects and financial condition as First
Union, as Agent, or any Bank may reasonably request.
(g) BORROWING BASE CERTIFICATES. In the event Xxxxxx shall not have
delivered a Borrowing Base Certificate to the Banks during any calendar month,
it will deliver to the Banks, no later than 15 days after the end of such
calendar month as of the last day of the preceding calendar month, a Borrowing
Base Certificate signed by the chief financial officer, treasurer or controller
of Xxxxxx.
(h) MONTHLY LEASE PORTFOLIO AND RECEIVABLES REPORT. As soon as
practicable and in any event within 15 days after the end of each calendar
month, Xxxxxx will deliver to the Banks a lease portfolio listing and lease
receivables aging report (in form and substance reasonably satisfactory to the
Banks).
(i) MAINTENANCE OF CURRENT DEPRECIATION POLICIES. Xxxxxx shall
maintain its method of depreciating its assets substantially consistent with
past practices as set forth in Exhibit F and will promptly notify the Banks of
any deviation from such practices.
(j) MONTHLY LEASE RECEIPTS REPORT. Within 15 days after the end of
each calendar month following the Revolver Termination Date and until the Note
is paid in full, Xxxxxx shall deliver to the Banks a report setting forth the
items of Collateral on lease and amounts received with respect to each such item
of Collateral.
5.2. CORPORATE EXISTENCE. Preserve its corporate existence and all
material franchises, licenses, patents, copyrights, trademarks and trade names
consistent with good business practice; and maintain, keep, and preserve all of
its properties (tangible and intangible) necessary or useful in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.
5.3. ERISA. Comply in all material respects with the provisions of ERISA
to the extent applicable to any Plan maintained for the employees of Xxxxxx or
any ERISA Affiliate; do or cause to be done all such acts and things that are
required to maintain the qualified status of each Plan and tax exempt status of
each trust forming part of such Plan; not incur any material accumulated funding
deficiency (within the meaning of ERISA and the regulations promulgated
thereunder), or any material liability to the PBGC (as established by ERISA);
not permit any event to occur as described in Section 4042 of ERISA or which may
result in the imposition of a lien on its properties or assets; notify the Banks
in writing promptly after it has come to the attention of senior management of
Xxxxxx of the assertion or threat of any "reportable event" or other event
described in Section 4042 of ERISA (relating to the soundness of a Plan) or the
PBGC's ability to assert a material liability against it or impose a lien on
its, or any ERISA Affiliates', properties or assets; and refrain from engaging
in any Prohibited Transactions or actions causing possible liability under
Section 5.02 of ERISA.
5.4. COMPLIANCE WITH REGULATIONS. Comply in all material respects with all
Regulations applicable to its business, the noncompliance with which reasonably
could have a Material Adverse Effect.
26
5.5. CONDUCT OF BUSINESS; PERMITS AND APPROVALS, COMPLIANCE WITH LAWS.
Continue to engage in an efficient and economical manner in a business of the
same general type as conducted by it on the date of this Agreement; maintain in
full force and effect, its franchises, and all licenses, patents, trademarks,
trade names, contracts, permits, approvals and other rights necessary to the
profitable conduct of its business.
5.6. MAINTENANCE OF PROPERTIES. Xxxxxx will maintain or cause to be
maintained in good repair, working order and condition all properties used or
useful in its business and make all reasonable and necessary renewals,
replacements, additions, betterments and improvements thereof and thereto, so
that the business carried on in connection therewith may be conducted in the
ordinary course at all times.
5.7. MAINTENANCE OF INSURANCE. Maintain insurance with financially sound
and reputable insurance companies or associations in such amounts and covering
such risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
5.8. PAYMENT OF DEBT; PAYMENT OF TAXES, ETC. Where the amount involved
exceeds $250,000 or where the non-payment or non-discharge would otherwise have
a Material Adverse Effect on Xxxxxx or any of its assets: promptly pay and
discharge (a) all of its Debt in accordance with the terms thereof; (b) all
taxes, assessments, and governmental charges or levies imposed upon it or upon
its income and profits, upon any of its property, real, personal or mixed, or
upon any part thereof, before the same shall become in default; (c) all lawful
claims for labor, materials and supplies or otherwise, which, if unpaid, might
become a lien or charge upon such property or any part thereof; provided,
however, that so long as Xxxxxx first notifies First Union, as Agent, of its
intention to do so, Xxxxxx shall not be required to pay and discharge any such
Debt, tax, assessment, charge, levy or claim so long as the failure to so pay or
discharge does not constitute or result in an Event of Default or a Potential
Default hereunder and so long as no foreclosure or other similar proceedings
shall have been commenced against such property or any part thereof and so long
as the validity thereof shall be contested in good faith by appropriate
proceedings diligently pursued and it shall have set aside on its books adequate
reserves with respect thereto.
5.9. NOTICE OF EVENTS. Promptly upon discovery of any of the following
events, Xxxxxx shall provide telephone notice to the Banks (confirmed within
three (3) calendar days by written notice), describing the event and all action
Xxxxxx proposes to take with respect thereto:
(a) an Event of Default or Potential Default under this Agreement or
any other Loan Document;
(b) any default or event of default under a contract or contracts and
the default or event of default involves payments by Xxxxxx in an aggregate
amount equal to or in excess of $250,000;
(c) a default or event of default under or as defined in any evidence
of or agreements for Indebtedness for Borrowed Money under which Xxxxxx'x
liability is equal to or in excess of $250,000, singularly or in the aggregate,
whether or not an event of default thereunder has been declared by any party to
such agreement or any event which, upon the lapse of time or the giving of
notice or both, would become an event of default under any such agreement or
instrument or would permit any party to any such instrument or agreement to
terminate or suspend any commitment to lend to Xxxxxx or to declare or to cause
any such indebtedness to be accelerated or payable before it would otherwise be
due;
27
(d) the institution of, any material adverse determination in, or the
entry of any default judgment or order or stipulated judgment or order in, any
suit, action, arbitration, administrative proceeding, criminal prosecution or
governmental investigation against Xxxxxx in which the amount in controversy is
in excess of $250,000, singularly or in the aggregate; or
(e) any change in any Regulation, including, without limitation,
changes in tax laws and regulations, which would have a Material Adverse Effect.
5.10. INSPECTION RIGHTS. At any time during the existence of an Event
of Default or Potential Default, during regular business hours and then as often
as requested of Xxxxxx, permit First Union, as Agent, or any authorized officer,
employee, agent, or representative of First Union to examine and make abstracts
from the records and books of account of Xxxxxx, wherever located, and to visit
the properties of Xxxxxx; and to discuss the affairs, finances, and accounts of
Xxxxxx with its Chairman, President, any executive vice president, it chief
financial officer, treasurer, controller or independent accountants. If no
Event of Default or Potential Default shall be in existence, First Union shall
limit such examination to once each calendar year. Xxxxxx shall reimburse First
Union up to $5,000 promptly following the completion of each such examination.
If the inspection shall be made during the continuance of a Potential Default or
an Event of Default, Xxxxxx shall reimburse First Union for its reasonable
out-of-pocket expense of such inspection. At all times, it is understood and
agreed by Xxxxxx that all expenses in connection with any such inspection which
may be incurred by Xxxxxx, any officers and employees thereof and the attorneys
and independent certified public accountants therefor shall be expenses payable
by Xxxxxx and shall not be expenses of the Banks or any of them.
5.11. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Maintain books and
records at all times in accordance with Generally Accepted Accounting
Principles.
5.12. COMPLIANCE WITH MATERIAL CONTRACTS. Xxxxxx will comply in all
material respects with all obligations, terms, conditions and covenants, as
applicable, in all Debt applicable to it and all instruments and agreements
related thereto, and all other instruments and agreements to which it is a party
or by which it is bound or any of its properties is affected and in respect of
which the failure to comply reasonably could have a Material Adverse Effect.
5.13. USE OF PROCEEDS. Xxxxxx will use the proceeds of each Loan made
pursuant hereto for the purchase or refinance of Equipment as provided herein or
general working capital purposes.
5.14. FURTHER ASSURANCES. Do such further acts and things and execute
and deliver to the Banks such additional assignments, agreements, powers and
instruments, as any Bank may reasonably require or reasonably deem advisable to
carry into effect the purposes of this Agreement or to better assure and confirm
unto each Bank its rights, powers and remedies hereunder.
6. NEGATIVE COVENANTS.
Xxxxxx covenants and agrees that, without the prior written consent of the
Required Banks, from and after the date hereof and so long as the Revolving Loan
Commitments are in effect or any Obligation remains unpaid or outstanding, it
will not:
6.1. CONSOLIDATION AND MERGER. Merge or consolidate with or into any
corporation except, if (1) no Potential Default or Event of Default shall have
occurred and be continuing either immediately prior to or upon the consummation
of such transaction, and (2) Xxxxxx is the surviving entity.
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6.2. LIENS. Create, assume or permit to exist any Lien on any of its
property or assets, whether now owned or hereafter acquired, or upon any income
or profits therefrom, except Permitted Liens.
6.3. GUARANTEES. Guarantee or otherwise in any way become or be
responsible for indebtedness or obligations (including working capital
maintenance, take-or-pay contracts) of any unconsolidated Person, contingently
or otherwise. Notwithstanding the preceding sentence, Xxxxxx may guarantee
indebtedness or obligations of unconsolidated Affiliates in amounts not to
exceed $15,000,000 in the aggregate, in the ordinary course of business with the
prior written consent of the Required Banks, which consent not to be
unreasonably withheld.
6.4. MARGIN STOCK. Use or permit any proceeds of the Loans to be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock within the meaning of Regulation U
of The Board of Governors of the Federal Reserve System, as amended from time to
time.
6.5. ACQUISITIONS AND INVESTMENTS. If an Event of Default or a Potential
Default exists or would exist immediately thereafter: purchase or otherwise
acquire (including without limitation by way of share exchange) any part or
amount of the capital stock or assets of, or make any Investments in any other
Person; or enter into any new business activities or ventures not directly
related to its present business; or create any Subsidiary, except (a) it may
acquire and hold stock, obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to it, and (b) it may
make and own (i) Investments in certificates of deposit or time deposits having
maturities in each case not exceeding one year from the date of issuance thereof
and issued by any Bank, or any FDIC-insured commercial bank incorporated in the
United States or any state thereof having a combined capital and surplus of not
less than $150,000,000, (ii) Investments in marketable direct obligations issued
or unconditionally guaranteed by the United States of America, any agency
thereof, or backed by the full faith and credit of the United States of America,
in each case maturing within one year from the date of issuance or acquisition
thereof, (iii) Investments in commercial paper issued by a corporation
incorporated in the United States or any State thereof maturing no more than one
year from the date of issuance thereof and, at the time of acquisition, having a
rating of A-1 (or better) by Standard & Poor's Corporation or P-1 (or better) by
Xxxxx'x Investors Service, Inc., and (iv) Investments in money market mutual
funds all of the assets of which are invested in cash or investments described
in the immediately preceding clauses (i), (ii) and (iii).
6.6. TRANSFER OF ASSETS; NATURE OF BUSINESS. Xxxxxx may not sell,
transfer, lease or dispose of assets constituting more than twenty percent (20%)
of its assets during any twelve month period without the written consent of the
Required Banks, such consent not to be unreasonably withheld. Notwithstanding
the above, (1) Xxxxxx may sell, transfer, pledge, assign, re-lease or otherwise
dispose of any equipment coming off lease if such sale or disposition is in the
ordinary course of its business, (2) Xxxxxx may sell individual or small groups
of leases and related equipment from time to time and sell groups of leases and
related equipment in securitization transactions and (3) Xxxxxx may engage in
the nonrecourse or partial recourse financing of leases. Xxxxxx may not
discontinue, liquidate or change in any material respect any substantial part of
its operations or business.
6.7. ACCOUNTING CHANGE. Without the prior written approval of the Required
Banks, make or permit any material change in financial accounting policies or
financial reporting practices, except as required by Generally Accepted
Accounting Principles or regulations of the Securities and Exchange Commission,
if applicable.
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6.8. TRANSACTIONS WITH AFFILIATES. Enter into any material transaction
(including, without limitation, the purchase, sale or exchange of property, the
rendering of any services or the payment of management fees) with any Affiliate,
except transactions in the ordinary course of, and pursuant to the reasonable
requirements of, its business, and in good faith and upon commercially
reasonable terms.
6.9. RESTRICTION ON AMENDMENT OF THIS AGREEMENT. Enter into or otherwise
become subject to or suffer to exist any agreement which would require it to
obtain the consent of any other person as a condition to the ability of the
Banks and Xxxxxx to amend or otherwise modify this Agreement.
7. FINANCIAL COVENANTS.
Xxxxxx covenants and agrees that, without the prior written consent of the
Required Banks, from and after the date hereof and so long as the Revolving Loan
Commitments are in effect or any Obligation remains unpaid or outstanding, that:
7.1. NO LOSSES. From and after April 1, 1997, Xxxxxx shall not at any time
suffer a net loss for the four (4) most recently ended consecutive Fiscal
Quarters.
7.2. MINIMUM TANGIBLE NET WORTH. Tangible Net Worth will not at any time
be less than $40,000,000.
7.3. DEBT TO TANGIBLE NET WORTH. From and after April 1, 1997, the ratio
of Debt (including, without limitation, Debt represented by the Note) to
Tangible Net Worth will not exceed 6.00:1 as at the end of any fiscal quarter.
7.4. MINIMUM INTEREST EXPENSE COVERAGE. From and after April 1, 1997, the
ratio of EBIT to interest for the four (4) most recently ended consecutive
Fiscal Quarters will not be less than 1.25:1.
7.5. BORROWING BASE. The aggregate principal amount of Loans outstanding
shall not at any time exceed the Borrowing Base or the Aggregate Revolving Loan
Commitment, whichever is less; provided, however, that this covenant shall not
be deemed breached if, at the time such aggregate amount exceeds said level,
within four Business Days after the earlier of the date Xxxxxx first has
knowledge of such excess or the date of the next Borrowing Base Certificate
disclosing the existence of such excess, a prepayment of Loans shall be made in
an amount sufficient to assure continued compliance with this covenant in the
future.
8. DEFAULT.
8.1. EVENTS OF DEFAULT. Xxxxxx shall be in default if any one or more of
the following events (each an "Event of Default") occurs:
(a) PAYMENTS. Xxxxxx fails to pay the principal due on any Revolving
Credit Note when due and payable (whether at maturity, by notice of intention to
prepay, or otherwise); or Xxxxxx fails to pay interest or any other amount
payable hereunder or under any other Loan Document within three Business Days
after the date such interest or other amount is due and payable.
(b) COVENANTS. Xxxxxx fails to observe or perform (1) within fifteen
days after receiving written notice from the Bank, any term, condition or
covenant set forth in Sections 5.1(a), 5.1(b), 5.1(c), 5.1(g), 5.1(h) or 5.1(i)
herein, (2) any term, condition or covenant set forth in Section 5.2 , Sections
6.1 through 6.9 or Section 8.1(a) herein, as and when required or (3) any term,
condition or covenant contained in this
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Agreement or any other Loan Document other than as set forth in (1) and (2)
above, as and when required and such failure shall continue for a period of 10
Business Days or more.
(c) REPRESENTATIONS, WARRANTIES. Any representation or warranty made
or deemed to be made by Xxxxxx, as applicable, herein or in any Loan Document or
in any exhibit, schedule, report or certificate delivered pursuant hereto or
thereto shall prove to have been false, misleading or incorrect in any material
respect when made or deemed to have been made.
(d) BANKRUPTCY. Xxxxxx is dissolved or liquidated, makes an
assignment for the benefit of creditors, files a petition in bankruptcy, is
adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any
receiver or trustee, commences any proceeding relating to itself under any
bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, has commenced against it any such proceeding
which remains undismissed for a period of thirty (60) days, or indicates its
consent to, approval of or acquiescence in any such proceeding, or any receiver
of or trustee for Xxxxxx or any substantial part of the property of Xxxxxx is
appointed, or if any such receivership or trusteeship to continues undischarged
for a period of thirty (60) days.
(e) CERTAIN OTHER DEFAULTS. Xxxxxx shall fail to pay when due any
Indebtedness for Borrowed Money which singularly or in the aggregate exceeds
$5,000,000, and such failure shall continue beyond any applicable cure period,
or Xxxxxx shall suffer to exist any default or event of default in the
performance or observance, subject to any applicable grace period, of any
agreement, term, condition or covenant with respect to any agreement or document
relating to Indebtedness for Borrowed Money if the effect of such default is to
permit, with the giving of notice or passage of time or both, the holders
thereof, or any trustee or agent for said holders, to terminate or suspend any
commitment (which is equal to or in excess of $5,000,000) to lend money or to
cause or declare any portion of any borrowings thereunder to become due and
payable prior to the date on which it would otherwise be due and payable,
provided that during any applicable cure period the Bank's obligations hereunder
to make further Loans shall be suspended.
(f) JUDGMENTS. Any judgments against Xxxxxx or against its assets or
property for amounts in excess of $5,000,000 in the aggregate remain unpaid,
unstayed on appeal, undischarged, unbonded and undismissed for a period of
thirty (30) days.
(g) ATTACHMENTS. Any assets of Xxxxxx shall be subject to
attachments, levies, or garnishments for amounts in excess of $250,000 in the
aggregate which have not been dissolved or satisfied within twenty (20) days
after service of notice thereof to Xxxxxx.
(h) CHANGE IN CONTROL. Xxxxxxx X. Xxxxxx or the CFW Partners, L.P.
limited partnership, shall cease to be the record and beneficial owner of at
least 34% of the issued and outstanding voting and capital stock of Xxxxxx.
(i) SECURITY INTERESTS. Any security interest created pursuant to
any Loan Document shall cease to be in full force and effect, or shall cease in
any material respect to give First Union, as Agent, the Liens, rights, powers
and privileges purported to be created thereby (including, without limitation, a
perfected security interest in, and Lien on, all of the Collateral), superior to
and prior to the rights of all third Persons, and subject to no other Liens
(except as permitted by Section 6.2).
31
(j) CHANGES IN SENIOR MANAGEMENT. Xxxxxxx X. Xxxxxx shall cease to
be a member of senior management or both Xxxxxx X. Xxxxxxxxx and Xxxxx XxXxxxx
shall cease to be members of senior management within any period of twelve
consecutive months.
THEN and in every such event other than that specified in Section 8.1.(d), First
Union, as Agent, may, or at the written request of the Required Banks shall
immediately terminate the Aggregate Revolving Loan Commitment by notice in
writing to Xxxxxx and immediately declare the Revolving Credit Notes, including
without limitation accrued interest, to be, and they shall thereupon forthwith
become due and payable without presentment, demand, or notice of any kind, all
of which are hereby expressly waived by Xxxxxx. Upon the occurrence of any
event specified in Section 8.1.(d), the Aggregate Revolving Loan Commitment
shall automatically terminate and the Revolving Credit Notes, including without
limitation accrued interest, shall immediately be due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by Xxxxxx. Any date on which the Notes and such other
Obligations are declared due and payable pursuant to this Section 8.1, shall be
the Revolver Termination Date for purposes of this Agreement. From and after
the date an Event of Default shall have occurred and for so long as an Event of
Default shall be continuing, the Loans shall bear interest at the Default Rate.
9. COLLATERAL.
9.1. COLLATERAL. Except as otherwise specifically set forth herein or in
any other Loan Document, any Loans made and outstanding and their repayment at
all times shall (i) in the case of Collateral (as defined in the Security
Agreement, hereinafter referred to as the "COLLATERAL") located in the United
States, be secured by a first priority perfected security interest and (ii) in
the case of Collateral located in jurisdictions outside the United States, be
secured by a security interest which adequately protects the first priority
security interest in favor of First Union, as Agent.
9.2. SECURITY AGREEMENT. As security for the punctual payment in full of
all Notes (including all payments of principal, and interest and other costs
contemplated hereby), Xxxxxx shall execute and deliver to First Union, as Agent,
the Security Agreement and such other documents as may be necessary to
constitute and evidence a security interest in the Collateral.
9.3. RELEASE OF COLLATERAL. Xxxxxx shall be entitled to remove any item of
Collateral at any time, PROVIDED, however, that at the time of such removal and
release (a) there is not then existing an Event of Default or Potential Default,
and (b) no Event of Default or Potential Default would exist immediately
following removal and release.
10. AGENT.
10.1. APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
appoints and authorizes First Union, as Agent, to take such action on its behalf
and to exercise such powers under this Agreement and the Loan Documents as are
specifically delegated to it as Agent by the terms hereof or thereof, together
with such other powers as are reasonably incidental thereto. The relationship
between First Union and each Bank has no fiduciary aspects, and First Union'
duties as Agent hereunder are acknowledged to be only ministerial and not
involving the exercise of discretion on its part. Nothing in this Agreement or
any Loan Document shall be construed to impose on First Union any duties or
responsibilities other than those for which express provision is made herein or
therein. In performing its duties and functions under this Article 10, First
Union does not assume and shall not be deemed to have assumed, and hereby
expressly disclaims, any obligation with or for Xxxxxx. As to matters not
expressly
32
provided for in this Agreement or any Loan Document, First Union shall not be
required to exercise any discretion or to take any action or communicate any
notice, but shall be fully protected in so acting or refraining from acting upon
the instructions of the Required Banks and their respective successors and
assigns; provided, however, that in no event shall First Union be required to
take any action which exposes it to personal liability or which is contrary to
this Agreement, any Loan Document or applicable law, and First Union shall be
fully justified in failing or refusing to take any action hereunder unless it
shall first be specifically indemnified to its satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of
taking or omitting to take any such action. If an indemnity furnished to First
Union for any purpose shall, in its reasonable opinion, be insufficient or
become impaired, First Union may call for additional indemnity from the Banks
and not commence or cease to do the acts for which such indemnty is requested
until such additional indemnity is furnished.
10.2. DUTIES AND OBLIGATIONS. In performing its functions and duties
hereunder on behalf of the Banks, First Union shall exercise the same care and
skill as it would exercise in dealing with loans for its own account. Neither
First Union nor any of its directors, officers, employees or other agents shall
be liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any Loan Document except for its or their own
gross negligence or willful misconduct. Without limiting the generality of the
foregoing, First Union (a) may consult with legal counsel and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith and in accordance with the advice of such experts; (b)
makes no representation or warranty to any Bank as to, and shall not be
responsible to any Bank for, any recital, statement, representation or warranty
made in or in connection with this Agreement, any Loan Document or in any
written or oral statement (including a financial or other such statement),
instrument or other document delivered in connection herewith or therewith or
furnished to any Bank by or on behalf of Xxxxxx; (c) shall have no duty to
ascertain or inquire into Xxxxxx'x performance or observance of any of the
covenants or conditions contained herein or to inspect any of the property
(including the books and records) of Xxxxxx or inquire into the use of the
proceeds of the Revolving Credit Loans or (unless the officers of First Union
active in their capacity as officers of First Union on Xxxxxx'x account have
actual knowledge thereof or have been notified in writing thereof) to inquire
into the existence or possible existence of any Event of Default or Potential
Default; (d) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, effectiveness, genuineness, sufficiency,
collectability or value of this Agreement or any other Loan Document or any
instrument or document executed or issued pursuant hereto or in connection
hereith, except to the extent that such may be dependent on the due
authorization and execution by First Union itself; (e) except as expressly
provided herein in respect of information and data furnished to First Union for
distribution to the Banks, shall have no duty or responsibility, either
initially or on a continuing basis, to provide to any Bank any credit or other
information with respect to Xxxxxx, whether coming into its possession before
the making of the Loans or at any time or times thereafter; and (f) shall incur
no liability under or in respect of this Agreement or any other Loan Document
for, and shall be entitled to rely and act upon, any notice, consent,
certificate or other instrument or writing (which may be by facsimile
(telecopier), telegram, cable, or other electronic means) believed by it to be
genuine and correct and to have been signed or sent by the proper party or
parties.
10.3. FIRST UNION AS A BANK. With respect to its Revolving Loan
Commitment and the Loans made and to be made by it, First Union shall have the
same rights and powers under this Agreement and all other Loan Documents as the
other Banks and may exercise the same as if it were not the Agent. The terms
"Bank" and "Banks" as used herein shall, unless otherwise expressly indicated,
include First Union in its individual capacity. First Union and any successor
Agent which is a commercial bank, and their respective affiliates, may accept
deposits from, lend money to, act as trustee under indentures of and
33
generally engage in any kind of business with, Xxxxxx and its affiliates from
time to time, all as if such entity were not the Agent hereunder and without any
duty to account therefor to any Bank.
10.4. INDEPENDENT CREDIT DECISIONS. Each Bank acknowledges to First
Union that it has, independently and without reliance upon First Union or any
other Bank, and based upon such documents and information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement. Each Bank also acknowledges that it will, independently or
through other advisers and representatives but without reliance upon First Union
or any other Bank, and based upon such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or refraining from taking any action under this Agreement or any Loan
Document.
10.5. INDEMNIFICATION. The Banks agree to indemnify First Union (to
the extent not previously reimbursed by Xxxxxx), ratably in proportion to each
Bank's Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against First Union in its capacity as Agent in any
way relating to or arising out of this Agreement or any Loan Document or any
action taken or omitted to be taken by First Union in its capacity as Agent
hereunder or under any Loan Document; provided that none of the Banks shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from First Union' gross negligence or willful misconduct. Without limiting the
generality of the foregoing, each Bank agrees to reimburse First Union, promptly
on demand, for such Bank's ratable share (based upon the aforesaid
apportionment) of any out-of-pocket expenses (including counsel fees and
disbursements) incurred by First Union in connection with the preparation,
execution, administration or enforcement of, or the preservation of any rights
under, this Agreement and the Loan Documents to the extent that First Union is
not reimbursed for such expenses by Xxxxxx.
10.6. SUCCESSOR AGENT. First Union may resign at any time by giving
written notice of such resignation to the Banks and Xxxxxx, such resignation to
be effective only upon the appointment of a successor Agent as hereinafter
provided. Upon any such notice of resignation, the Banks shall jointly appoint
a successor Agent upon written notice to Xxxxxx and First Union. If no
successor Agent shall have been jointly appointed by such Banks and shall have
accepted such appointment within thirty (30) days after First Union shall have
given notice of resignation, First Union may, upon notice to Xxxxxx and the
Banks, appoint a successor Agent. Upon its acceptance of any appointment as
Agent hereunder, the successor Agent shall succeed to and become vested with all
the rights, powers, privileges and duties of First Union, and First Union shall
be discharged from its duties and obligations as Agent under this Agreement and
the Loan Documents. After First Union' resignation hereunder, the provisions
hereof shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Agent under this Agreement and the Loan Documents.
10.7. ALLOCATIONS MADE BY FIRST UNION. As between First Union, as
Agent, and the Banks, unless a Bank objecting to a determination or allocation
made by First Union pursuant to this Agreement delivers to First Union written
notice of such objection within one hundred twenty (120) days after the date any
distribution was made by First Union, such determination or allocation shall be
conclusive on such one hundred twentieth day and only those items expressly
objected to in such notice shall be deemed disputed by such Bank. First Union
shall not have any duty to inquire as to the application by the Banks of any
amounts distributed to them.
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11. MISCELLANEOUS.
11.1. WAIVER. No failure or delay on the part of First Union or any
Bank or any holder of any Note in exercising any right, power or remedy under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under any Loan Document. The remedies provided under the Loan Documents are
cumulative and not exclusive of any remedies provided by law.
11.2. AMENDMENTS. No amendment, modification, termination or waiver of
any Loan Document or any provision thereof nor any consent to any departure by
Xxxxxx therefrom shall be effective unless the same shall have been approved by
the Required Banks, be in writing and be signed by First Union, as Agent, and
then any such waiver or consent shall be effective only in the instance and for
the specific purpose for which given. No notice to or demand on the Xxxxxx
shall entitle Xxxxxx to any other or further notice or demand in similar or
other circumstances.
11.3. GOVERNING LAW. The Loan Documents and all rights and obligations
of the parties thereunder shall be governed by and be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
Pennsylvania or federal principles of conflict of laws.
11.4. PARTICIPATIONS AND ASSIGNMENTS. Xxxxxx hereby acknowledges and
agrees that any Bank may at any time, with the consent of Xxxxxx (which consent
shall not be unreasonably withheld): (a) grant participations in all or any
portion of its Revolving Loan Commitment or any portion of its Note or of its
right, title and interest therein or in or to this Agreement (collectively,
"Participations") to any other lending office of such Bank or to any other bank,
lending institution or other entity which has the requisite sophistication to
evaluate the merits and risks of investments in Participations ("Participants");
provided, however, that: (i) all amounts payable by Xxxxxx hereunder shall be
determined as if such Bank had not granted such Participation; (ii) such Bank
shall act as agent for all Participants; and (iii) any agreement pursuant to
which such Bank may grant a Participation: (x) shall provide that such Bank
shall retain the sole right and responsibility to enforce the obligations of
Xxxxxx hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provisions of this Agreement; (y) such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement without the consent of the
Participant if such modification, amendment or waiver would reduce the principal
of or rate of interest on any Loan or postpone the date fixed for any payment of
principal of or interest on any Loan; and (z) shall not relieve such Bank from
its obligations, which shall remain absolute, to make Loans hereunder; and (b)
assign any of its Loans and its Revolving Loan Commitment. Upon execution and
delivery by the assignee to Xxxxxx of an instrument in writing pursuant to which
such assignee agrees to become a "Bank" hereunder having the Revolving Loan
Commitment and Loans specified in such instrument, and upon consent thereto by
Xxxxxx, to the extent required above, the assignee shall have, to the extent of
such assignment (unless otherwise provided in such assignment with the consent
of the Xxxxxx), the obligations, rights and benefits of a Bank hereunder holding
the Revolving Loan Commitment and Loans (or portions thereof) assigned to it,
and such Bank shall, to the extent of such assignment, be released from the
Commitment (or portion(s) thereof) so assigned.
11.5. CAPTIONS. Captions in the Loan Documents are included for
convenience of reference only and shall not constitute a part of any Loan
Document for any other purpose.
35
11.6. NOTICES. All notices, requests, demands, directions,
declarations and other communications between the Banks and the Xxxxxx provided
for in any Loan Document shall, except as otherwise expressly provided, be
mailed by registered or certified mail, return receipt requested, or
telegraphed, or faxed, or delivered in hand to the applicable party at its
address indicated opposite its name on the signature pages hereto. The
foregoing shall be effective and deemed received three days after being
deposited in the mails, postage prepaid, addressed as aforesaid and shall
whenever sent by telegram, telegraph or fax or delivered in hand be effective
when received. Any party may change its address by a communication in
accordance herewith.
11.7. SHARING OF COLLECTIONS, PROCEEDS AND SET-OFFS: APPLICATION OF
PAYMENTS.
(a) If any Bank, by exercising any right of set-off, counterclaim or
foreclosure against trade collateral or otherwise, receives payment of principal
or interest or other amount due on any Note which is greater than the percentage
share of such Bank (determined as set forth below), the Bank receiving such
proportionately greater payment shall purchase such participations in the Loans
held by the other Banks, and such other adjustments shall be made as may be
required, so that all such payments shall be shared by the Banks on the basis of
their percentage shares; provided that if all or any portion of such
proportionately greater payment of such indebtedness is thereafter recovered
from, or must otherwise be restored by, such purchasing Bank, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery, but
without interest being paid by such purchasing Bank. The percentage share of
each Bank shall be based on the portion of the outstanding Loans of such Bank
(prior to receiving any payment for which an adjustment must be made under this
Section in relation to the aggregate outstanding Loans of all the Banks. Xxxxxx
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Loan or reimbursement obligation,
whether or not acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of Xxxxxx in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Bank receives a secured claim
in lieu of a set-off to which this Section would apply, such Bank shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Banks entitled under this Section to
share in the benefits of any recovery on such secured claim.
(b) If an Event of Default or Potential Default shall have occurred
and be continuing First Union, as Agent, and each Bank and Xxxxxx agree that all
payments on account of the Loans shall be applied by First Union, as Agent, and
the Banks as follows:
FIRST, to First Union, as Agent, for any Agent fees then due and
payable under this Agreement until such fees are paid in full;
SECOND, to First Union, as Agent, for any fees, costs or expenses
(including expenses described in Section 11.8) incurred by First
Union, as Agent, under any of the Loan Documents or this Agreement,
then due and payable and not reimbursed by Xxxxxx or the Banks until
such fees, costs and expenses are paid in full;
THIRD, to the Banks for their percentage shares of the Commitment Fee
then due and payable under this Agreement until such fee is paid in
full;
FOURTH, to the Banks for their respective shares of all costs,
expenses and fees then due and payable from Xxxxxx until such costs,
expenses and fees are paid in full;
36
FIFTH, to the Banks for their percentage shares of all interest then
due and payable from Xxxxxx until such interest is paid in full, which
percentage shares shall be calculated by determining each Bank's
percentage share of the amounts allocated in (a) above determined as
set forth in said clause (a); and
SIXTH, to the Banks for their percentage shares of the principal
amount of the Loans then due and payable from Xxxxxx until such
principal is paid in full, which percentage shares shall be calculated
by determining each Bank's percentage share of the amounts allocated
in (a) above determined as set forth in said clause (a).
11.8. EXPENSES; INDEMNIFICATION. Xxxxxx will from time to time
reimburse First Union, as Agent, promptly following demand for all reasonable
out-of-pocket expenses (including the reasonable fees and expenses of its legal
counsel) in connection with (i) the preparation of the Loan Documents, (ii) the
making of any Loans, and (iii) the administration of the Loan Documents. Xxxxxx
also will from to time reimburse First Union, as Agent, and each Bank for all
out-of-pocket expenses (including reasonable fees and expenses of legal counsel)
in connection with the enforcement of the Loan Documents. In addition to the
payment of the foregoing expenses, Xxxxxx hereby agrees to indemnify, protect
and hold First Union, as Agent, each Bank and any holder of any Note and the
officers, directors, employees, agents, affiliates and attorneys of First Union,
as Agent, each Bank and such holder (collectively, the "Indemnitees") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature, including reasonable fees and expenses of legal counsel, which
may be imposed on, incurred by, or asserted against such Indemnitee by Xxxxxx or
other third parties and arise out of or relate to this Agreement or the other
Loan Documents or any other matter whatsoever related to the transactions
contemplated by or referred to in this Agreement or the other Loan Documents;
provided, however, that Xxxxxx shall have no obligation to an Indemnitee
hereunder to the extent that the liability incurred by such Indemnitee has been
determined by a court of competent jurisdiction to be the result of gross
negligence or willful misconduct of such Indemnitee.
11.9. SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS. All agreements,
representations and warranties expressly made herein shall survive the execution
and delivery of this Agreement, the making of the Loans hereunder and the
execution and delivery of the Note. Notwithstanding anything in this Agreement
or implied by law to the contrary, the agreements of Xxxxxx set forth in Section
11.8 shall survive the payment of the Loans and the termination of this
Agreement. This Agreement shall remain in full force and effect until the
repayment in full of all amounts owed by Xxxxxx under the Notes or any other
Loan Document.
11.10. SEVERABILITY. The invalidity, illegality or unenforceability in
any jurisdiction of any provision in or obligation under this Agreement, the
Note or other Loan Documents shall not affect or impair the validity, legality
or enforceability of the remaining provisions or obligations under this
Agreement, the Notes or other Loan Documents or of such provision or obligation
in any other jurisdiction.
11.11. BANKS' OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF BANKS' RIGHTS.
The obligation of each Bank hereunder is several and not joint and no Bank shall
be the agent of any other (except to the extent the Agent is authorized to act
as such hereunder). No Bank shall be responsible for the obligation or
commitment of any other Bank hereunder. In the event that any Bank at any time
should fail to make a Loan as herein provided, the other Banks, or any of them
as may then be agreed upon, at their sole option, may make the Loan that was to
have been made by the Bank so failing to make such Loan.
37
Nothing contained in any Loan Document and no action taken by Agent or any Bank
pursuant hereto or thereto shall be deemed to constitute the Banks to be a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Bank shall be a separate and
independent debt, and, subject to the terms of this Agreement, each Bank shall
be entitled to protect and enforce its rights arising out of this Agreement and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
11.12. NO FIDUCIARY RELATIONSHIP. No provision in this Agreement or in
any of the other Loan Documents and no course of dealing between the parties
shall be deemed to create any fiduciary duty by any Bank to Xxxxxx.
11.13. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. XXXXXX, FIRST
UNION AS AGENT AND THE BANKS, EACH HEREBY CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN THE EASTERN DISTRICT OF PENNSYLVANIA AND
IRREVOCABLY AGREES THAT, ANY ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING
TO THE NOTE, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY BE LITIGATED IN SUCH
COURTS. EACH PARTY TO THIS AGREEMENT ACCEPTS FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENT, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT, ANY NOTE, OR SUCH OTHER LOAN DOCUMENT.
11.14. WAIVER OF JURY TRIAL. XXXXXX, FIRST UNION AS AGENT AND THE
BANKS, EACH HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE LOAN
DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT AND THE LENDER/BORROWER RELATIONSHIP ESTABLISHED HEREBY. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. XXXXXX, FIRST UNION AS
AGENT AND THE BANKS, EACH ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO THE TRANSACTION, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO
THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. XXXXXX, FIRST UNION AS AGENT AND THE BANKS, EACH
FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS,
MODIFICATIONS, REPLACEMENTS OR RESTATEMENTS TO THIS AGREEMENT, THE LOAN
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS. IN
THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
11.15. COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendment
hereto or waiver hereof may be signed in any number of counterparts, each of
which shall be an original, with the same
38
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement and any amendments hereto or waivers hereof shall become
effective when First Union, as Agent, shall have received signed counterparts or
notice by fax of the signature page that the counterpart has been signed and is
being delivered to it or facsimile that such counterparts have been signed by
all the parties hereto or thereto.
11.16. USE OF DEFINED TERMS. All words used herein in the singular or
plural shall be deemed to have been used in the plural or singular where the
context or construction so requires. Any defined term used in the singular
preceded by "any" shall be taken to indicate any number of the members of the
relevant class.
11.17. OFFSETS. Nothing in this Agreement shall be deemed a waiver or
prohibition of any Bank's right of banker's lien or offset.
11.18. ENTIRE AGREEMENT. This Agreement, the Notes issued hereunder and
the other Loan Documents constitute the entire understanding of the parties
hereto as of the date hereof with respect to the subject matter hereof and
thereof and supersede any prior agreements, written or oral, with respect hereto
or thereto.
39
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to
be duly executed by their duly authorized representatives as of the date first
above written.
XXXXXX LEASE FINANCE CORPORATION
By: /s/ Xxxxx X. XxXxxxx
----------------------------------------
Name: Xxxxx X. XxXxxxx
Title: Executive Vice President
and Chief Financial Officer
Notices To:
0000 Xxxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxx, XX. 00000.
FAX No. (000) 000-0000
ATT: General Counsel
FIRST UNION NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Notices To:
Xxxx X. Xxxxxxxx
Vice President
First Union National Bank
Transportation and Leasing Division
FC 1-8-11-24
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
FAX No. (000) 000-0000
NATIONSBANK, N.A.
By: /s/ Xxxxxxx X. XxXxxxxx
----------------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
Notices To:
Xxxxxxx X. XxXxxxxx
Vice President
NationsBank, N.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
FAX No. (000) 000-0000
40
EXHIBIT A
BANK'S REVOLVING LOAN COMMITMENTS AND PERCENTAGES
BANK COMMITMENT PERCENTAGE
------ ------------ ------------
First Union National Bank $65,000,000 65.0%
Transportation and Leasing Division
FC 1-8-11-24
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax No. (000) 000-0000
NationsBank, N.A. $35,000,000 35.0%
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax No. (000) 000-0000
41
EXHIBIT B
REVOLVING CREDIT NOTE
$__,000,000 Philadelphia, PA
_____________
For Value Received, XXXXXX LEASE FINANCE CORPORATION, a California corporation
("XXXXXX"), hereby promises to pay to the order of ____________________ (the
"Bank"), in lawful currency of the United States of American in immediately
available funds at the offices First Union National Bank located at Broad and
Chestnut Streets, Philadelphia, Pennsylvania, on the Revolver Termination Date,
or on such earlier date or dates as provided in the Credit Agreement described
below, the principal sum of ____________________ DOLLARS ($__,000,000) or, if
less, the then unpaid principal amount of all Revolving Credit Loans made by the
Bank pursuant to the Credit Agreement.
Xxxxxx promises also to pay interest on the unpaid principal amount hereof in
like money at such office from the date hereof until paid at the rates and at
the times provided in the Amended and Restated Credit Agreement by and among
Xxxxxx and the banking institutions named therein, with First Union National
Bank as Agent (as such may be amended, modified, supplemented, restated or
replaced from time to time, the "Credit Agreement").
This is a Note as referred to in the Credit Agreement. This Note is entitled to
the benefits of and is secured by security interests referred to in the Credit
Agreement. This Note is subject to voluntary prepayment and mandatory repayment
prior to the Revolver Termination Date, in whole or in part, as provided in the
Credit Agreement.
In case an Event of Default shall occur and be continuing, the principal of and
the accrued interest on this Note may be declared to be due and payable in the
manner and with the effect provided in the Credit Agreement.
Xxxxxx hereby waives presentment, demand, protest or notice of any kind in
connection with this Note.
Notwithstanding the face amount of this Note, the undersigned's liability
hereunder shall be limited at all times to the actual aggregate outstanding
indebtedness to the Bank relating to such Bank's Revolving Credit Loans,
including all principal and interest, together with all fees and expenses as
provided in the Credit Agreement, as established by the Bank's books and records
which shall be conclusive absent manifest error.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Credit Agreement.
42
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO PENNSYLVANIA OR FEDERAL
PRINCIPLES OF CONFLICT OF LAWS.
XXXXXX LEASE FINANCE CORPORATION
By:
---------------------------------
Name:
Title:
43
EXHIBIT C
BORROWING BASE CERTIFICATE
Date of Certificate:
-----------------
Date of Information:
-----------------
To: FIRST UNION NATIONAL BANK
Gentlemen:
This Borrowing Base Certificate is delivered to you pursuant to the terms of
Section 5.1 of the Credit Agreement, dated as of June 2, 1998, as currently in
effect. Capitalized terms used without definition below have the same meanings
as they have in the Credit Agreement.
We hereby certify that:
1. No Potential Default or Event of Default has occurred and is continuing as
of the date of this Borrowing Base Certificate.
2. There has been no Material Adverse Change since [insert the date of the
most recent financial statements delivered to the Banks pursuant to the
terms of Section 5.1 of the Credit Agreement], except as disclosed on the
attached schedules.
3. The information set forth on the attached schedules is true, current and
complete as of the date of this Borrowing Base Certificate.
XXXXXX LEASE FINANCE CORPORATION
By:
----------------------------------
Name:
Title:
44
XXXXXX LEASE FINANCE CORPORATION
COMPUTATION OF BORROWING BASE AVAILABILITY
____________________________
COLLATERAL LOAN VALUE
1(a) Equipment (from Schedule A, $
attached hereto) ----------------
(b) Borrowing Base Percentage x 85%
(c) Collateral Loan Value [(a) x (b)] $
----------------
MAXIMUM LOANS
2. Maximum Loans as such shall be in $____,000,000.00
effect at the date of the ----------------
certificate
CREDIT USAGE
3. Aggregate Loan Balance $
(principal) at date of ----------------
certificate
LOAN AVAILABILITY
4. Line 1(c) minus Line 3 $
----------------
5. Line 2 minus Line 3 $
----------------
6. Availability (Line 4 or Line 5 $
whichever is less) ----------------
7. Amount of Loan Requested This $
Date (if any) (Not to exceed line ----------------
6)
Certification: Xxxxxx Lease Finance Corporation
Date: By:
---------------------------- ---------------------------
45
XXXXXX LEASE FINANCE CORPORATION
COLLATERAL INFORMATION SCHEDULE
FOR BORROWING ON
__________, ____
Xxxxxx Lease Finance Corporation has requested this date that a Loan be made to
it by the Banks. The following table sets forth information with respect to
items being added to the Collateral with this Request for Loan.
As applicable, Xxxxxx Lease Finance Corporation has delivered the original
counterpart of each lease to First Union National Bank, as Agent, and it
represents and warrants hereby that all other copies of each lease are clearly
marked to indicate that each is not the lessor's original counterpart of that
lease.
Physical
Customer Contract Monthly Lease Lease Remaining Gross Equipment Location of
Name Number Payment Expiry Term (1) Term (2) Remaining (3) Cost (4) Equipment
---------- -------- ------- ------- ------ ---------- ------------- --------- -------------
______ ______
Totals
Xxxxxx Lease Finance Corporation
By
---------------------------------
-----------------------
(1) This is the original term of months of the lease.
(2) This is the number of months remaining on the lease at the date of this
Schedule.
(3) This is the gross amount remaining payable in respect of the lease minus
any unearned finance charge.
(4) This is the purchase price of the equipment to Xxxxxx as shown on the
invoice of the manufacturer or distributor of the equipment.
46
EXHIBIT D
MORTGAGE AND SECURITY AGREEMENT
dated as of
June 27, 1997
made by
XXXXXX LEASE FINANCE CORPORATION
in favor of
CORESTATES BANK, N.A.
47
MORTGAGE AND SECURITY AGREEMENT
MORTGAGE AND SECURITY AGREEMENT, dated as of June 27, 1997, made by
XXXXXX LEASE FINANCE CORPORATION, a Delaware corporation (together with its
successors and assigns, the "BORROWER"), with its chief executive office and
chief place of business at 000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 in
favor of CORESTATES BANK, N.A., a national banking association (together with
its successors and assigns, the "MORTGAGEE").
W I T N E S S E T H:
WHEREAS, the Mortgagee has agreed to make revolving credit loans to
the Borrower (the "Loans") pursuant to the Credit Agreement, dated as of June
12, 1997 between the Borrower and the Mortgagee (as the same may be amended,
modified or supplemented from time to time, herein called the "Credit
Agreement");
WHEREAS, the Loans will be evidenced by a promissory note of the
Borrower substantially in the form of Exhibit A to the Credit Agreement payable
to the order of the Mortgagee (such note, as amended, modified or supplemented
from time to time, together with any extensions, replacements or renewals
thereof, herein called the "Note");
WHEREAS, as a condition to the making of the Loans by the Mortgagee to
the Borrower pursuant to the Credit Agreement, the Mortgagee has required that
the Borrower provide to the Mortgagee security for the payment by the Borrower
of the Note and the performance by the Borrower of its respective obligations
under the Credit Agreement, this Mortgage and the other Mortgage Documents;
WHEREAS, in order to secure the payment of the Note and the
performance of the other obligations of the Borrower to the Mortgagee under the
Credit Agreement, this Mortgage and the other Mortgage Documents, and for the
purpose of subjecting the Collateral to the Lien of this Mortgage as security
for the payment of the Note and the performance of such obligations, the
Borrower is entering into this Mortgage with the Mortgagee.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Mortgagee to make the Loan and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Borrower hereby
agrees with the Mortgagee for its benefit as follows:
48
ARTICLE I
CERTAIN DEFINITIONS
SECTION I.1. DEFINITIONS. The following terms shall have the
following defined meanings (and shall be applicable to both the singular and the
plural forms of such terms):
"ACT" shall mean the United States Federal Aviation Act of 1958, as
amended, as in effect on the date of this Mortgage, as recodified in 49 U.S.C.
Section 40101 et. seq., as amended, or any successor or substituted legislation
at the time in effect and applicable.
"AIRFRAME" means each Aircraft purchased by Borrower described in a
Mortgage Supplement hereto, together with any and all Parts which are either
incorporated or installed in or attached to such Airframe or required to be
subject to the lien and security interest of this Mortgage.
"COLLATERAL" shall have the meaning set forth in the Granting Clause
hereof.
"DEFAULT" means any event specified in Section 4.01 hereof, whether or
not any requirement for the giving of notice, the lapse of time, or both or for
the happening of any other condition, event or act has been satisfied.
"ENGINE" means each engine described in a Mortgage Supplement hereto
(each of which has 750 or more rated takeoff horsepower or the equivalent of
such horsepower), together with any and all Parts which are either incorporated
or installed in or attached to such Engine or required to be subject to the lien
and security interest of this Mortgage.
"EVENT OF DEFAULT" means any of the events specified in Section 4.01
hereof, provided that any requirement for the giving of notice, the lapse of
time or both for the happening of any other condition, event or act has been
satisfied.
"EVENT OF LOSS" means a Total Loss (as defined in each Lease) or, at
any time when a Lease shall not be in effect with respect to a particular piece
of Collateral, any of the following events with respect to any property:
(i) loss of such property due to theft,
disappearance for a period in excess of forty-five (45)
days, destruction, damage beyond repair or rendition of such
property permanently unfit for normal use for any reason
whatsoever;
(ii) any damage to such property which results in an
insurance settlement with respect to such property on the
basis of a total loss;
(iii) the confiscation, seizure or hijacking of, or requisition
of title to or use of, such property by private Persons or any
Governmental Authority or purported Governmental Authority other than
the United States government or any local authority within the United
States or any agency or instrumentality thereof for a period in excess
of 90 days;
49
(iv) the confiscation, seizure of, or requisition of title to
or use of, such property by the United States government or any local
authority within the United States or any agency or instrumentality of
the foregoing for a period in excess of ninety (90) days, except for a
requisition of use by the United States while the United States pays
to the Borrower or the Permitted Lessee compensation for such
requisition in an amount equal to or in excess of the Rent (as such
term is defined in the Lease or applicable Replacement Lease).
(v) the operation or location of such property in any area
excluded from coverage by any insurance policy in effect with respect
to such property except to the extent that such property is operated
in such area solely as a result of a hijacking or unlawful seizure.
"GAAP" means generally accepted accounting principles in the
jurisdiction of incorporation of such relevant Person in effect from time to
time.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.
"LEASE" means each of the lease agreements described in Mortgage
Supplement hereto, upon which the Borrower is the lessor or an assignee of the
lessor as the same may be modified, amended or supplemented from time to time
"LEASE EVENT OF DEFAULT" means an Event of Default as defined in the
Lease.
"LESSEE" means, with respect to a given Lease, the Lessee as defined
therein.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge or encumbrance, lease, right of
others or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same legal effect as any of the foregoing (e.g., a lease which
would be treated as a security agreement)), and the filing of, or agreement to
give, any financing statement or comparable document.
"MORTGAGE" means this Mortgage and Security Agreement, as the same may
be amended, modified or supplemented from time to time (including by means of
one or more Mortgage Supplements).
"MORTGAGE DOCUMENTS" means this mortgage and all documents relating to
the perfection and/or establishment of the Lien intended to be created by this
Mortgage (including, without limitation, the Mortgage Supplement(s), the Note,
any other documents relating to the Bank's security interest in the Collateral
and any documents expressly stated to be Mortgage Documents).
"MORTGAGE SUPPLEMENT" means a Mortgage Supplement, substantially in
the form of Exhibit A hereto.
"OBLIGATIONS" means the aggregate unpaid principal amount of, and
accrued interest on, the Note and all of the other payment and other obligations
and liabilities of the Borrower now or hereafter existing under this Mortgage,
the Note, the Credit Agreement and each Mortgage Document, whether for
principal, interest, premiums, fees, expenses or otherwise.
50
"PARTS" means, at any time, all parts, components, equipment,
instruments, appliances, avionics, radio and radar devices, cargo handling
systems and loose equipment that are at such time incorporated or installed in
or attached to an Airframe or Engine.
"PERMITTED LESSEE" means, with respect to a given Lease, the Lessee
thereunder and any substitute Lessee which is acceptable to the Mortgagee.
"PERSON" shall mean and include an individual, a partnership, a
corporation, a business trust, a joint stock company, a trust, an unincorporated
association, a joint venture, a Governmental Authority or any other entity of
whatever nature.
"PROCEEDS" means whatever is receivable or received when the Airframe
or any Engine or any Spare Part or any Part or other collateral is sold,
exchanged, collected or otherwise disposed of, including, without limitation,
all amounts payable or paid under insurance, requisition or other payments as
the result of any loss (including an Event of Loss) or damage to such Airframe
or Engine or Spare Part or Part.
"RECORDS" shall have the meaning set forth in the Granting Clause
hereof.
"SECURITY DEPOSIT" means, with respect to a given Lease, the "Security
Deposit" as such term is defined in such Lease.
"SPARE PARTS" means an accessory, appurtenance or part of an aircraft
(except an aircraft engine or propeller) or appliance that is to be installed at
a later time in an aircraft, aircraft engine, propeller or appliance as
described in a Mortgage Supplement hereto.
51
ARTICLE II
GRANTING CLAUSE
The Borrower hereby assigns, mortgages, transfers and confirms unto
the Mortgagee, and hereby grants to the Mortgagee a first priority security
interest in, all right, title and interest of the Borrower in and to the
following property, whether now owned or hereafter acquired, and all
replacements of the following property as collateral security for the prompt and
complete payment and performance when due of all the Obligations (herein
collectively called the "Collateral"),to wit:
(i) each Airframe, Engine, all Spare Parts and Parts;
(ii) all of the Borrower's right, title and interest in and to any
lease of an Engine and any Spare Parts, including, without limitation, each
Lease together with all renewals of or replacements for any such lease, executed
from time to time, and all payments, including, without limitation, all payments
of rent, each Security Deposit, and all proceeds thereof, insurance proceeds and
all other amounts due or to become due thereunder but not including maintenance
reserves (subject, in each case, to the rights of the Permitted Lessee thereto
under the applicable lease);
(iii) all logs, books, maintenance records and other information
relating to the Airframe, Engines or Spare Parts pertaining thereto
(collectively, the "Records") as well as all right, title and interest of the
Borrower in, to and under the overhaul, repair and maintenance manuals, programs
and catalogues which are part of or used in connection with the maintenance
program for the Airframe or Engines; and
(iv) all Proceeds of all or any of the foregoing.
ARTICLE III
COVENANTS
SECTION III.1. REGISTRATION: MAINTENANCE AND OPERATION. The
Borrower, at its own cost and expense, will: (i) prior to mortgaging an
Airframe hereunder, cause each Airframe to be duly registered, and at all times
thereafter to remain duly registered, in the name of the Borrower in accordance
with the Act, if applicable, or other applicable law; (ii) at all times
maintain, service, repair, overhaul and test or cause to be maintained,
serviced, repaired, overhauled and tested each Engine, Spare Part and Part so as
to keep the same in as good operating condition as when originally mortgaged
hereunder, ordinary wear and tear excepted, and, in any event in the condition
required by the relevant Lease; and (iii) maintain or cause to be maintained (in
the English language) all Records.
SECTION III.2. FURTHER ASSURANCES. The Borrower will take, or cause
to be taken, at the Borrowers cost and expense, such action with respect to the
execution, delivery, recording, registration, filing, re-recording,
re-registration and refiling of this Agreement and any financing statements,
Mortgage Supplements or other instruments as are necessary or desirable, or that
the Mortgagee may from time to time request, to fully carry out the intent and
purpose of this Agreement or to establish, protect, preserve, and/or perfect the
Liens created by this Agreement, and will furnish to the Mortgagee (a) timely
notice of the necessity of any such action, together with such instruments, in
52
execution form, and such other information as may be required to enable the
Mortgagee to take such action, and (b) evidence of every such action taken by
the Borrower.
SECTION III.3. LIENS. The Borrower will not create or suffer to
exist any Lien upon or with respect to any of the Collateral, except for (i) the
Lien of this Mortgage, (ii) materialmen's, suppliers' or mechanics' liens or
other similar liens arising in the ordinary course of business and for amounts
the payment of which is either not yet delinquent or is being contested by the
Borrower in good faith (and for the payment of which adequate reserves have been
set aside on the books of the Borrower) by appropriate proceedings, so long as
such proceedings do not involve any material danger of the sale, forfeiture or
loss of any of the Collateral, (iii) Liens for landing, navigation and
overflight charges not yet delinquent and in an aggregate amount not greater
than $50,000 and (iv) the rights of others under agreements and arrangements to
the extent permitted by the terms of the Credit Agreement or the relevant Lease.
SECTION III.4. BOOKS AND RECORDS; INSPECTION The Borrower shall
faithfully keep complete and accurate books and records and make all necessary
entries therein to reflect the quantities, costs, current values and locations
of all Collateral, the events and transactions giving rise thereto and all
payments, credits and adjustments applicable thereto, shall keep the Mortgagee
fully and accurately informed as to the locations of all such books and records
and shall permit the Mortgagee's agents to have such access to them and to any
other records pertaining to the Borrower's business as the Mortgagee may request
from time to time. In addition, the Borrower agrees to permit the Mortgagee to
visit the property of the Borrower to inspect any Airframe, Engine or Spare
Parts, and in the case of Airframes and Engines subject to lease, to the extent
permitted under the Lease, to arrange for the Lessee to permit Mortgagee to
inspect any Airframe, Engine or Spare Parts.
SECTION III.5. CERTIFICATE OF TITLE. If any item or unit of
Collateral is now or hereafter the subject of a certificate of title or is
required by law so to be, the Borrower will promptly procure the necessary
certificate of title and take all steps necessary to cause the Mortgagee's lien
or security interest therein to be noted on the face of such certificate and
undertake such other steps as may be necessary to assure that the Mortgagee has
a first priority, perfected security interest in each such item or unit of
Collateral, and shall thereafter deposit the original of such certificate of
title with the Mortgagee.
SECTION III.6. LOSS OF VALUE. The Borrower shall immediately notify
the Mortgagee of any event causing any deterioration, loss or depreciation in
value of any substantial portion of the Collateral and the Borrower's best
estimate of the amount of such deterioration, loss or depreciation.
SECTION III.7. INSURANCE. (a) The Borrower shall bear the risk of
each Airframe, Engine or Spare Part being lost, destroyed, irreparably damaged
or rendered permanently unfit for sale, lease or use or being damaged in part,
from any cause whatsoever at any time during the term of this Agreement, and
shall at its own cost and expense obtain and keep in full force and effect, in
kind and form reasonably satisfactory to the Mortgagee, or in the alternative
shall cause the lessee under each applicable Lease to do the same with respect
to each Airframe, Engine or Spare Part subject to the lessee's Lease, all risk
of physical loss or damage insurance covering the Airframe, Engine or Spare Part
wherever the same may be located, insuring against the risks of fire, explosion,
theft and such other risks as are customarily insured against by organizations
engaged in the same business and similarly situated with the Borrower (and
specifically including vandalism and malicious mischief coverage), in an amount
usually carried by organizations engaged in the same business or similarly
situated with the Borrower. All policies of such insurance shall be written for
the benefit of the Borrower as the insured.
53
(b) If the Borrower or the applicable lessee fails to pay any premium
on any such insurance, the Mortgagee shall have the right, but shall be under no
obligation, to pay such premium for the Borrower's account. The Borrower shall
repay to the Mortgagee on demand all sums which the Mortgagee shall have paid
under this section in respect of insurance premiums, with interest thereon and
the Borrower's liability to the Mortgagee for such repayment with interest shall
be included in the Obligations. The Borrower hereby assigns to the Mortgagee
any return or unearned premium which may be due upon the cancellation for any
reason whatsoever of any policy of insurance maintained in respect of the
Collateral and hereby directs the insurer to pay the Mortgagee any amount so
due. The Borrower's right to receive payment of any such return or unearned
premium and the proceeds of any such insurance shall constitute a part of the
Collateral for all purposes hereof. If no Event of Default has occurred and is
continuing, the Mortgagee shall pay any such return or unearned premium to the
Borrower, provided that all amounts paid by Mortgagee in respect of insurance
premiums have been repaid in full with interest.
ARTICLE IV
EVENTS OF DEFAULT AND REMEDIES
SECTION IV.1. EVENTS OF DEFAULT AND REMEDIES. (a) The Borrower shall
be in default upon the occurrence of any one of the following events (each an
"Event of Default"):
(i) the Borrower shall fail to pay any amount payable in respect of
any Obligation when due (including the expiration of any
applicable grace periods).
(ii) any representation, warranty or information herein, heretofore
or hereafter furnished to the Mortgagee by the Borrower in
connection with any of the Liabilities, including any warranty
made by the Borrower through the submission of any schedule,
statement, certificate or other document pursuant to or in
connection with this Agreement, shall be false in any material
respect.
(iii) there shall exist any Event of Default as defined under the
Credit Agreement.
(b) Upon the occurrence of any Event of Default which shall be continuing,
unless the Mortgagee elects otherwise, the entire unpaid amount of such of the
Liabilities as is not then otherwise due and payable shall become immediately
due and payable as provided in the Credit Agreement without notice to or demand
on the Borrower.
(c) The exercise by the Mortgagee of any one right or remedy shall not be
deemed a waiver or release of or any election against any other right or remedy,
and the Mortgagee may proceed against the Borrower and the Collateral and any
other collateral granted by the Borrower to the Mortgagee under any other
agreement, all in any order and through any available remedies. A waiver on any
one occasion shall not be construed as a waiver or bar on any future occasion.
All property of any kind held at any time by the Mortgagee as Collateral shall
stand as one general continuing collateral security for all the Obligations and
may be retained by the Mortgagee as security until all the Obligations are fully
satisfied.
SECTION IV.2. POSSESSION OF AIRFRAME, ENGINE AND SPARE PARTS. Upon
an event of default, the Mortgagee may, without notice, take possession of the
whole or any part of any Airframe, Engine or Spare Parts and may exclude the
Borrower, and all persons claiming under the Borrower,
54
wholly or partly therefrom. At the request of the Mortgagee, the Borrower shall
promptly deliver or cause to be delivered to the Mortgagee or to whomsoever the
Mortgagee shall designate, at such time or times and place or places as the
Mortgagee may specify, any item of Collateral specified by the Mortgagee. In
addition, the Borrower will provide, without cost or expense to the Mortgagee,
storage facilities for such Airframe, Engine or Spare Parts and will cause such
Airframe, Engines or Spare Parts to be maintained as required by the terms
hereof and of the Credit Agreement. It the Borrower shall for any reason fail
to deliver such Airframe, Engine or Spare Part or any part thereof after demand
by the Mortgagee, the Mortgagee may, without being responsible for loss or
damage, except to the extent caused by the gross negligence or wilful misconduct
of the Mortgagee, (i) obtain a judgment conferring on the Mortgagee the right to
immediate possession or requiring the Borrower to deliver immediate possession
of all or part of such Airframe, Engine or Spare Part to the Mortgagee, to the
entry of which judgment the Borrower hereby specifically consents, or (ii) with
or, to the fullest extent provided by law, without such judgment, pursue the
whole or any part of such Airframe, Engine or Spare Part wherever it may be
found and enter any of the premises where such Airframe, Engine or Spare Part
may be and take possession of and remove the same. Upon every such taking of
possession, the Mortgagee may (but shall not be obligated to), from time to
time, make all such reasonable expenditures for maintenance, insurance, repairs,
replacements, alterations, additions and improvements to and of the Airframe,
Engine or Spare Part as it may deem proper.
SECTION IV.3. RECEIVER. The Mortgagee shall be entitled, as a matter
of right as against the Borrower, without notice or demand and without regard to
the adequacy of the security for the Obligations by virtue of this Mortgage or
any other collateral or to the solvency of the Borrower, upon the commencement
of judicial proceedings by it to enforce any right under this Mortgage, to the
appointment of a receiver of all or any part of the Collateral.
SECTION IV.4. SALE AND SUITS FOR ENFORCEMENT. (a) Upon an Event of
Default, the Mortgagee, with or without taking possession of an Airframe, Engine
or Spare Part, may:
(i) to the extent and in the manner permitted by
law, sell at one or more sales, as an entirety or in
separate lots or parcels, the whole or any part of such
Airframe, Engine or Spare Part, at public or private sale,
at such place or places and at such time or times and upon
such terms, including terms of credit (which may include the
retention of title by the Mortgagee to the property so
sold), as the Mortgagee may determine, whether or not such
Airframe, Engine or Spare Part shall be at the place of
sale; and
(ii) proceed to protect and enforce its rights under
this Mortgage by suit, whether for specific performance of
any covenant herein contained or in aid of the exercise of
any power herein granted or for the foreclosure of this
Mortgage and the sale of the Collateral under the judgment
or decree of a court of competent jurisdiction or for the
enforcement of any other right.
(b) At any public sale of such Airframe, Engine or Spare Part or
any part thereof by the Mortgagee pursuant to paragraph (a)(i) above, the
Mortgagee may consider and accept bids requiring the extension of credit to the
bidder and may determine the highest bidder at such sale, whether or not the bid
of such bidder shall be solely for cash or shall require the extension of
credit.
55
(c) The Mortgagee, to the extent permitted by law, may from time to
time adjourn any sale under paragraph (a) (i) above by announcement at the time
and place appointed for such sale or for any adjournment thereof; and without
further notice or publication, except as may be required by law, such sale to be
made at the time and place to which the same shall have been so adjourned.
(d) Upon the completion of any sale under paragraph (a)(i) above,
full title and right of possession to the Airframe, Engine or Spare Part so sold
shall (subject to any retention of title by the Mortgagee as part of the terms
of such sale) pass to the accepted purchaser forthwith upon the completion of
such sale, and the Borrower shall deliver, in accordance with the instructions
of the Mortgagee (including causing the Engine or Spare Part to be flown to
such airports as the Mortgagee may specify), such Airframe, Engine or Spare Part
so sold. If the Borrower shall for any reason fail to deliver such Airframe,
Engine or Spare Part the Mortgagee shall have all of the rights granted by
Section 4.02 hereof. The Mortgagee is hereby irrevocably appointed the true and
lawful attorney of the Borrower, in its name and stead, to make all necessary
conveyances of an Airframe, Engine or Spare Part if so sold. Nevertheless, if
so requested by the Mortgagee or by any purchaser, the Borrower shall confirm
any such sale or conveyance by executing and delivering all proper instruments
of conveyance or releases as may be designated in any such request.
(e) The Borrower hereby covenants and agrees that a notice, which
shall be sent in accordance with the provisions of the Credit Agreement or this
Mortgage, at least 30 days before the date of any of the foregoing acts
described in this Section 4.04 shall be deemed to be reasonable notice of such
act and, specifically, reasonable notification of the time and place of any
public sale hereunder and reasonable notification of the time after which any
private sale or other intended disposition to be made hereunder is to be made.
SECTION IV.5. EXPENSES OF ENFORCEMENT. The Borrower shall pay to the
Mortgagee on demand any and all reasonable expenses (including reasonable
attorneys' fees and legal expenses) which may have been incurred by the
Mortgagee, with interest (i) in the prosecution or defense of any action growing
out of or connected with the subject matter of this Agreement, the Obligations,
the Collateral or any of the Mortgagee's rights therein or thereto; or (ii) in
connection with the custody, preservation, use, operation, preparation for sale
or sale of any of the Collateral or in connection with obtaining possession of
any of the Collateral, the incurring of all of which are hereby authorized to
the extent the Mortgagee deems the same advisable. The Borrower's liability to
the Mortgagee for any such payment with interest shall be included in the
Obligations. The Proceeds of any Collateral received by the Mortgagee at any
time before or after default, whether from a sale or other disposition of
Collateral or otherwise, or the Collateral itself, may be applied to the payment
in full or in part of such of the Obligations and in such order and manner as
the Mortgagee may elect. The Borrower, to the extent of its rights in the
Collateral, waives and releases any right to require the Mortgagee to collect
any of the Obligations from any other of the Collateral or any other collateral
then held by the Mortgagee under any theory of marshaling of assets or
otherwise.
SECTION IV.6. WAIVER OF APPRAISEMENT, ETC.. The Borrower agrees, to
the fullest extent that it lawfully may, that it will not (and hereby
irrevocably waives its right to) at any time plead, or claim the benefit or
advantage of, any appraisement, valuation, stay, extension, moratorium or
redemption law now or hereafter in force, in order to prevent or hinder the
enforcement of this Mortgage or the absolute sale of the Collateral.
56
SECTION IV.7. REMEDIES CUMULATIVE. No remedy herein conferred upon
the Mortgagee is intended to be exclusive of any other remedy, but every such
remedy shall be cumulative and shall be in addition to every other remedy herein
conferred or now or hereafter existing in law.
SECTION IV.8. APPLICATION OF PROCEEDS. If an Event of Default shall
have occurred and be continuing, the proceeds of any sale, lease or other
disposition of all or any part of the Collateral pursuant to this Mortgage and
all other sums realized or held by the Mortgagee under this Mortgage or any
proceedings hereunder (including any proceeds of insurance) shall be applied in
the following order of priority:
FIRST: To the payment of the expenses of any such
sale, lease, disposition or other realization (and of the
retaking, holding and preparing for sale or lease),
including reasonable compensation to the Mortgagee's agents
and counsel, and all expenses, liabilities and advances made
or incurred by the Mortgagee in connection therewith or
incurred as a result of the Mortgagee performing any
Obligation of the Borrower, including, without limitation,
taxes upon or with respect to such sale, lease, disposition
or realization and the payment of taxes and Liens, if any,
prior to the Lien of this Mortgage and the fees and expenses
of the Borrower;
SECOND: To the payment of the Obligations in whole or
in part in such order as the Mortgagee may elect;
THIRD: To the Borrower or as any court of competent
jurisdiction may otherwise direct.
SECTION IV.9. DELAY OR OMISSION; POSSESSION OF NOTES.. (a) No delay
or omission of the Mortgagee to exercise any right or remedy arising upon the
happening of any Default or Event of Default shall impair any right or remedy or
shall be construed to be a waiver of any such Default or Event of Default or an
acquiescence therein; and every right and remedy given to the Mortgagee by this
Article IV or by applicable law may be exercised from time to time and as often
as may be deemed expedient by the Mortgagee.
(b) All rights of action under this Mortgage may be enforced by the
Mortgagee without the possession of the Note or any other instrument or document
evidencing any obligation or the production thereof in any proceeding.
SECTION IV.10. POWER OF ATTORNEY. The Borrower hereby irrevocably
appoints the Mortgagee the true and lawful attorney of the Borrower for the
duration of this Agreement (with full power of substitution) in the name, place
and stead of, and at the expense of, the Borrower in connection with the
enforcement of the rights and remedies provided for in this Article IV: (a) to
give any necessary receipts or acquittances for amounts collected or received
hereunder, (b) to make all necessary transfers of the Airframe, Engines or Spare
Parts in connection with any sale, lease or other disposition made pursuant
hereto, (c) to execute and deliver for value all necessary or appropriate bills
of sale, assignments and other instruments in connection with any such sale,
lease or other disposition, the Borrower hereby ratifying and confirming all
that such attorney (or any substitute) shall lawfully do hereunder and pursuant
hereto, (d) execute in the Borrower's name and file one or more financing,
amendment and
57
continuation statements covering the Collateral, and (e) to sign any agreements,
orders or other documents in connection with or pursuant to the Lease.
Nevertheless, if so requested by the Mortgagee or a purchaser, lessor or lessee,
the Borrower shall ratify and confirm any such sale, lease or other disposition
by executing and delivering to the Mortgagee or such purchaser, lessor or lessee
all proper hills of sale, assignments, releases, leases and other instruments as
may be designated in any such request. Any such attorney of the Borrower shall
have full power to do any and all things necessary to be done with respect to
the above transactions as fully and effectually as the Borrower might do, and
the Borrower hereby ratifies all that said attorney shall lawfully do or cause
to be done by virtue hereof.
ARTICLE V
CONCERNING THE LEASES
SECTION V.1. ACKNOWLEDGMENT OF LEASES. The Borrower and the
Mortgagee acknowledge and agree for the benefit of each Permitted Lessee that
notwithstanding any other provisions hereof to the contrary, the Lien of this
Mortgage shall, so long as no Event of Default under a Lease has occurred and is
continuing, be expressly subject to all of the rights of such Permitted Lessee
under the applicable lease.
SECTION V.2. QUIET ENJOYMENT, ETC. Borrower and the Mortgagee
acknowledge and agree for the benefit of each Permitted Lessee that
notwithstanding any other provision hereof to the contrary;
(a) so long as no Event of Default under the Lease shall have
occurred and be continuing, the Mortgagee shall not interfere or permit any
Person acting by, through or under the Mortgagee to interfere with any right of
such Permitted Lessee peaceably and quietly without hindrance or molestation to
hold, possess and use, during the term of the applicable lease and in accordance
with the terms thereof, the Airframe, Engine or Spare Part;
(b) Subject to the provisions of this Agreement, and until the
occurrence of an Event of Default and upon demand by the Mortgagee, the Borrower
may exercise all the rights and enjoy all the benefits of the lessor under the
applicable Lease.
(c) any amounts held by the Mortgagee or any agent or trustee acting
on behalf of the Mortgagee for which application is provided in the Lease or
applicable Replacement Lease shall be applied solely as provided in such lease.
SECTION V.3. ONLY ONE ORIGINAL LEASE. One originally executed Lease
included in the Collateral shall be marked "original" and legended in form
satisfactory to the Mortgagee to indicate that it is the original of the Lease
with all other copies marked "copy." The original lease shall be delivered by
the Borrower to the Mortgagee together with the original invoices for the
equipment being leased, prior to said Lease being included in the Borrowing Base
calculation.
SECTION V.4. MISCELLANEOUS. (a) The Borrower shall remain liable as
lessor under the applicable Lease to perform all the obligations assumed by the
Borrower thereunder. The obligations of Borrower under the applicable Lease may
be performed by Mortgagee or any subsequent assignee of the Mortgagee
("Subsequent Mortgagee") without releasing Borrower therefrom. The Mortgagee or
any Subsequent Mortgagee shall have no liability or obligation under any Lease
by reason of this Agreement and shall not, by reason of this Agreement, be
obligated to perform any of the obligations of Borrower
58
under the Leases or to file any claim or take any other action to collect or
enforce any payment assigned hereunder.
(b) The Borrower hereby agrees (i) to perform duly and punctually
each of the terms, conditions and covenants contained in the Leases, and (ii)
subject to the Borrower's business judgment and reasonable commercial practice,
to exercise promptly and diligently each and every right it may have under the
Leases.
(c) The Borrower does hereby warrant and represent that all Leases
are in full force and effect and that it has not assigned or pledged, and hereby
covenants that it will not assign or pledge, so long as this Agreement shall
remain in effect, the whole or any part of the rights hereby assigned, to anyone
other than Mortgagee.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION VI.1. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Mortgage or consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Mortgagee, and any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION VI.2. NOTICES. All notices, requests and demands to or upon
the respective parties hereto to be effective, shall be in writing and shall be
personally delivered or sent by facsimile (with subsequent written confirmation)
or by registered or certified first class mail, postage prepaid, return receipt
requested, or by overnight (or next business day) courier service or by
telegraph and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, on the day that such
facsimile is transmitted, or, if by first class mail, five (5) days following
the date on which such writing is deposited with the postal service, or the day
after the date when deposited with an overnight (or next business day) courier
service or, in the case of telegraphic notice, when delivered to the telegraphic
company, addressed as follows, or to such other address as either party hereto
may hereafter specify in writing to the other party:
The Borrower:
Xxxxxx Lease Finance Corporation
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
The Mortgagee:
CoreStates Bank, N.A.
Transportation and Leasing Division
FC 1-8-11-24
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
59
SECTION VI.3. CONTINUING LIEN AND SECURITY INTERESTS; TRANSFER. (a)
This Mortgage shall create a continuing lien and security interest in the
Collateral and shall (i) remain in full force and effect until payment and
performance in full of all of the Obligations, (ii) be binding upon the
Borrower, its successors and assigns, and (iii) inure, together with the rights
and remedies of the Mortgagee hereunder, to the benefit of the Mortgagee, and
its respective successors, transferees and assigns.
(b) The Mortgagee may, with the consent of Borrower (which consent
shall not be unreasonably withheld) and subject to the provisions of Section
10.4 of the Credit Agreement assign or otherwise transfer the Note held by it
and/or its rights hereunder or under the Credit Agreement to any other person or
entity, and such other person or entity shall thereupon become vested with all
the benefits in respect thereof granted to the Mortgagee herein or otherwise,
subject, however, to the provisions hereof; provided that, as soon as
practicable after such assignment or transfer, Mortgagee shall notify the
Borrower of any change in payment instructions necessitated by such assignment
or transfer. Upon the payment and performance in full of all of the
Obligations, the lien and security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the Borrower. Upon any such
termination, the Mortgagee will, at the Borrower's expense, execute and deliver
to the Borrower an appropriate instrument evidencing such termination.
SECTION VI.4. GOVERNING LAW; SERVICE OF PROCESS; CHOICE OF FORUM.
(a)This Agreement shall be deemed to be a contract made under and shall be
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to Pennsylvania or federal principles of conflict of laws. This
Agreement is subject to Sections 10.11 and 10.12 of the Credit Agreement
regarding consent to jurisdiction and service of process and waiver of a jury
trial.
(b) To the extent permitted by law, service of process in any action
against the Borrower or the Lender may be made by registered or certified mail,
return receipt requested, to its address indicated herein.
(c) The Borrower agrees that any final judgment rendered against it
in any action or proceeding shall be conclusive as to the subject of such final
judgment and may be enforced in other jurisdictions in any manner provided by
law.
SECTION VI.5. SEVERABILITY. The invalidity of any one or more of the
provisions of this Mortgage shall not affect the remaining provisions of this
Mortgage; if any one or more of the provisions of this Mortgage should he held
by any court of law to be invalid, or should operate to render this Mortgage
invalid or to impair the lien and security interest of this Mortgage on all or
the major portion of the property intended to he mortgaged hereunder, this
Mortgage shall be construed as if such provisions had not been contained
therein.
SECTION VI.6. ENTIRE AGREEMENT. This Mortgage (including all
exhibits hereto) and the documents executed pursuant hereto constitute the
entire agreement of the parties with respect to the subject matter hereof and
there are not other prior or contemporaneous written or oral understandings with
regard to the subject matter hereof.
SECTION VI.7. COUNTERPARTS. This Mortgage may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute
60
one and the same instrument. No modification or waiver of any provision hereof
shall be effective unless the same is in writing and signed by the party against
whom its enforcement is sought.
SECTION VI.8. CREDIT AGREEMENT TO CONTROL. In the event of a
conflict between the terms of this Agreement and the terms of the Credit
Agreement, the terms of the Credit Agreement shall control.
61
IN WITNESS WHEREOF, the parties hereto have caused this Mortgage to be
duly executed and delivered as of the day and year first above written.
XXXXXX LEASE FINANCE CORPORATION
By:
---------------------------------
Name:
Title:
CORESTATES BANK, N.A.
By:
---------------------------------
Name:
Title:
62
EXHIBIT A
MORTGAGE SUPPLEMENT NO. ___
MORTGAGE SUPPLEMENT NO. _____ dated ____________, 199_, of
Xxxxxx Lease Finance Corporation (together with its successors and assigns being
hereinafter called the "Borrower"), supplementing the Mortgage and Security
Agreement, dated as of June __, 1997 (as amended, modified or supplemented from
time to time, herein called the "Mortgage"), made by the Borrower in favor of
CoreStates Bank, N.A. (together with its successors and assigns, the
"Mortgagee").
W I T N E S S E T H:
WHEREAS, the Mortgage provides for the execution and delivery from
time to time of Mortgage Supplements thereto substantially in the form hereof,
each of which shall particularly describe the Engines, Airframes and Spare Parts
(such term and other defined terms in the Mortgage being herein used with the
same meanings) and shall specifically mortgage such Engines, Airframes and Spare
Parts to the Mortgagee; and
WHEREAS, the Mortgage relates in part to the [Airframe, Engines or
Spare Parts] described in the following paragraph, [and a counterpart of the
Mortgage is attached hereto and made a part hereof (only for initial Mortgage
Supplement)] (which Mortgage [and Mortgage Supplement No. 1] was recorded as one
instrument with the Federal Aviation Administration on [ ] and assigned
Conveyance Number [ ] (Only for Mortgage Supplements entered into subsequent to
Mortgage Supplement No. 1)];
NOW, THEREFORE, This Supplement Witnesseth, that to secure (i) the
prompt and complete payment and performance when due of all of the Obligations
and (ii) the performance and observance by the Borrower of all the agreements,
covenants and provisions in the Mortgage, and in consideration of the premises
and of the covenants contained in the Mortgage, and of the sum of $1.00 paid to
the Borrower by the Mortgagee at or before the delivery hereof, the receipt
whereof is hereby acknowledged, the Borrower has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged, granted a security interest
in and confirmed unto the Mortgagee, and does hereby grant, bargain, sell,
assign, transfer, convey, mortgage, pledge, grant a security interest in and
confirm unto the Mortgagee, the following described property (the "Mortgaged
Property"):
[ (i) ## (#) airframe(s); Manufacturer's serial No. [
] ; and United States Registration NO. [ ] and;]
[(ii) ## (#) [ ] engines bearing,
respectively, Manufacturer's Serial Nos. [ ] and [ ],
respectively (each of which engines has 750 or more rated
takeoff horsepower or the equivalent of such horsepower),
whether or not such engines shall be installed in or
attached to any airframe;]
[(iii) the spare parts listed below]
63
[(iv) ____________ dated _________, 19__ between the
Borrower, as lessor and _______________ as lessee.]
B. all parts, components, equipment, instruments, appliances,
avionics, radio and radar devices, cargo handling systems and loose equipment
that are incorporated or installed in or attached to said [Engine, Airframe or
Spare Part], whether now owned or hereafter acquired by the Borrower; and
C. all Records relating to any of the property described in
paragraphs A and B above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, its successors and assigns, for the uses and purposes and subject to
the terms and provisions set forth in the Mortgage.
This Supplement shall be construed as supplemental to the Mortgage and
shall form a part of the Mortgage and the Mortgage is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement is being delivered in the State of Pennsylvania.
This Supplement may be executed by the Borrower and the Mortgagee in
separate counterparts, each of which when so executed and delivered is an
original, but all such counterparts shall together constitute but one and the
same Supplement.
AND, FURTHER, the Borrower hereby acknowledges that the Mortgaged
Property has been delivered to the Borrower and is included in the property of
the Borrower covered by all the terms and conditions of the Mortgage.
64
IN WITNESS WHEREOF, the Borrower and the mortgagee have each caused
this Supplement to be duly executed, as of the day and year first above written.
XXXXXX LEASE FINANCE CORPORATION
By:
-------------------------------
Name:
Title:
CORESTATES BANK, N.A.
By:
-------------------------------
Name:
Title:
65
AMENDMENT NO. 1
TO
MORTGAGE AND SECURITY AGREEMENT
Amendment No. 1, dated November 18, 1997, (the "AMENDMENT") to the Mortgage
and Security Agreement, dated as of June 27, 1997, (the "AGREEMENT") made by
XXXXXX LEASE FINANCE CORPORATION, a California corporation ("XXXXXX") in favor
of CORESTATES BANK, N.A., a national banking association ("CORESTATES BANK",
"CORESTATES" or the "BANK") which has been supplemented and recorded by the
Federal Aviation Administration as follows:
Agreement and Mortgage Supplement No. 1 of the Borrower, dated June 27,
1997 were recorded by the Federal Aviation Administration on July 9, 1997, and
assigned Conveyance No. H90651; and
Mortgage Supplement No. 2 of the Borrower, dated June 30, 1997 was recorded
by the Federal Aviation Administration on July 9, 1997, and assigned Conveyance
No. H90653; and
Mortgage Supplement No. 3 of the Borrower, dated July 28, 1997 was recorded
by the Federal Aviation Administration on July 31, 1997, and assigned Conveyance
No. GG011163; and
Mortgage Supplement No. 4 of the Borrower, dated August 1, 1997 was
recorded by the Federal Aviation Administration on August 20, 1997, and assigned
Conveyance No. M32717; and
Mortgage Supplement No. 5 of the Borrower, dated August 25, 1997 was filed
with the Federal Aviation Administration on August 26, 1997, but has not yet
been recorded; and
Mortgage Supplement No. 6 of the Borrower, dated September 29, 1997 was
filed with the Federal Aviation Administration on September 29, 1997, but has
not yet been recorded; and
Mortgage Supplement No. 7 of the Borrower, dated September 30, 1997 was
recorded by the Federal Aviation Administration on October 6, 1997, and assigned
Conveyance No. FF22634; and
All capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Agreement.
PRELIMINARY STATEMENT
WHEREAS, CoreStates and Xxxxxx have agreed in an amendment dated as of
November 8, 1997 to amend the Credit Agreement, dated as of June 12, 1997
between Xxxxxx and CoreStates (the "Credit Agreement") such that certain de
Havilland turbo prop aircraft along with certain spare engines will be included
within the definition of Category A Equipment, as such term is defined in the
Credit Agreement.
WHEREAS, CoreStates and Xxxxxx wish to amend the Agreement to enable
CoreStates to obtain a security interest in aircraft (including de Havilland
turbo prop aircraft) along with any lease of such aircraft,
NOW, THEREFORE, in consideration of the premises and promises hereinafter
set forth and intending to be legally bound hereby, the parties hereto agree as
follows:
1. SECTION 1.01 OF THE AGREEMENT.
66
(a) The following definition is hereby inserted and shall read as follows:
"AIRCRAFT" means each aircraft described on a Mortgage Supplement
hereto, including the Airframe, together with the Engines installed
thereon (or any Engine substituted for one of said Engines as a result
of an Event of Loss), whether or not any of said initial or substitute
Engines may from time to time be installed on such Airframe.
(b) The following definitions are hereby amended and restated in their
entirety to read as follows:
"Airframe" means each Aircraft (except for the Engine or Engines from
time to time installed thereon) described in a Mortgage Supplement
hereto, together with any and all Parts which are either incorporated
or installed in or attached to such Airframe or required to be subject
to the lien and security interest of this Mortgage.
"Engine" means each engine described in a Mortgage Supplement hereto
(each of which has 750 or more rated takeoff horsepower or the
equivalent of such horsepower), together with any propeller described
in a Mortgage Supplement hereto ("Propeller"), whether or not such
Propeller is from time to time installed on the Airframe (or any
propeller substituted for one of said Propellers). An Engine shall
also include any and all Parts which are either incorporated or
installed in or attached to such Engine or Propeller or required to be
subject to the lien and security interest of this Mortgage.
2. ARTICLE II OF THE AGREEMENT.
(a) Clause (ii) is hereby amended such that the word "Aircraft," shall be
and hereby is inserted immediately preceding the word "Engine"
(b) Clause (iii) is hereby amended and restated in its entirety to read as
follows:
"(iii) all records, logs and other materials required to be
maintained with respect to each Aircraft by persons in operational
control of such Aircraft under any applicable laws, rules or
regulations and all logs, books, maintenance records and other
information relating to the Airframe, Engines or Spare Parts
pertaining thereto (collectively, the "Records") as well as all right,
title and interest of the Borrower in, to and under the overhaul,
repair and maintenance manuals, programs and catalogues which are part
of or used in connection with the maintenance program for the
Aircraft, Airframe or Engines; and"
3. SECTION 3.01 OF THE AGREEMENT. Section 3.01 of the Agreement is hereby
amended and restated in its entirety to read as follows:
SECTION 3.01 REGISTRATION: MAINTENANCE AND OPERATION. The Borrower,
at its own cost and expense, will: (i) prior to mortgaging an
Aircraft or Airframe hereunder, cause each Airframe to be duly
registered, and at all times thereafter to remain duly registered, in
the name of the Borrower in accordance with the Act, if applicable, or
other applicable law; (ii) at all times maintain, service, repair,
overhaul and test or cause to be maintained, serviced, repaired,
overhauled and tested each Aircraft, Engine, Spare Part
67
and Part so as to keep the same in as good operating condition as when
originally mortgaged hereunder, ordinary wear and tear excepted, and,
in any event in the condition required by the relevant Lease; and
(iii) maintain or cause to be maintained (in the English language) all
Records.
4. SECTION 4.02 OF THE AGREEMENT. Section 4.02 of the Agreement is hereby
amended and restated in its entirety to read as follows:
SECTION 4.02 POSSESSION OF AIRCRAFT, AIRFRAME, ENGINE AND SPARE
PARTS. Upon an event of default, the Mortgagee may, without notice,
take possession of the whole or any part of any Aircraft, Airframe,
Engine or Spare Parts and may exclude the Borrower, and all persons
claiming under the Borrower, wholly or partly therefrom. At the
request of the Mortgagee, the Borrower shall promptly deliver or cause
to be delivered to the Mortgagee or to whomsoever the Mortgagee shall
designate, at such time or times and place or places as the Mortgagee
may specify, any item of Collateral specified by the Mortgagee. In
addition, the Borrower will provide, without cost or expense to the
Mortgagee, storage facilities for such Aircraft, Airframe, Engine or
Spare Parts and will cause such Aircraft, Airframe, Engines or Spare
Parts to be maintained as required by the terms hereof and of the
Credit Agreement. It the Borrower shall for any reason fail to
deliver such Aircraft, Airframe, Engine or Spare Part or any part
thereof after demand by the Mortgagee, the Mortgagee may, without
being responsible for loss or damage, except to the extent caused by
the gross negligence or wilful misconduct of the Mortgagee, (i) obtain
a judgment conferring on the Mortgagee the right to immediate
possession or requiring the Borrower to deliver immediate possession
of all or part of such Aircraft, Airframe, Engine or Spare Part to the
Mortgagee, to the entry of which judgment the Borrower hereby
specifically consents, or (ii) with or, to the fullest extent provided
by law, without such judgment, pursue the whole or any part of such
Aircraft, Airframe, Engine or Spare Part wherever it may be found and
enter any of the premises where such Aircraft, Airframe, Engine or
Spare Part may be and take possession of and remove the same. Upon
every such taking of possession, the Mortgagee may (but shall not be
obligated to), from time to time, make all such reasonable
expenditures for maintenance, insurance, repairs, replacements,
alterations, additions and improvements to and of the Aircraft,
Airframe, Engine or Spare Part xxxx may xxxx proper.
5. SECTION 4.04 OF THE AGREEMENT. Section 4.04 of the Agreement is hereby
amended and restated in its entirety to read as follows:
SECTION 4.04 SALE AND SUITS FOR ENFORCEMENT. (a) Upon an Event of
Default, the Mortgagee, with or without taking possession of an Aircraft,
Airframe, Engine or Spare Part, may:
(i) to the extent and in the manner permitted by law, sell at
one or more sales, as an entirety or in separate lots or parcels, the
whole or any part of such Aircraft, Airframe, Engine or Spare Part, at
public or private sale, at such place or places and at such time or
times and upon such terms, including terms of credit (which may
include the retention of title by the Mortgagee to the property so
sold), as the Mortgagee may determine, whether or not such Aircraft,
Airframe, Engine or Spare Part shall be at the place of sale; and
68
(ii) proceed to protect and enforce its rights under this
Mortgage by suit, whether for specific performance of any covenant
herein contained or in aid of the exercise of any power herein granted
or for the foreclosure of this Mortgage and the sale of the Collateral
under the judgment or decree of a court of competent jurisdiction or
for the enforcement of any other right.
(b) At any public sale of such Aircraft, Airframe, Engine or Spare
Part or any part thereof by the Mortgagee pursuant to paragraph (a)(i)
above, the Mortgagee may consider and accept bids requiring the
extension of credit to the bidder and may determine the highest bidder
at such sale, whether or not the bid of such bidder shall be solely
for cash or shall require the extension of credit.
(c) The Mortgagee, to the extent permitted by law, may from time to
time adjourn any sale under paragraph (a) (i) above by announcement at
the time and place appointed for such sale or for any adjournment
thereof; and without further notice or publication, except as may be
required by law, such sale to be made at the time and place to which
the same shall have been so adjourned.
(d) Upon the completion of any sale under paragraph (a)(i) above,
full title and right of possession to the Aircraft, Airframe, Engine
or Spare Part so sold shall (subject to any retention of title by the
Mortgagee as part of the terms of such sale) pass to the accepted
purchaser forthwith upon the completion of such sale, and the Borrower
shall deliver, in accordance with the instructions of the Mortgagee
(including causing the Aircraft, Engine or Spare Part to be flown to
such airports as the Mortgagee may specify), such Aircraft, Airframe,
Engine or Spare Part so sold. If the Borrower shall for any reason
fail to deliver such Aircraft, Airframe, Engine or Spare Part the
Mortgagee shall have all of the rights granted by Section 4.02 hereof.
The Mortgagee is hereby irrevocably appointed the true and lawful
attorney of the Borrower, in its name and stead, to make all necessary
conveyances of an Aircraft, Airframe, Engine or Spare Part if so sold.
Nevertheless, if so requested by the Mortgagee or by any purchaser,
the Borrower shall confirm any such sale or conveyance by executing
and delivering all proper instruments of conveyance or releases as may
be designated in any such request.
(e) The Borrower hereby covenants and agrees that a notice, which
shall be sent in accordance with the provisions of the Credit
Agreement or this Mortgage, at least 30 days before the date of any of
the foregoing acts described in this Section 4.04 shall be deemed to
be reasonable notice of such act and, specifically, reasonable
notification of the time and place of any public sale hereunder and
reasonable notification of the time after which any private sale or
other intended disposition to be made hereunder is to be made.
6. SECTION 5.02 OF THE AGREEMENT. Section 5.02, subsection (a) of the
Agreement is hereby amended and restated in its entirety to read as follows:
(a) so long as no Event of Default under the Lease shall have
occurred and be continuing, the Mortgagee shall not interfere or
permit any Person acting by, through or under the Mortgagee to
interfere with any right of such Permitted Lessee peaceably and
quietly without hindrance or molestation to hold, possess and use,
during the term of the
69
applicable lease and in accordance with the terms thereof, the
Aircraft, Airframe, Engine or Spare Part;
7. EXHIBIT A TO THE CREDIT AGREEMENT. Exhibit A to the Agreement shall be
and is hereby amended and restated in its entirety to be as set forth in Exhibit
A attached hereto.
8. COVENANTS. Xxxxxx hereby represents and warrants that it is in
compliance and has complied with each and every covenant set forth in the
Agreement, including but not limited to Article 3 thereof, on and as of the date
hereof.
9. CORPORATE AUTHORIZATION AND DELIVERY OF DOCUMENTS. CoreStates shall
have received copies, certified as of the date hereof, of all action taken by
Xxxxxx and any other necessary Person to authorize this Amendment and such other
papers as CoreStates shall require.
10. EFFECT OF AMENDMENT. This Amendment amends the Agreement only to the
extent and in the manner herein set forth, and in all other respects the
Agreement is ratified and confirmed.
11. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures hereto were upon the same instrument.
70
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to
be duly executed by their duly authorized representatives as of the date first
above written.
XXXXXX LEASE FINANCE CORPORATION
By
----------------------------
Name:
Title:
CORESTATES BANK, N.A.
By
----------------------------
Xxxx X. Xxxxxxxx
Vice President
71
EXHIBIT A
MORTGAGE SUPPLEMENT NO. ___
MORTGAGE SUPPLEMENT NO. _____ dated ____________, 199_, of Xxxxxx
Lease Finance Corporation (together with its successors and assigns being
hereinafter called the "Borrower"), supplementing the Mortgage and Security
Agreement, dated as of June __, 1997 (as amended, modified or supplemented from
time to time, herein called the "Mortgage"), made by the Borrower in favor of
CoreStates Bank, N.A. (together with its successors and assigns, the
"Mortgagee").
W I T N E S S E T H:
WHEREAS, the Mortgage provides for the execution and delivery from
time to time of Mortgage Supplements thereto substantially in the form hereof,
each of which shall particularly describe the Aircraft, Engines, Airframes and
Spare Parts (such term and other defined terms in the Mortgage being herein used
with the same meanings) and shall specifically mortgage such Aircraft, Engines,
Airframes and Spare Parts to the Mortgagee; and
WHEREAS, the Mortgage relates in part to the [Aircraft, Airframe,
Engine or Spare Parts] described in the following paragraph, [and a counterpart
of the Mortgage is attached hereto and made a part hereof (only for initial
Mortgage Supplement)] (which Mortgage [and Mortgage Supplement No. 1] was
recorded as one instrument with the Federal Aviation Administration on [ ] and
assigned Conveyance Number [ ] (Only for Mortgage Supplements entered into
subsequent to Mortgage Supplement No. 1)];
NOW, THEREFORE, This Supplement Witnesseth, that to secure (i) the
prompt and complete payment and performance when due of all of the Obligations
and (ii) the performance and observance by the Borrower of all the agreements,
covenants and provisions in the Mortgage, and in consideration of the premises
and of the covenants contained in the Mortgage, and of the sum of $1.00 paid to
the Borrower by the Mortgagee at or before the delivery hereof, the receipt
whereof is hereby acknowledged, the Borrower has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged, granted a security interest
in and confirmed unto the Mortgagee, and does hereby grant, bargain, sell,
assign, transfer, convey, mortgage, pledge, grant a security interest in and
confirm unto the Mortgagee, the following described property (the "Mortgaged
Property"):
A.
[(i) ## (#) [ ] aircraft consisting of the
following principal components (the "Aircraft"):
(a) ## (#) airframe(s); Manufacturer's Serial No. [ ];
and United States Registration No. [ ] and;
(b) ## (#) [ ] engines bearing, Manufacturer's
Serial Nos. [ ] and [ ], respectively (each of which
engines has 750 or more rated takeoff horsepower or the
equivalent of such horsepower), whether or not such
engines shall be installed in or attached to any
airframe;
(c) ## (#) [ ] propellers bearing Manufacturer's
Serial Nos. [ ] and [ ] (each of which is capable of
absorbing at least 750 rated takeoff horsepower or the
72
equivalent of such horsepower, whether or not such propellers
shall be installed on or attached to any engine.]
[ (ii) ## (#) airframe(s); Manufacturer's serial No.
[ ]; and United States Registration NO. [ ]
and;]
[(iii) ## (#) [ ] engines bearing
Manufacturer's Serial Nos. [ ] and [ ], respectively (each
of which engines has 750 or more rated takeoff horsepower or
the equivalent of such horsepower), whether or not such
engines shall be installed in or attached to any airframe;]
[(iv) the spare parts listed below]
[(v) ____________ dated _________, 19__ between the
Borrower, as lessor and _______________ as lessee.]
B. all parts, components, equipment, instruments, appliances,
avionics, radio and radar devices, cargo handling systems and loose
equipment that are incorporated or installed in or attached to said
[Aircraft, Engine, Airframe or Spare Part], whether now owned or
hereafter acquired by the Borrower; and
C. all Records relating to any of the property described in
paragraphs A and B above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, its successors and assigns, for the uses and purposes and subject to
the terms and provisions set forth in the Mortgage.
This Supplement shall be construed as supplemental to the Mortgage and
shall form a part of the Mortgage and the Mortgage is hereby incorporated by
reference herein and is hereby ratified, approved and confirmed.
This Supplement is being delivered in the State of Pennsylvania.
This Supplement may be executed by the Borrower and the Mortgagee in
separate counterparts, each of which when so executed and delivered is an
original, but all such counterparts shall together constitute but one and the
same Supplement.
AND, FURTHER, the Borrower hereby acknowledges that the Mortgaged
Property has been delivered to the Borrower and is included in the property of
the Borrower covered by all the terms and conditions of the Mortgage.
73
IN WITNESS WHEREOF, the Borrower and the Mortgagee have each caused
this Supplement to be duly executed, as of the day and year first above written.
XXXXXX LEASE FINANCE CORPORATION
By:
-----------------------------
Name:
Title:
CORESTATES BANK, N.A.
By:
-----------------------------
Name:
Title:
74
AMENDMENT NO. 2
TO
MORTGAGE AND SECURITY AGREEMENT
Amendment No. 2, dated June 5, 1998, (the "AMENDMENT") to the Mortgage and
Security Agreement, dated as of June 27, 1997, (the "AGREEMENT") made by XXXXXX
LEASE FINANCE CORPORATION, a California corporation ("BORROWER") in favor of
CORESTATES BANK, N.A., a national banking association (now First Union National
Bank, successor by merger to CoreStates Bank, N.A. ("First Union")) which has
been amended, supplemented and recorded by the Federal Aviation Administration
as follows:
Agreement and Mortgage Supplement No. 1 of the Borrower, dated June 27,
1997 were recorded by the Federal Aviation Administration on July 9, 1997, and
assigned Conveyance No. H90651; and
Mortgage Supplement No. 2 of the Borrower, dated June 30, 1997 was recorded
by the Federal Aviation Administration on July 9, 1997, and assigned Conveyance
No. H90653; and
Mortgage Supplement No. 3 of the Borrower, dated July 28, 1997 was recorded
by the Federal Aviation Administration on July 31, 1997, and assigned Conveyance
No. GG011163; and
Mortgage Supplement No. 4 of the Borrower, dated August 1, 1997 was
recorded by the Federal Aviation Administration on August 20, 1997, and assigned
Conveyance No. M32717; and
Mortgage Supplement No. 5 of the Borrower, dated August 25, 1997 was
recorded by the Federal Aviation Administration on December 11, 1997, and
assigned Conveyance No. MM015328; and
Mortgage Supplement No. 6 of the Borrower, dated September 29, 1997 was
recorded by the Federal Aviation Administration on December 12, 1997, and
assigned Conveyance No. MM015329; and
Mortgage Supplement No. 7 of the Borrower, dated September 30, 1997 was
recorded by the Federal Aviation Administration on October 6, 1997, and assigned
Conveyance No. FF22634; and
Amendment No. 1 to the Mortgage, dated November 18, 1997 was recorded by
the Federal Aviation Administration on January 13, 1998, and assigned Conveyance
No. P13938; and
Mortgage Supplement No. 8 of the Borrower, dated November 20, 1997 was
recorded by the Federal Aviation Administration on January 13, 1998, and
assigned Conveyance No. P13939; and
Mortgage Supplement No. 9 of the Borrower, dated December 2, 1997 was
recorded by the Federal Aviation Administration on December 3, 1997, and
assigned Conveyance No. Z02486; and
Mortgage Supplement No. 10 of the Borrower, dated December 4, 1997 was
recorded by the Federal Aviation Administration on December 9, 1997, and
assigned Conveyance No. X133882; and
Mortgage Supplement No. 11 of the Borrower, dated March 10, 1998 was
recorded by the Federal Aviation Administration on March 18, 1998, and assigned
Conveyance No. HH018194; and
75
Mortgage Supplement No. 12 of the Borrower, dated March 16, 1998 was filed
with the Federal Aviation Administration on March 16, 1998, but has not yet been
recorded; and
Mortgage Supplement No. 13 of the Borrower, dated March 19, 1998 was filed
with the Federal Aviation Administration on March 19, 1998, but has not yet been
recorded; and
Mortgage Supplement No. 14 of the Borrower, dated March 26, 1998 was
recorded by the Federal Aviation Administration on April 1, 1998, and assigned
Conveyance No. T057072; and
Mortgage Supplement No. 15 of the Borrower, dated April 2, 1998 was
recorded by the Federal Aviation Administration on April 22, 1998, and assigned
Conveyance No. BB26968; and
Mortgage Supplement No. 16 of the Borrower, dated April 30, 1998 was filed
with the Federal Aviation Administration on April 30, 1998, but has not yet been
recorded; and
Mortgage Supplement No. 17 of the Borrower, dated June 1, 1998 was filed
with the Federal Aviation Administration on June 1, 1998, but has not yet been
recorded; and
All capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to them in the Agreement as amended and
supplemented prior to the date hereof.
PRELIMINARY STATEMENT
WHEREAS, First Union and Borrower wish to amend the Agreement as set forth
hereinafter,
NOW, THEREFORE, in consideration of the premises and promises hereinafter
set forth and intending to be legally bound hereby, the parties hereto agree as
follows:
1.PREAMBLE OF THE AGREEMENT. The preamble is hereby amended and restated
in its entirety to read as follows:
"MORTGAGE AND SECURITY AGREEMENT, dated as of June 27, 1997, made by XXXXXX
LEASE FINANCE CORPORATION, a Delaware corporation (together with its successors
and assigns, the "Borrower"), with its chief executive office and chief place of
business at 0000 Xxxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx, XX 00000 in favor of FIRST
UNION NATIONAL BANK, as Agent (together with its successors and assigns, the
"Mortgagee").
2. SECTION 6.02 OF THE AGREEMENT. This section is hereby amended such that
the words "First Union National Bank, as Agent" shall be and hereby are inserted
to replace the words "CoreStates Bank, N.A."
76
3. AGENT CAPACITY. Pursuant to an amendment and restatement of the credit
agreement between the Borrower and First Union dated June 2, 1998, First Union
shall act as agent for itself and other banks named in said amended and restated
credit agreement (as such may be amended, supplemented, or amended and restated
in the future, together the "Credit Agreement") and not solely on its own
behalf. To the extent necessary, First Union and the Borrower hereby agree that
the existing interest of First Union as "Mortgagee" under the Agreement, as
amended and supplemented, shall be deemed and is hereby assigned to First Union
as "Mortgagee" and as Agent for itself and other banks as set forth in the
Credit Agreement.
4. COVENANTS. Xxxxxx hereby represents and warrants that it is in
compliance and has complied with each and every covenant set forth in the
Agreement, including but not limited to Article 3 thereof, on and as of the date
hereof.
5. CORPORATE AUTHORIZATION AND DELIVERY OF DOCUMENTS. First Union shall
have received copies, certified as of the date hereof, of all action taken by
Xxxxxx and any other necessary Person to authorize this Amendment and such other
papers as First Union shall require.
6. EFFECT OF AMENDMENT. This Amendment amends the Agreement only to the
extent and in the manner herein set forth, and in all other respects the
Agreement is ratified and confirmed.
7. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to
be duly executed by their duly authorized representatives as of the date first
above written.
XXXXXX LEASE FINANCE CORPORATION
By
------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
(successor by merger to CORESTATES BANK, N.A.),
individually and as Agent
By
------------------------------
Name:
Title:
77
EXHIBIT E
COMPLIANCE CERTIFICATE
The undersigned, president of Xxxxxx Lease Finance Corporation does hereby
certify that as of this date there exists no Event of Default as defined under
the Credit Agreement dated June 12, 1997, as such has been amended from time to
time (the "Credit Agreement"), between Xxxxxx Lease Finance Corporation and
CoreStates Bank, N.A., or does there exist any event which notice or lapse of
time or both would become an Event of Default. Further, the undersigned does
hereby certify the accuracy of the attached analysis of the extent to which
Xxxxxx Lease Finance Corporation is in compliance with the Financial Condition
and Ratios set forth in Section 7 of the Credit Agreement.
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & CEO
DATE:
-----------
78
EXHIBIT F
DEPRECIATION POLICIES
This Exhibit was never finalized
79
EXHIBIT G
DESCRIPTION OF AIRCRAFT, ENGINES AND PROPELLERS
Airframes: Two (2) de Havilland Dash 8-103 turboprop passenger aircraft
bearing U.S. Registration Nos. N853MA and N854MA and
Manufacturer's Serial Nos. 353 and 357.
Engines: Four (4) Xxxxx & Xxxxxxx Model PW121 aircraft engines bearing
Manufacturer's Serial Nos. 120968, 121244, 121298 and 121179 or
similar replacement engine.
Propellers: Four (4) Xxxxxxxx Standard Model 14SF-7 four-blade propellers
bearing Manufacturer's Serial Nos. 930310, 920913, 921018 and
921211 or similar replacement propeller.
Spare Engines: Three (3) Xxxxx & Xxxxxxx Model PW120A aircraft engines bearing
Manufacturer's Serial Nos. PC-E120140, PC-E120141 and PC-E120142.
80
