Exhibit 10.1
CREDIT AGREEMENT
Dated as of March 30, 2006
among
WORLD AIRWAYS, INC., and
NORTH AMERICAN AIRLINES, INC.,
as Borrowers,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.5 HEREOF,
as Lenders,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Agent
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.................................................... 1
1.1 General Definitions............................................. 1
1.2 Accounting Terms and Determinations............................. 32
1.3 Other Definitional Terms........................................ 33
ARTICLE II LOANS......................................................... 33
2.1 Revolving Loans................................................. 33
2.2 Optional and Mandatory Prepayments; Reduction of Revolving
Credit Committed Amount...................................... 38
2.3 Payments and Computations....................................... 40
2.4 Maintenance of Account.......................................... 42
2.5 Statement of Account............................................ 43
2.6 Taxes........................................................... 43
2.7 Sharing of Payments............................................. 45
2.8 Allocation of Payments; Pro Rata Treatment...................... 46
2.9 Extensions and Conversions...................................... 47
2.10 Replacement of Lenders.......................................... 48
ARTICLE III LETTERS OF CREDIT............................................ 49
3.1 Issuance........................................................ 49
3.2 Notice and Reports.............................................. 50
3.3 Participation................................................... 50
3.4 Reimbursement................................................... 50
3.5 Repayment with Revolving Loans.................................. 51
3.6 [Intentionally Omitted.]........................................ 52
3.7 Uniform Customs and Practices................................... 52
3.8 Indemnification; Nature of Issuing Bank's Duties................ 52
3.9 Responsibility of Issuing Bank.................................. 53
3.10 Conflict with Letter of Credit Documents........................ 54
ARTICLE IV INTEREST AND FEES............................................. 54
4.1 Interest on Loans............................................... 54
4.2 Interest After Event of Default................................. 54
4.3 Unused Line Fee................................................. 55
4.4 Lenders' Fees................................................... 55
4.5 Letter of Credit Fees........................................... 55
4.6 Authorization to Charge Account................................. 55
4.7 Indemnification in Certain Events............................... 56
4.8 Inability To Determine Interest Rate............................ 56
4.9 Illegality...................................................... 57
4.10 Funding Indemnity............................................... 57
ARTICLE V CONDITIONS PRECEDENT........................................... 58
TABLE OF CONTENTS
(continued)
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5.1 Closing Conditions.............................................. 58
5.2 Condition to all Loans and Letters of Credit.................... 63
ARTICLE VI REPRESENTATIONS AND WARRANTIES................................ 63
6.1 Organization and Qualification.................................. 64
6.2 Solvency........................................................ 64
6.3 Liens; Inventory; Spare Parts................................... 64
6.4 No Conflict..................................................... 65
6.5 Enforceability.................................................. 65
6.6 Financial Data; Forecasts; Material Adverse Change.............. 65
6.7 Locations of Offices, Records and Inventory..................... 66
6.8 Fictitious Business Names....................................... 66
6.9 Subsidiaries.................................................... 66
6.10 No Judgments or Litigation...................................... 67
6.11 No Defaults..................................................... 67
6.12 No Employee Disputes............................................ 67
6.13 Compliance with Law............................................. 67
6.14 ERISA........................................................... 68
6.15 Compliance with Environmental Laws.............................. 68
6.16 Use of Proceeds................................................. 69
6.17 Intellectual Property........................................... 69
6.18 Licenses and Permits............................................ 70
6.19 Title to Property............................................... 70
6.20 Labor Matters................................................... 71
6.21 Investment Company, Etc......................................... 71
6.22 Margin Security................................................. 71
6.23 No Event of Default............................................. 72
6.24 Taxes and Tax Returns........................................... 72
6.25 No Other Indebtedness........................................... 72
6.26 Status of Accounts.............................................. 72
6.27 Representations and Warranties.................................. 72
6.28 Material Contracts.............................................. 73
6.29 Survival of Representations..................................... 73
6.30 Affiliate Transactions.......................................... 73
6.31 Trade Suppliers................................................. 73
6.32 Key Members of Management....................................... 73
6.33 Accuracy and Completeness of Information........................ 73
6.34 Anti-Terrorism Laws............................................. 74
6.35 Deposit Accounts................................................ 75
6.36 Force Majeure................................................... 75
6.37 Dealings With Government........................................ 75
ARTICLE VII AFFIRMATIVE COVENANTS....................................... 75
TABLE OF CONTENTS
(continued)
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7.1 Financial Information........................................... 75
7.2 Inventory; Spare Parts.......................................... 78
7.3 Corporate Existence............................................. 78
7.4 ERISA........................................................... 78
7.5 Proceedings or Adverse Changes.................................. 80
7.6 Environmental Matters........................................... 80
7.7 Books and Records; Inspection................................... 81
7.8 [Intentionally Omitted.]........................................ 82
7.9 Security Interests.............................................. 82
7.10 Insurance; Casualty Loss........................................ 82
7.11 Taxes........................................................... 84
7.12 Compliance With Laws............................................ 84
7.13 Use of Proceeds................................................. 84
7.14 Fiscal Year; Accounting Policies................................ 85
7.15 Notification of Certain Events.................................. 85
7.16 Additional Borrowers and Guarantors............................. 85
7.17 Schedules of Accounts and Purchase Orders....................... 86
7.18 Collection of Accounts.......................................... 86
7.19 Notice; Credit Memoranda; and Returned Goods.................... 87
7.20 Acknowledgment Agreements....................................... 87
7.21 [Intentionally Omitted.]........................................ 87
7.22 Maintenance of Property......................................... 87
7.23 Revisions or Updates to Schedules............................... 87
7.24 Anti-Terrorism Laws............................................. 88
ARTICLE VIII FINANCIAL COVENANTS......................................... 88
8.1 Leverage Ratio.................................................. 88
8.2 Fixed Charge Coverage Ratio..................................... 88
8.3 Capital Expenditures............................................ 89
ARTICLE IX NEGATIVE COVENANTS............................................ 89
9.1 Restrictions on Liens........................................... 89
9.2 Restrictions on Additional Indebtedness......................... 89
9.3 Restrictions on Sale of Assets.................................. 89
9.4 No Corporate Changes............................................ 90
9.5 No Guarantees................................................... 90
9.6 No Restricted Payments.......................................... 90
9.7 No Investments.................................................. 90
9.8 No Affiliate Transactions....................................... 90
9.9 No Prohibited Transactions Under ERISA.......................... 91
9.10 No Additional Bank Accounts..................................... 92
9.11 [Intentionally Omitted.]........................................ 92
9.12 Amendments of Material Contracts................................ 92
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9.13 Additional Negative Pledges..................................... 92
9.14 Subordinated Debt............................................... 92
9.15 Sale and Leaseback.............................................. 93
9.16 Licenses, Etc................................................... 93
9.17 Limitations..................................................... 93
9.18 [Intentionally Omitted.]........................................ 93
9.19 Issuance of Capital Stock....................................... 93
9.20 Hedge Transactions.............................................. 93
ARTICLE X POWERS......................................................... 94
10.1 Appointment as Attorney-in-Fact................................. 94
10.2 Limitation on Exercise of Power................................. 94
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES................................ 95
11.1 Events of Default............................................... 95
11.2 Acceleration.................................................... 97
ARTICLE XII TERMINATION.................................................. 98
ARTICLE XIII THE AGENT................................................... 98
13.1 Appointment of Agent............................................ 98
13.2 Nature of Duties of Agent....................................... 99
13.3 Lack of Reliance on Agent....................................... 99
13.4 Certain Rights of the Agent..................................... 100
13.5 Reliance by Agent............................................... 100
13.6 Indemnification of Agent........................................ 100
13.7 The Agent in its Individual Capacity............................ 100
13.8 Holders of Notes................................................ 101
13.9 Successor Agent................................................. 101
13.10 Collateral Matters.............................................. 102
13.11 Actions with Respect to Defaults................................ 103
13.12 Delivery of Information......................................... 104
13.13 No Reliance on Agent's Customer Identification Program.......... 104
13.14 USA Patriot Act................................................. 104
ARTICLE XIV MISCELLANEOUS................................................ 104
14.1 Waivers......................................................... 104
14.2 JURY TRIAL...................................................... 105
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE................ 105
14.4 Notices......................................................... 106
14.5 Assignability................................................... 107
14.6 Information..................................................... 110
14.7 Payment of Expenses; Indemnification............................ 110
14.8 Entire Agreement, Successors and Assigns........................ 112
14.9 Amendments, Etc................................................. 112
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14.10 Nonliability of Agent and Lenders............................... 113
14.11 Independent Nature of Lenders' Rights........................... 113
14.12 Counterparts.................................................... 113
14.13 Effectiveness................................................... 113
14.14 Severability.................................................... 114
14.15 Headings Descriptive............................................ 114
14.16 Maximum Rate.................................................... 114
14.17 Right of Setoff................................................. 115
14.18 Concerning Joint and Several Liability of the Borrowers......... 115
14.19 Delegation of Authority......................................... 117
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Acknowledgment Agreement
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Guaranty Agreement
Exhibit D Form of Landlord Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of Revolving Note
Exhibit H Form of Notice of Borrowing and Borrowing Base Certificate
Exhibit I-1 Form of Deposit Account Control Agreement
Exhibit I-2 Form of Securities Account Control Agreement
Exhibit J Form of Notice of Extension/Conversion
Exhibit K Form of Compliance Certificate
Exhibit L Form of Borrowing Base Certificate
Exhibit M Form of Joinder Agreement
Exhibit N Form of Solvency Certificate
Exhibit O Form of Account Designation Letter
Exhibit P Form of Licensor Consent
Exhibit Q Form of Contribution Agreement
Exhibit R Form of Collateral Disclosure Certificate
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Liens
Schedule 1.1C Indebtedness
Schedule 1.1D Investments
Schedule 1.1E Existing Letters of Credit
Schedule 6.1 Jurisdictions of Organization
Schedule 6.8 Fictitious Business Names
Schedule 6.7 Collateral Locations
Schedule 6.9 Subsidiaries
Schedule 6.10 Litigation
Schedule 6.14 ERISA
Schedule 6.15 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.19 Real Estate
Schedule 6.20 Labor Matters
Schedule 6.24 Taxes and Tax Returns
Schedule 6.28 Material Contracts
Schedule 6.30 Affiliate Transactions
Schedule 6.31 Trade Suppliers
Schedule 6.32 Key Members of Management
Schedule 6.35 Bank Accounts
TABLE OF CONTENTS
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Schedule 14.4 Lenders' Lending Offices and Notice Information
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of March 30, 2006, among WORLD
AIRWAYS, INC., a Delaware corporation ("World Airways"), NORTH AMERICAN
AIRLINES, INC., a Delaware corporation ("North American"), and any other
Subsidiaries of the Parent (as defined in Section 1.1) which may become
Borrowers hereunder pursuant to Section 7.16 (each of the foregoing,
hereinafter, the "Borrowers" or individually referred to as a "Borrower"), each
of the financial institutions identified as Lenders on the signature pages
hereto (together with each of their successors and assigns, referred to
individually as a "Lender" and, collectively, as the "Lenders"), and WACHOVIA
BANK, NATIONAL ASSOCIATION ("Wachovia"), acting in the manner and to the extent
described in Article XIII hereof (in such capacity, the "Agent").
WITNESSETH:
WHEREAS, the Borrowers wish to obtain a revolving credit facility to
refinance approximately $30,000,000 of U.S. Government guaranteed loans and for
the working capital, letter of credit and general corporate needs of the
Borrowers; and
WHEREAS, upon the terms and subject to the conditions set forth herein, the
Lenders are willing to make loans and advances to the Borrowers;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS.
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein specified:
"Account Designation Letter" shall mean the Notice of Account Designation
Letter dated the Closing Date from the Borrowers to the Agent substantially in
the form attached hereto as Exhibit O.
"Accounts" shall mean all of each Credit Party's "accounts" as such term is
defined in the UCC, and, in any event, includes, without limitation, (a) all
accounts receivable (whether or not specifically listed on schedules furnished
to the Agent), and all other rights to payment for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel or aircraft under a
charter or other contract, arising out of the use of a credit card or charge
card, or for services rendered or to be rendered or in connection with any other
transaction (whether or not yet earned by performance), (b) all rights in, to,
and under all purchase orders or receipts for goods or services, (c) all rights
to any goods represented by any of the foregoing, including, without limitation,
all rights of rescission, replevin, reclamation, and stoppage in transit and
rights to returned, reclaimed, or repossessed goods, (d) all reserves and credit
balances held by each Credit Party with respect to any such
accounts receivable or account debtors, (e) all books, records, computer tapes,
programs and ledger books arising therefrom or relating thereto, and (f) all
guarantees and collateral security of any kind, given by any account debtor or
any other Person with respect to any of the foregoing, all whether now owned or
existing or hereafter acquired or arising, by or in favor of, any Credit Party.
"Acknowledgment Agreements" shall mean (a) the acknowledgment agreements,
substantially in the form of Exhibit A (or such other form as shall be
acceptable to the Agent), between each Credit Party's warehousemen, aircraft
lessors and the Agent, (b) Landlord Agreements and (c) Licensor Consents.
"Acquired Company" shall mean the Person (or the assets thereof) which is
acquired pursuant to an Acquisition.
"Acquisition" shall mean the purchase of (i) the Capital Stock of a Person
(other than pursuant to a stock repurchase program of the Parent permitted under
Section 9.6), (ii) the assets of such Person through merger or consolidation
with such Person or (iii) the plant, property and equipment of such Person, or a
material part thereof, together with the related current assets and intangible
assets of such Person.
"Acquisition Documents" shall mean the purchase agreement pursuant to which
an Acquisition is made in accordance with the terms hereof and thereof,
including the exhibits and schedules thereto, and all agreements, documents and
instruments executed and delivered pursuant thereto or in connection therewith.
"Affiliate" shall mean, with respect to any Person, any entity which
directly or indirectly controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to (i) vote thirty-five percent
(35%) or more of the securities having ordinary voting power for the election of
directors of such Person, or (ii) direct or cause the direction of management
and policies of a business, whether through the ownership of voting securities,
by contract or otherwise and either alone or in conjunction with others or any
group.
"Agent" or "Administrative Agent" shall mean Wachovia as provided in the
preamble to this Credit Agreement or any permitted successor to Wachovia acting
in such capacity; provided, however, that so long as Wachovia is the only Lender
pursuant to this Credit Agreement, all references to the Agent shall mean
Wachovia in its capacity as the sole Lender.
"Aggregate Borrowing Base" shall mean, collectively, the NA Borrowing Base
and the WA Borrowing Base.
"AMC" shall mean the Air Mobility Command, a unit of the United States Air
Force.
"Anti-Terrorism Law" shall mean the USA Patriot Act or any other statute,
regulation, executive order, or other law pertaining to the prevention of future
acts of terrorism, in each case as such law may be amended from time to time.
"Applicable Percentage" means:
(a) when the Revolver Loans are Base Rate Loans, 0.00% per annum;
(b) when Revolver Loans are LMIR Loans, 2.00% per annum; and
(c) when the Revolver Loans are Eurodollar Loans, 2.00% per annum.
"Approved Assignee" shall mean any Lender, an Affiliate of a Lender or an
Approved Fund.
"Approved Banks" shall have the meaning given such term in the definition
of "Cash Equivalents" herein.
"Approved Fund" shall mean any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Asset Disposition" shall mean the disposition (other than (x) a
disposition described in clauses (a) or (b) of Section 9.3 or (y) a disposition
described in clauses (c) or (d) of Section 9.3, so long as the proceeds thereof
are used to repair existing assets or acquire other assets or property useful in
the relevant Credit Party's business within one hundred eighty (180) days of
such disposition or (z) the grant of licenses or sublicenses in the ordinary
course of business) of any or all of the assets (including, without limitation,
the Capital Stock of a Credit Party or Subsidiary of a Credit Party) of any
Credit Party or its Subsidiaries, whether by sale, lease, transfer or otherwise,
in a single transaction, or in a series of related transactions.
"Assignment and Acceptance" shall mean an assignment and acceptance entered
into by an assigning Lender and an assignee Lender, accepted by the Agent, in
accordance with Section 14.5(f), in the form attached hereto as Exhibit B.
"Assignment Act" shall mean, with respect to any US Government Account, the
Federal Assignment of Claims Act of 1940, as amended from time to time, and,
with respect to any other governmental entity or body, any comparable law,
regulation, order, decree, or official pronouncement setting forth any
requirements of law as to the attachment, perfection or priority of, or the
ability of the Agent to enforce, the Agent's security interest in any Account or
other Collateral payable by such entity or body.
"Average Three Month Excess Borrowing Base Availability" shall mean the
average Excess Borrowing Base Availability, if any, for a three fiscal month
period, determined by averaging the calculations of the Borrowing Base contained
in the monthly Borrowing Base Certificates delivered during the three most
recently completed fiscal months prior to the date of determination.
"Bank Products" shall mean any one or more of the following types of
services or facilities extended to any of the Credit Parties by the Agent or any
Affiliate of the Agent in reliance on the Agent's agreement to indemnify such
Affiliate: (i) Automated Clearing House (ACH) transactions and other similar
money transfer services; (ii) cash management, including
controlled disbursement and lockbox services; (iii) establishing and maintaining
deposit accounts; (iv) credit cards or stored value cards; and (v) other similar
or related bank products and services identified by the Credit Parties involved
and the Agent or any Affiliate of the Agent as being intended to constitute Bank
Products hereunder.
"Bankruptcy Code" shall mean Title 11 of the United States Code, as amended
from time to time, and any successor statute thereto.
"Base Rate" shall mean, for any day, the rate per annum (rounded upwards,
if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater
of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1% or (b) the
Prime Rate in effect on such day. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability of the Agent to obtain sufficient quotations in
accordance with the terms hereof, the Base Rate shall be determined without
regard to clause (a) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
"Base Rate Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Benefit Plan" shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which any Credit
Party, any Subsidiary or any ERISA Affiliate is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Blocked Person" shall have the meaning given to such term in Section 6.34.
"Borrower" and "Borrowers" shall have the meaning given to such terms in
the preamble of this Credit Agreement.
"Borrowing Base" shall mean with respect to World Airways, the WA Borrowing
Base, and with respect to North American, the NA Borrowing Base.
"Borrowing Base Certificate" shall mean a borrowing base certificate in
substantially the form of Exhibit L hereto.
"Business Day" shall mean any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized or required by law
or other governmental action to close in Charlotte, North Carolina, Atlanta,
Georgia or New York, New York; provided that in the case of Eurodollar Loans,
such day is also a day on which dealings between banks are carried on in U.S.
dollar deposits in the London interbank market.
"Capital Expenditures" shall mean expenditures for the acquisition
(including the acquisition by capitalized lease) or improvement of capital
assets, as determined in accordance with GAAP.
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" shall mean (a) in the case of a corporation, capital stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
evidencing ownership or membership in the entity, (c) in the case of a
partnership, partnership interests (whether general or limited), (d) in the case
of a limited liability company, membership interests and (e) any other equity
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person.
"Cash Concentration Account" shall mean a deposit account established and
maintained by each of the Credit Parties, individually, over which the Agent has
"control" (as such term is used in Article 9 of the UCC) by virtue of such
account being maintained with the Agent, or, an account over which the Agent,
for itself and for the benefit of the Lenders, otherwise has "control" pursuant
to the terms of a Deposit Account Control Agreement in form and substance
satisfactory to the Agent in its reasonable discretion.
"Cash Equivalents" shall mean, as to any Person, (a) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having either maturities of not more than
one (1) year from the date of acquisition, or average maturities of not more
than 390 days from the date of acquisition, (b) time deposits or certificates of
deposit of any commercial bank incorporated under the laws of the United States
or any state thereof, of recognized standing having capital and unimpaired
surplus in excess of $1,000,000,000 and whose short-term commercial paper rating
at the time of acquisition is at least A-1 or the equivalent thereof by Standard
& Poor's Ratings Group or at least P-1 or the equivalent thereof by Xxxxx'x
Investors Services, Inc. (any such bank, an "Approved Bank"), with such deposits
or certificates having maturities of not more than one (1) year from the date of
acquisition, (c) repurchase obligations with a term of not more than seven (7)
days for underlying securities of the types described in clauses (a) and (b)
above entered into with any Approved Bank, (d) commercial paper or finance
company paper issued by any Person incorporated under the laws of the United
States or any state thereof and rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc., and in each case maturing not more than one
year after the date of acquisition, (e) securities issued by a Government
Sponsored Agency carrying a rating of at least AAA and having maturities of not
more than one (1) year from the date of acquisition, (f) taxable municipal
securities, dutch auction rate securities, and unconditional demand floating
rate securities rated "X0, X0, X0, X0, XXX-0/XXXX-0, XX-0" or equivalent at the
time of acquisition and having rate resets no less frequent than every ninety
(90) days, (g) corporate bonds and medium term notes with long-term debt ratings
of at least "investment grade" and having maturities of not more than one (1)
year from the date of acquisition, (h) taxable and tax exempt municipal bonds
rated "A" or better and having maturities of not more than one (1) year from the
date of acquisition, (i) auction rate preferred stocks rated "A" or better and
having rate resets no less frequent than every ninety (90) days, (j) investments
in money market funds that are registered under the Investment Company Act of
1940, as amended, which have net assets of at least $1,000,000,000 and at least
eighty-five percent (85%) of whose assets consist of securities and other
obligations of the type described in clauses (a) through (i) above, (k) shares
of any money market mutual fund that (i) has substantially all of its assets
invested continuously in the types of investments referred to in clauses (a)
through (i) above and (ii) has net assets of not less than $500,000,000, (l)
funds held by Valley National Bank in connection with AMC-related contracts or
arrangements so long as (i) such funds are managed in a consistent manner based
on historical practices and (ii) the Agent is reasonably satisfied with the
creditworthiness of Valley National Bank. All such Cash Equivalents must be
denominated solely for payment in Dollars.
"Casualty Loss" shall have the meaning given to such term in Section 7.10.
"Change of Control" shall mean the occurrence of any of the following: (i)
any person or group of persons (within the meaning of Section 13 or 14 of the
Securities Exchange Act of 1934, as amended), other than any employee benefit
plan or plans (within the meaning of Section 3(3) of ERISA), shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 35% or more in voting
power of the outstanding Voting Stock of the Parent, or (ii) during any period
of twelve (12) consecutive calendar months, individuals who were directors of
the Parent on the first day of such period shall cease to constitute a majority
of the board of directors of the Parent other than because of the replacement as
a result of death or disability of one or more such directors.
"Closing" shall mean the consummation of the first to occur under this
Credit Agreement of (a) the making of the initial Loan by the Lenders to a
Borrower under this Credit Agreement and (b) the issuance of any Letter of
Credit by the Issuing Bank.
"Closing Date" shall mean the date on which the Closing occurs.
"Collateral" shall mean any and all assets and rights and interests in or
to the personal property (excluding leased property and assets acquired with
purchase money indebtedness constituting Permitted Indebtedness) of the Credit
Parties pledged from time to time as security for the Obligations pursuant to
the Security Documents.
"Collateral Disclosure Certificate" means a certificate submitted by a
Credit Party on or before the Closing Date pursuant to Section 5.1 hereto
concerning certain factual information about such Credit Party, to be
substantially in the form of Exhibit R attached hereto.
"Collection Account" shall have the meaning given to such term in Section
2.3(b)(i).
"Collection Bank" shall have the meaning given to such term in Section
2.3(b)(i).
"Commitment" of any Lender shall mean the Revolving Credit Commitment of
such Lender.
"Compliance Certificate" shall mean a certificate, executed by the chief
financial officer, controller or treasurer of the Parent, substantially in the
form of Exhibit K.
"Consolidated" or "consolidated" with reference to any term defined herein,
shall mean that term as applied to the accounts of the Parent and all of its
consolidated Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Capital Expenditures" shall mean, for any applicable period
of computation, an amount equal to the consolidated aggregate Capital
Expenditures of the Parent and its consolidated Subsidiaries made during such
fiscal period net of trade-ins and allowances, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Cash Taxes" shall mean, for any applicable period of
computation, the sum of all taxes paid in cash by the Parent and its
consolidated Subsidiaries during such period, determined on a consolidated basis
in accordance with applicable law and GAAP.
"Consolidated EBITDA" shall mean, for any applicable period of computation,
(a) Consolidated Net Income for such period, but excluding therefrom all
extraordinary items of income or loss for such period, plus (b) the sum of the
following to the extent deducted in calculating Consolidated Net Income: (i)
Consolidated Interest Expense for such period, plus (ii) tax expense (including,
without limitation, any federal, state, local and foreign income and similar
taxes) of the Parent and its Subsidiaries for such period, plus (iii)
depreciation, amortization and other non-cash charges (excluding non-cash
charges that are expected to become cash charges in a future period or that are
reserves for future cash charges) of the Parent and its consolidated
Subsidiaries for such period.
"Consolidated EBITDAR" shall mean, for any applicable period of
computation, the sum of (i) Consolidated EBITDA for such period plus (ii)
Consolidated Rental Expense for such period.
"Consolidated Fixed Charges" shall mean, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Interest
Expense for such period plus (ii) Consolidated Scheduled Funded Indebtedness
Payments made during such period plus (iii) Consolidated Rental Expense.
"Consolidated Funded Indebtedness" shall mean, as of any date of
determination, all Funded Indebtedness of the Parent and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any applicable period of
computation, all interest expense, net of cash interest income, of the Parent
and its consolidated Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" shall mean, for any applicable period of
computation, the income (or deficit) of the Parent and its consolidated
Subsidiaries for such period, net of interest expense, income taxes and
depreciation and amortization for such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Rental Expense" shall mean, for any applicable period of
computation, the sum of all capital lease and operating lease expenses for
aircraft and aircraft engines of the
Company and its consolidated Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Scheduled Funded Indebtedness Payments" shall mean, for any
applicable period of computation, the sum of all scheduled payments of principal
on Consolidated Funded Indebtedness for such period (including the principal
component of payments due on Capital Leases or under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product during such period), determined on a consolidated basis in
accordance with GAAP; it being understood that Consolidated Scheduled Funded
Indebtedness Payments shall not include payments made pursuant to Section
2.3(b)(ii), voluntary prepayments or the mandatory prepayments required pursuant
to Section 2.2.
"Contractual Obligations" shall mean, with respect to any Person, any term
or provision of any securities issued by such Person, or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement to which such Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Contribution Agreement" shall mean the Contribution Agreement of even date
herewith in substantially the form of Exhibit Q to be executed by each of the
Credit Parties or any Person who becomes party hereto or to the Guaranty
Agreement pursuant to a joinder agreement in form and substance satisfactory to
the Agent, including, without limitation, and any Subsidiaries of the Parent
which may become Borrowers or Guarantors hereunder pursuant to Section 7.16.
"Credit Agreement" shall mean this credit agreement, dated as of the date
hereof, as the same may be modified, amended, extended, restated or supplemented
from time to time.
"Credit and Collateral Termination Events" shall have the meaning given
such term in Article XII.
"Credit Documents" shall mean, collectively, this Credit Agreement, the
Revolving Notes, the Letter of Credit Documents, each Guaranty Agreement, the
Contribution Agreement, the Collateral Disclosure Certificate, the Security
Documents and all other documents, agreements, instruments, opinions and
certificates executed and delivered in connection herewith or therewith,
excluding Lender Hedging Agreements.
"Credit Parties" shall mean the Borrowers, the Guarantors, and any
Affiliate of a Borrower or a Guarantor or any of their respective Subsidiaries
which has pledged Collateral or furnished a guaranty to secure the Obligations.
"Current Derivative Exposure" shall mean, as to any Person, as of any date
of determination, the amount that would be payable by such Person (subject to
netting provisions of its Hedging Agreements) in the event all transactions
under its Hedging Agreements outstanding on such date were terminated due to an
event of default for which such Person was the defaulting party under such
Hedging Agreements, without giving credit for any amounts that would be payable
to such Person in connection with such terminations.
"Default" shall mean an event, condition or default which, with the giving
of notice, the passage of time or both would become an Event of Default.
"Default Rate" shall mean a rate equal to the Base Rate, plus the highest
Applicable Percentage, plus two percent (2%).
"Daily Loan Activity Sheet" shall mean the Daily Loan Activity sheet in
form and substance mutually agreed upon by the Agent and the Borrowers.
"Daily Rate Loan" means, individually or collectively, Base Rate Loans or
LMIR Loans.
"Defaulting Lender" shall have the meaning given to such term in Section
2.1(d)(iii).
"Deposit Account Control Agreement" shall mean an agreement among a Credit
Party, a Collection Bank or other depositary institution, and the Agent, which
agreement (a) is substantially in the form of Exhibit I-1 or (b) is in such
other form as is acceptable to the Agent and its counsel and which provides for
the Agent's having "control" (as such term is used in Article 9 of the UCC) over
the deposit accounts described therein, in each case as the same may be amended,
restated, supplemented, or otherwise modified from time to time.
"Dispute" shall mean any judicial proceeding, dispute, claim or controversy
in each case arising out of, connected with or relating to this Credit Agreement
and other Credit Documents.
"DOL" shall mean the U.S. Department of Labor and any successor department
or agency.
"Dollars" and "dollars" and "$" shall mean dollars in lawful currency of
the United States of America.
"Domestic Subsidiaries" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any state of the United States or the District of Columbia.
"Eligible Accounts Receivable" shall mean the aggregate face amount of the
Accounts of the relevant Credit Parties that conform to the warranties contained
herein and at all times continue to be acceptable to the Agent in its reasonable
discretion, less (without duplication) the aggregate amount of all returns,
discounts, claims, credits, charges (including warehousemen's charges) and
allowances of any nature (whether issued, owing, granted or outstanding), and
less (without duplication) the aggregate amount of all reserves for slow paying
accounts, foreign sales (except as otherwise expressly provided below), xxxx and
hold (or deferred shipment) transactions and the Lenders' charges as set forth
in this Credit Agreement. Unless otherwise approved in writing by the Agent, no
Account shall be deemed to be an Eligible Account Receivable if:
(a) the Account arises out of a sale or lease made by or the
performance of services for any Credit Party to an Affiliate;
(b) the Account is unpaid more than ninety (90) days after the
original invoice date or sixty (60) days after the original payment due
date thereof;
(c) the Account is from the same account debtor (or any Affiliate
thereof) and fifty percent (50%) or more, in face amount, of other Accounts
from the account debtor (or any Affiliate thereof) are due or unpaid more
than ninety (90) days after the original invoice date;
(d) except for Eligible Prime Government Accounts and Eligible
Unbilled Government Accounts, the amount of the Account, when aggregated
with all other Accounts of such account debtor, exceeds ten percent (10%)
in face value of all Accounts of the Credit Parties then outstanding, but
only to the extent of such excess, or the amount of the Account, on an
individual basis, exceeds ten percent (10%) in face value of all Accounts
of any one Credit Party, but only to the extent of such excess;
(e) an Account for which (i) the account debtor is also a creditor of
any Credit Party, but only to the extent of the amount owed by such Credit
Party to the account debtor, (ii) the account debtor has disputed its
liability on, or the account debtor has made any claim with respect to,
such Account or any other Account due from such account debtor to such
Credit Party, which has not been resolved, or (iii) the account debtor has
or acquires any right of setoff against such Account, but only to the
extent of the amount of such setoff;
(f) the Account is owing by an account debtor that has commenced a
voluntary case under the Bankruptcy Code or made an assignment for the
benefit of creditors, or if a decree or order for relief has been entered
by a court having jurisdiction in the premises in respect to such account
debtor in an involuntary case under the Bankruptcy Code; any petition or
other application for relief under the Bankruptcy Code has been filed by or
against the account debtor; or such account debtor is generally not paying
its debts as they become due (unless such debts are the subject of a bona
fide dispute), or has suspended business, ceased to be solvent, or
consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or
affairs;
(g) the Account arises from a sale or lease to or the performance of
services for an account debtor located outside the continental United
States, unless (i) the sale is on letter of credit, guaranty or acceptance
terms, or subject to credit insurance, in each case acceptable to the Agent
in its reasonable discretion (the Accounts in the aggregate not to exceed
an amount satisfactory to the Agent of aggregate Eligible Accounts
Receivable), (ii) as security for payment of such Account, such account
debtor maintains a collateral deposit account in the United States over
which the Agent has "control" (as such term is used in Article 9 of the
UCC), but only to the extent of the proceeds in such collateral deposit
account, and (iii) the sale is otherwise approved by and acceptable to the
Agent in its reasonable discretion;
(h) the Account arises from a sale on a xxxx-and-hold, guaranteed
sale, sale-and-return, sale on approval or consignment basis or is made
pursuant to any other written agreement providing for repurchase or return;
(i) the Agent believes, in its reasonable discretion, that collection
of the Account is insecure or that the Account may not be paid by reason of
the account debtor's financial inability to pay;
(j) the Account is one for which the related account debtor is a USG
Entity and such Account has not been duly assigned to the Agent pursuant to
the Assignment Act; provided however, anything in this subsection (j)
notwithstanding, any Account arising in connection with an AMC-related
contract or other arrangement shall be an Eligible Account Receivable for
so long as such Account is satisfied by AMC through payment to a third
party intermediary with which the Agent has a Funds Letter Agreement;
provided further that if at any time such Account is not satisfied through
payment to a third party intermediary with which the Agent has a Funds
Letter Agreement, such Account shall only be an Eligible Account Receivable
if duly assigned to the Agent pursuant to the Assignment Act;
(k) an Account for which the goods giving rise thereto have not been
shipped and delivered to and accepted or deemed accepted by the related
account debtor or its designee; the services giving rise to the Account
have not been performed by or on behalf of the applicable Credit Party
hereunder and accepted or deemed accepted by the related account debtor or
its designee; or the Account otherwise does not represent a final sale;
(l) the aggregate face amount of the Account and all other Accounts
owing by the same account debtor to any Credit Party exceeds a credit limit
as to such account debtor determined by the Agent, in its reasonable
discretion, but only to the extent such aggregate face amount exceeds such
limit and notice of such limit has been given to the Borrowers;
(m) the Agent does not have a first priority, perfected security
interest in the Account;
(n) except for Eligible Unbilled Government Accounts, an Account for
which an invoice has not been prepared and delivered to the related account
debtor;
(o) an Account which, by contract, subrogation, mechanics' lien laws
or otherwise, is subject to claims by any Credit Party's creditors or other
third parties or which are owed by account debtors as to whom any creditor
of a Credit Party (including any bonding company) or the account debtor has
lien or retainage rights; or
(p) an Account which the Agent, at any time and in the exercise of its
reasonable discretion, determines it to be ineligible.
"Eligible Assignee" shall mean (a) an Approved Assignee or (b) any other
Person (i) which is a commercial bank, finance company, insurance company or
other financial institution or fund and which, in the ordinary course of
business, extends credit of the type contemplated herein; (ii) whose becoming an
assignee would not constitute a prohibited transaction under Section 4975 of the
Internal Revenue Code or Section 406 of ERISA; (iii) which is organized under
the laws of the United States of America or any state thereof; and (iv) which
has capital in
excess of $500,000,000, provided, however, that "Eligible Assignee" shall not
include the Credit Parties, or any of the Credit Parties' Affiliates or
Subsidiaries.
"Eligible Commercial Accounts" shall mean that portion of Eligible Accounts
Receivable consisting of all Accounts other than Eligible Prime Government
Accounts, Eligible Contractor Accounts, and Eligible Unbilled Government
Accounts.
"Eligible Contractor Accounts" shall mean that portion of Eligible Accounts
Receivable which are payable by a contractor of a USG Entity, and arising in
connection with a contract between such contractor and such USG Entity; provided
that such contractor (i) has an investment rating of at least BBB- or the
equivalent thereof by Standard & Poor's Corporation or at least Baa3 or the
equivalent thereof by Xxxxx'x Investors Service, Inc., or (ii) otherwise has
been designated in writing by the Agent as one whose Accounts will be Eligible
Contractor Accounts.
"Eligible Prime Government Accounts" shall mean that portion of Eligible
Accounts Receivable which are payable by a USG Entity; excluding, however, in
any event, any US Government Accounts: (i) to the extent such Accounts represent
last payments due to the relevant Credit Party under prime contracts between
such Credit Party and the relevant USG Entity, unless (a) such contracts are a
"Fixed Price Contract" (as defined in Federal Acquisition Regulation Part 16.2,
or any successor regulation) which do not include any provision for progress
payments, incentive arrangements, or price redetermination, or (b) the Agent
otherwise has consented in writing to the inclusion of such account as an
Eligible Prime Government Account; and (ii) as to which the relevant Credit
Party shall not have executed all other agreements, instruments and documents
and performed all acts which the Agent may request to ensure compliance with the
Assignment Act, where such compliance is required by the Agent.
"Eligible Spare Parts" shall mean (a) the NOLV of a relevant Credit Party's
rotable and non-rotable Spare Parts (excluding Spare Parts "fly-away" kits),
which (i) are owned solely by such Credit Party and with respect to which such
Credit Party has good title; (ii) are (A) stored on real property that is either
(A) owned or leased by such Credit Party, provided that such Credit Party shall
have delivered in favor of the Agent an Acknowledgment Agreement from the
landlord of any such leased location, or (B) stored in a warehouse with a
warehouseman, or with a bailee on such bailee's premises, provided that such
Credit Party shall have delivered in favor of the Agent an Acknowledgment
Agreement from the warehouseman or bailee or for which the Agent has established
a reasonable reserve; (iii) are subject to a valid, enforceable and first
priority Lien in favor of Agent (except, with respect to Eligible Spare Parts
stored at sites described in clause (ii)(B) above for normal and customary
warehouseman charges); (iv) are located in a Spare Parts Location; and (v) which
otherwise conform to the warranties contained herein and which at all times
continue to be acceptable to the Agent in its reasonable discretion, less (b)
the sum of (i) damaged Spare Parts (unless such damaged Spare Parts are
rotable), (ii) a reserve equal to the amount of all accounts payable of such
Credit Party owed or owing at the date of any calculation regarding Eligible
Spare Parts to any warehouseman or bailee of such Credit Party, and (iii) any
Spare Parts that the Agent determines in its reasonable discretion to be
ineligible.
"Eligible Unbilled Government Accounts" shall mean that portion of Eligible
Accounts Receivable consisting of Eligible Prime Government Accounts that do not
satisfy the criteria contained in item (n) of the definition of Eligible Account
Receivable because an invoice has not been delivered to a USG Entity, provided
that, with respect to any such Eligible Prime Government Account, (i) an invoice
will be delivered to the USG Entity within 30 days from the time the relevant
Credit Party completed performance, (ii) the relevant Credit Party's complete
performance is confirmed by the USG Entity, (iii) such invoice, or the contract
related thereto, specifies a date on or before which payment is due, and (iv)
there are no additional requirements under the applicable government contract
for the relevant Credit Party to receive payment.
"Equipment" shall mean all of Credit Parties' present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
trade fixtures, vehicles (including motor vehicles and trailers not subject to a
certificate of title), tools, parts, goods (other than consumer goods, Farm
Products, or Inventory), wherever located, including, (a) any interest of a
Credit Party in any of the foregoing (other than leased equipment), and (b) all
attachments, accessories, accessions, replacements, substitutions, additions and
improvements to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is or was at any
time a member of the same controlled group of corporations (within the meaning
of Section 414(b) of the Internal Revenue Code) as the Credit Parties or any of
their Subsidiaries; (ii) partnership or other trade or business (whether or not
incorporated) at any time under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with the Credit Parties or any of their
Subsidiaries; and (iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the Internal Revenue Code) as the Credit Parties or
any of their Subsidiaries, any corporation described in clause (i) above, or any
partnership or trade or business described in clause (ii) above.
"Eurodollar Loan" shall mean a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions, extensions
and renewals), a per annum interest rate determined pursuant to the following
formula:
London Interbank Offered Rate
Eurodollar Rate = ---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" shall mean for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with
respect to Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by reference to
which the interest rate of Eurodollar Loans is determined), whether or not any
Lender has any Eurocurrency liabilities subject to such reserve requirement at
that time. Eurodollar Loans and LMIR Loans shall be deemed to constitute
Eurocurrency liabilities and as such shall be deemed subject to reserve
requirements without benefits of credits for proration, exceptions or offsets
that may be available from time to time to a Lender. The Eurodollar Rate and the
LMIR Rate shall be adjusted automatically on and as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Event(s) of Default" shall have the meaning provided for in Article XI.
"Excess Borrowing Base Availability" shall mean, at any time, the amount,
if any, by which (a) the Aggregate Borrowing Base (less any Overadvances
outstanding) exceeds (b) the aggregate amount of (i) the outstanding principal
amount of all Revolving Loans, plus (ii) the Letter of Credit Obligations.
"Excluded Taxes" shall have the meaning given to such term in Section 2.6.
"Existing Letters of Credit" shall mean those letters of credit listed on
Schedule 1.1E.
"FAA" means the United States Federal Aviation Administration.
"FAA Act" means the collective reference to the United States
Transportation Code (currently codified at Subtitle VII of Title 49 of the U.S.
Code) as amended, supplemented, or otherwise modified from time to time, and all
FARs and other rules, regulations, directives and orders issued or promulgated
from time to time thereunder.
"FARs" means the FAA Regulations as in effect from time to time under Title
14 of the U.S. Code of Federal Regulations, including, without limitation, the
Special Federal Aviation Regulations (as applicable), as amended, supplemented
or otherwise modified from time to time.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal, for each day during such period, to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"Fees" shall mean, collectively, the Lenders' Fees, the Unused Line Fee,
the Letter of Credit Fee and the Issuing Bank Fees payable hereunder.
"Financial Covenant Testing Period" shall mean, beginning June 30, 2006,
any period thereafter in which, during the three most recently completed fiscal
months preceding the time of determination of whether or not testing will be
required, the Average Three Month Excess Borrowing Base Availability was less
than $20,000,000.
"Financials" shall have the meaning given to such term in Section 6.6.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of each fiscal
quarter of the Parent, the ratio of (a) (i) Consolidated EBITDAR (computed for
the consecutive twelve-month fiscal period then ending), minus (ii) Unfinanced
Capital Expenditures for such period, minus (iii) Consolidated Cash Taxes for
such period, minus (iv) cash dividends or other distributions paid by the Parent
pursuant to Section 9.6 during such period, to (b) Consolidated Fixed Charges
(computed for the consecutive twelve-month fiscal period then ending).
"Forecasts" shall have the meaning given to such term in Section 6.6.
"Foreign Lender" shall mean any Lender that is not a United States person,
as such term is defined in Section 7701(a)(30) of the Internal Revenue Code.
"Foreign Subsidiary" shall mean, with respect to any Person, any Subsidiary
of such Person which is not a Domestic Subsidiary.
"Fund" shall mean any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funded Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) the maximum amount of all
letters of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (g) all preferred Capital Stock issued by such Person
and required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date prior to 180 days following the Maturity
Date, (h) the principal portion of all obligations of such Person under a
synthetic lease, tax retention operating lease, or off-balance sheet loan, (i)
the amount of Current Derivative Exposure under Hedging Agreements of such
Person, (j) all Indebtedness of another Person of the type referred to in
clauses (a) through (i) above secured by (or for which the holder of such Funded
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of production from, property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (k) all guaranties of such Person with respect to Indebtedness of
the type referred to in clauses (a) through (i) above of another Person and (l)
Indebtedness of the type referred to in clauses (a) through (i) above of any
partnership or unincorporated joint venture in which such Person is legally
obligated with respect thereto.
"Funding Bank" shall mean Wachovia or any other banking or financial
institution from whom any of the Lenders borrow funds or obtain credit.
"Funds Letter Agreement" shall mean an agreement between a Credit Party,
the Agent and a third party who maintains certain funds owed to such Credit
Party and others in connection with AMC-related contracts or other arrangements,
providing the Agent the exclusive right, upon notice or otherwise, to direct the
disbursement of the portion of such funds that are owed to such Credit Party, in
form and substance reasonably satisfactory to the Agent.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, as in effect on the date hereof and applied on a consistent
basis with the Financials.
"Government Acts" shall mean any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority
"Governmental Authority" shall mean any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Government Sponsored Agencies" shall mean any financial corporation or
enterprise created by the United States Congress including, but not limited to,
the Government National Mortgage Association, Tennessee Valley Authority, World
Bank, Federal Farm Credit Bank, Federal National Mortgage Association, Federal
Home Loan Mortgage Corporation, Federal Home Loan Bank, Student Loan Marketing
Association, Financing Corporation, The Resolution Funding Corporation. Farm
Credit System Financial Assistance Corporation, and the Federal Housing Finance
Board.
"Guarantor" shall mean each of World Air Holdings, Inc., a Delaware
corporation, and World Airways Parts Company, LLC, a Delaware limited liability
company, pursuant to the Guaranty Agreement, and each other Person who enters
into a guaranty agreement or who becomes party to the Guaranty Agreement
pursuant to a joinder agreement in form and substance satisfactory to the Agent,
including, without limitation, any Subsidiaries of the Parent which may become
Guarantors hereunder pursuant to Section 7.16.
"Guaranty Agreement" shall mean the Guaranty Agreement dated as of the date
hereof executed by the initial Guarantors and the Agent, substantially in the
form of Exhibit C, guaranteeing the Obligations of the Borrowers, and as
modified by the joinder of any Domestic Subsidiary pursuant to Section 7.16.
"Hedging Agreements" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity purchase or option agreement or
other interest or exchange rate or commodity price hedging agreements.
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness under this Credit
Agreement, under the laws of the State of Georgia (or the law of any other
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Credit Agreement and the other Credit Documents), or under
applicable federal laws which may presently or hereafter be in effect and which
allow a higher maximum nonusurious interest rate than under the State of Georgia
or such other jurisdiction's law, in any case after taking into account, to the
extent permitted by applicable law, any and all relevant payments or charges
under this Credit Agreement and any other Credit Documents executed in
connection herewith, and any available exemptions, exceptions and exclusions.
"Indebtedness" shall mean, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of property or services purchased by such Person (other
than trade debt incurred in the ordinary course of business and due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
guaranties of such Person with respect to Indebtedness of the type referred in
this definition of another Person, (h) the principal portion of all obligations
of such Person under Capital Leases, (i) all obligations of such Person under
Hedging Agreements, (j) the maximum amount of all letters of credit issued or
bankers' acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person and required by the terms
thereof to be redeemed, or for which mandatory sinking fund payments are due, by
a fixed date prior to 180 days following the Maturity Date, (l) the principal
portion of all obligations of such Person under off-balance sheet financing
arrangements and (m) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer.
"Independent Accountant" shall mean a firm of independent public
accountants of nationally recognized standing or determined by the Parent to be
of recognized regional standing selected by the Board of Directors of the
Parent, which is "independent" as that term is defined in Rule 2-01 of
Regulation S-X promulgated by the Securities and Exchange Commission.
"Interest Payment Date" shall mean (a) as to any Base Rate Loan or LMIR
Loan, the last Business Day of each calendar month to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of three
months or less, the last day of such Interest Period, and (c) as to any
Eurodollar Loan having an Interest Period longer than three months, (i) each day
which is three months after the first day of such Interest Period and (ii) the
last day of such Interest Period.
"Interest Period" shall mean, as to Eurodollar Loans, a period of one
month, two months, three months or six months, as selected by the applicable
Borrower, commencing on the date of the borrowing (including continuations and
conversions thereof); provided, however, (i) if any Interest Period would end on
a day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (ii) no Interest Period shall extend beyond the Maturity Date, (iii) any
Interest Period with respect to
a Eurodollar Loan that begins on the last 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 end on the last Business Day of
the relevant calendar month at the end of such Interest Period.
"Internal Revenue" shall mean the Internal Revenue Service and any
successor agency.
"Internal Revenue Code" or "IRC" shall mean the Internal Revenue Code of
1986, as amended from time to time, and any successor statute thereto and all
rules and regulations promulgated thereunder.
"Inventory" shall mean all of each Credit Party's inventory, including
without limitation, (a) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in such Credit Party's
business; (b) all goods, wares and merchandise, finished or unfinished, held for
sale or lease or leased or furnished or to be furnished under contracts of
service; and (c) all goods returned to or repossessed by such Credit Party.
"Investment" in any Person shall mean (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or otherwise,
but exclusive of the acquisition of inventory, supplies, equipment and other
property or assets used or consumed in the ordinary course of business of the
applicable Credit Party or any of its Subsidiaries) of assets, shares of Capital
Stock, bonds, notes, debentures, partnership interests, joint ventures or other
ownership interests or other securities of such Person, (b) any deposit (other
than deposits constituting a Permitted Lien) with, or advance, loan or other
extension of credit (other than sales of inventory on credit in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms and sales on credit of the type described in clauses (c) or (d) of
Section 9.3) to, such Person or (c) any other capital contribution to or
investment in such Person, including, without limitation, any obligation
incurred for the benefit of such Person. In determining the aggregate amount of
Investments outstanding at any particular time, (i) the amount of any Investment
represented by a guaranty shall be taken at not less than the maximum principal
amount of the obligations guaranteed and still outstanding; (ii) there shall be
deducted in respect of each such Investment any amount received as a return of
capital (but only by repurchase, redemption, retirement, repayment, liquidating
dividend or liquidating distribution); (iii) there shall not be deducted in
respect of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise; and (iv) there shall not be
deducted from or added to the aggregate amount of Investments any decrease or
increases, as the case may be, in the market value thereof.
"Issuing Bank" shall mean Wachovia or any Lender that is acceptable to the
Agent which shall issue a Letter of Credit for the account of the Borrowers.
"Issuing Bank Fees" shall have the meaning given to such term in Section
4.5(b).
"Landlord Agreement" shall mean a Landlord Lien Waiver Agreement,
substantially in the form of Exhibit D hereto (or such other form as shall be
acceptable to the Agent), between a Credit Party's landlord and the Agent,
acknowledging and agreeing, among other things, (a) that such landlord does not
have any Liens on any of the property of such Credit Party and (b) to
permit the Agent access to the property for the purposes of exercising its
remedies under the Security Agreement.
"Leases" shall mean leases with respect to any leased real property,
together with any leases of real property entered into by a Credit Party or any
of its Subsidiaries after the date hereof.
"Lender" shall have the meaning given to such term in the preamble of this
Credit Agreement.
"Lender Hedging Agreement" shall mean any Hedging Agreement between any
Borrower or other Credit Party and any Person (or affiliate of such Person) that
was a Lender at the time it entered into such Hedging Agreement whether or not
such Person has ceased to be a Lender under the Credit Agreement.
"Lenders' Fees" shall mean a $175,000 non-refundable fee payable by the
Borrowers to the Lenders on the Closing Date.
"Lending Party" shall mean the Agent and each Lender.
"Letter of Credit Committed Amount" shall mean the maximum aggregate amount
of the Letter of Credit Obligations that is permitted to be outstanding from
time to time pursuant to clause (a) of the proviso contained in Section 3.1,
which at the date hereof is $15,000,000.
"Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"Letter of Credit Fee" shall have the meaning given to such term in Section
4.5(a).
"Letter of Credit Obligations" shall mean, at any time of determination,
the sum of (i) the aggregate undrawn amount of all Letters of Credit outstanding
at such time, plus (ii) the aggregate amount of all drawings made under Letters
of Credit for which the Issuing Bank has not at such time been reimbursed, plus
(iii) without duplication, the aggregate amount of all payments made by each
Lender to the Issuing Bank with respect to such Lender's participation in
Letters of Credit as provided in Section 3.3 for which the Borrowers have not at
such time reimbursed the Lenders, whether by way of a Revolving Loan or
otherwise.
"Letters of Credit" shall mean (a) all Existing Letters of Credit issued by
Wachovia and (b) all letters of credit (whether documentary or stand-by and
whether for the purchase of inventory, equipment or otherwise) issued by an
Issuing Bank for the account of the Borrowers pursuant to this Credit Agreement,
and all amendments, renewals, extensions or replacements thereof.
"Leverage Ratio" shall mean, as of the last day of each fiscal quarter of
the Parent, the ratio of Consolidated Funded Indebtedness as of such date to
Consolidated EBITDA (computed for the consecutive twelve-month fiscal period
then ending).
"Licensor Consent" shall mean a consent substantially in the form of
Exhibit P hereto (or such other form as shall be reasonably acceptable to the
Agent) given by the licensor of any intellectual property licensed to a Credit
Party.
"Lien(s)" shall mean any lien, claim, charge, pledge, security interest,
deed of trust, mortgage, or other encumbrance.
"LMIR Loan" shall mean a Revolving Loan, or portion thereof, during any
period in which it bears interest at a rate based upon the LMIR Rate.
"LMIR Rate" shall mean, at any time of determination, a rate of interest
per annum determined by the Agent by reference to the following formula, which
rate shall be adjusted (without notice to the Borrowers) as of the first
Business Day of each calendar month:
London Interbank Offered Rate
LMIR Rate = ---------------------------------
1 - Eurodollar Reserve Percentage
"Loan" or "Loans" shall mean the Revolving Loans (or a portion of any
Revolving Loan).
"London Interbank Offered Rate" shall mean, (i) with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of interest
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two (2)
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period, and (ii) at any time of determination, with
respect to any LMIR Loan, the rate for 1 month U.S. dollar deposits appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 A.M. (London time), or if such
day is not a Business Day, then the immediately preceding Business Day;
provided, however, if more than one rate is specified on Telerate Page 3750, the
applicable rate shall be the arithmetic mean of all such rates. If, for any
reason, such rate is not available, the term "London Interbank Offered Rate"
shall mean, (i) with respect to any Eurodollar Loan for the Interest Period
applicable thereto, the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period, and (ii) with respect to
any LMIR Loan, the rate of interest per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time), on the day of determination; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.
"Material Adverse Change" shall mean a material adverse change in (a) the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Credit Parties, taken as a whole, (b) the
Collateral taken as a whole, (c) the Credit Parties' ability to perform their
respective obligations under the Credit Documents, or (d) the rights and
remedies of the Lenders hereunder, in each case as determined by the Agent in
its reasonable discretion.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Credit Parties, taken as a whole, (b) the
Collateral taken as a whole, (c) the Credit Parties' ability to perform their
respective obligations under the Credit Documents, or (d) the rights and
remedies of the Lenders hereunder, in each case as determined by the Agent in
its reasonable discretion.
"Material Contract" shall mean any contract or other arrangement (other
than any of the Leases or the Credit Documents), whether written or oral, to
which any Credit Party or any of its Subsidiaries is a party as to which the
breach, nonperformance, cancellation or failure to renew by any party thereto
could reasonably be expected to have a Material Adverse Effect and shall include
in any event the Operative Documents to which a Credit Party is a party.
"Maturity Date" shall mean March 30, 2008.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (i) which is, or within the immediately
preceding six (6) years was, contributed to by any Credit Parties or any of
their Subsidiaries or ERISA Affiliates or (ii) with respect to which any Credit
Parties or any of their Subsidiaries may incur any liability.
"NA Borrowing Base" shall mean, as of any date of determination, the
following amount (the "NA Borrowing Base") calculated in dollars as follows:
(a) (i) for so long as North American does not receive payment on
Eligible Prime Government Accounts through a Valley National Bank account
subject to a Funds Letter Agreement, an amount equal to eighty-five percent
(85%) of the NA Credit Parties' Eligible Prime Government Accounts, and
(ii) otherwise, an amount equal to ninety percent (90%) of the NA Credit
Parties' Eligible Prime Government Accounts; plus
(b) an amount equal to eighty-five percent (85%) of the NA Credit
Parties' Eligible Contractor Accounts; plus
(c) an amount equal to eighty percent (80%) of the NA Credit Parties'
Eligible Commercial Accounts; plus
(d) an amount equal to the lesser of (a) the sum of $5,000,000 minus
the amount of World Airways' current borrowings that are based on the WA
Credit Parties' Eligible Unbilled Government Accounts, and (b) seventy
percent (70%) of the NA Credit Parties' Eligible Unbilled Government
Accounts; plus
(e) an amount equal to the lesser of (a) seventy-five percent (75%) of
the NA Credit Parties' Eligible Spare Parts, and (b) the sum of $15,000,000
minus the amount of World Airways' current borrowings that are based on the
WA Credit Parties' Eligible Spare Parts; minus
(f) reserves established by the Agent from time to time in its
reasonable discretion (the "NA Reserves").
Subject to the relevant terms and provisions set forth in this Credit
Agreement, including specifically Section 14.9(g), the Agent at all times
shall be entitled to reduce or increase the advance rates and standards of
eligibility under this Credit Agreement, in each case in its reasonable
discretion.
"NA Reserves" shall have the meaning given to such term in the definition
of NA Borrowing Base.
"NA Credit Parties" shall mean North American and each of its Subsidiaries
which are, or may become, Credit Parties hereunder.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by the
Credit Parties or any of their Subsidiaries in respect of any Asset Disposition,
net of (a) direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) and (b) taxes paid or payable as
a result thereof; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received by the Credit Parties or any of their
Subsidiaries in any Asset Disposition.
"Net Orderly Liquidation Value" or "NOLV" shall mean the appraised orderly
liquidation value of Spare Parts, net of all costs, fees and expenses of such
liquidation as determined from time to time pursuant to a Spare Parts Appraisal.
"North American" shall have the meaning given to such term in the preamble
of this Credit Agreement.
"Note" or "Notes" shall mean the Revolving Notes (if any).
"Notice of Borrowing and Borrowing Base Certificate" shall mean a notice in
the form attached hereto as Exhibit H.
"Notice of Extension/Conversion" shall mean a notice substantially in the
form of Exhibit J.
"Obligations" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Borrower, or to
others for any Borrower's account in each case pursuant to the terms and
provisions of this Credit Agreement, together with interest thereon (including
interest which accrues after the commencement of any bankruptcy or similar case,
whether or not such post-petition interest is allowed in such case) and,
including, without limitation, any reimbursement obligation or indemnity of the
Borrowers on account of Letters of
Credit and all other Letter of Credit Obligations and all indebtedness, fees,
liabilities and obligations which may at any time be owing by any Borrower to
any Lender (or an Affiliate of a Lender) or the Agent in each case pursuant to
this Credit Agreement or any other Credit Document, whether now in existence or
incurred by a Borrower from time to time hereafter, whether unsecured or secured
by pledge, Lien upon or security interest in any of a Borrower's assets or
property or the assets or property of any other Person, whether such
indebtedness is absolute or contingent, joint or several, matured or unmatured,
direct or indirect and whether such Borrower is liable to such Lender (or an
Affiliate of a Lender) for such indebtedness as principal, surety, endorser,
guarantor or otherwise. Obligations shall also include any other indebtedness
owing to any Lender (or an Affiliate of a Lender) by any Borrower under this
Credit Agreement and the other Credit Documents, any Borrower's liability to any
Lender (or an Affiliate of a Lender) pursuant to this Credit Agreement as maker
or endorser of any promissory note or other instrument for the payment of money,
any Borrower's liability to any Lender (or an Affiliate of a Lender) pursuant to
this Credit Agreement or any other Credit Document under any instrument of
guaranty or indemnity, or arising under any guaranty, endorsement or undertaking
which any Lender (or an Affiliate of a Lender) may make or issue to others for
any such Borrower's account pursuant to this Credit Agreement, including any
accommodation extended with respect to applications for Letters of Credit, all
liabilities and obligations arising under Lender Hedging Agreements owing from
any Borrower or another Credit Party to the Agent, any Lender, or any Affiliate
of the Agent or any Lender (or any Person that was a Lender or an affiliate of a
Lender at the time such Lender Hedging Agreement was entered into), permitted
under Section 9.2, all liabilities and obligations now or hereafter arising from
or in connection with any Bank Products, and all obligations of the Guarantors
to any Lender (or an Affiliate of any Lender) and the Agent arising under or in
connection with the Guaranty Agreement or any other Credit Document, including,
without limitation, the Guaranteed Obligations (as defined in the Guaranty
Agreement).
"Operative Documents" shall mean the Credit Documents, the Acquisition
Documents, any Subordination Agreements, and any documents or instruments
evidencing Subordinated Debt.
"Other Taxes" shall have the meaning given to such term in Section 2.6(e).
"Overadvance" shall mean, as to each Borrower, as of any date of
determination, the amount, if any, by which the sum of the outstanding principal
balance of such Borrower's Revolving Loans and its Letter of Credit Obligations
exceeds its Borrowing Base.
"Parent" shall mean World Air Holdings, Inc., a Delaware corporation.
"Payment Taxes" shall have the meaning given such term in Section 2.6(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Permitted Acquisitions" shall mean an Acquisition by any Credit Party of
an Acquired Company which Acquisition complies with the following requirements
(in each case to the satisfaction of the Agent) (i) the Acquired Company shall
be an operating company that engages
in a line of business substantially similar to the business of the Credit
Parties engaged in on the Closing Date, (ii) the aggregate purchase price for
all Acquisitions during the term of this Credit Agreement shall not exceed
$10,000,000, (iii) the Agent shall have received the "Board Paper" for the
Acquired Company (i.e., a short memo prepared by the applicable Credit Party
with respect to the Acquired Company), (iv) the Agent shall have received a
financial pro forma of the Parent and its consolidated Subsidiaries showing that
after giving effect to the Acquisition, no Default would occur, (v) the Agent
shall have received an appraisal from Xxxx-Xxxxxxxx, Inc., or its successors and
assigns, or another appraiser of nationally or regionally recognized standing
setting forth the NOLV of the Spare Parts, if any, of the Acquired Company to
the extent such Spare Parts are to be included in the Borrowing Base, (vi) the
Agent shall have completed a field examination with respect to the working
capital assets of the Acquired Company to the extent such assets are to be
included in the Borrowing Base, (vii) the Agent shall have received all items
required by Sections 7.9 and 7.16 in connection with the Acquired Company,
(viii) in the case of an Acquisition of the Capital Stock of another Person, the
board of directors (or other comparable governing body) of such other Person
shall have duly approved such Acquisition, (ix) the Parent shall have delivered
to the Agent a certificate demonstrating that, (1) upon giving effect to such
Acquisition on a pro forma basis, the Credit Parties shall be in compliance with
all of the covenants set forth in Article VIII, (determined on a pro forma basis
if not during a Financial Covenant Testing Period) or the Agent and the Required
Lenders have agreed upon amended financial covenants, in their sole discretion,
and (2) on a combined basis, the working capital of the Credit Parties will not
be impaired to a degree unacceptable to the Agent, as determined by the Agent in
its reasonable discretion, (x) no Default or Event of Default shall exist
immediately prior to or immediately after the consummation of the Acquisition,
(xi) the Agent shall be satisfied with the sources and nature of funds used by
the Credit Party to consummate the Acquisition, (xii) the Parent shall have
delivered to the Agent all Acquisition Documents, in addition to any other due
diligence materials requested by Agent, in connection with such Permitted
Acquisition, and such documents and other materials shall be satisfactory to the
Agent, and (xiii) the Agent shall have filed such Liens with regard to any new
Collateral acquired in connection with such Permitted Acquisition as Agent deems
necessary to perfect its security interests in such Collateral.
"Permitted Indebtedness" shall mean:
(i) Indebtedness to the Lenders with respect to the Revolving Loans,
the Letters of Credit or otherwise, pursuant to the Credit Documents;
(ii) trade payables incurred in the ordinary course of the Credit
Parties' business;
(iii) purchase money Indebtedness (including Capital Leases) hereafter
incurred by the Credit Parties or any of their Subsidiaries to finance the
purchase of fixed assets provided that (A) the total of all such
Indebtedness for all such Persons taken together shall not exceed an
aggregate principal amount of $2,000,000 at any one time outstanding
(including any such Indebtedness referred to in clause (v) immediately
below); (B) such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed; and (C) no such Indebtedness shall be
refinanced for a principal
amount in excess of the principal balance outstanding thereon at the time
of such refinancing;
(iv) obligations of a Borrower or any of its Subsidiaries in respect
of Hedging Agreements entered into in order to manage existing or
anticipated interest rate or exchange rate risks and not for speculative
purposes and otherwise in accordance with Section 9.20;
(v) Indebtedness described on Schedule 1.1C attached hereto and any
refinancings of such Indebtedness; provided that the aggregate principal
amount of such Indebtedness is not increased, the scheduled maturity dates
of such Indebtedness are not shortened and such refinancing is on terms and
conditions no more restrictive than the terms and conditions of the
Indebtedness being refinanced;
(vi) any Subordinated Debt; and
(vii) any loan or Investment described in clause (vi) of the
definition of Permitted Investments.
"Permitted Investments" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including certificates
of deposit) which are insured by the Federal Deposit Insurance Corporation
("FDIC") or a similar federal insurance program; provided, however, that
the Credit Parties may, in the ordinary course of their respective
businesses, maintain in their disbursement accounts from time to time
amounts in excess of then applicable FDIC or other program insurance
limits;
(iii) Investments existing on the Closing Date and set forth on
Schedule 1.1D attached hereto;
(iv) advances to officers, directors and employees for expenses
incurred or anticipated to be incurred in the ordinary course;
(v) Permitted Acquisitions;
(vi) loans and Investments in (A) the Credit Parties and (B) newly
created Domestic Subsidiaries, provided that the applicable requirements of
Section 7.16 are satisfied;
(vii) Investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(viii) Hedging Agreements entered into in order to manage existing or
anticipated interest rate or exchange rate risks and not for speculative
purposes and otherwise in accordance with Section 9.20;
(ix) Equity advances in an amount not to exceed $2,000,000 per
calendar year in World Risk Solutions, but only to the extent required to
satisfy the regulations promulgated by the Bermuda Monetary Authority;
(x) Customer prepayment deposits in connection with aircraft charters
to the extent of such prepayment deposits and to the extent such prepayment
deposits are held in a Credit Party's escrow account with Valley National
Bank;
(xi) Any payment permitted under Section 9.6; and
(xii) such other Investments as the Agent may approve in its sole
discretion.
"Permitted Liens" shall mean
(i) Liens granted to the Agent or the Lenders (or their Affiliates to
secure Lender Hedging Agreements) by the Credit Parties pursuant to any
Credit Document;
(ii) Liens listed on Schedule 1.1B;
(iii) Liens on fixed assets securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section 9.2,
provided that (A) any such Lien attaches to such assets concurrently with
or within one hundred eighty (180) days after the acquisition thereof and
only to the assets to be acquired and (B) a description of the assets so
acquired is furnished to the Agent;
(iv) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, common carriers, landlords, aircraft lessors and other similar
Liens arising by operation of law or otherwise, not waived in connection
herewith, for amounts that are not yet due and payable or which are being
diligently contested in good faith by the relevant Credit Party by
appropriate proceedings, provided that in any such case an adequate
reserve, to the extent required by GAAP, is being maintained by such Credit
Party for the payment of same;
(v) attachment or judgment Liens individually or in the aggregate not
in excess of $2,000,000 (exclusive of (a) any amounts that are duly bonded
to the satisfaction of the Agent in its reasonable discretion, including,
but not limited to, the judgment bond in the amount of $5,000,000 placed by
North American with the clerk of Alameda County, California, in connection
with civil case number RG 03129400, or (b) any amount adequately covered by
insurance as to which the insurance company has acknowledged in writing its
obligations for coverage);
(vi) Liens for taxes, assessments or other governmental charges not
yet due and payable or which are being diligently contested in good faith
by a Credit Party by
appropriate proceedings, provided that in any such case an adequate reserve
is being maintained by such Credit Party for the payment of same in
accordance with GAAP;
(vii) zoning ordinances, easements, covenants and other customary
restrictions on the use of real property and other title exceptions that do
not interfere in any material respect with the ordinary course of business;
(viii) deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance;
(ix) Liens securing Subordinated Debt (to the extent such Subordinated
Debt is permitted hereunder);
(x) deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, regulatory or statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business;
(xi) Liens in the aggregate not in excess of $800,000 in favor of the
issuers of non-Wachovia Existing Letters of Credit, and only until such
time as such non-Wachovia Existing Letters of Credit are replaced by
Letters of Credit; and
(xii) Liens that the Credit Parties contend are wrongfully asserted to
the extent the same are being diligently contested in good faith by
appropriate proceedings or actions.
"Person" shall mean any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by any Credit Party or any
of its Subsidiaries, or with respect to which any Credit Party or any such
Subsidiary may incur liability.
"Pledge Agreement" shall mean the Pledge Agreement, of even date herewith,
between the Agent and the relevant Credit Parties, in the form attached hereto
as Exhibit E.
"Pledged Collateral" shall have the meaning given to such term in the
Pledge Agreement.
"Prime Rate" shall mean the rate which Wachovia announces from time to time
as its prime or base lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Wachovia (and its affiliates) may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"Proprietary Rights" shall have the meaning given to such term in Section
6.17.
"Real Estate" shall mean the real property owned or leased by the relevant
Credit Parties described in Schedule 6.19, as it may be updated from time to
time pursuant to Sections 7.9 and 7.23, together with all Structures thereon.
"reasonable discretion" shall mean a determination made in good faith and
in the exercise of reasonable business judgment.
"Related Parties" shall mean, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" shall mean any of the events described in Section 4043
of ERISA and the regulations thereunder, other than any such event as to which
the requirement for filing a notice to the PBGC has been waived or is otherwise
inapplicable.
"Required Lenders" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent) and
holding in the aggregate at least 66 2/3% of (i) the Revolving Credit
Commitments or (ii) if the Commitments have been terminated, the outstanding
Loans and participation interests (including the participation interests of the
Issuing Bank in any Letters of Credit).
"Responsible Officer" shall mean (a), as to the Parent, its chief executive
officer or chief financial officer, and (b), as to each Borrower, those officers
of the Borrower granted borrowing authority by its Board of Directors and as to
which the Agent has received a secretary's certificate certifying to the
accuracy and effectiveness of the Board of Director resolutions granting such
borrowing authority, and which includes an incumbency certification with respect
to such certifying secretary.
"Reserves" shall mean, collectively, the NA Reserves and the WA Reserves.
"Restricted Payment" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, as the case may
be, now or hereafter outstanding, (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Credit Party or any of its
Subsidiaries now or hereafter outstanding by such Credit Party or Subsidiary, as
the case may be, except for any redemption, retirement, sinking funds or similar
payment payable solely in such shares of that class of stock or in any class of
stock junior to that class, (iii) any cash payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire any shares of any class of Capital Stock of
any Credit Party or any of its Subsidiaries now or hereafter outstanding, or
(iv) any payment to any Affiliate of any Credit Party except to the extent
expressly permitted in this Credit Agreement.
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Revolving Loans in a
principal amount of up to such Lender's Revolving Credit Commitment Percentage
of the Revolving Credit Committed Amount.
"Revolving Credit Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Revolving Credit Commitment Percentage on Schedule
1.1A, as such percentage may be modified in connection with any assignment made
in accordance with the provisions of Section 14.5.
"Revolving Credit Committed Amount" shall mean the aggregate revolving
credit line extended by the Lenders to the Borrowers for Revolving Loans and
Letters of Credit pursuant to and in accordance with the terms of this Credit
Agreement, in an amount up to $50,000,000, as such revolving credit line may be
reduced from time to time in accordance with Section 2.2(c).
"Revolving Loans" shall mean loans and advances made to the Borrowers on a
revolving basis pursuant to Section 2.1, and includes Base Rate Loans, LMIR
Loans and Eurodollar Loans.
"Revolving Notes" shall mean promissory notes of the Borrowers to the
Lenders that request such notes pursuant to Section 2.1(c), substantially in the
form of Exhibit G.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Account Control Agreement" shall mean an agreement among a
Credit Party, an investment institution, and the Agent, which agreement (a) is
substantially in the form of Exhibit I-2 or (b) is in such other form as is
acceptable to the Agent and its counsel and which provides for the Agent's
having "control" (as such term is used in Article 9 of the UCC) over the
investment accounts described therein, in each case as the same may be amended,
restated, supplemented, or otherwise modified from time to time.
"Security Agreement" shall mean the Security Agreement, of even date
herewith, between the Agent and the Credit Parties (and such other Persons who
may from time to time become party thereto by joinder agreement), substantially
in the form of Exhibit F.
"Security Documents" shall mean, collectively, the Pledge Agreement, the
Security Agreement, each Acknowledgment Agreement, each Deposit Account Control
Agreement, each Securities Account Control Agreement and any other document or
agreement granting or acknowledging a security interest in favor of the Agent to
secure the Obligations.
"Settlement Period" shall mean each week, or such lesser period or periods
as the Agent shall determine.
"Solvency Certificate" shall mean an officer's certificate of the Parent
prepared by the chief financial officer of the Parent as to the financial
condition, solvency and related matters of the Credit Parties, in each case on a
pro forma basis after giving effect to the initial borrowings under the Credit
Documents, substantially in the form of Exhibit N hereto.
"Spare Parts" shall mean any "spare part" (as defined in the FAA
Act)(currently defined in 49 U.S.C. Section 40102(a)(43)), unless and until such
"spare parts" are installed on an aircraft.
"Spare Parts Appraisal" shall mean an appraisal of the Spare Parts
performed by an appraiser selected by the Agent, in form and substance, and
using assumptions and appraisal
methods, satisfactory to the Agent, which shall, among other things, identify
new Collateral locations.
"Spare Parts Location" shall mean any location in the Continental United
States designated by the Agent in any filing with the FAA for the purposes of
perfecting the Agent's security interest in Spare Parts.
"Structures" shall mean all plants, offices, manufacturing facilities,
warehouses, administration buildings and related facilities of the Credit
Parties located on the Real Estate described on Schedule 6.19 attached hereto.
"Subordinated Debt" shall mean unsecured Indebtedness incurred by any
Credit Party, which, in each case, is expressly subordinated and made junior to
the payment and performance in full of the Obligations and contains terms and
conditions satisfactory to the Agent.
"Subordination Agreements" shall mean the agreements entered into from time
to time by and among one or more Borrowers, the Agent, on behalf of the Lenders,
and a third party creditor of any such Borrower(s) providing for the
subordination of such third party creditor's claims to those of the Lenders on
terms and conditions satisfactory to the Agent.
"Subsidiary" shall mean, as to any Person, (a) any corporation more than
50% of whose Capital Stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time, any class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries, (b) any partnership, association, joint venture or other
entity in which such Person directly or indirectly through Subsidiaries has more
than a fifty percent (50%) interest in the total capital, total income and/or
total ownership interests of such entity at any time and (c) any partnership in
which such Person is a general partner. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Credit Agreement shall
refer to a Subsidiary or Subsidiaries of the Parent.
"Taxes" shall mean any federal, state, local or foreign income, sales, use,
transfer, payroll, personal, property, occupancy, franchise or other tax, levy,
impost, fee, imposition, assessment or similar charge, together with any
interest or penalties thereon.
"Termination Event" shall mean (i) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any Credit Parties or
any of their Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan
year in which such entity was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a
Benefit Plan pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC
of proceedings to terminate, or the appointment of a trustee to administer, any
Benefit Plan or Multiemployer Plan; (v) the termination of a Multiemployer Plan
pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal
within the meaning of Sections 4203 and 4205 of ERISA, of any Credit Parties or
any of their Subsidiaries or ERISA Affiliates from a Multiemployer Plan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to time
in the State of Georgia.
"UCP" shall mean The Uniform Customs and Practice for Documentary Credits,
as published as of the date of issue of any Letter of Credit by the
International Chamber of Commerce (the "UCP")
"Unfinanced Capital Expenditures" shall mean for any period Capital
Expenditures made during such period and not financed from the proceeds of
Funded Indebtedness.
"Unrestricted Cash Balances" shall mean, at any time of determination, the
aggregate amount of all cash deposits of the Borrowers and the Guarantors
maintained in any demand deposit or securities account maintained in the United
States with the Agent or in a demand deposit or securities account subject to a
Deposit Account Control Agreement or Securities Account Control Agreement, as
applicable, to the extent such cash deposits are subject to the Agent's
first-priority perfected security interest and are free of any Lien or other
encumbrance (other than (i) customary Liens arising in the ordinary course of
business which the depository institution or financial intermediary may have
with respect to any right of offset against funds in such account, (ii)
customary holds for uncollected deposits, and (iii) Liens granted to the Agent
and securing the Obligations).
"Unused Line Fee" shall mean the fee required to be paid to the Agent for
the benefit of the Lenders at the end of each calendar quarter as partial
compensation for extending the Revolving Credit Committed Amount to the
Borrowers, and shall be determined by multiplying (i) the positive difference,
if any, between (A) the Revolving Credit Committed Amount in effect at such time
and (B) the average daily amount of Revolving Loans and Letter of Credit
Obligations outstanding during such calendar quarter by (ii) 0.25%.
"USA Patriot Act" shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT) Act of 2001, as in effect from time to time.
"USG Entity" means the government of the United States of America, its
agencies, instrumentalities, authorities, and subdivisions (but not including
any "state" comprising the United States of America).
"US Government Account" means any Account that is payable by a USG Entity.
"Voting Stock" shall mean, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"WA Borrowing Base" shall mean, as of any date of determination, the
following amount (the "WA Borrowing Base") calculated in dollars as follows:
(a) an amount equal to ninety percent (90%) of the WA Credit Parties'
Eligible Prime Government Accounts (and for the purposes hereof, the amount
of such
account shall not be reduced by any cash paid by the Account Debtor but not
yet available to World Airways); plus
(b) an amount equal to eighty-five percent (85%) of WA Credit Parties'
Eligible Contractor Accounts (and for the purposes hereof, the amount of
such account shall not be reduced by any cash paid by the Account Debtor
but not yet available to World Airways); plus
(c) an amount equal to eighty percent (80%) of the WA Credit Parties'
Eligible Commercial Accounts; plus
(d) an amount equal to the lesser of (a) the sum of $5,000,000 minus
the amount of North American's current borrowings that are based on the NA
Credit Parties' Eligible Unbilled Government Accounts, and (b) seventy
percent (70%) of the WA Credit Parties' Eligible Unbilled Government
Accounts; plus
(e) an amount equal to the lesser of (a) seventy-five percent (75%) of
the WA Credit Parties' Eligible Spare Parts, and, (b) the sum of
$15,000,000 minus the amount of North Americans' current borrowings that
are based on the NA Credit Parties' Eligible Spare Parts; minus
(f) reserves established by the Agent from time to time in its
reasonable discretion (the "WA Reserves").
Subject to the relevant terms and provisions set forth in this Credit
Agreement, including specifically Section 14.9(g), the Agent at all times
shall be entitled to reduce or increase the advance rates and standards of
eligibility under this Credit Agreement, in each case in its reasonable
discretion.
"Wachovia" shall mean Wachovia Bank, National Association and its
successors and permitted assigns.
"WA Credit Parties" shall mean World Airways and each of its Subsidiaries
which are, or may become, Credit Parties hereunder.
"WA Reserves" shall have the meaning given to such term in the definition
of WA Borrowing Base.
"World Airways" shall have the meaning given to such term in the preamble
of this Credit Agreement.
"World Risk Solutions" shall mean World Risk Solutions, Ltd., a Bermuda
limited liability company.
1.2 ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise defined or specified herein, all accounting terms shall be
construed herein and all accounting determinations for purposes of determining
compliance with Sections
8.1 and 8.2 hereof and otherwise to be made under this Credit Agreement shall be
made in accordance with GAAP applied on a basis consistent in all material
respects with the Financials. All financial statements required to be delivered
hereunder from and after the Closing Date and all financial records shall be
maintained in accordance with GAAP. If GAAP shall change from the basis used in
preparing the Financials, the certificates required to be delivered pursuant to
Section 7.1 demonstrating compliance with the covenants contained herein shall
include calculations setting forth the adjustments necessary to demonstrate how
the Credit Parties are in compliance with the financial covenants based upon
GAAP as in effect on the Closing Date. If the Credit Parties shall change their
method of inventory accounting, all calculations necessary to determine
compliance with the covenants contained herein shall be made as if such method
of inventory accounting had not been so changed.
The Credit Parties shall deliver to the Agent and each Lender at the same
time as the delivery of any annual financial statements given in accordance with
the provisions of Section 7.1, (i) a description in reasonable detail of any
material change in the application of accounting principles employed in the
preparation of such financial statements from those applied in the most recently
preceding annual financial statements and (ii) a reasonable estimate of the
effect on the financial statements on account of such changes in application.
1.3 OTHER DEFINITIONAL TERMS.
Terms not otherwise defined herein which are defined in the UCC shall have
the meanings given them in the UCC. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Credit Agreement shall refer to
the Credit Agreement as a whole and not to any particular provision of this
Credit Agreement, unless otherwise specifically provided. References in this
Credit Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be
to Articles, Sections, Schedules or Exhibits of or to this Credit Agreement
unless otherwise specifically provided. Any of the terms defined in Section 1.1
may, unless the context otherwise requires, be used in the singular or plural
depending on the reference. "Include", "includes" and "including" shall be
deemed to be followed by "without limitation" whether or not they are in fact
followed by such words or words of like import. "Writing", "written" and
comparable terms refer to printing, typing, computer disk, e-mail and other
means of reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof. References to any Person include the successors and permitted assigns
of such Person. References "from" or "through" any date mean, unless otherwise
specified, "from and including" or "through and including", respectively.
References to any times herein shall refer to Eastern Standard or Daylight
Savings time, as applicable.
ARTICLE II
LOANS
2.1 REVOLVING LOANS.
(a) Revolving Credit Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each of the Lenders severally agrees to lend to the Borrowers at
any time or from time to time on or after the Closing Date and before the
Maturity Date, such Lender's Revolving Credit Commitment Percentage of the
Revolving Loans as may be requested or deemed requested by the Borrowers.
(b) Determination of Borrowing Base.
(i) The Lenders agree, subject to the terms and conditions of this
Credit Agreement, from time to time, to make Revolving Loans to the
Borrowers on a revolving basis. The aggregate principal amount outstanding
of all Revolving Loans of World Airways, together with its Letter of Credit
Obligations, shall not in the aggregate exceed the lesser of (A) the
Revolving Credit Committed Amount then in effect and (B) the WA Borrowing
Base. The aggregate principal amount outstanding of all Revolving Loans of
North American, together with its Letter of Credit Obligations, shall not
in the aggregate exceed the lesser of (A) the Revolving Credit Committed
Amount then in effect and (B) the NA Borrowing Base. In addition, the
aggregate principal amount outstanding of all Revolving Loans to all
Borrowers, together with the Letter of Credit Obligations of all Borrowers,
shall not in the aggregate exceed the lesser of (A) the Revolving Credit
Committed Amount then in effect and (B) the Aggregate Borrowing Base.
(ii) No Lender shall be obligated at any time to make available to the
Borrowers its Revolving Credit Commitment Percentage of any requested
Revolving Loan if such amount plus its Revolving Credit Commitment
Percentage of the aggregate principal amount outstanding of all Revolving
Loans and its Revolving Credit Commitment Percentage of all Letter of
Credit Obligations would exceed such Lender's Revolving Credit Commitment
at such time. The aggregate balance of Revolving Loans and the Letter of
Credit Obligations shall not at any time exceed the Revolving Credit
Committed Amount. No Lender shall be obligated to make available (except
pursuant to and in accordance with Section 2.1(d)(vii), nor shall the Agent
make available, any Revolving Loans to World Airways to the extent such
Revolving Loan when added to World Airways' then outstanding Revolving
Loans and Letter of Credit Obligations would cause its aggregate
outstanding Revolving Loans and Letter of Credit Obligations to exceed the
WA Borrowing Base. No Lender shall be obligated to make available (except
pursuant to and in accordance with Section 2.1(d)(vii), nor shall the Agent
make available, any Revolving Loans to North American to the extent such
Revolving Loan when added to North American's then outstanding Revolving
Loans and Letter of Credit Obligations would cause its aggregate
outstanding Revolving Loans and Letter of Credit Obligations to exceed the
NA Borrowing Base. No Lender shall be obligated to make available (except
pursuant to and in accordance with Section 2.1(d)(vii), nor shall the
Agent make available, any Revolving Loans to any of the Borrowers to the
extent such Revolving Loan when added to the then outstanding Revolving
Loans to all Borrowers and Letter of Credit Obligations of all Borrowers
would cause the aggregate outstanding Revolving Loans to all Borrowers and
Letter of Credit Obligations of all Borrowers to exceed the Aggregate
Borrowing Base. The full amount of the Revolving Loans to be disbursed on
the Closing Date shall be disbursed as Base Rate Loans.
(c) Revolving Notes. If so requested by a Lender (on or at any time
after the Closing Date), the obligations of the Borrowers to repay the
Revolving Loans to such Lender and to pay interest thereon shall be
evidenced by a separate Revolving Note to such Lender, with appropriate
insertions. One Revolving Note shall be issued to the order of each Lender
that so requests a Revolving Note, and each such Revolving Note shall be in
a principal amount equal to such Lender's Revolving Credit Commitment and
shall represent the obligations of the Borrowers to pay such Lender the
amount of such Lender's Revolving Credit Commitment or, if less, the
aggregate unpaid principal amount of all Revolving Loans made to any
Borrower by such Lender hereunder, plus interest accrued thereon, as set
forth herein. The Borrowers irrevocably authorize each Lender that has been
issued a Revolving Note to make or cause to be made appropriate notations
on its Revolving Note, or on a record pertaining thereto, reflecting
Revolving Loans and repayments thereof by each Borrower. The outstanding
amount of the Revolving Loans set forth on such Lender's Revolving Note or
record shall be prima facie evidence of the principal ----- ----- amount
thereof owing and unpaid to such Lender, but the failure to make such
notation or record, or any error in such notation or record shall not limit
or otherwise affect the obligations of the Borrowers hereunder or under any
Revolving Note to make payments of principal of or interest on any
Revolving Note when due. Any of the foregoing to the contrary
notwithstanding, any lack of a Lender's request to be issued a Revolving
Note shall not, in any manner, diminish the Borrowers' obligations to repay
the Revolving Loans made by such Lender, together with all other amounts
owing to such Lender by the Borrowers.
(d) Borrowings under Revolving Notes.
(i) Each request for borrowings hereunder shall be made by a Notice of
Borrowing and Borrowing Base Certificate, and, if at the time of such
request there is more than one Lender hereunder, a completed Daily Loan
Activity Sheet, from such Borrower to the Agent given not later than 11:00
A.M. (A) on the Business Day on which the proposed borrowing is requested
to be made for Revolving Loans that will be Base Rate Loans or LMIR Loans
and (B) three Business Days prior to the date of the requested borrowing of
Revolving Loans that will be Eurodollar Loans. Each Notice of Borrowing and
Borrowing Base Certificate shall be given by either telecopy or electronic
mail. Each Notice of Borrowing and Borrowing Base Certificate shall be
irrevocable by and binding on the requesting Borrower. Each Borrower shall
be entitled to borrow Revolving Loans in a minimum principal amount of
$50,000 and integral multiples of $10,000 in excess thereof (or the
remaining amount of the Revolving Credit Committed Amount, if less) and
shall be entitled to borrow Base Rate Loans, LMIR Loans or Eurodollar
Loans, or a combination thereof, as such Borrower may request; provided,
that no more than five (5) Eurodollar Loans for each Borrower shall be
outstanding hereunder at any one time; and
provided, further, that Eurodollar Loans shall be in a minimum principal
amount of at least $1,000,000 and integral multiples of $100,000 in excess
thereof. Revolving Loans may be repaid and reborrowed in accordance with
the provisions hereof.
The Agent shall give to each Lender prompt notice (but in no
event later than 2:00 P.M. on the date of the Agent's receipt of
notice from the requesting Borrower) of each Notice of Borrowing and
Borrowing Base Certificate by telecopy or electronic mail (other than
any Notice of Borrowing and Borrowing Base Certificate which will be
funded by the Agent in accordance with subsection (d)(ii) below). No
later than 3:00 P.M. on the date on which a borrowing is requested to
be made pursuant to the applicable Notice of Borrowing and Borrowing
Base Certificate, each Lender will make available to the Agent at the
address of the Agent set forth on the signature pages hereto, in
immediately available funds, its Revolving Credit Commitment
Percentage of such borrowing requested to be made (unless such funding
is to be made by the Agent in accordance with subsection (d)(ii)
below). Unless the Agent shall have been notified by any Lender prior
to the date of borrowing that such Lender does not intend to make
available to the Agent its portion of the borrowing to be made on such
date, the Agent may assume that such Lender will make such amount
available to the Agent as required above and the Agent may, in
reliance upon such assumption, make available the amount of the
borrowing to be provided by such Lender. Upon fulfillment of the
conditions set forth in Article V for such borrowing, the Agent will
make such funds available to the requesting Borrower at the account
specified by such Borrower in its Notice of Borrowing and Borrowing
Base Certificate.
(ii) Because the Borrowers anticipate requesting borrowings of
Revolving Loans on a daily basis and repaying Revolving Loans on a daily
basis through the collection of Accounts and the proceeds of other
Collateral, resulting in the amount of outstanding Revolving Loans
fluctuating from day to day, in order to administer the Revolving Loans in
an efficient manner and to minimize the transfer of funds between the Agent
and the Lenders, the Lenders hereby instruct the Agent, and the Agent may
(but is not obligated to) (A) make available, on behalf of the Lenders, the
full amount of all Revolving Loans requested by the requesting Borrower
without requiring that such Borrower give the Agent a Notice of Borrowing
and Borrowing Base Certificate with respect to such borrowing (provided
that, if at the time of any such Borrowing there is more than one Lender,
the requesting Borrower shall furnish to the Agent a completed Daily Loan
Activity Sheet on each Business Day by not later than 11:00 a.m.) and
without giving each Lender prior notice of the proposed borrowing, of such
Lender's Revolving Credit Commitment Percentage thereof and the other
matters covered by the Notice of Borrowing and Borrowing Base Certificate
and (B) if the Agent has made any such amounts available as provided in
clause (A), upon repayment of Revolving Loans by the applicable Borrower,
apply such amounts repaid directly to the amounts made available by the
Agent in accordance with clause (A) and not yet settled as described below;
provided that the Agent shall not advance funds as described in clause (A)
above if the Agent has actually received prior to such borrowing (1) an
officer's certificate from the Parent or any Borrower pursuant to and in
accordance with Section 7.1(j) that a
Default or Event of Default is in existence or (2) a Notice of Borrowing
and Borrowing Base Certificate from any Borrower wherein the certification
provided therein states that the conditions to the making of the requested
Revolving Loans have not been satisfied or (3) a written notice from the
Required Lenders that the conditions to such borrowing have not been
satisfied, which officer's certificate, Notice of Borrowing and Borrowing
Base Certificate or notice, in each case, shall not have been rescinded. If
the Agent advances Revolving Loans on behalf of the Lenders, as provided in
the immediately preceding sentence, the amount of outstanding Revolving
Loans and each Lender's Revolving Credit Commitment Percentage thereof
shall be computed weekly rather than daily and shall be adjusted upward or
downward on the basis of the amount of outstanding Revolving Loans as of
5:00 P.M. on the Business Day immediately preceding the date of each
computation; provided, however, that the Agent retains the absolute right
at any time or from time to time to make the foregoing adjustments at
intervals more frequent than weekly. The Agent shall deliver to each of the
Lenders after the end of each Settlement Period, a summary statement of the
amount of outstanding Revolving Loans for such period. If the summary
statement is sent by the Agent and received by the Lenders prior to 12:00
Noon on any Business Day each Lender shall make the transfers described in
the next succeeding sentence no later than 3:00 P.M. on the day such
summary statement was sent; and if such summary statement is sent by the
Agent and received by the Lenders after 12:00 Noon on any Business Day,
each Lender shall make such transfers no later than 3:00 P.M. on the next
succeeding Business Day. If in any Settlement Period, the amount of a
Lender's Revolving Credit Commitment Percentage of the Revolving Loans is
in excess of the amount of Revolving Loans actually funded by such Lender,
such Lender shall forthwith (but in no event later than the time set forth
in the next preceding sentence) transfer to the Agent by wire transfer in
immediately available funds the amount of such excess; and, on the other
hand, if the amount of a Lender's Revolving Credit Commitment Percentage of
the Revolving Loans in any Settlement Period is less than the amount of
Revolving Loans actually funded by such Lender, the Agent shall forthwith
transfer to such Lender by wire transfer in immediately available funds the
amount of such difference. The obligation of each of the Lenders to
transfer such funds shall be irrevocable and unconditional and without
recourse to or warranty by the Agent. Each of the Agent and the Lenders
agree to xxxx their respective books and records at the end of each
Settlement Period to show at all times the dollar amount of their
respective Revolving Credit Commitment Percentages of the outstanding
Revolving Loans. Because the Agent on behalf of the Lenders may be
advancing and/or may be repaid Revolving Loans prior to the time when the
Lenders will actually advance and/or be repaid Revolving Loans, interest
with respect to Revolving Loans shall be allocated by the Agent to each
Lender (including the Agent) in accordance with the amount of Revolving
Loans actually advanced by and repaid to each Lender (including the Agent)
during each Settlement Period and shall accrue from and including the date
such Revolving Loans are advanced by the Agent to but excluding the date
such Revolving Loans are repaid by the applicable Borrower in accordance
with Section 2.3 or actually settled by the applicable Lender as described
in this Section 2.1(d)(ii). All such Revolving Loans under this Section
2.1(d)(ii) shall be made as Base Rate Loans.
(iii) If the amounts described in subsection (d)(i) or (d)(ii) of this
Section 2.1 are not in fact made available to the Agent by a Lender (such
Lender being hereinafter
referred to as a "Defaulting Lender") and the Agent has made such amount
available to the requesting Borrower, the Agent shall be entitled to
recover such corresponding amount on demand from such Defaulting Lender. If
such Defaulting Lender does not pay such corresponding amount forthwith
upon the Agent's demand therefor, the Agent shall promptly notify the
Borrowers and the Borrowers shall no later than five Business Days after
demand pay such corresponding amount to the Agent. The Agent shall also be
entitled to recover from such Defaulting Lender and the Borrowers, (A)
interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the applicable
Borrower to the date such corresponding amount is recovered by the Agent,
at a rate per annum equal to either (1) if paid by such Defaulting Lender,
the overnight Federal Funds Rate or (2) if paid by the applicable Borrower,
the then applicable rate of interest, calculated in accordance with Section
4.1, plus (B) in each case, an amount equal to any costs (including legal
expenses) and losses incurred as a result of the failure of such Defaulting
Lender to provide such amount as provided in this Credit Agreement. Nothing
herein shall be deemed to relieve any Lender from its obligation to fulfill
its commitments hereunder or to prejudice any rights which the Borrowers
may have against any Lender as a result of any default by such Lender
hereunder, including, without limitation, the right of the applicable
Borrower be reimbursed by any Defaulting Lender for any amounts paid by
such Borrower under clause (B) above on account of such Defaulting Lender's
default.
(iv) The failure of any Lender to make the Revolving Loan to be made
by it as part of any borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Revolving Loan on the date of
such borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Revolving Loan to be made by such other Lender on
the date of any borrowing.
(v) Each Lender shall be entitled to earn interest at the then
applicable rate of interest, calculated in accordance with Article IV, on
outstanding Revolving Loans which it has funded to the Agent from the date
such Lender funded such Revolving Loan to, but excluding, the date on which
such Lender is repaid with respect to such Revolving Loan.
(vi) [intentionally omitted]
(vii) Notwithstanding anything to the contrary contained elsewhere
herein, and whether or not a Default or Event of Default exists at the
time, unless otherwise objected to by the Required Lenders in writing, the
Agent may in its discretion require all Lenders to honor requests or deemed
requests by any Borrower for Revolving Loans at a time that an Overadvance
exists or which would result in an Overadvance and each Lender shall be
obligated to continue to make its pro rata share of Revolving Loans, up to
a maximum amount outstanding equal to its Revolving Credit Commitment, so
long as the aggregate amount of Overadvances with respect to all Borrowers
is not known by the Agent to exceed $5,000,000 and so long as such
Overadvance is not outstanding for more than ten (10) Business Days.
2.2 OPTIONAL AND MANDATORY PREPAYMENTS; REDUCTION OF REVOLVING CREDIT
COMMITTED AMOUNT.
(a) Voluntary Prepayments. In addition to payments from collections
pursuant to Section 2.3(b)(ii), the Borrowers shall have the right to
prepay Loans in whole or in part from time to time, without premium or
penalty; provided, however, that (i) Loans that are Eurodollar Loans may
only be prepaid on three Business Days' prior written notice to the Agent
specifying the applicable Loans to be prepaid; (ii) any prepayment of Loans
that are Eurodollar Loans will be subject to Section 4.10; (iii) each such
partial prepayment of Loans shall be in a minimum principal amount of
$1,000,000 and integral multiples of $100,000. Prepayments on Revolving
Loans shall be applied first to Base Rate Loans, then to LMIR Loans and
then to Eurodollar Loans in direct order of Interest Period maturities.
(b) Mandatory Prepayments.
(i) Revolving Credit Committed Amount. As to each Borrower, if at any
time, the sum of the aggregate principal amount of such Borrower's
outstanding Revolving Loans plus such Borrower's Letter of Credit
Obligations outstanding shall exceed the lesser of (A) the Revolving Credit
Committed Amount and (B) its Borrowing Base, subject to any Overadvance
permitted to be outstanding under Section 2.1(d)(vii), such Borrower within
one (1) Business Day following receipt of demand shall pay to the Agent,
for the ratable account of the Lenders, an amount sufficient to eliminate
such excess.
(ii) Casualty Loss. Subject to Section 7.10, to the extent a Borrower
receives cash proceeds in connection with a Casualty Loss, such Borrower
shall prepay the Loans in an amount equal to one hundred percent (100%) of
such cash proceeds if the Agent shall have elected to apply the proceeds
realized from such Casualty Loss to the prepayment of the Loans (such
prepayment to be applied as set forth in clause (iv) below).
(iii) Asset Dispositions. Promptly and in any event within five (5)
Business Days following the occurrence of any Asset Disposition or upon the
date of any renewal of any Eurodollar Loan, if later, the applicable
Borrower shall prepay the Loans in an aggregate amount equal to the Net
Cash Proceeds of the related Asset Disposition in excess of $5,000,000.
Such prepayment shall be applied as set forth in clause (iv) below.
(iv) Application of Mandatory Prepayments. All amounts required to be
paid pursuant to this Section 2.2(b) shall be applied to Revolving Loans
and (after all Revolving Loans have been repaid) to a cash collateral
account held by the Agent in respect of Letter of Credit Obligations (in an
amount equal to 103% of the aggregate amount thereof or of any Eurodollar
Loan pending repayment on a date of renewal). Any excess shall be retained
by the Credit Parties. Within the parameters of the applications set forth
above for Revolving Loans, prepayments shall be applied first to Base Rate
Loans, then to LMIR Loans and then to Eurodollar Loans in direct order of
Interest
Period maturities. All prepayments under this Section 2.2(b) shall be
subject to Section 4.10.
(c) Voluntary Reductions of Revolving Credit Committed Amount. The
Borrowers may from time to time permanently reduce or terminate the
Revolving Credit Committed Amount in whole or in part (in minimum aggregate
amounts of $5,000,000 or in integral multiples of $5,000,000 in excess
thereof (or, if less, the full remaining amount of the then applicable
Revolving Credit Committed Amount)) upon three (3) Business Days' prior
written notice to the Agent; provided, however, no such termination or
reduction shall be made which would cause an Overadvance to be in effect
for either Borrower, unless, concurrently with such termination or
reduction, the Borrowers make a mandatory prepayment in accordance with the
provisions of Section 2.2(b)(i). The Agent shall promptly notify each
affected Lender of receipt by the Agent of any notice from the Borrowers
pursuant to this Section 2.2(c).
(d) Maturity Date. The Revolving Credit Commitment of the Lenders and
the Letter of Credit Commitment of the Issuing Bank shall automatically
terminate and all Obligations shall be due and payable on the Maturity
Date.
(e) General. The Borrowers shall pay to the Agent for the account of
the Lenders in accordance with the terms of Section 4.3, on the date of
each termination or reduction of the Revolving Credit Committed Amount, the
Unused Line Fee accrued through the date of such termination or reduction
on the amount of the Revolving Credit Committed Amount so terminated or
reduced.
(f) Hedging Obligations Unaffected. Any prepayment made pursuant to
this Section 2.2 shall not affect the Borrowers' obligation to continue to
make payments under any Lender Hedging Agreement, which shall remain in
full force and effect notwithstanding such prepayment, subject to the terms
of such Lender Hedging Agreement.
2.3 PAYMENTS AND COMPUTATIONS.
(a) The Borrowers shall make each payment hereunder and under the
Notes not later than 2:00 P.M. on the day when due (unless such payments
are otherwise paid by the Agent from amounts in the Cash Concentration
Account as provided in Section 2.3(b) below). Payments made by the
Borrowers shall be in Dollars to the Agent at its address referred to in
Section 14.4 in immediately available funds without deduction, withholding,
setoff or counterclaim. Payments made with respect to the Revolving Loans
shall be applied to repay Revolving Loans consisting of Base Rate Loans
first, then to Revolving Loans consisting of LMIR Loans and then to
Revolving Loans consisting of Eurodollar Loans. As soon as practicable
after the Agent receives payment from any Borrower, but in no event later
than one Business Day after such payment has been made, subject to Section
2.1(d)(ii), the Agent will cause to be distributed like funds relating to
the payment of principal, interest, or Fees (other than amounts payable to
the Agent to reimburse the Agent and the Issuing Bank for fees and expenses
payable solely to them pursuant to Article IV) or expenses payable to the
Agent and the Lenders in accordance
with Section 14.7 ratably to the Lenders, and like funds relating to the
payment of any other amounts payable to such Lender. The Borrowers'
obligations to the Lenders with respect to such payments shall be
discharged by making such payments to the Agent pursuant to this Section
2.3(a) or if not timely paid or any Event of Default then exists, may be
added to the principal amount of the Revolving Loans outstanding.
(b) (i) Each Credit Party shall establish and shall maintain one or
more collection accounts (each a "Collection Account") with Wachovia and
shall instruct all account debtors (other than AMC) on the Accounts of such
Credit Party to remit all payments to such Credit Party's Collection
Account. All amounts received by each such Credit Party from any of its
account debtors, in addition to all other cash received from any other
source (including but not limited to, proceeds from asset sales and
judgments), shall be promptly deposited into such Credit Party's Collection
Account or into such Credit Party's Cash Concentration Account. The
foregoing notwithstanding, the Agent may, in its sole discretion, permit
the Credit Parties to maintain Collection Accounts with other financial
institutions provided that each Collection Account is subject to a Deposit
Account Control Agreement or Funds Letter Agreement, as the case may be, in
favor of the Agent (Wachovia, along with each other financial institution
which maintains a Collection Account, each a "Collection Bank"). Unless the
Agent otherwise requires, no Deposit Account Control Agreement shall be
required with respect to any Collection Account maintained with the Agent,
so long as the Agent has "control" (as such term is used in Article 9 of
the UCC) over such account.
(ii) All receipts received by any Credit Party shall be remitted
promptly to its Collection Account. All funds deposited into any Credit
Party's Collection Account on any Business Day shall be transferred to its
Cash Concentration Account. All funds deposited on any Business Day to a
Borrower's Cash Concentration Account shall be applied by the Agent on the
same Business Day as follows: (x) so long as Wachovia is the sole Lender
hereunder, to the outstanding balance of the Revolving Loans initially
advanced to such Borrower and accrued interest thereon and to pay any other
outstanding Obligations of such Borrower which are then due and payable
hereunder, and (y) if on the day of such deposit Wachovia is not the sole
Lender hereunder, in accordance with such Borrower's instructions set forth
in the Daily Loan Activity Sheet provided on such Business Day to reduce
the then outstanding balance of such Borrower's Revolving Loans and to pay
accrued interest thereon and to pay any other outstanding Obligations of
such Borrower which are then due and payable hereunder; provided that for
the purpose of determining the availability of Revolving Loans hereunder,
such funds deposited into such Borrower's Cash Concentration Account shall
be deemed to have reduced such Borrower's outstanding Revolving Loans on
the Business Day such funds were deposited into such account. All amounts
received directly by any Credit Party from any account debtor, in addition
to all other cash received from any other source (including, without
limitation, proceeds from asset sales and judgments), shall be held in
trust by such Credit Party and promptly deposited into its Collection
Account or, if made by wire transfer, directly to its Cash Concentration
Account. Notwithstanding the foregoing to the contrary, upon the occurrence
and during the continuation of an Event of Default, the Agent may disregard
any Borrower's instructions set forth in such Borrower's Daily Loan
Activity Sheet and shall apply funds deposited in any Cash Concentration
Account as directed by the Required Lenders or as otherwise provided
herein.
(iii) All funds deposited into any Cash Concentration Account shall
immediately become the property of the Agent, and the Credit Parties shall
obtain the agreement by the Collection Banks to waive any offset rights
against the funds so deposited. The Agent assumes no responsibility for the
Collection Account arrangements, including without limitation, any claim of
accord and satisfaction or release with respect to deposits accepted by the
Collection Banks thereunder.
(iv) A Credit Party may close its Collection Account only upon (a) ten
(10) days' prior written notice to the Agent, (b) substitution of a new
Collection Account which is subject to a Deposit Account Control Agreement
or Funds Letter Agreement, and subject to the terms and conditions set
forth in any applicable Deposit Account Control Agreement or Funds Letter
Agreement, as applicable. The Agent may allow, in its reasonable
discretion, the Credit Parties to open new Collection Accounts, subject to
such Collection Account's being subject to a Deposit Account Control
Agreement or Funds Letter Agreement as contemplated above.
(v) No Credit Party shall direct any account debtor (other than AMC)
to submit payment on any Account to any location other than to such Credit
Party's Collection Account. No collections from any Credit Party's Accounts
(other than with respect to AMC) shall be deposited into any account other
than to such Credit Party's Collection Account or its Cash Concentration
Account.
(c) Each Borrower hereby authorizes each Lender to charge from time to
time against any or all of its accounts with such Lender any of the
Obligations which are then due and payable by such Borrower. Each Lender
receiving any payment as a result of charging any such account shall
promptly notify the Agent thereof and make such arrangements as the Agent
shall request to share the benefit thereof in accordance with Section 2.8.
(d) Except as otherwise provided herein with respect to Eurodollar
Loans, any payments falling due under this Credit Agreement on a day other
than a Business Day shall be due and payable on the next succeeding
Business Day and shall accrue interest at the applicable interest rate
provided for in this Credit Agreement to but excluding such Business Day.
Except as otherwise provided herein, computation of interest and fees
hereunder shall be made on the basis of actual number of days elapsed over
a year of 360 days. Interest on Base Rate Loans bearing interest based on
the Prime Rate shall be calculated on the basis of a year of 365 (or 366,
if applicable) days.
2.4 MAINTENANCE OF ACCOUNT.
The Agent shall maintain an account on its books in the name of each
Borrower in which such Borrower will be charged with all loans and advances made
by the Lenders to such Borrower or for such Borrower's account, including such
Borrower's Revolving Loans, Letter of Credit Obligations and any other
Obligations, including any and all costs, expenses and
attorney's fees which the Agent may actually incur, including, without
limitation, in connection with the exercise by or for the Lenders of any of the
rights or powers herein conferred upon the Agent (other than in connection with
any assignments or participations by any Lender) or in the prosecution or
defense of any action or proceeding by or against any Borrower or the Lenders
concerning any matter arising out of, connected with, or relating to this Credit
Agreement or the Accounts, or any Obligations owing to the Lenders by any
Borrower. The Borrowers will be credited in accordance with Section 2.3(b)(ii)
above, with all amounts received by the Lenders from the Borrowers or from
others for the Borrowers' account, including, as above set forth, all amounts
received by the Agent in payment of Accounts. In no event shall prior recourse
to any Accounts or other Collateral be a prerequisite to the Agent's right to
demand payment of any Obligation upon its maturity. Further, it is understood
that the Agent shall have no obligation whatsoever to perform in any respect any
of the Borrowers' contracts or obligations relating to the Accounts.
2.5 STATEMENT OF ACCOUNT.
Within fifteen (15) days after the end of each month the Agent shall send
the Borrowers a statement showing the accounting for the charges, loans,
advances and other transactions occurring between the Lenders and each of the
Borrowers during that month. The monthly statements shall be deemed correct and
binding upon the Borrowers and shall constitute an account stated between each
Borrower and the Lenders unless, with respect to any Borrower, the Agent
receives a written statement of such Borrower's exceptions within thirty-three
(33) days after same is mailed to the Borrowers.
2.6 TAXES.
(a) All payments made by the Borrowers hereunder or under any Note
will be, except as provided in Section 2.6(b), made free and clear of, and
without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now
or hereafter imposed by any Governmental Authority or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding any tax imposed on or measured by the net income or
profits (or any substitute for any such tax) of a Lender pursuant to the
laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is
located or any subdivision thereof or therein (the "Excluded Taxes")) and
all interest, penalties or similar liabilities with respect thereto (all
such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as "Payment Taxes"). If any
Payment Taxes are so levied or imposed, the Borrowers jointly and severally
agree to pay the full amount of such Payment Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under
this Credit Agreement or any other Credit Document, after withholding or
deduction for or on account of any Payment Taxes, will not be less than the
amount provided for herein or therein. The Borrowers jointly and severally
agree to indemnify and hold harmless each Lender, and reimburse such Lender
upon its written request, for the amount of any Payment Taxes so levied or
imposed and paid by such Lender.
(b) Each Foreign Lender agrees to deliver to the Borrowers and the
Agent on or prior to the Closing Date, or in the case of a Lender that is
an assignee or transferee of an interest under this Credit Agreement
pursuant to Section 14.5(c) (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the
date of such assignment or transfer to such Foreign Lender, two accurate
and complete original signed copies of Internal Revenue Service Form X-0
XXX, X-0 ECI or W-8 IMY, as applicable (or successor forms) certifying such
Foreign Lender's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Credit
Agreement and under any Note. In addition, each Foreign Lender agrees that
it will deliver updated versions of the foregoing, as applicable, whenever
the previous certification has become obsolete or inaccurate in any
material respect, together with such other forms as may be required in
order to confirm or establish the entitlement of such Foreign Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note. Notwithstanding
anything to the contrary contained in Section 2.6(a), but subject to the
immediately succeeding sentence, (x) each Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold Payment
Taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Foreign Lender to the extent that such
Foreign Lender has not provided to the Borrowers U.S. Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) the Borrowers shall not be obligated pursuant to
Section 2.6(a) to gross-up payments to be made to a Foreign Lender in
respect of Payment Taxes imposed by the United States if such Foreign
Lender has not provided to the Borrowers the Internal Revenue Service Forms
required to be provided to the Borrowers pursuant to this Section 2.6(b).
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.6, the Borrowers jointly and
severally agree to pay additional amounts and to indemnify each Lender in
the manner set forth in Section 2.6(a) (without regard to the identity of
the jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described in the immediately
preceding sentence as a result of any changes after the Closing Date in any
applicable law, treaty, governmental rule, regulation, guideline or order,
or in the interpretation thereof, relating to the deducting or withholding
of Payment Taxes.
(c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its lending office) to avoid or to minimize any amounts
which might otherwise be payable pursuant to this Section 2.6; provided,
however, that such efforts shall not cause the imposition on such Lender of
any additional costs or legal or regulatory burdens deemed by such Lender
in its sole discretion to be material.
(d) If any Borrower pays any additional amount pursuant to this
Section 2.6 with respect to a Lender, such Lender shall use reasonable
efforts to obtain a refund of tax or credit against its tax liabilities on
account of such payment; provided that such Lender shall have no obligation
to use such reasonable efforts if either (i) it is in an excess foreign tax
credit position or (ii) it believes in its reasonable discretion, that
claiming a refund or credit would cause adverse tax consequences to it. In
the event that such Lender receives such a refund or credit, such Lender
shall pay to the applicable
Borrower an amount that such Lender in the exercise of its reasonable
discretion determines is equal to the net tax benefit obtained by such
Lender as a result of such payment by such Borrower. In the event that no
refund or credit is obtained with respect to such Borrower's payments to
such Lender pursuant to this Section 2.6, then such Lender shall upon
request provide a certification that such Lender has not received a refund
or credit for such payments. Nothing contained in this Section 2.6 shall
require a Lender to disclose or detail the basis of its calculation of the
amount of any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of this
Section 2.6(a) to the Borrowers or any other party.
(e) In addition, the Borrowers agree to pay any present or future
stamp, documentary, privilege, intangible or similar Taxes or any other
excise or property Taxes, charges or similar levies that arise at any time
or from time to time (other than Excluded Taxes) (i) from any payment made
under any and all Credit Documents, (ii) from the transfer of the rights of
any Lender under any Credit Documents to any other Lender or Lenders or
(iii) from the execution or delivery by any Borrower of, or from the filing
or recording or maintenance of, or otherwise with respect to, any and all
Credit Documents (hereinafter referred to as "Other Taxes").
(f) The Borrowers will indemnify each Lender and the Agent for the
full amount of Payment Taxes (including, without limitation and without
duplication, any Payment Taxes imposed by any jurisdiction on amounts
payable under this Section 2.6), subject to (i) the exclusion set out in
the first sentence of Section 2.6(a), and (ii) the provisions of Section
2.6(b), and will indemnify each Lender and the Agent for the full amount of
Other Taxes (including, without limitation and without duplication, any
Payment Taxes imposed by any jurisdiction on amounts payable under this
Section 2.6) paid by such Lender or the Agent (on its own behalf or on
behalf of any Lender), as the case may be, in respect of payments made or
to be made hereunder, and any liability (including penalties, interest and
expenses) arising solely therefrom or with respect thereto, whether or not
such Payment Taxes or Other Taxes were correctly or legally asserted.
Payment of this indemnification shall be made within thirty (30) days from
the date such Lender or the Agent, as the case may be, makes written demand
therefor.
(g) Within thirty (30) days after the date of any payment of Payment
Taxes or Other Taxes, the applicable Borrower shall furnish to the Agent,
at its address referred to in Section 14.4, the original or certified copy
of a receipt evidencing payment thereof.
(h) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.6 shall survive the payment in full of all
Obligations hereunder and under the Notes.
2.7 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff or otherwise) on account of the
Loans by it in excess of its pro rata share of such payment as provided in this
Credit Agreement or its participation in Letters of Credit in excess of its pro
rata share of its participation therein as provided for in this Credit
Agreement, such Lender shall forthwith purchase from the other Lenders such
participations in the Loans made by them or in their participation in Letters of
Credit as shall be necessary to cause such purchasing Lender to share the excess
payment accruing to all Lenders in accordance with their respective ratable
shares as provided for in this Credit Agreement; provided, however, that if all
or any portion of such excess is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) or any interest or
other amount paid or payable by the purchasing Lender in respect to the total
amount so recovered. The Borrowers agree that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.7 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrowers in the amount of such
participation.
2.8 ALLOCATION OF PAYMENTS; PRO RATA TREATMENT.
(a) Allocation of Payments Prior to Event of Default; Payments
Generally. Each borrowing of Revolving Loans and any reduction of the
Revolving Credit Commitments shall be made pro rata according to the
respective Revolving Credit Commitment Percentages of the Lenders. Each
payment under this Agreement or any Note shall be applied, first, to any
Fees then due and owing pursuant to Article IV, second, to interest then
due and owing in respect of the Loans and, third, to principal then due and
owing hereunder and under the Loans. Each payment on account of any Fees
pursuant to Section Article IV shall be made pro rata in accordance with
the respective amounts due and owing (except the Issuing Bank Fees which
shall be payable solely to the Issuing Bank). Each payment (other than
prepayments) by a Borrower on account of principal of and interest on the
Loans initially advanced to such Borrower shall be allocated pro rata among
the Lenders in accordance with the respective principal amounts of the
Lenders' outstanding Loans. Payments made pursuant to Section 4.9 shall be
applied in accordance with such Section. Each voluntary and mandatory
prepayment on account of principal of the Loans shall be applied in
accordance with Section 2.2(a) or (b), as applicable.
(b) Allocation of Payments After Event of Default and Collateral
Proceeds. Notwithstanding any other provisions of this Credit Agreement or
any other Credit Document to the contrary, after the occurrence and during
the continuance of an Event of Default, all amounts collected or received
by the Agent or any Lender on account of the Obligations (whether in an
insolvency or bankruptcy case or proceeding or otherwise) or any other
amounts outstanding under any of the Credit Documents or in respect of the
Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees
actually incurred) of the Agent in connection with enforcing the
rights of the Lenders under the Credit
Documents, any protective advances made by the Agent with respect to
the Collateral under or pursuant to the terms of the Security
Documents;
SECOND, to payment of any fees owed to the Agent or an Issuing
Bank hereunder or under any other Credit Document;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable attorneys' fees
actually incurred) of each of the Lenders in connection with enforcing
its rights under the Credit Documents;
FOURTH, to the payment of all Obligations consisting of accrued
fees and interest payable to the Lenders hereunder, and including with
respect to any Lender Hedging Agreement, to the extent such Lender
Hedging Agreement is permitted by this Agreement, any fees, premiums
and scheduled periodic payments due under such Lender Hedging
Agreement and any interest accrued thereon;
FIFTH, to the payment of the outstanding principal amount of the
Loans and to the payment or cash collateralization of the outstanding
Letters of Credit Obligations (in an amount equal to 103% of the
aggregate amount thereof), pro rata, as set forth below and including
with respect to any Lender Hedging Agreement, to the extent such
Lender Hedging Agreement is permitted by this Agreement, any breakage,
termination or other payments due under such Lender Hedging Agreement
and any interest accrued on such payments;
SIXTH, to all liabilities and obligations now or hereafter
arising from or in connection with any Bank Products;
SEVENTH, to all other Obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied (x)
without regard to whether any such amount obtained from any one Borrower is
applied with respect to amounts initially advanced to another Borrower and (y)
in the numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that its then outstanding Revolving
Loans, Letters of Credit Obligations and obligations outstanding under the
Lender Hedging Agreements permitted by this Agreement bears to the aggregate
then outstanding Revolving Loans, Letters of Credit Obligations, and obligations
outstanding under the Lender Hedging Agreements) of amounts available to be
applied pursuant to clauses "THIRD", "FOURTH," "FIFTH," "SIXTH", and "SEVENTH"
above; (c) to the extent that any amounts available for distribution pursuant to
clause "FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Agent in a cash
collateral
account (which account shall be an interest bearing checking account) and
applied (x) first, to reimburse the Issuing Bank from time to time for any
drawings under such Letters of Credit and (y) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in clause
"SEVENTH" above in the manner provided in this Section 2.8 and in the Security
Documents.
2.9 EXTENSIONS AND CONVERSIONS.
Subject to the terms of Article V, each Borrower shall have the option, on
any Business Day, to extend such Borrower's existing Eurodollar Loans into a
subsequent permissible Interest Period, to convert Base Rate Loans into
Eurodollar Loans, to convert Eurodollar Loans into Base Rate Loans, to convert
Base Rate Loans into LMIR Loans, to convert LMIR Loans into Base Rate Loans, to
convert LMIR Loans to Eurodollar Loans, or to convert Eurodollar Loans into LMIR
Loans; provided, however, that (i) except as provided in Section 4.10,
Eurodollar Loans may be converted into Base Rate Loans or LMIR Loans only on the
last day of the Interest Period applicable thereto, (ii) Eurodollar Loans may be
extended, and Base Rate Loans or LMIR Loans may be converted into Eurodollar
Loans, only if no Default or Event of Default is in existence on the date of
extension or conversion, (iii) Loans extended as, or converted into, Eurodollar
Loans shall be subject to the terms of the definition of "Interest Period" and
shall be in such minimum amounts as provided in with respect to Revolving Loans,
Section 2.1(d)(i), and (iv) no more than five (5) separate Eurodollar Loans for
each Borrower shall be outstanding hereunder at any time. Each such extension or
conversion shall be effected by the applicable Borrower by giving a written
Notice of Extension/Conversion (or telephone notice promptly confirmed in
writing) to the Agent prior to 11:00 A.M. on the Business Day of, in the case of
the conversion of a Eurodollar Loan into a Base Rate Loan or LMIR Loan, and on
the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan or LMIR Loan into a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the applicable Interest Periods with respect thereto. Each request for extension
or conversion shall constitute a representation and warranty by the Borrowers of
the matters specified in Article V. In the event a Borrower fails to request
extension or conversion of any of such Borrower's Eurodollar Loans in accordance
with this Section, or any such conversion or extension is not permitted or
required by this Section, then such Loan shall be automatically converted into a
Base Rate Loan at the end of the Interest Period applicable thereto. The Agent
shall give each Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Loan.
2.10 REPLACEMENT OF LENDERS.
The Borrowers shall be permitted to replace with a replacement financial
institution satisfactory to the Agent (a) any Lender that requests reimbursement
for amounts owing or payments of additional amounts pursuant to Section 2.6, 4.7
or 4.9; (b) any Defaulting Lender; or (c) any Lender (other than Wachovia Bank,
National Association) that fails to consent to any proposed amendment,
modification, termination, waiver or consent with respect to any provision
hereof or of any other Credit Document that requires the unanimous approval of
all of the Lenders, the approval of all of the Lenders affected thereby or the
approval of a class of Lenders,
in each case in accordance with the terms of Section 14.9, so long as the
consent of the Required Lenders shall have been obtained with respect to such
amendment, modification, termination, waiver or consent; provided that (i) such
replacement does not conflict with any applicable law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, (ii) except with respect to clause (c) above, no Event of Default
shall exist at the time of such replacement, (iii) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (iv) with respect to
clause (c) above, the replacement financial institution shall approve the
proposed amendment, modification, termination, waiver or consent, (v) the
Borrowers shall be liable to such replaced Lender under Section 4.10 if any
Eurodollar Loan owing to such replaced Lender shall be purchased other than on
the last day of the Interest Period relating thereto, (vi) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 14.5(c) (provided that the Borrowers shall be obligated to pay the
registration and processing fee referred to therein), (vii) until such time as
such replacement shall be consummated, the Borrowers shall pay to the replaced
Lender all additional amounts (if any) required pursuant to Section 2.6, 4.7 or
4.9, as the case may be, (viii) in the case of clause (c) above, the Borrowers
provide at least three (3) Business Days' prior notice to such replaced Lender,
and (ix) any such replacement shall not be deemed to be a waiver of any rights
that the Borrowers, the Agent or any other Lender shall have against the
replaced Lender. In the event any replaced Lender fails to execute the
agreements required under Section 14.5 in connection with an assignment pursuant
to this Section 2.10, the Borrowers may, upon two (2) Business Days' prior
notice to such replaced Lender, execute such agreements on behalf of such
replaced Lender, and each Lender hereby irrevocably authorizes the Borrowers to
do so on its behalf. A Lender shall not be required to be replaced if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrowers to require such replacement cease to apply.
ARTICLE III
LETTERS OF CREDIT
3.1 ISSUANCE.
Subject to the terms and conditions hereof and of the Letter of Credit
Documents, if any, and any other terms and conditions which the Issuing Bank may
reasonably require, the Lenders will participate in the issuance by the Issuing
Bank from time to time of such Letters of Credit in Dollars from the Closing
Date until the Maturity Date as each Borrower may request, in a form acceptable
to the Issuing Bank; provided, however, that, as to all Borrowers, (a) all of
the Letter of Credit Obligations outstanding shall not at any time exceed the
Letter of Credit Committed Amount and (b) the sum of the aggregate principal
amount of all outstanding Revolving Loans plus all Letter of Credit Obligations
outstanding shall not at any time exceed the lesser of (i) the Revolving Credit
Committed Amount and (ii) the Aggregate Borrowing Base; provided further, that
(A) as to World Airways, the sum of the aggregate principal amount of World
Airways' outstanding Revolving Loans plus its Letter of Credit Obligations
outstanding shall not at any time exceed the lesser of (1) the Revolving Credit
Committed Amount and (2) the WA Borrowing Base and (B) as to North American, the
sum of the aggregate principal amount of
North American's outstanding Revolving Loans plus its Letter of Credit
Obligations outstanding shall not at any time exceed the lesser of (1) the
Revolving Credit Committed Amount and (2) the NA Borrowing Base. No Letter of
Credit shall, as originally issued or as extended, have an expiry date extending
beyond the Maturity Date; provided however, notwithstanding the forgoing, a
Letter of Credit may have an expiry date beyond the Maturity Date, if (i) the
Borrower shall surrender such Letter of Credit on the Maturity Date, or (ii)
deposit with the Agent cash collateral in the amount equal to 105% of the Letter
of Credit Obligations, to be held by the Agent until all of the Credit and
Collateral Termination Events have occurred. Each Letter of Credit shall comply
with the related Letter of Credit Documents. The issuance and expiry date of
each Letter of Credit shall comply with the related Letter of Credit Documents.
The issuance and expiry date of each Letter of Credit shall be a Business Day.
The Existing Letters of Credit issued by Wachovia shall be deemed to have been
issued hereunder on the Closing Date, and no request for issuance thereof need
be made.
3.2 NOTICE AND REPORTS.
The request for the issuance of a Letter of Credit shall be submitted by
the requesting Borrower to the Issuing Bank at least three (3) Business Days
prior to the requested date of issuance. The Issuing Bank will, upon request,
disseminate to each of the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the beneficiary, the face amount and the
expiry date as well as any payment or expirations which may have occurred.
3.3 PARTICIPATION.
Each Lender, upon issuance of a Letter of Credit, shall be deemed to have
purchased without recourse a risk participation from the Issuing Bank in such
Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its Revolving Credit Commitment Percentage of such Letter of
Credit, and shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Bank therefor
and discharge when due, its Revolving Credit Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the extent
that the Issuing Bank has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to the Issuing Bank its
Revolving Credit Commitment Percentage of such unreimbursed drawing pursuant to
the provisions of Section 3.4. The obligation of each Lender to so reimburse the
Issuing Bank shall be absolute and unconditional and shall not be affected by
the occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrowers to reimburse the Issuing Bank under any Letter of
Credit, together with interest as hereinafter provided.
3.4 REIMBURSEMENT.
In the event of any drawing under any Letter of Credit, the Issuing Bank
will promptly notify the applicable Borrower. Unless the applicable Borrower
shall promptly notify the Issuing Bank that such Borrower intends to otherwise
reimburse the Issuing Bank for such drawing, such
Borrower shall be deemed to have requested that the Lenders make a Revolving
Loan in the amount of the drawing as provided in Section 3.5 on the related
Letter of Credit, the proceeds of which will be used to satisfy the related
reimbursement obligations. Each Borrower promises to reimburse the Issuing Bank
on the day of drawing under any of its Letters of Credit (either with the
proceeds of a Revolving Loan obtained hereunder or otherwise) in same day funds.
If such Borrower shall fail to reimburse the Issuing Bank as provided
hereinabove, the unreimbursed amount of such drawing shall bear interest at a
per annum rate equal to the Base Rate plus the sum of (i) the Applicable
Percentage for Base Rate Loans and (ii) two percent (2%). Each Borrower's
reimbursement obligations hereunder shall be absolute and unconditional under
all circumstances irrespective of any rights of setoff, counterclaim or defense
to payment such Borrower may claim or have against the Issuing Bank, the Agent,
the Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of such
Borrower to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Bank will promptly notify
the other Lenders of the amount of any unreimbursed drawing and each Lender
shall promptly pay to the Agent for the account of the Issuing Bank in Dollars
and in immediately available funds, the amount of such Lender's Revolving Credit
Commitment Percentage of such unreimbursed drawing. Such payment shall be made
on the Business Day such notice is received by such Lender from the Issuing Bank
if such notice is received at or before 2:00 P.M. otherwise such payment shall
be made at or before 12:00 Noon on the Business Day next succeeding the day such
notice is received. If such Lender does not pay such amount to the Issuing Bank
in full upon such request, such Lender shall, on demand, pay to the Agent for
the account of the Issuing Bank interest on the unpaid amount during the period
from the date of such drawing until such Lender pays such amount to the Issuing
Bank in full at a rate per annum equal to, if paid within two (2) Business Days
of the date that such Lender is required to make payments of such amount
pursuant to the preceding sentence, the Federal Funds Rate and thereafter at a
rate equal to the Base Rate. Each Lender's obligation to make such payment to
the Issuing Bank, and the right of the Issuing Bank to receive the same, shall
be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the obligations of the Borrowers hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a Lender to the Issuing
Bank, such Lender shall, automatically and without any further action on the
part of the Issuing Bank or such Lender, acquire a participation in an amount
equal to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Bank) in the related unreimbursed drawing portion
of the Letter of Credit Obligation and in the interest thereon and in the
related Letter of Credit Documents, and shall have a claim against the Borrowers
with respect thereto.
3.5 REPAYMENT WITH REVOLVING LOANS.
On any day on which any Borrower shall have requested, or been deemed to
have requested, a Revolving Loan advance to reimburse a drawing under a Letter
of Credit, the Agent shall give notice to the Lenders that a Revolving Loan has
been requested or deemed requested by such Borrower to be made in connection
with a drawing under a Letter of Credit, in which case a Revolving Loan advance
comprised of Base Rate Loans or LMIR Loans (or Eurodollar Loans to the extent
such Borrower has complied with the procedures of Section 2.1(d)(i) with
respect thereto) shall be immediately made to such Borrower by all Lenders
(notwithstanding any termination of the Commitments pursuant to Section 11.2)
pro rata based on the respective Revolving Credit Commitment Percentages of the
Lenders (determined before giving effect to any termination of the Commitments
pursuant to Section 11.2) and the proceeds thereof shall be paid directly by the
Agent to the Issuing Bank for application to the respective Letter of Credit
Obligations. Each such Lender hereby irrevocably agrees to make its Revolving
Credit Commitment Percentage of each such Revolving Loan immediately upon any
such request or deemed request in the amount, in the manner and on the date
specified in the preceding sentence notwithstanding (i) the amount of such
borrowing may not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in Article V
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) failure for any such request or deemed request for Revolving Loan to be
made by the time otherwise required hereunder, (v) whether the date of such
borrowing is a date on which Revolving Loans are otherwise permitted to be made
hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event that
any Revolving Loan cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
bankruptcy or insolvency case or proceeding with respect to any Borrower), then
each such Lender hereby agrees that it shall forthwith purchase (as of the date
such borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrowers on or after such date and prior to such purchase)
from the Issuing Bank such participation in the outstanding Letter of Credit
Obligations as shall be necessary to cause each such Lender to share in such
Letter of Credit Obligations ratably (based upon the respective Revolving Credit
Commitment Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 11.2)), provided that at the
time any purchase of participation pursuant to this sentence is actually made,
the purchasing Lender shall be required to pay to the Issuing Bank, to the
extent not paid to the Issuing Bank by the applicable Borrower in accordance
with the terms of Section 3.4, interest on the principal amount of participation
purchased for each day from and including the day upon which such borrowing
would otherwise have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2) Business Days of the
date of the Revolving Loan advance, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
3.6 [INTENTIONALLY OMITTED.]
3.7 UNIFORM CUSTOMS AND PRACTICES.
The Issuing Bank may provide that the Letters of Credit shall be subject to
the UCP, in which case the UCP may be incorporated by reference therein and
deemed in all respects to be a part thereof.
3.8 INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(a) In addition to their other obligations under this Article III, the
Borrowers agree to protect, indemnify, pay and save the Issuing Bank
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Bank may incur or be subject to as
a consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Bank to honor a drawing under a
Letter of Credit as a result of Government Acts.
(b) As between the Borrowers and the Issuing Bank, the Borrowers shall
assume all risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. The Issuing Bank shall not be responsible: (i)
for the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the application
for and issuance of any Letter of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole
or in part, that may prove to be invalid or ineffective for any reason;
(iii) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (iv) for any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under a Letter of Credit or of the proceeds thereof; and (v) for
any consequences arising from causes beyond the control of the Issuing
Bank, including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Bank's rights
or powers hereunder.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the
Issuing Bank, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Issuing Bank under any resulting liability to any Borrower. It is the
intention of the parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Bank against any and all risks
involved in the issuance of the Letters of Credit, all of which risks are
hereby assumed by the Borrowers, including, without limitation, any and all
Government Acts. The Issuing Bank shall not, in any way, be liable for any
failure by the Issuing Bank or anyone else to pay any drawing under any
Letter of Credit as a result of any Government Acts or any other cause
beyond the control of the Issuing Bank.
(d) Nothing in this Section 3.8 is intended to limit the reimbursement
obligations of the Borrowers contained in Section 3.4. The obligations of
the Borrowers under this Section 3.8 shall survive the termination of this
Credit Agreement. No act or omission of any current or prior beneficiary of
a Letter of Credit shall in any way affect or impair the rights of the
Issuing Bank to enforce any right, power or benefit under this Credit
Agreement.
(e) Notwithstanding anything to the contrary contained elsewhere in
this Section 3.8, the Borrowers shall have no obligation to indemnify the
Issuing Bank in respect of any liability incurred by the Issuing Bank (i)
arising solely out of the gross negligence or willful misconduct of the
Issuing Bank, as determined by a court of competent jurisdiction, or (ii)
caused by the Issuing Bank's failure to pay under any Letter of Credit
after presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law, regulation,
court order or decree.
3.9 RESPONSIBILITY OF ISSUING BANK.
It is expressly understood and agreed that the obligations of the Issuing
Bank hereunder to the Lenders are only those expressly set forth in this Credit
Agreement and that the Issuing Bank shall be entitled to assume that the
conditions precedent set forth in Article III or V have been satisfied unless it
shall have acquired actual knowledge that any such condition precedent has not
been satisfied; provided, however, that nothing set forth in this Article III
shall be deemed to prejudice the right of any Lender to recover from the Issuing
Bank any amounts made available by such Lender to the Issuing Bank pursuant to
this Article III in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit constituted
gross negligence or willful misconduct on the part of the Issuing Bank.
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS.
In the event of any conflict between this Credit Agreement and any Letter
of Credit Document (including any letter of credit application), this Credit
Agreement shall control.
ARTICLE IV
INTEREST AND FEES
4.1 INTEREST ON LOANS.
(a) Subject to the provisions of Section 4.2, the Loans shall bear
interest as follows:
(i) Base Rate Loans. During such periods as the Loans shall be
comprised of Base Rate Loans, each such Base Rate Loan shall bear interest
at a per annum rate equal to the sum of the Base Rate plus the Applicable
Percentage;
(ii) LMIR Loans. During such periods as the Loans shall be comprised
of LMIR Loans, each such LMIR Loan shall bear interest at a per annum rate
equal to the sum of the LMIR Rate plus the Applicable Percentage; and
(iii) Eurodollar Loans. During such periods as the Loans shall be
comprised of Eurodollar Loans, each such Eurodollar Loan shall bear
interest at a per annum rate equal to the sum of the Eurodollar Rate plus
the Applicable Percentage.
(b) Any other term or provision hereof to the contrary
notwithstanding, all Daily Rate Loans of a Borrower shall bear interest at
the same rate, meaning, for example, that all Daily Rate Loans for such
Borrower shall, at any given time, be either Base Rate Loans or LMIR Loans.
Any request by a Borrower for the making of a Daily Rate Loan at a rate of
interest which is different than the rate of interest of the
outstanding Daily Rate Loans of such Borrower bear shall be deemed to be a
request made pursuant to Section 2.9 to convert all outstanding Daily Rate
Loans to the requested rate of interest.
(c) Interest on the Loans shall be payable in arrears on each Interest
Payment Date.
4.2 INTEREST AFTER EVENT OF DEFAULT.
(a) If any Event of Default under Section 11.1(f) shall have occurred
and be continuing, the Borrowers shall pay interest on the principal amount
of all outstanding Obligations hereunder at the Default Rate.
(b) Upon the request of the Agent or the Required Lenders, while any
other Event of Default exists, (i) the Borrowers shall pay interest on the
principal amount of all outstanding Obligations hereunder at the Default
Rate and (ii) all Letter of Credit Fees and other fees payable pursuant to
Section 4.5 shall accrue at a per annum rate 2% greater than the rate which
would otherwise be applicable.
Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be due and payable upon demand.
4.3 UNUSED LINE FEE.
At the end of each fiscal quarter the Borrowers shall pay to the Agent for
the benefit of the Lenders the Unused Line Fee due in respect of such calendar
quarter.
4.4 LENDERS' FEES.
On the Closing Date the Borrowers shall pay to each Lender the Lenders'
Fees.
4.5 LETTER OF CREDIT FEES.
(a) Letter of Credit Fee. In consideration of the issuance of Letters
of Credit hereunder, the Borrowers promise to pay to the Agent for the
account of each Lender a fee (the "Letter of Credit Fee") on such Lender's
Revolving Credit Commitment Percentage of the average daily maximum amount
available to be drawn under each such Letter of Credit computed at a per
annum rate for each day from the date of issuance (or the Closing Date, as
to the Existing Letters of Credit issued by Wachovia) to the date of
expiration equal to (i) 1.25% for the first $10,000,000 of outstanding
Letters of Credit, (ii) 1.75% for Letters of Credit amounts outstanding in
excess of $10,000,000, to the extent of such excess, and (iii),
notwithstanding anything in subsection (i) or (ii) above to the contrary,
0.75% for all cash-collateralized outstanding Letters of Credit, to the
extent of such cash-collateralization. The Letter of Credit Fee will be
payable monthly in arrears on the last day of each calendar month.
(b) Issuing Bank Fees. In addition to the Letter of Credit Fee payable
pursuant to clause (a) above, at any time there is more than one Lender
hereunder, each
of the Borrowers promises to pay to the Issuing Bank for its own account
without sharing by the other Lenders letter of credit fronting and
negotiation fees in the amount of 0.125% of the amount of each such Letter
of Credit requested by a Borrower and the customary charges from time to
time of the Issuing Bank with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings under, each
such Letter of Credit (collectively, the "Issuing Bank Fees").
4.6 AUTHORIZATION TO CHARGE ACCOUNT.
The Borrowers hereby authorize the Agent to charge any of the Borrowers'
accounts or the Borrowers' Revolving Loan accounts with the amount of all
payments and fees due hereunder to the Lenders, the Agent and the Issuing Bank
as and when such payments become due. The Borrowers confirm that any charges
which the Agent may so make to the Borrowers' Revolving Loan accounts or such
other accounts as herein provided will be made as an accommodation to the
Borrowers and solely at the Agent's discretion. The Agent shall provide the
Borrowers with notice of any such charges.
4.7 INDEMNIFICATION IN CERTAIN EVENTS.
If after the Closing Date, either (a) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to any Funding Bank
or any of the Lenders, or (b) a Funding Bank or any of the Lenders complies with
any future guideline or request from any central bank or other Governmental
Authority or (c) a Funding Bank or any of the Lenders determines that the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof has or would have the effect
described below, or a Funding Bank or any of the Lenders complies with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, and in the
case of any event set forth in this clause (c), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate
of return on any of the Lenders' capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Funding
Bank's or Lenders' policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, and the result of any of the foregoing
events described in clauses (a), (b) or (c) is or results in an increase in the
cost to any of the Lenders of funding or maintaining the Revolving Credit
Committed Amount, the Revolving Loans, or the Letters of Credit, then the
Borrowers shall from time to time upon demand by the Agent, pay to the Agent
additional amounts sufficient to indemnify the Lenders against such increased
cost. A certificate as to the amount of such increased cost shall be submitted
to the Borrowers by the Agent and shall be conclusive and binding absent
manifest error. Notwithstanding anything in the above to the contrary, the
Borrowers shall not be required to indemnify the Lenders under this Section 4.7
for events occurring more than one hundred twenty (120) days prior to the
Agent's demand for any such additional amount.
4.8 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, (a) the Agent shall have
determined in good faith (which determination shall be conclusive and binding
upon the Borrowers) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, (b) the Agent has received notice from
the Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Eurodollar Loans during such Interest
Period, or (c) Dollar deposits in the principal amounts of the Eurodollar Loans
to which such Interest Period is to be applicable are not generally available in
the London interbank market, the Agent shall give telecopy or telephonic notice
thereof to the Borrowers and the Lenders as soon as practicable thereafter, and
will also give prompt written notice to the Borrowers when such conditions no
longer exist. If such notice is given (i) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans,
(ii) any Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted to or
continued as Base Rate Loans and (iii) each outstanding Eurodollar Loan shall be
converted, on the last day of the then-current Interest Period thereof, to Base
Rate Loans. Until such notice has been withdrawn by the Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrowers
have the right to convert Base Rate Loans to Eurodollar Loans.
4.9 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority or in
the interpretation or application thereof occurring after the Closing Date shall
make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrowers and the Agent (which
notice shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall
forthwith be canceled and, until such time as it shall no longer be unlawful for
such Lender to make or maintain Eurodollar Loans, such Lender shall then have a
commitment only to make a Base Rate Loan when a Eurodollar Loan is requested and
(c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrowers shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 4.10.
4.10 FUNDING INDEMNITY.
The Borrowers, jointly and severally, promise to indemnify each Lender and
to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by any Borrower in making a
borrowing of, conversion into or extension of Eurodollar Loans after
such Borrower has given a notice requesting the same in accordance with the
provisions of this Credit Agreement, (b) default by any Borrower in making any
prepayment of a Eurodollar Loan after such Borrower has given a notice thereof
in accordance with the provisions of this Credit Agreement, and (c) the making
of a prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. With respect to Eurodollar Loans, such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or extended, for the period from the date of such prepayment
or of such failure to borrow, convert or extend to the last day of the
applicable Interest Period (or, in the case of a failure to borrow, convert or
extend, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. This covenant shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
ARTICLE V
CONDITIONS PRECEDENT
The obligation of the Lenders to make any Revolving Loan or of the Issuing
Bank to issue any Letter of Credit hereunder is subject to the satisfaction of,
or waiver of, immediately prior to or concurrently with the making of such
Revolving Loan or issuance of such Letter of Credit the following conditions
precedent:
5.1 CLOSING CONDITIONS.
The obligation of each Lender to make the Loans and/or of the Issuing
Bank to issue Letters of Credit hereunder shall be subject to the satisfaction
or waiver by the Agent in its reasonable discretion, on or prior to the Closing
Date, of the following conditions precedent:
(a) Executed Credit Documents. Receipt by the Agent of duly executed
counterparts of: this Credit Agreement; any requested Notes; the Guaranty
Agreement; the Contribution Agreement; the Collateral Disclosure
Certificate(s), the Security Documents; and all other Credit Documents,
each in form and substance acceptable to the Lenders in their sole
discretion.
(b) Organizational Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates of
incorporation or other formation or charter documents of each Credit Party
certified to be true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of its
incorporation or organization and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the Closing
Date.
(ii) Bylaws. A copy of the bylaws or operating agreement or similar
agreement of each Credit Party certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of the Closing
Date.
(iii) Resolutions. Copies of resolutions of the Board of Directors or
similar managing body of each Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of such Credit Party to be true and
correct and in force and effect as of the Closing Date.
(iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to each Credit Party certified as
of a recent date by the appropriate Governmental Authorities of the state
or other jurisdiction of incorporation or organization and each other
jurisdiction in which the failure to so qualify and be in good standing
could reasonably be expected to have a Material Adverse Effect and (ii) to
the extent available, a certificate indicating payment of all corporate or
other franchise taxes certified as of a recent date by the appropriate
taxing Governmental Authorities.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and correct as
of the Closing Date.
(c) Financial Statements. Receipt by the Agent and the Lenders of (a)
the financial statements and the accountants' unqualified opinion and
management letter prepared in connection therewith described in Section
6.6, (b) the Forecasts, and (c) such other information relating to the
Credit Parties as the Agent may reasonably require in connection with the
structuring and syndication of credit facilities of the type described
herein.
(d) Opinions of Counsel. Receipt by the Agent of an opinion, or
opinions (which shall cover, among other things, authority, legality,
validity, binding effect, enforceability, absence of conflict with existing
contracts and constitutional or charter documents, and attachment and
perfection of liens), satisfactory to the Agent, addressed to the Agent and
the Lenders and dated the Closing Date, from legal counsel to the Credit
Parties.
(e) Personal Property Collateral. The Agent shall have received:
(i) searches of UCC filings in the jurisdiction of organization of
each Credit Party, the chief executive office of each Credit Party and each
jurisdiction where any Collateral is located or where a filing could have
been properly made by a creditor of a Credit Party, copies of the financing
statements on file in such jurisdictions and evidence that no Liens exist
other than Permitted Liens;
(ii) UCC financing statements for each appropriate jurisdiction as is
necessary, in the Agent's sole discretion, to perfect the Agent's security
interest in the Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Agent in order to perfect the Agent's security
interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock pledged to
the Agent pursuant to the Pledge Agreement, together with duly executed in
blank undated stock powers attached thereto;
(v) Deposit Account Control Agreements with respect to all deposit
accounts of the Credit Parties listed on Schedule 6.35, except as otherwise
provided in Section 9.10;
(vi) Securities Account Control Agreements with respect to all
investment accounts of the Credit Parties listed on the Collateral
Disclosure Certificate;
(vii) Funds Letter Agreements with respect to Valley National Bank and
the United Parcel Service;
(viii) all instruments and chattel paper in the possession of any of
the Credit Parties, together with allonges or assignments as may be
necessary or appropriate to perfect the Agent's security interest in the
Collateral to the extent requested under the Security Documents;
(ix) duly executed consents as are necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the Collateral,
including, without limitation, such Acknowledgment Agreements from lessors
of real property, warehousemen and other third parties as the Agent may
require;
(x) searches of FAA lien filings in Oklahoma City, Oklahoma, and
evidence that no Liens exist other than Permitted Liens; and
(xi) evidence satisfactory to the Agent that all filings or other
actions necessary under the FAA Act to perfect the Agent's security
interest in Spare Parts have been completed;
(f) Field Examinations. All required field exams shall have been
completed to the Agent's satisfaction.
(g) Priority of Liens. The Agent shall have received satisfactory
evidence that (i) the Agent, on behalf of the Lenders, holds a perfected,
first priority Lien on all Collateral (subject to clause (ii)), including,
but not limited to, Spare Parts, and (ii) none of the Collateral is subject
to any other Liens other than Permitted Liens.
(h) Opening Borrowing Base Certificate. Receipt by the Agent of a
Borrowing Base Certificate for each Borrower as of the Closing Date,
substantially in the form of Exhibit L and certified by a Responsible
Officer of such Borrower to be true and correct as of the Closing Date.
(i) Evidence of Insurance. Receipt by the Agent of copies of insurance
policies or certificates of insurance of the Credit Parties evidencing
liability and property insurance meeting the requirements set forth in the
Credit Documents, including, without limitation, naming the Agent as loss
payee on behalf of the Lenders as to property
insurance and each Lender as additional insured and copies of any credit
insurance policies insuring foreign Accounts to be included as Eligible
Accounts Receivable.
(j) Corporate Structure. The corporate capital and ownership structure
of the Parent and its Subsidiaries shall be as described in Schedule 6.9.
(k) Governmental, Shareholder and Third Party Consents. Receipt by the
Agent of evidence that all governmental, shareholder and third party
consents and approvals necessary in connection with the transactions and
the related financings contemplated hereby and expiration of all applicable
waiting periods without any action being taken by any authority that could
restrain, prevent or impose any material adverse conditions on such
transactions or that could seek or threaten any of the foregoing, and no
law or regulation shall be applicable which in the judgment of the Agent
could have such effect.
(l) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against any Credit Party or its
assets that could reasonably be expected to (i) have a Material Adverse
Effect or (ii) affect any transaction contemplated by this Credit Agreement
or any other Credit Document or the ability of the Credit Parties to
perform their respective obligations under the Credit Documents.
(m) Other Indebtedness. Receipt by the Agent of evidence that, after
giving effect to the making of the Loans made on the Closing Date, the
Credit Parties shall have no Funded Indebtedness other than the Permitted
Indebtedness.
(n) Solvency Certificate. Receipt by the Agent of the Solvency
Certificate.
(o) Officer's Certificates. Receipt by the Agent of a certificate or
certificates executed by a Responsible Officer of the Parent as of the
Closing Date stating that (i) after giving effect to the making of the
Loans and application of the proceeds thereof, each Credit Party is in
compliance with all existing financial obligations, (ii) all governmental,
shareholder and third party consents and approvals, if any, with respect to
the Credit Documents and the transactions contemplated thereby have been
obtained, (iii) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Credit Party or any transaction
contemplated by the Credit Documents, if such action, suit, investigation
or proceeding could reasonably be expected to have a Material Adverse
Effect and (iv) immediately after giving effect to this Credit Agreement,
the other Credit Documents and all the transactions contemplated therein to
occur on such date, (A) each of the Credit Parties is solvent, (B) no
Default or Event of Default exists, (C) all representations and warranties
contained herein and in the other Credit Documents are true and correct in
all material respects, and (D) if the Closing Date occurs during a
Financial Covenant Testing Period, the Borrowers are in compliance with
each of the financial covenants set forth in Article VIII.
(p) Fees and Expenses. Payment by the Borrowers of all fees and
expenses owed by them to the Lenders and the Agent, including, without
limitation, the Lenders' Fees.
(q) Sources and Uses; Payment Instructions. Receipt by the Agent of
(a) a statement of sources and uses of funds covering all payments
reasonably expected to be made by the Borrowers in connection with the
transactions contemplated by the Credit Documents to be consummated on the
Closing Date, including an itemized estimate of all fees, expenses and
other closing costs and (b) payment instructions with respect to each wire
transfer to be made by the Agent on behalf of the Lenders or the Parent or
the Borrowers on the Closing Date setting forth the amount of such
transfer, the purpose of such transfer, the name and number of the account
to which such transfer is to be made, the name and ABA number of the bank
or other financial institution where such account is located and the name
and telephone number of an individual that can be contacted to confirm
receipt of such transfer.
(r) Account Designation Letter. Receipt by the Agent of an Account
Designation Letter.
(s) Material Adverse Change. (i) Except as disclosed to the Agent in
writing, no Material Adverse Change, or development reasonably likely to
have a Material Adverse Effect, shall have occurred since December 31,
2004, (ii) no occurrence or event which is reasonably likely to have a
Material Adverse Effect shall have occurred since December 31, 2004, and be
continuing and (iii) on or prior to the Closing Date, there shall not have
occurred a substantial impairment of the financial markets generally which,
in the opinion of the Required Lenders, has materially and adversely
affected the transactions contemplated hereby.
(t) Minimum Excess Borrowing Base Availability. Receipt by the Agent
of evidence satisfactory to the Agent that the Borrowers have Excess
Borrowing Base Availability of at least $3,000,000 as of the Closing Date,
after giving effect to the payment of fees and expenses associated with the
closing of this Credit Agreement, the making of the Loans and other
extensions of credit and the application of the proceeds thereof to be made
on the Closing Date and after deductions for past due payables and other
obligations.
(u) USA Patriot Act Certificate. Receipt by the Agent, at least five
(5) Business Days prior to the Closing Date, of a certificate reasonably
satisfactory to the Agent, for benefit of itself and the Lenders, provided
by the Parent that sets forth information required by the USA Patriot Act
including, without limitation, the identity of the Credit Parties, the name
and address of the Credit Parties and other information that will allow the
Agent or any Lender, as applicable, to identify the Credit Parties in
accordance with the USA Patriot Act.
(v) Collection Accounts. Agent shall be satisfied that the Credit
Parties have established such Collection Accounts and Cash Concentration
Accounts as required by
this Credit Agreement, and shall be otherwise satisfied with the Credit
Parties' cash management structure.
(w) Labor Matters. Agent shall have received and be satisfied with all
documents or other due diligence materials requested by Agent in connection
with the Credit Parties' relationship with their employees' unions.
(x) Aircraft Lessor Intercreditor Agreements. Agent shall have
received and be satisfied with intercreditor agreements with such aircraft
lessors as the Agent deems necessary in its reasonable discretion.
(y) FAA Release. Agent shall have received and be satisfied with a
release executed by Citibank, N.A., in form and substance sufficient for
filing with the FAA releasing all of Citibank, N.A.'s, interest in the
Credit Party's Spare Parts.
(i) Payoff Letter. Agent shall have received and be satisfied with a
copy of a payoff letter addressed to the Credit Parties from Citibank,
N.A., with respect to the ATSB loan, which letter shall, among other
things, require UCC termination statements for each jurisdiction in which
Citibank, N.A., as a secured party, has filed a UCC financing statement
naming any Credit Party as a debtor.
(z) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, without limitation, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Credit Parties.
5.2 CONDITION TO ALL LOANS AND LETTERS OF CREDIT.
(a) Renewal of Representations and Warranties; No Default or Event of
Default; No Material Adverse Change. On the date of the making of any
Revolving Loan or the issuance of any Letter of Credit, both before and
after giving effect thereto and to the application of the proceeds
therefrom, the following statements shall be true to the satisfaction of
the Agent (and each request for a Revolving Loan and request for a Letter
of Credit, and the acceptance by the Borrower of the proceeds of such
Revolving Loan or issuance of such Letter of Credit, shall constitute a
representation and warranty by the Borrowers that on the date of such
Revolving Loan or issuance of such Letter of Credit before and after giving
effect thereto and to the application of the proceeds therefrom, such
statements are true):
(i) the representations and warranties contained in this Credit
Agreement are true and correct in all material respects on and as of the
date of such Revolving Loan or issuance of such Letter of Credit as though
made on and as of such date and as updated as provided herein, except to
the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall
have been true and complete on and as of such earlier date);
(ii) no event has occurred and is continuing, or would result from
such Revolving Loan or issuance of such Letter of Credit or the application
of the proceeds thereof, which would constitute a Default or an Event of
Default under this Credit Agreement; and
(iii) no Material Adverse Change, or development reasonably likely to
have a Material Adverse Effect shall have occurred and be continuing.
(b) Notice of Borrowing and Borrowing Base Certificate. On the date of
the making of any Revolving Loan, the Agent shall have received a Notice of
Borrowing and Borrowing Base Certificate to the extent such Notice of
Borrowing and Borrowing Base Certificate is required to be given with
respect to the making of such Revolving Loan.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement and the
Issuing Bank to issue the Letters of Credit, and to make available the credit
facilities contemplated hereby, each Borrower and (by execution and delivery of
the Guaranty Agreement or of a joinder thereto and incorporation by reference
therein) each Guarantor, if any, hereby represents and warrants to the Lenders
and the Issuing Bank as of the Closing Date, the Closing Date and on the date of
each extension of credit hereunder, as follows:
6.1 ORGANIZATION AND QUALIFICATION.
Such Credit Party and each of its Subsidiaries (i) is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has the power and
authority to own its properties and assets and to transact the businesses in
which it is presently, or proposes to be, engaged, and (iii) is duly qualified
and is authorized to do business and is in good standing in every jurisdiction
in which the failure to be so qualified could reasonably be expected to have a
Material Adverse Effect. Schedule 6.1 contains a true, correct and complete list
of all jurisdictions in which such Credit Party and its Subsidiaries are
qualified to do business as a domestic or foreign corporation or domestic or
foreign limited liability company as of the Closing Date, in addition to, such
Credit Party's organizational number, if any, assigned by such Credit Party's
jurisdiction of organization.
6.2 SOLVENCY.
The fair saleable value of such Credit Party's assets exceeds all known
liabilities, including those to be incurred pursuant to this Credit Agreement.
Such Credit Party (i) does not have unreasonably small capital in relation to
the business in which it is or proposes to be engaged or (ii) has not incurred,
and does not believe that it will incur after giving effect to the transactions
contemplated by this Credit Agreement, debts beyond its ability to pay such
debts as they become due.
6.3 LIENS; INVENTORY; SPARE PARTS.
There are no Liens in favor of third parties with respect to any of the
Collateral, including, without limitation, with respect to the Inventory or
Spare Parts, wherever located, other than Permitted Liens. To the best of such
Credit Party's knowledge, no lessor, warehouseman, or aircraft lessor of such
Credit Party has been granted any Lien with respect to the Inventory or Spare
Parts maintained by such Credit Party at the property of any such lessor or
warehousemen or on aircraft leased by such aircraft lessor. Upon the proper
filing of financing statements and the proper recordation of other applicable
documents with the appropriate filing or recordation offices in each of the
necessary jurisdictions, the security interests granted pursuant to the Credit
Documents constitute and shall at all times constitute valid and enforceable
first, prior and perfected Liens on the Collateral (other than Permitted Liens
and Collateral for which a certificate of title has been issued to the extent
the Agent has not noted its Lien thereon). The Credit Parties are or will be at
the time additional Collateral is acquired by them, the absolute owners of the
Collateral with full right to pledge, sell, consign, transfer and create a Lien
therein, free and clear of any and all Liens in favor of third parties, except
Permitted Liens. The Credit Parties will at their expense warrant, until payment
in full of the Obligations and termination of the Commitments, and, at the
Agent's request, defend the Collateral from any and all Liens (other than
Permitted Liens) of any third party. The Credit Parties will not grant, create
or permit to exist, any Lien upon the Collateral, or any proceeds thereof, in
favor of any third party (other than Permitted Liens).
6.4 NO CONFLICT.
The execution and delivery by such Borrower of this Credit Agreement and by
the Credit Parties of each of the other Credit Documents executed and delivered
in connection herewith and the performance of the obligations of such Credit
Party hereunder and thereunder, as applicable, and the consummation by such
Credit Party of the transactions contemplated hereby and thereby: (i) are within
the corporate or other organizational, as the case may be, powers of such Credit
Party; (ii) are duly authorized by the Board of Directors or similar managing
body of such Credit Party; (iii) are not in contravention of the terms of the
organizational documents of such Credit Party or of any material indenture,
contract, lease, agreement instrument or other commitment to which such Credit
Party is a party or to its knowledge by which such Credit Party or any of its
properties are bound; (iv) do not require the consent, registration or approval
of any Governmental Authority or any other Person (except such as have been or
may be duly obtained, made or given from time to time, and are in full force and
effect); (v) do not contravene in any material respect any statute, law,
ordinance regulation, rule, order or other governmental restriction applicable
to or binding upon such Credit Party; and (vi) will not, except as contemplated
herein for the benefit of the Agent on behalf of the Lenders, result in the
imposition of any Liens upon any property of such Credit Party under any
existing indenture, mortgage, deed of trust, loan or credit agreement or other
material agreement or instrument to which such Credit Party is a party or to its
knowledge by which it or any of its property may be bound or affected.
6.5 ENFORCEABILITY.
The Credit Agreement and all of the other Credit Documents, as applicable,
are the legal, valid and binding obligations of such Credit Party, and with
respect to those Credit Documents executed and delivered by any other
Subsidiary, of each such other Subsidiary, and are enforceable against such
Credit Party and such other Subsidiaries, as the case may be, in accordance with
their terms except as such enforceability may be limited by (i) the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and (ii) general principles of
equity.
6.6 FINANCIAL DATA; FORECASTS; MATERIAL ADVERSE CHANGE.
(a) The Parent has furnished to the Lenders the following financial
statements (the "Financials") and the Forecasts referenced below: (i) the
consolidated balance sheet of the Parent as of, and consolidated statements
of income, retained earnings and changes in financial position for the
fiscal year ended December 31, 2004, audited by independent certified
public accountants, (ii) the unaudited consolidated balance sheet of the
Parent as of, and consolidated statement of income, retained earnings and
changes in financial position for the period ending September 30, 2005,
prepared by the chief financial officer of the Parent, (iii) an unaudited
opening consolidated balance sheet of the Parent dated December 31, 2005,
prepared by the chief financial officer of the Parent and (iv) yearly
financial and operational forecasts for fiscal year 2006 (the "Forecasts").
The Financials are and the historical financial statements to be furnished
to the Lenders in accordance with Section 7.1 below will be in accordance
with the books and records of the Parent and fairly present the financial
condition of each of the Credit Parties at the dates thereof and the
results of operations for the periods indicated (subject, in the case of
unaudited financial statements, to normal year-end adjustments), and such
financial statements have been and will be prepared in conformity with GAAP
consistently applied throughout the periods involved. The Forecasts have
been prepared in good faith based on reasonable assumptions at the time
made.
(b) Since the date of the Financials, except as disclosed in the
Parent's filings with the SEC, there have been no changes in the condition,
financial or otherwise, of such predecessor corporations or any of the
Credit Parties as shown on the respective balance sheets of such
predecessor corporations and each of the Credit Parties described above,
except (i) as contemplated herein or disclosed to the Agent in writing and
(ii) for changes which individually or in the aggregate would not
constitute a Material Adverse Change.
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
The Credit Parties' states of domicile, principal places of business and
chief executive offices are set forth in Schedule 6.7, and the books and records
(other than records located on Collateral or aircraft leased or operated by the
Credit Parties) of the Credit Parties and all chattel paper and all records of
accounts are located at the principal places of business and chief executive
offices of the Credit Parties. There is no jurisdiction in which any Credit
Party has any Collateral (except for vehicles, Inventory held for shipment by
third Persons, Inventory in transit or on aircraft leased or operated by the
Credit Parties), Inventory held for processing by third
Persons, or immaterial quantities of assets, equipment or Inventory) other than
those jurisdictions listed on Schedule 6.7. Schedule 6.7 is a true, correct and
complete list of (i) the legal names and addresses of each warehouseman at which
Inventory or Spare Parts are stored and of each aircraft lessor, (ii) the
address of the chief executive offices of the Credit Parties and each of their
Subsidiaries, and (iii) the address of all offices where records and books of
account of the Credit Parties and each of their Subsidiaries are kept. None of
the receipts received by any of the Credit Parties from any warehouseman states
that the goods covered thereby are to be delivered to bearer or to the order of
a named person or to a named person and such named person's assigns.
6.8 FICTITIOUS BUSINESS NAMES.
No Credit Party has used any corporate or fictitious name during the five
(5) years preceding the date hereof, other than the corporate name shown on its
or such Credit Party's articles or certificate of incorporation or formation and
as set forth on Schedule 6.8.
6.9 SUBSIDIARIES.
The only direct or indirect Subsidiaries of the Parent are those listed on
Schedule 6.9. The Persons identified on Schedule 6.9 are the record and
beneficial owner of all of the shares of Capital Stock of each of the
Subsidiaries listed on Schedule 6.9 as being owned by thereby, there are no
proxies, irrevocable or otherwise, with respect to such shares, and no equity
securities of any of such Subsidiaries are or may become required to be issued
by reason of any options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any Capital Stock of any such
Person, and there are no contracts, commitments, understandings or arrangements
by which any such Person is or may become bound to issue additional shares of
its Capital Stock or securities convertible into or exchangeable for such
shares. All of such shares are owned by such Persons free and clear of any Liens
other than Permitted Liens.
6.10 NO JUDGMENTS OR LITIGATION.
Except as set forth on Schedule 6.10, no judgments, orders, writs or
decrees are outstanding against such Credit Parties or any of its Subsidiaries
nor is there now pending or, to the best of such Credit Party's knowledge after
diligent inquiry, threatened any litigation, contested claim, investigation,
arbitration, or governmental proceeding by or against such Credit Party or any
of its Subsidiaries except judgments and pending or threatened litigation,
contested claims, investigations, arbitrations and governmental proceedings
which could not reasonably be expected to have a Material Adverse Effect.
6.11 NO DEFAULTS.
Neither such Credit Party nor any of its Subsidiaries is in default under
any term of any indenture, contract, lease, agreement, instrument or other
commitment to which any of them is a party or by which any of them is bound
which default has had or could be reasonably expected to have a Material Adverse
Effect. Such Credit Party knows of no (other than as disclosed under Section
6.10) dispute regarding any indenture, contract, lease, agreement, instrument or
other commitment which could reasonably be expected to have a Material Adverse
Effect.
6.12 NO EMPLOYEE DISPUTES.
Except as described on Schedule 6.20, there are no controversies pending
or, to the best of such Credit Party's knowledge after diligent inquiry,
threatened between such Credit Party or any of its Subsidiaries and any of their
respective employees, other than those arising in the ordinary course of
business which could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.13 COMPLIANCE WITH LAW.
Except with respect to (i) the Parent's failure to timely make certain of
its 2005 securities filings with the SEC and the resulting violations of NASDAQ
rules and regulations, (ii) the matters relating to the Parent and the Borrowers
discussed in the Parent's Form 10-Q for the third fiscal quarter 2005 as filed
with the SEC, (iii) the litigation matters identified in Schedule 6.10 to the
Credit Agreement, and (iv) the anticipated inability of Parent to timely file
with the SEC the Parent's security filings as they come due for the first fiscal
quarter in 2006: (a) neither such Credit Party nor any of its Subsidiaries has
violated or failed to comply with any statute, law, ordinance, regulation, rule
or order of any foreign, federal, state or local government, or any other
Governmental Authority or any self regulatory organization, or any judgment,
decree or order of any court, applicable to its business or operations except
where the aggregate of all such violations or failures to comply could not
reasonably be expected to have a Material Adverse Effect; (b) the conduct of the
business of such Credit Party and each of its Subsidiaries is in conformity with
all securities, commodities, energy, public utility, zoning, building code,
health, OSHA and environmental requirements and all other foreign, federal,
state and local governmental and regulatory requirements and requirements of any
self regulatory organizations, except where such non-conformities could not
reasonably be expected to have a Material Adverse Effect; and (c) neither such
Credit Party nor any of its Subsidiaries has received any notice to the effect
that, or otherwise been advised that, it is not in compliance with, and neither
such Credit Party nor any of its Subsidiaries has any reason to anticipate that
any currently existing circumstances are likely to result in the violation of
any such statute, law, ordinance, regulation, rule, judgment, decree or order
which failure or violation could reasonably be expected to have a Material
Adverse Effect.
6.14 ERISA.
None of such Credit Parties or any of their Subsidiaries or ERISA
Affiliates maintains or contributes to any Benefit Plan other than those listed
on Schedule 6.14. Each Benefit Plan has been and is being maintained and funded
in accordance with its terms and in compliance in all material respects with all
provisions of ERISA and the Internal Revenue Code applicable thereto, except
where failure would not reasonably be expected to give rise to a liability in
excess of $2,000,000. Such Credit Party, each of its Subsidiaries and each of
its ERISA Affiliates has fulfilled all obligations related to the minimum
funding standards of ERISA and the Internal Revenue Code for each Benefit Plan,
is in compliance in all material respects with the currently applicable
provisions of ERISA and of the Internal Revenue Code and has not incurred any
liability (other than routine liability for premiums) under Title IV of ERISA,
except where failure would not reasonably be expected to give rise to a
liability in excess of $2,000,000. No Termination Event has occurred with
respect to a Benefit Plan other than a Multiemployer Plan,
nor, to the best of the Credit Parties' knowledge, has (i) a Termination Event
with respect to a Benefit Plan which is a Multiemployer Plan nor (ii) any other
event occurred that may result in a Termination Event. No event or events have
occurred in connection with which such Credit Parties or any of their
Subsidiaries or ERISA Affiliates, any fiduciary of a Benefit Plan to which such
Credit Parties are obligated for indemnification or any Benefit Plan, directly
or indirectly, would be subject to any liability, individually or in the
aggregate, exceeding $2,000,000 under ERISA, the Internal Revenue Code or any
other law, regulation or governmental order or under any agreement, instrument,
statute, rule of law or regulation pursuant to or under which any such entity
has agreed to indemnify or is required to indemnify any person against liability
incurred under, or for a violation or failure to satisfy the requirements of,
any such statute, regulation or order.
6.15 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except as disclosed on Schedule 6.15, and except where failure would not
reasonably be expected to have a Material Adverse Effect, (a) the operations of
such Credit Party and each of its Subsidiaries comply with all applicable
federal, state or local environmental, health and safety statutes, regulations,
directions, ordinances, criteria or guidelines and (b) none of the operations of
such Credit Party or any of its Subsidiaries is the subject of any judicial or
administrative proceeding alleging the violation of any federal, state or local
environmental, health or safety statute, regulation, direction, ordinance,
criteria or guidelines. Except as disclosed on Schedule 6.15, and except where
failure would not reasonably be expected to have a Material Adverse Effect, none
of the operations of such Credit Party or any of its Subsidiaries is the subject
of any federal or state investigation evaluating whether such Credit Party or
any of its Subsidiaries disposed any hazardous or toxic waste, substance or
constituent or other substance at any site that may require remedial action, or
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any hazardous or toxic waste, substance or
constituent, or other substance into the environment. Except as disclosed on
Schedule 6.15, and except where failure would not reasonably be expected to have
a Material Adverse Effect, neither such Credit Party nor any of its Subsidiaries
have filed any notice under any federal or state law indicating past or present
treatment, storage or disposal of a hazardous waste or reporting a spill or
release of a hazardous or toxic waste, substance or constituent, or other
substance into the environment. Except as disclosed on Schedule 6.15, and except
where failure would not reasonably be expected to have a Material Adverse
Effect, neither such Credit Party nor any of its Subsidiaries have any
contingent liability of which such Credit Party has knowledge or reasonably
should have knowledge in connection with any release of any hazardous or toxic
waste, substance or constituent, or other substance into the environment, nor
has such Credit Party or any of its Subsidiaries received any notice, letter or
other indication of potential liability arising from the disposal of any
hazardous or toxic waste, substance or constituent or other substance into the
environment.
6.16 USE OF PROCEEDS.
All proceeds of the Loans will be used only in accordance with Section
7.13.
6.17 INTELLECTUAL PROPERTY.
Such Credit Party and each of its Subsidiaries possesses adequate assets,
licenses, patents, patent applications, copyrights, service marks, trademarks
and tradenames to continue to conduct its business as heretofore conducted by
it. Schedule 6.17 sets forth (a) all of the material federal, state and, to the
best knowledge of the Credit Parties, foreign registrations of trademarks,
service marks and other marks, trade names or other trade rights of such Credit
Party and its Subsidiaries, and all pending applications for any such
registrations, (b) all of the material patents and registered copyrights of such
Credit Party and its Subsidiaries and all pending applications therefor and (c)
all other material trademarks, service marks and other marks, trade names and
other trade rights used by such Credit Party or any of its Subsidiaries in
connection with their businesses (collectively, the "Proprietary Rights"). Such
Credit Party and its Subsidiaries are collectively the owners of each of the
trademarks listed on Schedule 6.17 as indicated on such schedule, and to such
Credit Party's knowledge no other Person has the right to use any of such marks
in commerce either in the identical form or in such near resemblance thereto as
may be likely to cause confusion or to cause mistake or to deceive. Each of the
trademarks listed on Schedule 6.17 is a federally registered trademark of such
Credit Party or its Subsidiaries having the registration number and issue date
set forth on Schedule 6.17. The Proprietary Rights listed on Schedule 6.17 are
all material Proprietary Rights used in the businesses of such Credit Party and
its Subsidiaries. All applications pertaining to such Credit Party's Proprietary
Rights have been duly and properly filed, and all registrations or letters
pertaining to such Proprietary Rights have been duly and properly filed and
issued. Except as disclosed on Schedule 6.17, no person has a right to receive
any material royalty or similar payment in respect of any Proprietary Rights
pursuant to any contractual arrangements entered into by such Credit Party, or
any of its Subsidiaries and to such Credit Party's knowledge no person otherwise
has a right to receive any royalty or similar payment in respect of any such
Proprietary Rights except as disclosed on Schedule 6.17. Except as disclosed on
Schedule 6.17, neither such Credit Party nor any of its Subsidiaries has granted
any license or sold or otherwise transferred any interest in any of the
Proprietary Rights to any other person. To the knowledge of such Credit Party,
the use of each of the Proprietary Rights by such Credit Party and its
Subsidiaries is not infringing upon or otherwise violating the rights of any
third party in or to such Proprietary Rights, and no proceeding has been
instituted against or notice received by such Credit Party or any of its
Subsidiaries that are presently outstanding (i) alleging that the use of any of
the material Proprietary Rights infringes upon or otherwise violates in any
material respect the rights of any third party in or to any of the Proprietary
Rights, or (ii) otherwise seeking to limit, cancel or question the validity of
any Proprietary Rights of such Credit Party or any of its Subsidiaries. No
holding, decision or judgment has been rendered by any Governmental Authority
which would materially limit, cancel or question the validity of any Proprietary
Rights of such Credit Party nor any of its Subsidiaries. Neither such Credit
Party nor any of its Subsidiaries have given notice to any Person that it is
infringing on any of the Proprietary Rights and to the best of such Credit
Party's knowledge, no Person is infringing on any of the Proprietary Rights. All
of the material Proprietary Rights of such Credit Party and its Subsidiaries are
valid, subsisting, unexpired and enforceable rights of such Credit Party and its
Subsidiaries, have not been abandoned, and will not cease to be valid and in
full force and effect by reason of the execution and delivery of this Credit
Agreement or the Credit Documents or the consummation of the transactions
contemplated hereby or thereby.
6.18 LICENSES AND PERMITS.
Such Credit Party and each of its Subsidiaries have obtained and hold in
full force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and other
rights and approvals which are necessary or appropriate for the operation of
their businesses as presently conducted and as proposed to be conducted,
including, but not limited to, all air carrier certificates required under the
FAA Act. Neither such Credit Party nor any of its Subsidiaries is in violation
of the terms of any such franchise, license, lease, permit, certificate,
authorization, qualification, easement, right of way, right or approval in any
such case which violation could reasonably be expected to have a Material
Adverse Effect.
6.19 TITLE TO PROPERTY.
Such Credit Party has (i) good and marketable fee simple title to or valid
leasehold or usufruct interests in all of its real property, including, without
limitation, the Real Estate, if any (all such real property and the nature of
such Credit Party's or any of its Subsidiary's interest therein is disclosed on
Schedule 6.19, as it may be updated from time to time pursuant to Section 7.9)
and (ii) good and valid title to all of its other owned property (including
without limitation, all real and other property in each case as reflected in the
Financial Statements delivered to the Agent hereunder), other than, with respect
to properties described in clause (ii) above, properties disposed of in the
ordinary course of business or in any manner otherwise permitted under this
Credit Agreement since the date of the most recent audited consolidated balance
sheet of the Parent, and in each case subject to no Liens other than Permitted
Liens. Such Credit Party and its Subsidiaries enjoy peaceful and undisturbed
possession of all its real property, including, without limitation, the Real
Estate, and there is no pending or, to the best of their knowledge, threatened
condemnation proceeding relating to any such real property. None of the Leases
contains provisions which, if complied with, have or could reasonably be
expected to have a Material Adverse Effect. No material default on the part of
any Credit Party, or to its knowledge, any other party, exists under any Lease.
All of the Structures and other tangible assets owned, leased or used by such
Credit Party or any of its Subsidiaries in the conduct of their respective
businesses are (a) insured to the extent and in a manner customary in the
industry in which such Credit Party or such Subsidiaries are engaged, (b) to its
knowledge, structurally sound with no known defects which have or could
reasonably be expected to have a Material Adverse Effect, (c) in satisfactory
operating condition and repair, subject to ordinary wear and tear, (d) not in
need of maintenance or repair except for ordinary, routine maintenance and
repair the cost of which is immaterial, (e) sufficient for the operation of the
businesses of such Credit Party and its Subsidiaries as currently conducted and
(f) in conformity with all applicable laws, ordinances, orders, regulations and
other requirements (including applicable zoning, environmental, motor vehicle
safety, occupational safety and health laws and regulations) relating thereto,
except where in each instance listed above the failure to conform could not
reasonably be expected to have a Material Adverse Effect.
6.20 LABOR MATTERS.
Neither such Credit Party nor any of its Subsidiaries is engaged in any
unfair labor practice. Except as described in Schedule 6.20, there is (a) no
material unfair labor practice complaint pending against such Credit Party or
any of its Subsidiaries or, to the best knowledge
of such Credit Party, threatened against any of them, before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements that has or could reasonably be expected
to have a Material Adverse Effect is so pending against such Credit Party or any
of its Subsidiaries or, to the best knowledge of such Credit Party, threatened
against any of them, (b) no strike, labor dispute, slowdown or stoppage pending
against either of such Credit Party or any of its Subsidiaries or, to the best
knowledge of such Credit Party, threatened against any of them, and (c) no union
representation questions with respect to the employees of such Credit Party or
any Subsidiaries and no union organizing activities.
6.21 INVESTMENT COMPANY, ETC.
Neither such Credit Party nor any of its Subsidiaries is (a) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or (b) subject to any other
law which purports to regulate or restrict its ability to borrow money or to
consummate the transactions contemplated by this Credit Agreement or the other
Credit Documents or to perform its obligations hereunder or thereunder.
6.22 MARGIN SECURITY.
Such Borrower does not own any margin stock and no portion of the proceeds
of any Loans or Letters of Credit shall be used by the Borrowers for the purpose
of purchasing or carrying any "margin stock" (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) or for any other purpose which
violates the provisions or Regulation U, T, U or X of said Board of Governors or
for any other purpose in violation of any applicable statute or regulation, or
of the terms and conditions of this Credit Agreement.
6.23 NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.24 TAXES AND TAX RETURNS.
Each Credit Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid all
amounts of taxes shown thereon to be due (including interest and penalties) and
has paid all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (a) that are not yet
delinquent or (b) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Except as described in Schedule 6.24, none of the Credit
Parties is aware of any proposed material tax assessments against it or any
other Credit Party.
6.25 NO OTHER INDEBTEDNESS.
Such Credit Party has no Indebtedness that is senior, pari passu or
subordinated in right of payment to their Indebtedness to the Lenders hereunder,
except for Permitted Indebtedness.
6.26 STATUS OF ACCOUNTS.
Each Account is based on an actual and bona fide sale and delivery of goods
or rendition of services to customers, including, but not limited to, any
applicable USG Entity, made by such Credit Party in the ordinary course of its
business; the goods and inventory being sold, services provided and the Accounts
created are its exclusive property and are not and shall not be subject to any
Lien, consignment arrangement, encumbrance, security interest or financing
statement whatsoever, other than the Permitted Liens; and such Credit Party's
customers have accepted the goods or services, owe and are obligated to pay the
full amounts stated in the invoices according to their terms, without any
dispute, offset, defense, counterclaim or contra that could reasonably be
expected to have, when aggregated with any such other disputes, offsets,
defenses, counterclaims or contras, a Material Adverse Effect. Such Credit Party
confirms to the Lenders that any and all taxes or fees relating to its business,
its sales, the Accounts or the goods relating thereto, are its sole
responsibility and that same will be paid by such Credit Party when due (unless
duly contested and adequately reserved for) and that none of said taxes or fees
is or will become a lien on or claim against the Accounts, except with respect
to any USG Entity's right of offset.
6.27 REPRESENTATIONS AND WARRANTIES.
As of the Closing Date, each of the representations and warranties made in
the Operative Documents by each of the Credit Parties and their Subsidiaries,
and to the knowledge of each such Credit Party and its Subsidiaries, each other
party thereto is true and correct in all material respects, and such
representations and warranties are hereby incorporated herein by reference with
the same effect as though set forth in their entirety herein, as qualified
therein.
6.28 MATERIAL CONTRACTS.
Schedule 6.28 sets forth a true, correct and complete list of all the
Material Contracts currently in effect on the date hereof. None of the Material
Contracts contains provisions the performance or nonperformance of which have or
could reasonably be expected to have a Material Adverse Effect. All of the
Material Contracts are in full force and effect, and no material defaults
currently exist thereunder.
6.29 SURVIVAL OF REPRESENTATIONS.
All representations made by such Credit Party in this Credit Agreement
(including by incorporation by reference in the Guaranty Agreement, if any) and
in any other Credit Document shall survive the execution and delivery hereof and
thereof.
6.30 AFFILIATE TRANSACTIONS.
Except as set forth on Schedule 6.30, neither such Credit Party nor any of
its Subsidiaries is a party to or bound by any agreement or arrangement (whether
oral or written) to which any Affiliate of such Credit Party or any of its
Subsidiaries is a party except (a) in the ordinary course of and pursuant to the
reasonable requirements of such Credit Party's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to such Credit Party and such
Subsidiary than it could obtain in a comparable arm's-length transaction with an
unaffiliated
Person or (b) agreements regarding intercompany indebtedness or capital
contributions or (c) as permitted under Section 9.4, Section 9.5, Section 9.6 or
clause (iv) of the definition of Permitted Investments or (d) usual and
customary indemnification arrangements for officers and directors, payments of
customary directors fees and expenses, employment agreements and employee
benefit or compensation plans.
6.31 TRADE SUPPLIERS.
Schedule 6.31 is a true, correct and complete list of all of the suppliers
who have sold goods or provided services to such Credit Party or any of its
Subsidiaries (or their predecessor entities) during the calendar year ended
December 31, 2005.
6.32 KEY MEMBERS OF MANAGEMENT.
Schedule 6.32 is a true, correct and complete list of the executive
management of such Credit Party as of the Closing Date.
6.33 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties or any of their respective
Subsidiaries in writing to the Agent, any Lender, or the Independent Accountant
for purposes of or in connection with this Credit Agreement or any Credit
Documents, or any transaction contemplated hereby or thereby taken as a whole is
or will be true and accurate in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact known to it necessary to make such information not misleading
at such time. There is no fact (other than matters of a general economic nature)
now known to any executive officer of any Credit Party or any of its
Subsidiaries which has, or would have, a Material Adverse Effect which fact has
not been set forth herein, in the Financials, the Parent's filings with the SEC,
or any certificate, opinion or other written statement made or furnished by any
Credit Party to the Agent. Notwithstanding anything to the contrary set forth
herein, with respect to projected financial information and forecasts, (a) each
of the Credit Parties represents only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time, and (b) each
of the Lenders and the Agent recognizes that such forecasts as to future events
are not to be viewed as facts and that actual results may differ from the
forecasts.
6.34 ANTI-TERRORISM LAWS.
(a) General. None of the Credit Parties or their Affiliates is in
violation of any Anti-Terrorism Law or engages in or conspires to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any Anti-Terrorism Law.
(b) Executive Order No. 13224. None of the Credit Party or their
Affiliates is any of the following (each a "Blocked Person"):
(i) a Person owned or controlled by, or acting for or on behalf of,
any Person that is listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224;
(ii) a Person or entity with which any bank or other financial
institution is prohibited from dealing or otherwise engaging in any
transaction by any Anti-Terrorism Law;
(iii) a Person or entity that commits, threatens or conspires to
commit or supports "terrorism" as defined in Executive Order No. 13224;
(iv) a Person or entity that is named as a "specially designated
national" on the most current list published by the U.S. Treasury
Department Office of Foreign Asset Control at its official website or any
replacement website or other replacement official publication of such list;
or
(v) a Person or entity who is affiliated with a Person or entity
listed above.
(c) None of the Credit Parties or their Affiliates (i) conducts any
business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any Blocked Person or (ii) deals in,
or otherwise engages in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224.
6.35 DEPOSIT ACCOUNTS.
As of the Closing Date, none of the Credit Parties has any checking,
savings or other accounts at any bank or other financial institution, or any
other account where money is or may be deposited or maintained with any Person
that is not described on Schedule 6.35, and Schedule 6.35 accurately sets forth
the purpose for which each such deposit account is maintained.
6.36 FORCE MAJEURE.
None of any Credit Party's business is suffering from effects of fire,
accident, strike, drought, storm, earthquake, embargo, tornado, hurricane, act
of God, acts of public enemy or other casualty that would reasonably be likely
to have a Material Adverse Effect.
6.37 DEALINGS WITH GOVERNMENT.
To the best knowledge of the Credit Parties, neither the Credit Parties nor
any of their respective directors, officers, partners, members, agents or
employees, or any Affiliate or other Person acting on behalf of any such Person,
(i) has made any unlawful contributions, payments, gifts or entertainment, or
made any unlawful expenditures relating to political activity, to government
officials or others, or (ii) is currently or was previously debarred or
suspended from any contracting with a USG Entity, and no event has occurred and
no condition currently exists that is likely to result in any such debarment or
suspension.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and the Commitments hereunder
and payment and satisfaction of all Obligations due or to become due hereunder,
each Borrower and (by execution and delivery of the Guaranty Agreement or of a
joinder thereto and incorporation by reference therein) each Guarantor, if any,
agrees that, unless the Required Lenders shall have otherwise consented in
writing:
7.1 FINANCIAL INFORMATION.
The Parent will furnish to the Lenders the following information within the
following time periods:
(a) With respect to (i) the Parent's 2005 fiscal year, on or before
May 15, 2006, and (ii) each subsequent fiscal year of the Parent, within
ninety (90) days after the close of such fiscal year, the audited
consolidated and consolidating balance sheets and statements of income and
retained earnings and of changes in cash flow of the Parent and its
Subsidiaries, for such year, each in reasonable detail, each setting forth
in comparative form the corresponding figures for the preceding year and
the corresponding figures from the Parent's forecast for such year,
prepared in accordance with GAAP, and accompanied by a report and opinion
of an Independent Accountants selected by the Borrower and approved by the
Agent (which report and opinion shall be prepared in accordance with GAAP
and shall not be subject to any "going concern" or like assumption,
qualification or exception or any assumption, qualification or exception as
to the scope of the audit);
(b) within forty-five (45) days after the end of each fiscal month of
the Parent, unaudited consolidated and consolidating financial statements
similar to those required by clause (a) above as of the end of such period
and for such period then ended and for the period from the beginning of the
current fiscal year to the end of such period, setting forth in comparative
form the corresponding figures for the comparable period in the preceding
fiscal year and the corresponding figures from the Parent's forecasts for
such month, prepared in accordance with GAAP (except that such monthly
statements need not include footnotes and year end adjustments) and
certified by any of the officers described in paragraph (e) below;
(c) [Intentionally Omitted.]
(d) within fifty (50) days after the end of each fiscal quarter, a
Compliance Certificate (i) stating that such officer has caused this Credit
Agreement to be reviewed and has no knowledge of any default by the Parent
in the performance or observance of any of the provisions of this Credit
Agreement, during such quarter, or, if such officer has such knowledge,
specifying each default and the nature thereof, and (ii), during any
Financial Compliance Testing Period, showing compliance by the Parent as of
the date of such statement with the financial covenants set forth in
Article VIII and the other applicable covenants set forth in Exhibit K;
(e) not later than 12:00 Noon on the tenth Business Day of each fiscal
month, a Borrowing Base Certificate for each Borrower, duly completed and
certified by such Borrower's Responsible Officer, detailing such Borrower's
Eligible Prime Government Accounts, Eligible Contractor Accounts, Eligible
Commercial Accounts, and Eligible Unbilled Government Accounts as of the
previous Business Day and Eligible Spare Parts as of the most recent date
of determination which shall be determined not less frequently than
monthly. In addition, on the 15th day of each month (or if such day is not
a Business Day, then on the next succeeding Business Day), the Parent shall
furnish a written report to the Lenders setting forth (i) the accounts
receivable aged trial balance at the immediately preceding month end for
each account debtor, aged by due date, which aging reports shall indicate
which Accounts are current, up to 30, 30 to 60 and over 60 days past due
and shall list the names and addresses of all applicable account debtors,
(ii) an accounts payable aged trial balance at the immediately preceding
month end for each account creditor, aged by due date (such aging reports
shall indicate which Accounts are current, up to 30, 30 to 60 and over 60
days past due and shall list the names and addresses of all applicable
account creditors), and (iii) a schedule of Spare Parts owned by each
Borrower by location and category. The Agent may, but shall not be required
to, rely on each Borrowing Base Certificate delivered hereunder as
accurately setting forth the available Borrowing Base for all purposes of
this Credit Agreement until such time as any new Borrowing Base Certificate
is delivered to the Agent in accordance herewith; Borrowing Base
Certificates may be prepared and submitted to the Lenders on a more
frequent basis than monthly, provided that such certificate complies with
the requirements set forth elsewhere herein;
(f) promptly upon receipt thereof, copies of all management letters
and other material reports which are submitted to the Parent by its
Independent Accountant in connection with any annual or interim audit of
the books of the Parent made by such accountants;
(g) within ten (10) Business Days after the issuance thereof, copies
of any financial statements and reports sent by the Parent to its
stockholders, unless such statements and reports have also been filed with
the SEC;
(h) no later than the last Business Day of December during each year
when this Credit Agreement is in effect, a business plan for the
immediately following fiscal year of the Parent which includes a projected
consolidated balance sheet and statement of income for such fiscal year and
a projected consolidated statement of cash flows for such fiscal year and,
no later than the last Business Day of January during each year when this
Credit Agreement is in effect, a business plan for such fiscal year of the
Parent which includes projected consolidated balance sheets and statements
of income on a monthly basis for such fiscal year, and projected
consolidated statements of cash flows on a quarterly basis for such fiscal
year;
(i) promptly upon receipt thereof, copies of all notices delivered to
the Parent or sent by the Parent with respect to any Subordinated Debt and
any other material indebtedness of the Parent, including, without
limitation, any notice of default (the Parent expressly agreeing to furnish
all such notices by telecopy);
(j) within five (5) Business Days after any Responsible Officer
becomes aware of the occurrence of a Default or Event of Default, a
certificate of a Responsible Officer specifying the nature thereof and the
Credit Parties' proposed response thereto, each in reasonable detail;
(k) promptly upon any substantial change relating to the type,
quantity or quality of the Collateral or any event which could reasonably
be expected to have a Material Adverse Effect, information describing in
sufficient detail such change;
(l) promptly upon the Agent's request from time to time such written
statements and schedules, with respect to the Parent or any of its
Subsidiaries, as the Agent may reasonably require, including without
limitation those described in this Section 7.1, designating, identifying or
describing the Collateral pledged to the Lenders hereunder. The Parent's or
any other Credit Party's failure, however, to promptly give the Agent such
statements or schedules shall not affect, diminish, modify or otherwise
limit the Lenders' security interests in the Collateral; and
(m) with reasonable promptness, such other data as the Agent or any of
the Lenders may reasonably request.
7.2 INVENTORY; SPARE PARTS.
(a) unless the Agent shall have otherwise received a Spare Parts
Appraisal pursuant to section (b) below for the applicable month, within
thirty (30) days after the end of each month, upon the request of the Agent
from time to time, the Credit Parties will provide to the Agent written or
electronic statements listing items of Inventory and Spare Parts in
reasonable detail as requested by the Agent.
(b) the Credit Parties shall assist the independent third party
appraiser who will, within twenty-five (25) days after the end of each
month, provide the Agent with a written or electronic Spare Parts
Appraisal.
7.3 CORPORATE EXISTENCE.
Each Credit Party and each of its Subsidiaries (a) will maintain their
current corporate or other organizational existence (except for changes
permitted under Section 9.4), will maintain in full force and effect all
material licenses, bonds, franchise, leases, trademarks and qualifications to do
business, (b) will obtain or maintain patents, contracts and other rights
necessary or desirable to the profitable conduct of their businesses, (c) will
continue in, and limit their operations to, the same general lines of business
as that presently conducted by them and (d) will comply with all applicable laws
and regulations of any federal, state or local Governmental Authority, except
where noncompliance could not reasonably be expected to have a Material Adverse
Effect.
7.4 ERISA.
Each Credit Party will deliver to the Agent, at such Credit Party's
expense, the following information at the times specified below:
(a) within ten (10) Business Days after any Credit Party or any of its
Subsidiaries or ERISA Affiliates knows or has reason to know that a
Termination Event has occurred, a written statement of the chief financial
officer of the Parent describing such Termination Event and the action, if
any, which such Credit Party or other such entities have taken, are taking
or propose to take with respect thereto, and when known, any action taken
or threatened by the Internal Revenue Service, DOL or PBGC with respect
thereto;
(b) within ten (10) Business Days after any Credit Party or any of its
Subsidiaries or ERISA Affiliates knows or has reason to know that a
prohibited transaction (as defined in Section 406 of ERISA and Section 4975
of the Internal Revenue Code) has occurred with respect to a Plan that
could result in a material civil penalty or excise tax, a statement of the
chief financial officer of the Parent describing such transaction and the
action which such Credit Party or other such entities have taken, are
taking or propose to take with respect thereto;
(c) within thirty (30) Business Days after the filing thereof with the
DOL, Internal Revenue Service or PBGC, copies of each annual report (form
5500 series), including all schedules and attachments thereto, filed with
respect to each Benefit Plan;
(d) within thirty (30) Business Days after receipt by any Credit Party
or any of its Subsidiaries or ERISA Affiliates of each actuarial report for
any Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(e) within three (3) Business Days after the filing thereof with the
Internal Revenue Service, a copy of each funding waiver request filed with
respect to any Benefit Plan and all communications received by any Credit
Party or any of its Subsidiaries or ERISA Affiliates with respect to such
request;
(f) within ten (10) Business Days upon the occurrence thereof,
notification of any material increase in the benefits of any existing Plan
or the establishment of any new Plan imposing an added, material
contribution obligation on the Credit Party or any of its Subsidiaries or
ERISA Affiliates (after taking into account any corresponding reductions in
contribution obligations made to previously existing Plans) or the
commencement of contributions to any Plan to which any Credit Party or any
of its Subsidiaries or ERISA Affiliates was not previously contributing
which contributions represent an added, material contribution obligation of
such party (after taking into account any corresponding reductions in
contribution obligations made to previously existing Plans);
(g) within three (3) Business Days after receipt by any Credit Party
or any of its Subsidiaries or ERISA Affiliates of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice;
(h) within ten (10) Business Days after receipt by any Credit Party or
any of its Subsidiaries or ERISA Affiliates of any written determination
from the Internal
Revenue Service to the effect that the tax-qualified status of any Plan
under Section 401(a) of the Internal Revenue Code is revoked, copies of
each such communication;
(i) within ten (10) Business Days after receipt by any Credit Party or
any of its Subsidiaries or ERISA Affiliates of a notice regarding the
imposition of withdrawal liability against any such party with respect to a
Multiemployer Plan, copies of each such notice;
(j) within ten (10) Business Days after any Credit Party or any of its
Subsidiaries or ERISA Affiliates fail to make a required installment or any
other required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of such
failure; and
(k) within three (3) Business Days after any Credit Party or any of
its Subsidiaries or ERISA Affiliates knows (a) a Multiemployer Plan has
been terminated, (b) the administrator or plan sponsor of a Multiemployer
Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan, a written statement setting forth any such
event or information.
For purposes of this Section 7.4, any Credit Party or any of its
Subsidiaries or ERISA Affiliates shall be deemed to know all facts known by the
administrator of any Plan of which such entity is the plan sponsor.
The Credit Parties will establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Internal Revenue
Code, and all other applicable laws, and the regulations and interpretations
thereunder other than to the extent that any Credit Parties is in good faith
contesting by appropriate proceedings the validity or implication of any such
provision, law, rule, regulation or interpretation.
7.5 PROCEEDINGS OR ADVERSE CHANGES.
The Credit Parties will within five (5) Business Days after any executive
officer of any Credit Party learns of the following, give written notice to the
Agent of (i) any material proceeding(s) being instituted or threatened to be
instituted by or against any Credit Party or any of its Subsidiaries in any
federal, state, local or foreign court or before any commission or other
regulatory body (federal, state, local or foreign), and (ii) any Material
Adverse Change. Provision of such notice by the Credit Parties will not
constitute a waiver or excuse of any Default or Event of Default occurring as a
result of such changes or events.
7.6 ENVIRONMENTAL MATTERS.
Each Credit Party will conduct its business and the businesses of each of
the Subsidiaries so as to comply in all material respects with all environmental
laws, regulations, directions, ordinances, criteria and guidelines in all
jurisdictions in which any of them is or may at any time be doing business
including, without limitation, environmental land use, occupational safety or
health laws, regulations, directions, ordinances, criteria, guidelines,
requirements or permits in all jurisdictions in which any of them is or may at
any time be doing business, except to the
extent that any Credit Party or any of its Subsidiaries is contesting, in good
faith by appropriate legal proceedings, any such law, regulation, direction,
ordinance, criteria, guideline, or interpretation thereof or application
thereof, and except where failure would not reasonably be expected to have a
Material Adverse Effect; provided, further, that each Credit Party and each of
the Subsidiaries will comply with the order of any court or other governmental
body of the applicable jurisdiction relating to such laws unless such Credit
Party or Subsidiary shall currently be prosecuting an appeal or proceedings for
review and shall have secured a stay of enforcement or execution or other
arrangement postponing enforcement or execution pending such appeal or
proceedings for review. If any executive officer of any Credit Party or any of
its Subsidiaries shall (a) receive notice that any violation of any federal,
state or local environmental law, regulation, direction, ordinance, criteria or
guideline may have been committed or is about to be committed by such Credit
Party or any of its Subsidiaries, (b) receive notice that any administrative or
judicial complaint or order has been filed or is about to be filed against such
Credit Party or any of its Subsidiaries alleging violations of any federal,
state or local environmental law, regulation, direction, ordinance, criteria or
guideline or requiring such Credit Party or any of its Subsidiaries to take any
action in connection with the release of toxic or hazardous substances into the
environment or (c) receive any notice from a federal, state, or local
governmental agency or private party alleging that such Credit Party or any of
its Subsidiaries may be liable or responsible for costs associated with a
response to or cleanup of a release of a toxic or hazardous substance into the
environment or any damages caused thereby, the Credit Parties will provide the
Agent with a copy of such notice within fifteen (15) days after the receipt
thereof by the applicable Credit Party or any of its Subsidiaries. Within
fifteen (15) days after any Credit Party learns of the enactment or promulgation
of any federal, state or local environmental law, regulation, direction,
ordinance, criteria or guideline which could reasonably have a Material Adverse
Effect, such Credit Party will provide the Agent with notice thereof. Each
Credit Party will promptly take all actions necessary to prevent the imposition
of any Liens on any of its properties arising out of or related to any
environmental matters.
7.7 BOOKS AND RECORDS; INSPECTION.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain books and records pertaining to the Accounts and other Collateral in
such detail, form and scope as is consistent with good business practice or as
the Agent may otherwise reasonably require, and agrees that such books and
records will reflect the Lenders' interest in the Accounts and such other
Collateral. Each Credit Party agrees that the Agent or its agents, upon
reasonable prior written notice (except during the existence of an Event of
Default), may enter upon the premises of each Credit Party or any of its
Subsidiaries at any time and from time to time, during normal business hours and
subject to the limitations, if any, contained in any Leases of Real Property,
and at any time at all during the existence of an Event of Default, for the
purpose of (a) enabling the Agent's internal auditors or outside third party
designees to conduct quarterly field examinations at such Credit Party's
expense, (b) inspecting the Collateral, (c) inspecting and/or copying (at such
Credit Party's expense) any and all records pertaining thereto, (d) discussing
the affairs, finances and business of any Credit Party or with any executive
officers and directors of any Credit Party and (e) verifying Eligible Accounts
Receivable and/or Eligible Spare Parts. The Lenders, in the reasonable
discretion of the Agent, may accompany the Agent at their sole expense in
connection with the foregoing inspections. The Agent expects to conduct two
field examinations per year, but reserves the right, in its sole discretion, to
conduct a field examination
at any time, or with less frequency, upon reasonable notice to the Parent. The
Agent reserves the right, exercisable from time to time hereafter in the Agent's
commercially reasonable judgment, to require that any Credit Party obtain, and
the Credit Parties shall so obtain, at the Credit Parties' expense, Spare Parts
Appraisals or other appraisals or updates to any existing appraisals being
obtained in connection with the execution and delivery of this Agreement,
reflecting then current values of the Spare Parts; provided, that unless an
Event of Default has occurred and is continuing, so long as the Agent continues
to receive the Spare Parts Appraisals described in Section 7.2(b), the Agent
shall not require additional Spare Parts Appraisals. Each Credit Party agrees
to afford the Agent thirty (30) days prior written notice of any change in the
location of any Collateral (other than Inventory held for shipment by third
Persons, Inventory in transit or on aircraft, Inventory held for processing by
third Persons or immaterial quantities of assets, equipment or Inventory), its
jurisdiction of organization or the location of its chief executive office or
place of business from the locations specified in Schedule 6.7, and to execute
(to the extent required) in advance of such change, cause to be filed and/or
delivered to the Agent any financing statements or other documents required by
the Agent, all in form and substance satisfactory to the Agent. Each Credit
Party agrees to furnish any Lender with such other information regarding its
business affairs and financial condition as such Lender may reasonably request
from time to time.
7.8 [INTENTIONALLY OMITTED.]
7.9 SECURITY INTERESTS.
Each Credit Party will defend the Collateral against all claims and demands
of all Persons at any time claiming the same or any interest therein. Each
Credit Party agrees to, and will cause the other Credit Parties to, comply with
the requirements of all state (other than state certificate of title laws) and
federal laws in order to grant to the Lenders valid and perfected first priority
security interests in the Collateral. The Agent is hereby authorized by each
Credit Party to file any financing statements covering the Collateral whether or
not any Credit Party's signature appears thereon. Each Credit Party agrees to do
whatever the Agent may reasonably request, from time to time, by way of: filing
notices of liens, financing statements, fixture filings and amendments, renewals
and continuations thereof; making appropriate filings with the FAA as to any
aircraft, engines or Spare Parts that are owned by any Credit Party, cooperating
with the Agent's custodians; keeping stock records; obtaining waivers from
landlords and mortgagees and from warehousemen and aircraft lessors and their
respective landlords and mortgagees; paying claims, which might if unpaid,
become a Lien (other than a Permitted Lien) on the Collateral; assigning its
rights to the payment of Accounts pursuant to the Assignment Act (the failure of
which to so assign will permit the Agent to exclude such Accounts from the
Borrowing Base); and performing such further acts as the Agent may reasonably
require in order to effect the purposes of this Credit Agreement and the other
Credit Documents. Any and all fees, costs and expenses of whatever kind and
nature (including any Taxes, reasonable attorneys' fees actually incurred or
costs for insurance of any kind), which the Agent may incur with respect to the
Collateral or the Obligations: in filing public notices; in preparing or filing
documents; making title examinations or rendering opinions (subject to express
limitations as provided herein); in protecting, maintaining, or preserving the
Collateral or its interest therein; in enforcing or foreclosing the Liens
hereunder, whether through judicial procedures or otherwise; or in defending or
prosecuting any actions or proceedings arising out of or relating to its
transactions
with any Credit Party or any of its Subsidiaries under this Credit Agreement or
any other Credit Document, will be borne and paid by the Credit Parties. If the
same are not promptly paid by the Credit Parties, the Agent may pay same on the
Credit Parties' behalf, and the amount thereof shall be an Obligation secured
hereby and due to the Agent on demand. If any Credit Party acquires or leases
any Real Estate after the date hereof, such Credit Party will promptly submit to
the Agent an updated Schedule 6.19 pursuant to Section 7.23, and all provisions
of this Credit Agreement (including, without limitation, the foregoing
provisions of this Section 7.9 and all other applicable representations,
warranties and covenants) that are applicable to Real Estate shall apply
thereto.
7.10 INSURANCE; CASUALTY LOSS.
Each Credit Party will, and will cause each of the Subsidiaries to,
maintain public liability insurance, third party property damage liability
insurance and replacement value property insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts and
covering such risks as are customary for similarly situated companies and at all
times satisfactory to the Agent in its reasonable discretion. The Lenders shall
be named as additional insured on all liability policies. All property policies
covering the Collateral are to name the Agent as loss payee and the Credit
Parties and the Lenders as additional insureds in case of loss, as their
interests may appear, and are to contain such other provisions as the Agent may
reasonably require to fully protect the Agent's interest in the Collateral and
to any payments to be made under such policies. True copies of all original
insurance policies or certificates of insurance evidencing such insurance
covering the Collateral are to be delivered to the Agent on or prior to the
Closing Date, premium prepaid, with the loss payable endorsement in the Agent's
favor, and shall provide for not less than thirty (30) days prior written notice
to the Agent, of the exercise of any right of cancellation. In the event any
Credit Party or any of its Subsidiaries fail to respond in a timely and
appropriate manner (as determined by the Agent in its reasonable discretion)
with respect to collecting any claim in excess of $500,000 under any insurance
policies required to be maintained under this Section 7.10, the Agent shall have
the right (subject to the last sentence in this Section 7.10), in the name of
the Agent, such Credit Party or Subsidiary, to file claims under such insurance
policies, to receive and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies. Each Credit Party will provide written notice to the Lenders of the
occurrence of any of the following events within five (5) Business Days after
its risk manager has knowledge of such event: any asset or property owned or
used by any Credit Party or any of its Subsidiaries is (i) materially damaged or
destroyed, or suffers any other loss or (ii) is condemned, confiscated or
otherwise taken, in whole or in part, or the use thereof is otherwise diminished
so as to render impracticable or unreasonable the use of such asset or property
for the purpose to which such asset or property were used immediately prior to
such condemnation, confiscation or taking, by exercise of the powers of
condemnation or eminent domain or otherwise, and in either case the amount of
the damage, destruction, loss or diminution in value of the Collateral is in
excess of $500,000 (collectively, a "Casualty Loss"). Each Credit Party will
diligently file and prosecute its claim or claims for any award or payment in
connection with a Casualty Loss. In the event of a Casualty Loss (subject to the
last sentence in this Section 7.10), the Credit Parties will pay to the Agent,
promptly upon receipt thereof, any and all
insurance proceeds and payments received by any Credit Party or any of its
Subsidiaries on account of damage, destruction or loss of all or any portion of
the Collateral in excess of $500,000. The Agent may, at its election and in its
sole discretion, either (a) apply the proceeds realized from Casualty Losses in
excess of $500,000 to payment of accrued and unpaid interest or outstanding
principal of the Revolving Loans or (b) pay such proceeds to the Credit Parties
to be used to repair, replace or rebuild the asset or property or portion
thereof that was the subject of the Casualty Loss. After the occurrence and
during the continuance of an Event of Default, (i) no settlement on account of
any such Casualty Loss shall be made without the consent of the Agent and (ii)
the Agent may participate in any such proceedings and the Credit Parties will
deliver to the Agent such documents as may be requested by the Agent to permit
such participation and will consult with the Agent, its attorneys and agents in
the making and prosecution of such claim or claims. Each Credit Party hereby
irrevocably authorizes and appoints the Agent its attorney-in-fact, after the
occurrence and continuance of an Event of Default, to collect and receive for
any such award or payment and to file and prosecute such claim or claims, which
power of attorney shall be irrevocable and shall be deemed to be coupled with an
interest, and each Credit Party shall, upon demand of the Agent, make, execute
and deliver any and all assignments and other instruments sufficient for the
purpose of assigning any such award or payment to the Agent for the benefit of
the Lenders, free and clear of any encumbrances of any kind or nature
whatsoever. Notwithstanding anything in this Section 7.10 to the contrary,
provided there exists no Event of Default, if there is Casualty Loss with
respect to assets or property which does not constitute Collateral, to the
extent a Credit Party has paid money toward the repair or replacement of such
assets or property, and such assets or property have been, or are in the process
of being, repaired or replaced in a timely manner, the Agent shall have no right
to file insurance claims or collect insurance proceeds with respect to such
assets or property, but, if there is a Casualty Loss with respect to Collateral,
to the extent a Credit Party has paid money toward the repair or replacement of
such Collateral, and such Collateral is, or is in the process of being, repaired
or replaced in a timely manner, such Credit Party shall be entitled to insurance
proceeds and consequential damages to the extent of the amount paid for such
repair or replacement and any consequential damages incurred in connection with
such Casualty Loss, provided that this subsection (b) shall not limit the
Agent's right to file insurance claims to the extent provided in this Section
7.10 and collect insurance proceeds in excess of the amount paid by such Credit
Party for such repair or replacement.
7.11 TAXES.
Each Credit Party will, and will cause each of the Subsidiaries to, pay,
when due and in any event prior to delinquency (giving effect to all
extensions), all Taxes lawfully levied or assessed against any Credit Party, any
of its Subsidiaries or any of the Collateral; provided, however, that unless
such Taxes have become a federal tax or ERISA Lien on any of the assets of any
Credit Party or any of its Subsidiaries, no such Tax need be paid if the same is
being contested in good faith, by appropriate proceedings promptly instituted
and diligently conducted and if an adequate reserve or other appropriate
provision shall have been made therefor as required in order to be in conformity
with GAAP.
7.12 COMPLIANCE WITH LAWS.
Each Credit Party will, and will cause each of the Subsidiaries to, comply
with all lawful acts, rules, regulations, orders, directions and ordinances of
any legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof, or to the operation of its business, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
7.13 USE OF PROCEEDS.
The proceeds of any advances made hereunder shall be used by the Borrowers
solely to refinance approximately $24,000,000 of outstanding U.S. Government
guaranteed loans and for the working capital, letter of credit and general
corporate needs of the Borrowers or any other lawful purpose; provided, however,
that in any event, no portion of the proceeds of any such advances shall be used
by the Borrowers for the purpose of purchasing or carrying any "margin stock"
(as defined in Regulation U of the Board of Governors of the Federal Reserve
System) or for any other purpose which violates the provisions or Regulation U
or X of said Board of Governors or for any other purpose in violation of any
applicable statute or regulation, or of the terms and conditions of this Credit
Agreement.
7.14 FISCAL YEAR; ACCOUNTING POLICIES.
Each Credit Party agrees that it will not change its fiscal year from a
year ending December 31 unless required by law or its Independent Accountant, in
which case such Credit Party will give the Agent at least thirty (30) days prior
written notice thereof or such shorter period as may be required to assure
Credit Parties' compliance with any such requirement. Each Credit Party agrees
that it will not change its accounting policies from those used to prepare the
financial statements delivered pursuant to Section 5.1(c) without complying with
the requirements of Section 1.2.
7.15 NOTIFICATION OF CERTAIN EVENTS.
Each Credit Party agrees that it will within five (5) Business Days after
such Credit Party learns of the following, notify the Agent of the occurrence of
any of the following events (with it being understood that providing of notice
pursuant to this Section 7.15 does not constitute any waiver or consent to any
of the following):
(a) any Material Contract of any Credit Party or any of its
Subsidiaries with a USG Entity is terminated before the scheduled
termination date or amended in any material respect adverse to such Credit
Party or any new Material Contract is entered into with a USG Entity (in
which event each Credit Party shall provide the Agent with a copy of such
Material Contract); or
(b) any of the material terms upon which any of the material suppliers
to any Credit Party or any of its Subsidiaries do business with any Credit
Party or any Subsidiary are changed or amended in any material adverse
respect; or
(c) any order, judgment or decree in excess of $1,000,000 shall have
been entered against any Credit Party or any of its Subsidiaries or any of
their respective properties or assets; or
(d) any notification of violation of any law or regulation in any
material respect or any material inquiry shall have been received by any
Credit Party or any of its Subsidiaries from any local, state, federal or
foreign Governmental Authority or agency.
7.16 ADDITIONAL BORROWERS AND GUARANTORS.
The Credit Parties will not form or acquire any material Foreign
Subsidiary. Upon any Person becoming a direct or indirect Subsidiary of the
Parent, the Credit Parties will provide the Agent with written notice thereof
setting forth information in reasonable detail describing all of the assets of
such Person and shall (a) cause any such Person that is a Domestic Subsidiary to
execute and deliver to the Agent a Joinder Agreement in substantially the form
of Exhibit M, causing such Subsidiary to become a party to (i) this Credit
Agreement, as a joint and several "Borrower", (ii) the Security Agreement, as an
"Obligor" granting a first priority Lien on its personal property, subject to
Permitted Encumbrances, (iii) the Contribution Agreement, as a "Contributing
Party" and (iv) as appropriate, the Pledge Agreement, as a "Pledgor", causing
all of its Capital Stock (or in the case of any Foreign Subsidiary, and without
waiving the requirement for the prior consent of the Required Lenders for the
formation or acquisition thereof, sixty-five percent (65%) of its Capital Stock)
to be delivered to the Agent (together with undated stock powers signed in blank
and pledged to the Agent) (b) cause any such Person that is a Domestic
Subsidiary to execute and deliver to the Agent Revolving Notes in favor of the
Lenders, and (c) deliver such other documentation as the Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, Acknowledgment Agreements, certified
resolutions and other organizational and authorizing documents of such Person
and favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above), all in form, content and scope reasonably
satisfactory to the Agent; provided, however, in lieu of the foregoing, at the
option of the Agent, the Credit Parties shall cause such Person to execute and
deliver to the Agent a joinder agreement in substantially the form of Exhibit M
causing such Subsidiary (other than a Foreign Subsidiary) to become a party to
the Guaranty Agreement, as a joint and several "Guarantor", and each of the
Contribution Agreement and the Security Documents described in clauses (a)(ii)
through (iv) above, as applicable and with the same effect set forth above, and
to deliver such additional documentation of the types described in clause (c)
above, all as the Agent reasonably shall request.
7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in the
Accounts of each Credit Party granted pursuant to the Security Agreement, at
such time as the Agent may reasonably request, each Credit Party will execute
and deliver to the Agent in such form and manner as the Agent may require,
solely for its convenience in maintaining records of collateral, such
confirmatory schedules of Accounts, and other appropriate reports designating,
identifying and describing the Accounts as the Agent may require. In addition,
upon the Agent's request,
each Credit Party will provide the Agent with copies of agreements with, or
purchase orders from, the customers of each Credit Party and its Subsidiaries,
and copies of invoices to customers, proof of shipment or delivery and such
other documentation and information relating to said Accounts and other
collateral as the Agent may require. Failure to provide the Agent with any of
the foregoing shall in no way affect, diminish, modify or otherwise limit the
security interests granted herein. Each Credit Party hereby authorizes the Agent
to regard such Credit Party's or any such Subsidiary's printed name or rubber
stamp signature on assignment schedules or invoices as the equivalent of a
manual signature by such Credit Party's or such Subsidiary's authorized officers
or agents.
7.18 COLLECTION OF ACCOUNTS.
(a) Unless an Event of Default shall have occurred and be continuing,
each Credit Party may and will in the ordinary course of business enforce,
collect and receive all amounts owing on the Accounts, for the Lenders'
benefit and on the Lenders' behalf but at the Credit Parties' expense in
accordance with the provisions of Section 2.3; such privilege shall
terminate automatically, however, without notice to the Credit Parties
which is hereby expressly waived by the Credit Parties, during the
existence of any Event of Default and from and after such time and during
the continuance thereof, the Agent shall be entitled to enforce, collect
and receive all amounts owing on the Accounts and all other amounts for the
Lenders' benefit and on the Lenders' behalf (but at the Credit Parties'
expense) pursuant to cash management arrangements reasonably satisfactory
to the Agent and in accordance with the Security Agreement.
(b) Any checks, cash, notes or other instruments or property received
directly by any Credit Party or any of its Subsidiaries with respect to any
Accounts shall be held by such Credit Party or such Subsidiary in trust for
the benefit of the Lenders, separate from such Credit Party's or
Subsidiary's own property and funds, and immediately turned over to the
Agent with proper assignments or endorsements. No checks, drafts or other
instruments received by the Agent shall constitute final payment unless and
until such instruments have actually been collected.
7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Credit Party will notify the Agent promptly of any matters materially
affecting the value, enforceability or collectibility of any Account, and of all
material customer disputes, offsets, defenses, counterclaims, returns and
rejections, and all reclaimed or repossessed merchandise or goods, provided,
however, that such notice shall only be required as to any such matter that
affects Accounts outstanding at any one time from any account debtor, or
reclaimed or repossessed merchandise and goods in each instance, having a value
greater than $250,000. Each Credit Party will issue credit memoranda in
accordance with its customary practices (with duplicates to the Agent upon its
request for same) upon accepting returns or granting allowances, and may
continue to do so until the existence of an Event of Default. After the
occurrence and during the continuance of an Event of Default, each Credit Party
agrees that all returned, reclaimed or repossessed merchandise or goods shall be
set aside by such Credit Party, marked with the Lenders' name and held by such
Credit Party for the Lenders' account as owner and assignee.
7.20 ACKNOWLEDGMENT AGREEMENTS.
Each Credit Party will assist the Agent in obtaining executed
Acknowledgment Agreements from each of the warehousemen, aircraft lessors,
landlords and mortgagees with whom such Credit Party conducts business from time
to time.
7.21 [INTENTIONALLY OMITTED.]
7.22 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
all property useful and necessary to its respective business in satisfactory
working order and condition (ordinary wear and tear excepted) in accordance with
their past operating practices and not to commit or suffer any waste with
respect to any of its properties, except for properties which either
individually or in the aggregate are not material.
7.23 REVISIONS OR UPDATES TO SCHEDULES.
If any of the information or disclosures provided on any of Schedules 6.8,
6.7, 6.9, 6.10, 6.14, 6.15, 6.17, 6.19, 6.20, 6.24, 6.28, 6.31 or 6.32, or to
any of the schedules to the Security Agreement, originally attached hereto or
thereto, as the case may be, become outdated or incorrect in any material
respect, the Credit Parties shall deliver to the Agent and the Lenders as part
of the compliance certificate required pursuant to Section 7.1(d) such revision
or updates to such Schedule(s) as may be necessary or appropriate to update or
correct such Schedule(s); provided, that no such revisions or updates to any
such Schedule(s) shall be deemed to have amended, modified or superseded such
Schedule(s) as originally attached hereto, or to have cured any breach of
warranty or misrepresentation resulting from the inaccuracy or incompleteness of
any such Schedule(s) in any material respect at the date originally delivered
unless and until the Required Lenders, in their sole and absolute discretion,
shall have accepted in writing such revisions or updates to such Schedule(s).
7.24 ANTI-TERRORISM LAWS.
None of the Credit Parties shall, nor shall any of them permit any of their
respective Subsidiaries to, knowingly (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including the making or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person; (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224; or (iii) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or the
USA Patriot Act. Each of the Credit Parties shall deliver to the Agent and
Lenders any certification or other evidence requested from time to time by the
Agent or any Lender, in the Agent's reasonable discretion, confirming such
Person's compliance with this Section.
ARTICLE VIII
FINANCIAL COVENANTS
Until termination of this Credit Agreement and the Commitments hereunder
and payment and satisfaction of all Obligations due or to become due hereunder,
each Borrower and (by execution and delivery of the Guaranty Agreement or of a
joinder thereto and incorporation by reference therein) each Guarantor, if any,
agrees that, unless the Required Lenders shall have otherwise consented in
writing, during any Financial Compliance Testing Period:
8.1 LEVERAGE RATIO.
The Parent and its consolidated Subsidiaries shall maintain a Leverage
Ratio of no greater than 3.0 to 1.00 as of the last day of each fiscal quarter,
commencing with the first fiscal quarter (or portion thereof) ending after the
Closing Date.
8.2 FIXED CHARGE COVERAGE RATIO.
The Parent and its consolidated Subsidiaries shall maintain a Fixed Charge
Coverage Ratio of not less than 1.15 to 1.00 as of the last day of each fiscal
quarter, commencing with the first fiscal quarter (or portion thereof) ending
after the Closing Date.
8.3 CAPITAL EXPENDITURES.
The Credit Parties shall not make Consolidated Capital Expenditures in
excess of $10,000,000 during any fiscal year.
ARTICLE IX
NEGATIVE COVENANTS
Until termination of the Credit Agreement and the Commitments hereunder and
payment and satisfaction of all Obligations due or to become due hereunder, each
Borrower and (by execution and delivery of the Guaranty Agreement or of a
joinder thereto and incorporation by reference therein) each Guarantor, if any,
agrees that, unless the Required Lenders shall have otherwise consented in
writing, it will not, and will not permit any of the Subsidiaries to:
9.1 RESTRICTIONS ON LIENS.
Mortgage, assign, pledge, transfer or otherwise permit any Lien or judgment
(whether as a result of a purchase money or title retention transaction, or
other security interest, or otherwise) to exist on any of its assets or
properties, whether real, personal or mixed, whether now owned or hereafter
acquired, except for Permitted Liens and except during the period specified in
Section 11.1(l) for the stay, vacation, discharge or bonding of a judgment.
9.2 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS.
Incur or create any liability for Indebtedness other than Permitted
Indebtedness.
9.3 RESTRICTIONS ON SALE OF ASSETS.
Sell, lease, assign, transfer or otherwise dispose of any assets (including
the Capital Stock of any Subsidiary of the Parent, except as permitted under
Section 9.4 below) other than (a) sales or consumption of Inventory in the
ordinary course of business, (b) sale-leaseback transactions permitted by
Section 9.15, (c) sales or other dispositions in the ordinary course of business
of assets or properties that are obsolete, surplus or that are no longer used or
useful in the conduct of such Credit Party's or Subsidiary's business, (d) sales
or other disposition or consumption in the ordinary course of business of assets
or properties (other than Inventory) used in such Credit Party's or Subsidiary's
business that are worn out, destroyed by use or in need of replacement and that
are repaired to be reasonably equivalent in value and utility or are replaced
with assets of reasonably equivalent value or utility, (e) termination of
Hedging Agreements in the ordinary course of business, (f) transfers between or
among Credit Parties, (g) trade-ins in connection with permitted purchase money
Indebtedness, (h) leases or subleases in the ordinary course of business and (i)
non-exclusive licenses or sublicenses of Proprietary Rights in the ordinary
course of business..
9.4 NO CORPORATE CHANGES.
(a) Merge or consolidate with any Person, provided, however, that
subject to Section 7.16, the Parent and its Subsidiaries may merge or
consolidate with and into each other (so long as, if such merger or
consolidation involves the Parent, the Parent is the surviving entity, and
if such merger or consolidation involves a Domestic Subsidiary and a
Foreign Subsidiary, the Domestic Subsidiary is the surviving entity) and
the Parent may engage in Permitted Acquisitions, (b) alter or modify any
Credit Party's or any of its Subsidiary's Articles or Certificate of
Incorporation or other equivalent organizational document or form of
organization in any manner materially adverse to the interests of the Agent
or the Lenders or in any way which could reasonably be expected to have a
Material Adverse Effect, (c) without providing thirty (30) days prior
written notice to the Agent and without filing (or confirming that the
Agent has filed) such amendments to any previously filed financing
statements as the Agent may require, (i) change its state of incorporation
or formation, (ii) change its registered corporate name, (iii) change the
location of its chief executive office and principal place of business (as
well as its books and records) from the locations set forth on Schedule
6.7, or (iv) change the location of its Collateral (except as permitted by
Section 5(i) of the Security Agreement), or (d) enter into or engage in any
business, operation or activity materially different from that presently
being or presently contemplated to be conducted by the Credit Parties, as
reflected in the Forecasts.
9.5 NO GUARANTEES.
Assume, guarantee, endorse, or otherwise become liable upon the obligations
of any other Person, including, without limitation, any Affiliate (other than a
Credit Party or World Risk
Solutions) of any Credit Party, except (a) by the endorsement of negotiable
instruments in the ordinary course of business, (b) by the giving of indemnities
in connection with the sale of Inventory or other asset dispositions permitted
hereunder or in connection with leases of aircraft or other assets or other
contracts entered in the ordinary course of business and (c) guarantees of
Permitted Indebtedness.
9.6 NO RESTRICTED PAYMENTS.
Make a Restricted Payment, other than a Permitted Investment, and other
than (a) to pay dividends or make distributions of cash from Parent or any
Subsidiary to any Credit Party, and (b) to repurchase shares or warrants issued
by the Credit Parties, so long as immediately after such repurchase the sum of
Excess Borrowing Base Availability plus Unrestricted Cash Balances shall not be
less than $20,000,000.
9.7 NO INVESTMENTS.
Make any Investment other than Permitted Investments or as permitted under
Section 9.6.
9.8 NO AFFILIATE TRANSACTIONS.
Enter into any material transaction with, including, without limitation,
the purchase, sale or exchange of property or the rendering of any service to
any Subsidiary or Affiliate (other than another Credit Party or any other
Subsidiary of the Parent on a comparable basis for the same type of services) of
any Credit Party except (a) in the ordinary course of and pursuant to the
reasonable requirements of such Credit Party's business and upon fair and
reasonable terms no less favorable to such Credit Party than could be obtained
in a comparable arm's-length transaction with an unaffiliated Person, (b) as
permitted under Section 9.4, Section 9.5, Section 9.6 or clause (iv) of the
definition of Permitted Investments and (c) usual and customary indemnification
arrangements for officers and directors, payments of customary directors fees
and expenses, employment agreements and employee benefit or compensation plans.
9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA.
(a) Engage, or permit any ERISA Affiliate to engage, in any prohibited
transaction involving the assets of a Plan which could result in a material
civil penalty or excise tax described in Section 406 of ERISA or Section
4975 of the Internal Revenue Code for which a statutory or class exemption
is not available or a private exemption has not been previously obtained
from the DOL;
(b) permit to exist with respect to any Benefit Plan any accumulated
funding (as defined in Sections 302 of ERISA and 412 of the Internal
Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any Benefit
Plan where such event would result in any liability of the Credit Party or
any of its Subsidiaries or ERISA Affiliates under Title IV of ERISA;
(e) fail, or permit any ERISA Affiliate to fail to make any required
contribution or payment to any Multiemployer Plan;
(f) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment to a Benefit Plan required under Section
412 of the Internal Revenue Code on or before the due date for such
installment or other payment;
(g) amend, or permit any ERISA Affiliate to amend, a Benefit Plan
resulting in an increase in current liability for the plan year such that
any of the Credit Parties or any of their Subsidiaries or ERISA Affiliates
is required to provide security to such Benefit Plan under Section
401(a)(29) of the Internal Revenue Code;
(h) withdraw, or permit any ERISA Affiliate to withdraw, from any
Multiemployer Plan where such withdrawal may result in any liability of any
such entity under Title IV of ERISA in excess of $2,000,000; or
(i) allow any representation made in Section 6.14 to be untrue at any
time during the term of this Credit Agreement.
9.10 NO ADDITIONAL BANK ACCOUNTS.
Open, maintain or otherwise have any checking, savings or other accounts at
any bank or other financial institution, or any other account where money is or
may be deposited or maintained with any Person, other than (a) accounts with
Wachovia maintained in accordance with Section 2.3, (b) the accounts set forth
on Schedule 6.35, each of which shall be subject to a Deposit Account Control
Agreement, except to the extent otherwise determined by the Agent, (c) deposit
accounts established after the Closing Date that are subject to a Deposit
Account Control Agreement, (d) any account with Valley National Bank subject to
a Funds Letter Agreement, (e) any account with the United Parcel Service subject
to a Funds Letter Agreement, (f) foreign accounts containing balances in an
aggregate amount not exceeding $5,000,000 and domestic accounts containing
balances in an aggregate amount not exceeding $200,000 and (g) other deposit
accounts established after the Closing Date solely as payroll, charter escrow
accounts and other zero balance accounts.
9.11 [INTENTIONALLY OMITTED.]
9.12 AMENDMENTS OF MATERIAL CONTRACTS.
Without the prior written consent of the Agent, amend or modify in any
material respect adverse to a Credit Party, or cancel or terminate, unless
promptly renewed, or permit such amendment or modification, or such cancellation
or termination of any of the Material Contracts including, without limitation
any Operative Document.
9.13 ADDITIONAL NEGATIVE PLEDGES.
Create or otherwise cause or suffer to exist or become effective, or permit
any of the Subsidiaries to create or otherwise cause or suffer to exist or
become effective, directly or indirectly, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the Agent and the
Lenders) on the creation or existence of any Lien upon the assets of any Credit
Party or any of its Subsidiaries, other than Permitted Liens or (ii) any
Contractual Obligation which could reasonably be expected to restrict or inhibit
in any material respect the Agent's rights or ability to sell or otherwise
dispose of the Collateral or any part thereof after the occurrence of an Event
of Default.
9.14 SUBORDINATED DEBT.
Effect or permit any change in or amendment to any document or instrument
pertaining to the subordination, terms of payment or required prepayments of any
Subordinated Debt, increase the rates or amounts of interest or fees payable
with respect to any Subordinated Debt, effect or permit any change in or
amendment to any document or instrument pertaining to the covenants or events of
default of any Subordinated Debt if the effect of any such change or amendment
is to make such covenants or events of default more restrictive, give any notice
of optional redemption or optional prepayment or offer to repurchase under any
such document or instrument, or, directly or indirectly, make any payment of
principal of or interest on or in redemption, retirement or repurchase of any
Subordinated Debt, except for the scheduled payments required by the terms of
the documents and instruments evidencing Subordinated Debt and permitted by the
subordination provisions of the documents and instruments evidencing
Subordinated Debt and except as permitted under Section 9.6.
9.15 SALE AND LEASEBACK.
Enter into any arrangement, directly or indirectly, whereby any Credit
Party or any of its Subsidiaries shall sell or transfer any property owned by it
to a Person (other than the Credit Parties or any of their Subsidiaries) in
order then or thereafter to lease such property or lease other property which
such Credit Party or Subsidiary intends to use for substantially the same
purpose as the property being sold or transferred.
9.16 LICENSES, ETC.
Enter into licenses of, or otherwise restrict the use of, any Proprietary
Rights which would prevent any Credit Party or any of its Subsidiaries from
selling, transferring, encumbering or otherwise disposing of any such
Proprietary Rights.
9.17 LIMITATIONS.
Create, nor will it permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) pay dividends or make any other distribution
on any of such Person's Capital Stock, (b) pay any Indebtedness owed to the
Credit Parties, (c) make loans or advances to any other Credit Party or (d)
transfer
any of its property to any other Credit Party, except for encumbrances or
restrictions existing under or by reason of (i) customary non-assignment
provisions in any lease or license governing a leasehold interest or license,
(ii) any agreement or other instrument of a Person existing at the time it
becomes a Subsidiary of a Credit Party; provided that such encumbrance or
restriction is not applicable to any other Person, or any property of any other
Person, other than such Person becoming a Subsidiary of a Credit Party and was
not entered into in contemplation of such Person becoming a Subsidiary of a
Credit party, and (iii) this Credit Agreement and the other Credit Documents.
9.18 [INTENTIONALLY OMITTED.]
9.19 ISSUANCE OF CAPITAL STOCK.
Sell or permit any of its Subsidiaries to sell or issue any Capital Stock
having a preference over the common stock of such Person.
9.20 HEDGE TRANSACTIONS.
Engage in any transaction involving commodity options or future contracts
or any similar speculative transactions, except for Lender Hedging Agreements or
Hedging Agreements used solely as part of the normal business operations of the
Borrowers as a risk management strategy and/or a hedge against changes resulting
from market operations in accordance with the Borrowers' customary policies and
not as a means to speculate for investment purposes.
ARTICLE X
POWERS
10.1 APPOINTMENT AS ATTORNEY-IN-FACT.
Each Credit Party hereby irrevocably authorizes and appoints the Agent, or
any Person or agent the Agent may reasonably designate, as such Credit Party's
attorney-in-fact, at such Credit Party's cost and expense, to exercise, subject
to the limitations set forth in Section 10.2, all of the following powers, which
being coupled with an interest, shall be irrevocable until all of the
Obligations to the Lenders have been paid and satisfied in full and all of the
Commitments have been terminated:
(a) To receive, take, endorse, sign, assign and deliver, all in the
name of the Agent, the Lenders or such Credit Party, as the case may be,
any and all checks, notes, drafts, and other documents or instruments
relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to such Credit
Party and to notify postal authorities to change the address for delivery
thereof to such address as the Agent may designate;
(c) To request at any time from customers indebted on Accounts, in the
name of such Credit Party or a third party designee of the Agent, customary
information concerning the Accounts and the amounts owing thereon;
(d) To give customers indebted on Accounts notice of the Lenders'
interest therein, and/or to instruct such customers to make payment
directly to the Agent for such Credit Party's account;
(e) To take or bring, in the name of the Agent, the Lenders or such
Credit Party, all steps, actions, suits or proceedings deemed by the Agent
necessary or desirable to enforce or effect collection of the Accounts; and
(f) To file, record and register any or all of the Lenders' security
interest in intellectual property of the Credit Parties with the United
States Patent and Trademark Office or the United States Copyright Office.
10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set forth
in subparagraphs (b), (d) and (e) above may only be exercised by the Agent on
and after the occurrence of an Event of Default which has not otherwise been
waived by the Agent. The powers set forth in subparagraphs (a), (c) and (f)
above may be exercised by the Agent at any time.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an "Event of
Default" hereunder:
(a) failure of any Borrower to pay (i) any interest or Fees hereunder
within three (3) Business Days of when due hereunder, in each case whether
at stated maturity, by acceleration, or otherwise, (ii) any principal of
the Revolving Loans or the Letter of Credit Obligations when due, whether
at stated maturity, by acceleration or otherwise or (iii) any expenses
hereunder within ten (10) Business Days after receipt by the Borrowers from
the Agent or any applicable Lender of notice that such expenses are
payable;
(b) any representation or warranty, contained in this Credit
Agreement, the other Credit Documents or any other agreement, document,
instrument or certificate among any Credit Party, the Agent and the Lenders
or executed by any Credit Party in favor of the Agent or the Lenders shall
prove untrue in any material respect on or as of the date it was made or
was deemed to have been made;
(c) failure of any Credit Party to perform, comply with or observe any
term, covenant or agreement applicable to it contained in Section 7.1(j),
Section 7.3(a)(but only as to maintenance of corporate or other
organizational existence), Section 7.5, Article VIII (during any Financial
Covenant Testing Period) or Article IX;
(d) failure of any Credit Party (i) to deliver the Borrowing Base
Certificate within five Business Days of the day required by Section
7.1(e), or (ii) to comply with any other covenant contained in this Credit
Agreement, the other Credit Documents or any other agreement, document,
instrument or certificate among any Credit Party, the Agent and the Lenders
or executed by any Credit Party in favor of the Agent or the Lenders and,
in the event such breach or failure to comply is capable of cure, such
breach or failure to comply is not cured within thirty (30) days of its
occurrence;
(e) except as permitted by Section 9.4 above, dissolution,
liquidation, winding up or cessation of the business of any Credit Party or
any of its Subsidiaries, or the failure of any Credit Party or any of its
Subsidiaries to meet its debts generally as they mature, or the calling of
a meeting of any Credit Party's or any of its Subsidiaries' creditors for
purposes of compromising any Credit Party's or any of its Subsidiaries'
debts, or the failure by any Credit Party or any of its Subsidiaries
generally, or the admission by any Credit Party or any of its Subsidiaries
of its inability, to pay its debts as they become due (unless such debts
are the subject of a bona fide dispute);
(f) the commencement by or against any Credit Party or any of its
Subsidiaries of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar case or proceeding with respect to it under any
federal or state law and, in the event any such proceeding is commenced
against any Credit Party or any of its Subsidiaries, such proceeding is not
dismissed within sixty (60) days or an order for relief is entered at any
time;
(g) the occurrence of a Change of Control;
(h) any Credit Party or any of its Subsidiaries shall fail to make any
payment in respect of Indebtedness outstanding (other than the Loans) in an
aggregate principal amount of $2,000,000 or more when due or within any
applicable grace period or waiver; or
(i) the occurrence of a default or event of default (in each case
which shall continue beyond the expiration of any applicable grace periods)
under, or the occurrence of any event that results in or would permit (i)
the acceleration of the maturity of any note, agreement or instrument
evidencing (A) any Subordinated Debt or (B) any other Indebtedness of any
Credit Party or any of its Subsidiaries and the aggregate principal amount
of all such other Indebtedness with respect to which a default or an event
of default has occurred, or the maturity of which is accelerated or
permitted to be accelerated, exceeds $2,000,000, or (ii) the termination
(other than in accordance with its terms) of any Lender Hedging Agreement;
(j) any covenant, agreement or obligation of any party contained in or
evidenced by any of the Credit Documents shall cease to be enforceable in
accordance with its terms, or any party (other than the Agent or the
Lenders) to any Credit Document shall deny or disaffirm its obligations
under any of the Credit Documents, or any Credit Document shall be
canceled, terminated, revoked or rescinded without the express prior
written consent of the Agent, or any action or proceeding shall have been
commenced by
any Person (other than the Agent or any Lender) seeking to cancel, revoke,
rescind or disaffirm the obligations of any party to any Credit Document,
or any court or other Governmental Authority shall issue a judgment, order,
decree or ruling to the effect that any of the obligations of any party to
any Credit Document are illegal, invalid or unenforceable;
(k) (i) any holder of Subordinated Debt alleges (or any Governmental
Authority with applicable jurisdiction determines) that the Subordinated
Debt is not subordinated to any of the Obligations or (ii) the
subordination provisions in any agreement relating to Subordinated Debt
shall, in whole or in part, terminate, cease to be effective or cease to be
legally valid, binding and enforceable as to any holder of the Subordinated
Debt;
(l) one or more judgments or decrees shall be entered against one or
more of the Credit Parties or any of their Subsidiaries involving a
liability of $2,000,000 or more in the aggregate (to the extent not paid or
covered by insurance (i) provided by a carrier who has acknowledged
coverage and has the ability to perform or (ii) as determined by the Agent
in its reasonable discretion) and any such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within
thirty (30) days from the entry thereof;
(m) any Termination Event (other than a Reportable Event with respect
to a Multiemployer Plan) with respect to a Benefit Plan shall have occurred
and be continuing thirty (30) days after notice thereof shall have been
given to the Parent by the Agent or any Lender, and the then current value
of such Benefit Plan's benefits guaranteed under Title IV of ERISA exceeds
the then current value of such Benefit Plan's assets allocable to such
benefits by more than $2,000,000 (or in the case of a Termination Event
involving the withdrawal of a substantial employer from a Benefit Plan, the
withdrawing employer's proportionate share of such excess exceeds such
amount, or, in the case of a Termination Event involving the withdrawal by
an ERISA Affiliate from a Multiemployer Plan, the assessment of withdrawal
liability in excess of said amount);
(n) any default or termination shall have occurred under any Material
Contract, including, without limitation, any Operative Document, to which
any Credit Party is a party, which default or termination could reasonably
be expected to have a Material Adverse Effect; or
(o) any other Credit Document shall fail to be in full force and
effect or to give the Agent and/or the Lenders the security interests,
liens, rights, powers and privileges purported to be created thereby
(except as such documents may be terminated or no longer in force and
effect in accordance with the terms thereof, other than those indemnities
and provisions which by their terms shall survive).
11.2 ACCELERATION.
Upon the occurrence and during the continuance of an Event of Default, at
the direction of the Required Lenders, the Agent shall, upon the written,
telecopied or telex request of the
Required Lenders, and by delivery of written notice to the Credit Parties from
the Agent, take any or all of the following actions, without prejudice to the
rights of the Agent, any Lender or the holder of any Note to enforce its claims
against any Borrower: (a) declare all Obligations (other than those arising in
connection with a Lender Hedging Agreement) to be immediately due and payable
(except with respect to any Event of Default set forth in Section 11.1(e) or (f)
in which case all Obligations (other than those arising in connection with a
Lender Hedging Agreement) shall automatically become immediately due and payable
without the necessity of any notice or other demand) without presentment,
demand, protest or any other action or obligation of the Agent or any Lender,
(b) immediately terminate this Credit Agreement and the Commitments hereunder;
and (c) enforce any and all rights and interests created and existing under the
Credit Documents or arising under applicable law, including, without limitation,
all rights and remedies existing under the Security Documents and all rights of
setoff. The enumeration of the foregoing rights is not intended to be exhaustive
and the exercise of any right shall not preclude the exercise of any other
rights, all of which shall be cumulative.
In addition, upon demand by the Agent or the Required Lenders upon the
occurrence of any Event of Default, and at any time thereafter unless and until
such Event of Default has been waived by the requisite Lenders (in accordance
with the voting requirements of Section 14.9), the Borrowers shall deposit with
the Agent for the benefit of the Lenders with respect to each Letter of Credit
then outstanding, promptly upon such demand, cash or Cash Equivalents in an
amount equal to the greatest amount for which such Letter of Credit may be
drawn. Such deposit shall be held by the Agent for the benefit of the Issuing
Bank and the other Lenders as security for, and to provide for the payment of,
outstanding Letters of Credit.
ARTICLE XII
TERMINATION
(a) Except as otherwise provided in Article XI, the Revolving Loan
Commitments made hereunder shall terminate on the Maturity Date and all
then outstanding Loans shall be immediately due and payable in full and all
outstanding Letters of Credit shall immediately terminate. Unless sooner
demanded, all Obligations shall become due and payable as of any
termination hereunder or under Article XI and, pending a final accounting,
the Agent may withhold any balances in the Borrowers' Loan accounts, in an
amount sufficient, in the Agent's sole discretion, to cover all of the
Obligations, whether absolute or contingent, unless supplied with a
satisfactory indemnity to cover all of such Obligations. All of the Agent's
and the Lenders' rights, liens and security interests shall continue after
any termination until termination in accordance with the provisions of this
Section.
(b) This Credit Agreement, together with all other Credit Documents,
shall continue in full force and effect until each of the following events
(collectively, the "Credit and Collateral Termination Events") has
occurred: (i) all of the Obligations have been fully and finally paid and
performed (other than inchoate indemnity obligations), (ii) all Letters of
Credit have expired or terminated, (iii) all Lender Hedging Agreements have
expired or terminated (or other arrangements relating thereto have been
made in a writing signed by all Persons party to such Lender Hedging
Agreements and the Agent),
(iv) all agreements relating to Bank Products have expired or terminated
(or other arrangements relating thereto have been made in a writing signed
by all Persons party to such agreements and the Agent), and (v) all
Commitments have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from
the Agent or the Lenders in connection with any of the foregoing.
ARTICLE XIII
THE AGENT
13.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates Wachovia as Agent to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of
any Note or participation in any Letter of Credit by the acceptance of a
Note or participation shall be deemed irrevocably to authorize, the Agent
to take such action on its behalf under the provisions of this Credit
Agreement and the Notes and any other instruments and agreements referred
to herein and to exercise such powers and to perform such duties hereunder
and thereunder as are specifically delegated to or required of the Agent by
the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent shall hold all Collateral and all payments of
principal, interest, Fees, charges and expenses received pursuant to this
Credit Agreement or any other Credit Document for the ratable benefit of
the Lenders. The Agent may perform any of its duties hereunder by or
through its agents or employees.
(b) The provisions of this Article XIII are solely for the benefit of
the Agent and the Lenders, and none of the Credit Parties shall have any
rights as a third party beneficiary of any of the provisions hereof (other
than Section 13.9). In performing its functions and duties under this
Credit Agreement, the Agent shall act solely as agent of the Lenders and
does not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for any Borrower.
13.2 NATURE OF DUTIES OF AGENT.
The Agent shall have no duties or responsibilities except those expressly
set forth in this Credit Agreement. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Credit Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Credit Agreement, expressed or implied, is intended to or shall
be so construed as to impose upon the Agent any obligations in respect of this
Credit Agreement except as expressly set forth herein.
13.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each Lender, to
the extent it deems appropriate, has made and shall continue to make (i)
its own independent
investigation of the financial or other condition and affairs of each
Credit Party in connection with the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of
each Credit Party, and, except as expressly provided in this Credit
Agreement, the Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before
the making of the Revolving Loans or at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Credit Agreement, the Notes
or any other Credit Document or the financial or other condition of any
Credit Party. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Credit Agreement, the Notes or any other
Credit Document, or the financial condition of any Credit Party, or the
existence or possible existence of any Default or Event of Default, unless
specifically requested to do so in writing by any Lender.
13.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the Required
Lenders or, as required, each of the Lenders. If the Agent shall request
instructions from the Required Lenders or each of the Lenders, as the case may
be, with respect to any act or action (including the failure to act) in
connection with this Credit Agreement, the Agent shall be entitled to refrain
from such act or taking such action unless and until the Agent shall have
received instructions from the Required Lenders or each of the Lenders, as the
case may be, and the Agent shall not incur liability to any Person by reason of
so refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders or each of the Lenders, as the case may be.
13.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex teletype or telecopier message, cablegram, radiogram, order or other
documentary, teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper person. The
Agent may consult with legal counsel (including counsel for the Credit Parties
with respect to matters concerning the Credit Parties), independent public
accountants 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 in accordance with the
advice of such counsel, accountants or experts.
13.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the Credit
Parties, each Lender will reimburse and indemnify the Agent, in proportion to
its respective Commitment, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder, in any way relating to or arising out
of this Credit Agreement or any other Credit Documents, provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct.
13.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement, the
Loans made by it and the Notes issued to it, its participation in Letters of
Credit issued hereunder, and all of its rights and obligations as a Lender
hereunder and under the other Credit Documents, the Agent shall have the same
rights and powers hereunder as any other Lender or holder of a Note or
participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders", "Required
Lenders", "holders of Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Credit Parties or any Affiliate of the Credit Parties as if it
were not performing the duties specified herein, and may accept fees and other
consideration from the Credit Parties for services in connection with this
Credit Agreement and otherwise without having to account for the same with the
Lenders.
13.8 HOLDERS OF NOTES.
The Agent may deem and treat the payee of any Note as the owner thereof for
all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
13.9 SUCCESSOR AGENT.
The Agent may at any time give notice of its resignation to the Lenders,
the Issuing Bank and the Borrowers. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may on
behalf of the Lenders and the Issuing Lender, appoint a successor Agent meeting
the qualifications set forth above; provided that if the Agent shall
notify the Borrowers and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Credit Documents and
(2) all payments, communications and determinations provided to be made by, to
or through the Agent shall instead be made by or to each Lender and the Issuing
Bank directly, until such time as the Required Lenders appoint a successor Agent
as provided for above in this Section. Upon the acceptance of a successor's
appointment as Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Agent, and the retiring Agent shall be discharged from all of its
duties and obligations hereunder or under the other Credit Documents (if not
already discharged therefrom as provided above in this Section). The fees
payable by the Borrowers to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrowers and such
successor. After the retiring Agent's resignation hereunder and under the other
Credit Documents, the provisions of this Article and Section 14.7 shall continue
in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Agent was acting as Agent. Any
resignation by Wachovia as Agent pursuant to this Section shall also constitute
its resignation as Issuing Bank. Upon the acceptance of a successor's
appointment as Agent hereunder, (a) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Issuing Bank, (b) the retiring Issuing Bank shall be discharged from all of
their respective duties and obligations hereunder or under the other Credit
Documents, and (c) the successor Issuing Lender shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangement satisfactory to the retiring Issuing Lender
to effectively assume the obligations of the retiring Issuing Lender with
respect to such Letters of Credit.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter into the
Security Documents for the benefit of the Lenders. Each Lender authorizes
and directs the Agent to make such changes to the form Acknowledgment
Agreement attached hereto as Exhibit A as the Agent deems necessary in
order to obtain any Acknowledgment Agreement from any landlord,
warehouseman or aircraft lessor of any Credit Party. Each Lender also
authorizes and directs the Agent to review and approve all agreements
regarding the Collection Accounts (including the Deposit Account Control
Agreements related thereto) on such terms as the Agent deems necessary.
Each Lender hereby agrees, and each holder of any Note by the acceptance
thereof will be deemed to agree, that, except as otherwise set forth
herein, any action taken by the Required Lenders or each of the Lenders, as
applicable, in accordance with the provisions of this Credit Agreement or
the Security Documents, and the exercise by the Required Lenders or each of
the Lenders, as applicable, of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall
be authorized and binding upon all of the Lenders. The Agent is hereby
authorized on behalf of all of the Lenders, without the necessity of any
notice to or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or
Security Document which may be necessary or appropriate to perfect and
maintain perfected the security interest in and liens upon the Collateral
granted pursuant to the Security
Documents. The rights, remedies, powers and privileges conferred upon the
Agent hereunder and under the other Credit Documents may be exercised by
the Agent without the necessity of the joinder of any other parties unless
otherwise required by applicable law.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment in cash and
satisfaction of all of the Obligations (including the Letter of Credit
Obligations) at any time arising under or in respect of this Credit
Agreement or the other Credit Documents, or any Lender Hedging Agreement or
the transactions contemplated hereby or thereby, (ii) constituting property
being sold or disposed of upon receipt of the proceeds of such sale by the
Agent if the applicable Credit Party certifies to the Agent that the sale
or disposition is made in compliance with Section 9.3 (and the Agent may
rely conclusively on any such certificate, without further inquiry) or
(iii) if approved, authorized or ratified in writing by the Required
Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Agent at any time, the Lenders will
confirm in writing the Agent's authority to release particular types or
items of Collateral pursuant to this Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to
in writing by the Required Lenders or all of the Lenders, as applicable,
and upon at least five (5) Business Days' prior written request by the
applicable Credit Party, the Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to the Agent for the benefit of
the Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred; provided that (i) the Agent shall not be required to execute
any such document on terms which, in the Agent's opinion, would expose the
Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations
or any Liens upon (or obligations of such Credit Party or any of its
Subsidiaries in respect of) all interests retained by such Credit Party or
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral. In the event of
any sale or transfer of Collateral, or any foreclosure with respect to any
of the Collateral, the Agent shall be authorized to deduct all of the
expenses reasonably incurred by the Agent from the proceeds of any such
sale, transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or to
any other Person to assure that the Collateral exists or is owned by the
Credit Parties or any Subsidiary or is cared for, protected or insured or
that the liens granted to the Agent herein or pursuant hereto have been
properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to the Agent in this Section 13.10 or in any of the Security
Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Agent may
act
in any manner it may deem appropriate, in its sole discretion, given the
Agent's own interest in the Collateral as one of the Lenders and that the
Agent shall have no duty or liability whatsoever to the Lenders, except for
its gross negligence or willful misconduct.
(e) The Agent shall promptly, upon receipt thereof, forward to each
Lender copies of the results of any field examinations by the Agent with
respect to any Credit Party and any appraisals obtained by the Agent with
respect to any of the Collateral. The Agent shall have no liability to any
Lender for any errors in or omissions from any field examination or other
examination of any Credit Party or the Collateral, or in any such
appraisal, unless such error or omission was the direct result of the
Agent's willful misconduct.
13.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Agent's right to take actions on its own accord as
permitted under this Credit Agreement, the Agent shall take such action with
respect to a Default or Event of Default as shall be directed by the Required
Lenders or all of the Lenders, as the case may be; provided that, until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable and in the best
interests of the Lenders, including, without limitation, actions permitted by
clause (c) of Section 11.2.
13.12 DELIVERY OF INFORMATION.
The Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by the Agent from the Credit Parties or any of their
Subsidiaries, the Required Lenders, any Lender or any other Person under or in
connection with this Credit Agreement or any other Credit Document except (a) as
specifically provided in this Credit Agreement or any other Credit Document and
(b) as specifically requested from time to time in writing by any Lender with
respect to a specific document instrument, notice or other written communication
received by and in the possession of the Agent at the time of receipt of such
request and then only in accordance with such specific request.
13.13 NO RELIANCE ON AGENT'S CUSTOMER IDENTIFICATION PROGRAM.
Each Lender acknowledges and agrees that neither such Lender, nor any of
its affiliates, Participants or Assignees, may rely on Agent to carry out such
Lender's, Affiliate's, participant's or assignee's customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the "CIP Regulations"), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with the Borrowers, their
Affiliates or its agents, the Credit Documents or the transactions hereunder:
(1) any identity verification procedures, (2) any record keeping, (3) any
comparisons with government lists, (4) any customer notices or (5) any other
procedures required under the CIP Regulations or such other laws.
13.14 USA PATRIOT ACT.
Each Lender or assignee or participant of a Lender that is not organized
under the laws of the United States of America or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of the USA
Patriot Act and the applicable regulations because it is both (i) an affiliate
of a depository institution or foreign bank that maintains a physical presence
in the United States or foreign country, and (ii) subject to supervision by a
banking authority regulating such affiliated depository institution or foreign
bank) shall deliver to Agent the certification, or, if applicable,
recertification, certifying that such Lender is not a "shell" and certifying to
other matters as required by Section 313 of the USA Patriot Act and the
applicable regulations: (1) within ten (10) days after the Closing Date and (2)
at such other times as are required under the USA Patriot Act.
ARTICLE XIV
MISCELLANEOUS
14.1 WAIVERS.
Each Borrower hereby waives due diligence, demand, presentment and protest
and any notices thereof (except to the extent elsewhere provided in any of the
Credit Documents) as well as notice of nonpayment. No delay or omission of the
Agent or the Lenders to exercise any right or remedy hereunder, whether before
or after the happening of any Event of Default, shall impair any such right or
shall operate as a waiver thereof or as a waiver of any such Event of Default.
No single or partial exercise by the Agent or the Lenders of any right or remedy
shall preclude any other or further exercise thereof, or preclude any other
right or remedy.
14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER AND (BY EXECUTION
AND DELIVERY OF THE GUARANTY AGREEMENT OR OF A JOINDER THERETO AND INCORPORATION
BY REFERENCE THEREIN) EACH GUARANTOR, IF ANY, AND THE AGENT AND THE LENDERS EACH
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING
OUT OF THIS CREDIT AGREEMENT, THE CREDIT DOCUMENTS OR ANY OTHER AGREEMENTS OR
TRANSACTIONS RELATED HERETO OR THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF GEORGIA. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document shall be brought in the
courts of the State of Georgia in Xxxxxx County or of the United States for
the Northern District of Georgia,
and, by execution and delivery of this Credit Agreement, each of the
Borrowers, and by execution and delivery of the Guaranty Agreement or of a
joinder thereto and incorporation by reference therein each of the
Guarantors, if any, hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the nonexclusive jurisdiction
of such courts, and agrees to be bound by the other provisions set forth in
this Section 14.3. Each of the Credit Parties further irrevocably consents
to the service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 14.4, such service to become effective three (3)
Business Days after such mailing. Nothing herein shall affect the right of
the Agent or any Lender to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against any
Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts
referred to in subsection (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
14.4 NOTICES.
Except as otherwise expressly provided herein, all notices, requests and
other communications shall have been duly given and shall be effective (a) when
delivered by hand or courier, (b) when transmitted via telecopy (or other
facsimile device), (c) the Business Day following the day on which the same has
been delivered prepaid to a reputable national overnight air courier service, or
(d) the third Business Day following the day on which the same is sent by
certified or registered mail, postage prepaid, in each case to the respective
parties at the following address or telecopy numbers in the case of the Parent,
the other Credit Parties, the Agent and the Issuing Bank, and as set forth on
Schedule 14.4 in the case of the Lenders, or at such other address as such party
may specify by written notice to the other parties hereto; provided, however,
that if any notice is delivered on a day other than a Business Day, or after
5:00 P.M. on any Business Day, then such notice shall not be effective until the
next Business Day.
The Parent
and the other
Credit Parties: World Air Holdings, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
World Air Holdings, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and
Xxxxxx Xxxxxxxxx LLP
One Atlantic Center - Fourteenth Floor
0000 Xxxx Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
The Agent
and the Issuing Bank: Wachovia Bank, National Association
000 00xx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and, if at the time of such notice there is
more than one Lender hereunder,
a copy to:
Wachovia Bank, National Association
000 Xxxxx Xxxxxxx Xxxxxx
XX0000/XX0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telecopier: (000) 000-0000
Telephone: (000) 000-0000(1)
provided, that notices given by the Parent pursuant to Section 2.1, Section 2.9
or Article III hereof shall be effective only upon receipt thereof by the Agent
or the Issuing Lender, as applicable.
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(1) This address is to be used only if this credit facility has been
syndicated. Otherwise, only the Wachovia address set forth below is to be
used.
14.5 ASSIGNABILITY.
(a) No Borrower shall have the right to assign this Credit Agreement
or any interest therein except with the prior written consent of the
Lenders.
(b) Notwithstanding subsection (c) of this Section 14.5, nothing
herein shall restrict, prevent or prohibit any Lender from (i) pledging its
Loans hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank or (ii) granting assignments or
participations in such Lender's Loans and/or Commitments hereunder to any
Approved Assignee. Any Lender may make, carry or transfer Loans at, to or
for the account of, any of its branch offices or the office of an affiliate
of such Lender except to the extent such transfer would result in increased
costs to the Borrowers.
(c) Any Lender may, in the ordinary course of its lending business and
in accordance with applicable law, at any time, assign to any Approved
Assignee and, with the consent of the Agent (such consent not to be
unreasonably withheld or delayed) and concurrent notice to the Borrowers,
but without the consent of the Borrowers or any other Lender, assign to one
or more other Eligible Assignees all or a portion of its rights and
obligations under this Credit Agreement and the Notes; provided, however,
that (i) any such assignment of a portion must be for a constant and
non-varying portion of its Loans and Commitments, (ii) for each such
assignment, the parties thereto shall execute and deliver to the Agent, for
its acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500 for each
assignment to be paid by the assignee, (iii) no such assignment shall be
for less than $5,000,000 or, if less, the entire remaining Commitments of
such Lender of the Commitments and (iv) if such assignee is a Foreign
Lender, all of the requirements of Section 2.6(b) shall have been satisfied
as a condition to such assignment; and provided, further, that any
assignment to an Approved Assignee shall not be subject to the minimum
assignment amounts specified herein. Upon such execution and delivery of
the Assignment and Acceptance to the Agent, from and after the effective
date of such Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto, and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, such
assignee shall have the rights and obligations of a Lender hereunder and
(y) the assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights (other than any rights it may have
pursuant to Section 14.7 which will survive) and be released from its
obligations under this Credit Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Credit Agreement, such Lender
shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
assignee thereunder confirms and agrees as follows: (i) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
the Notes or any other instrument or document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Credit
Parties or the performance or observance by the Credit Parties of any of
its obligations under this Credit Agreement or any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto, (iii) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the financial statements referred
to in Section 7.1 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (iv) such assignee will, independently and
without reliance upon the Agents, such assigning Lender or any other Lender
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under this Credit Agreement, (v) such assignee appoints and
authorizes the Agents to take such action as agent on its behalf and to
exercise such powers under this Credit Agreement and the other Credit
Documents as are delegated to the Agents by the terms hereof, together with
such powers as are reasonably incidental thereto and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Credit Agreement are required to be
performed by it as a Lender.
(e) The Agent shall maintain at its address referred to in Section
14.4 a copy of each Assignment and Acceptance delivered to and accepted by
it and a register for the recordation of the names and addresses of the
Lenders and the Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error,
and the Borrowers, the Agents and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of
this Credit Agreement. The Register and copies of each Assignment and
Acceptance shall be available for inspection by the Borrowers or any Lender
at any reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, together with any Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit B, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrowers. Within
five (5) Business Days after its receipt of such notice, if requested by
the assignee, the Borrowers shall execute and deliver to the Agent in
exchange for any surrendered Note or Notes (which the assigning Lender
agrees to promptly deliver to the Parent) a new Note or Notes to the order
of the assignee in an amount equal to the Commitment or Commitments assumed
by it pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained a Commitment or Commitments hereunder and if requested
by it, a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment or Commitments retained by it hereunder. Any
such new Note or Notes shall re-evidence the indebtedness outstanding under
any old Notes or Notes and shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the Closing Date and
shall otherwise be in substantially the form of the Note or Notes subject
to such assignments.
(g) Each Lender may sell participations (without the consent of the
Agent, the Borrowers or any other Lender) to one or more parties in or to
all or a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Commitments, the
Loans owing to it and any Note or Notes held by it); provided that (i) such
Lender's obligations under this Credit Agreement (including, without
limitation, its Commitments to the Borrowers hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of any such Note for all purposes of this Credit
Agreement, (iv) the Borrowers, the Agent, and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Credit Agreement and (v)
such Lender shall not transfer, grant, assign or sell any participation
under which the participant shall have rights to approve any amendment or
waiver of this Credit Agreement except to the extent such amendment or
waiver would (A) extend the final maturity date or the date for the
payments of any installment of fees or principal or interest of any Loans
or Letter of Credit reimbursement obligations in which such participant is
participating, (B) reduce the amount of any installment of principal of the
Loans or Letter of Credit reimbursement obligations in which such
participant is participating, (C) except as otherwise expressly provided in
this Credit Agreement, reduce the interest rate applicable to the Loans or
Letter of Credit reimbursement obligations in which such participant is
participating, or (D) except as otherwise expressly provided in this Credit
Agreement, reduce any Fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent of the
Borrowers and the Agent, it will not make any assignment or sell a
participation hereunder in any manner or under any circumstances that would
require registration or qualification of, or filings in respect of, any
Loan, Note or other Obligation under the securities laws of the United
States of America or of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its rights
or obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Borrowers or any of their
Subsidiaries, subject to compliance with Section 14.6 below.
14.6 INFORMATION.
Each Lending Party agrees to keep confidential any information furnished or
made available to it by the Borrowers pursuant to this Credit Agreement that is
marked confidential; provided that nothing herein shall prevent any Lending
Party from disclosing such information (a) to any other Lending Party or any
affiliate of any Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party or affiliate of any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the credit facility
provided herein, (c) as required by any law, rule, or regulation, (d) upon the
order of any court or administrative agency, (e) upon the request or demand of
any regulatory agency or authority; provided,
however, that, with respect to clauses (c) through (e), to the extent permitted
by law, the affected Lending Party shall provide prior written notice to the
affected Borrower of any such request or demand, (f) that is or becomes
available to the public or that is or becomes available to any Lending Party
other than as a result of a disclosure by any Lending Party prohibited by this
Credit Agreement, (g) in connection with any litigation to which such Lending
Party or any of its affiliates may be a party, whether to defend itself, reduce
its liability, protect or exercise any of its claims, rights, remedies or
interests under or in connection with the Credit Documents or any Lender Hedging
Agreement, or otherwise, (h) to the extent necessary in connection with the
exercise of any remedy under this Credit Agreement or any other Credit Document,
(i) subject to provisions substantially similar to those contained in this
Section 14.6, to any actual or proposed participant or assignee and (j) to Gold
Sheets and other similar bank trade publications; such information to consist of
deal terms and other information customarily found in such publications. Each
Borrower hereby authorizes the Agent to use the name, logos and other insignia
of such Borrower and the amount of the credit facility provided hereunder in any
"tombstone" or comparable advertising, on its website or in other marketing
materials of the Agent, subject to such Borrower's prior review of appropriate
notices identifying Borrower's intellectual property rights therein.
14.7 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Borrowers agree to: (a) pay all out-of-pocket costs and expenses of (i)
the Agent in connection with (A) the syndication, negotiation, preparation,
execution, delivery, administration and monitoring of this Credit Agreement and
the other Credit Documents and the documents and instruments referred to therein
or executed in connection therewith, including evaluating the compliance by the
Credit Parties with law and the provisions of such documents (including, without
limitation, the reasonable fees actually incurred and expenses of special
counsel to the Agent and the fees and expenses of counsel for the Agent in
connection with collateral issues and all due diligence, appraisal, field exam,
environmental audit and other similar costs (including ongoing per diem and out
of pocket expenses related to field exams and appraisals)), and (B) any
amendment, waiver or consent relating hereto and thereto including, without
limitation, any such amendments, waivers or consents resulting from or related
to any work-out, re-negotiation or restructure relating to the performance by
any of the Credit Parties under this Credit Agreement or any other Credit
Documents and (ii) the Agent and the Lenders in connection with (A) enforcement
of the Credit Documents and the documents and instruments referred to therein or
executed in connection therewith, including but not limited to, any work-out,
re-negotiation or restructure relating to the performance by any of the Credit
Parties under this Credit Agreement or any other Credit Documents, including,
without limitation, in connection with any such enforcement, the reasonable fees
actually incurred and disbursements of counsel for the Agent and each of the
Lenders, and the reasonable fees and expenses of a financial consultant engaged
by the Agent or its counsel in connection with the foregoing, and (B) any
investigation (including, without limitation, background checks) performed to
determine whether any Credit Party, or any officer, director shareholder or
Affiliate of a Credit Party has violated any Anti-Terrorism Law or other similar
law. The Borrowers shall indemnify, defend and hold harmless the Agent, the
Issuing Bank and each of the Lenders and their respective directors, officers,
agents, employees and counsel from and against (x) any and all losses, claims,
damages, liabilities, deficiencies, judgments or expenses incurred by any of
them (except to the extent that it is finally judicially determined to have
resulted from their own gross negligence or willful
misconduct or breach of this Agreement) arising out of or by reason of any
litigation, investigation, claim or proceeding which arises out of or is in any
way related to (i) this Credit Agreement, any Letter of Credit or any other
Credit Documents or the transactions contemplated hereby or thereby, (ii) any
actual or proposed use by any Borrower of the proceeds of the Loans or (iii) the
Agent's, the Issuing Bank's or the Lenders' entering into this Credit Agreement,
the other Credit Documents or any other agreements and documents relating
hereto, including, without limitation, amounts paid in settlement, court costs
and the fees and disbursements of counsel incurred in connection with any such
litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing and (y) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred in connection with any
remedial or other action taken by any Borrower or any of the Lenders in
connection with compliance by any Borrower or any of its Subsidiaries, or any of
their respective properties, with any federal, state or local environmental
laws, acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines. If and to the extent that the obligations of any Borrower hereunder
are unenforceable for any reason, such Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. The Borrowers' obligations under this
Section 14.7 shall survive any termination of this Credit Agreement and the
other Credit Documents and the payment in full of the Obligations, and are in
addition to, and not in substitution of, any other of their Obligations set
forth in this Credit Agreement. In addition, the Borrowers shall, upon demand,
pay to the Agent and any Lender all costs and expenses (including the reasonable
fees actually incurred and disbursements of counsel and other professionals)
paid or incurred by the Agent, the Issuing Bank or such Lender in (A) enforcing
or defending its rights under or in respect of this Credit Agreement, the other
Credit Documents or any other document or instrument now or hereafter executed
and delivered in connection herewith, (B) in collecting the Loans, (C) in
foreclosing or otherwise collecting upon the Collateral or any part thereof and
(D) obtaining any legal, accounting or other advice in connection with any of
the foregoing.
14.8 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.
This Credit Agreement along with the other Credit Documents constitutes the
entire agreement among the Credit Parties, the Agent and the Lenders, supersedes
any prior agreements among them, and shall bind and benefit the Credit Parties
and the Lenders and their respective successors and permitted assigns.
14.9 AMENDMENTS, ETC.
Neither the amendment or waiver of any provision of this Credit Agreement
or any other Credit Document, nor the consent to any departure by any Credit
Party therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, or if the Lenders shall not be
parties thereto, by the parties thereto and consented to by the Required Lenders
and (so long as no Event of Default has occurred and is continuing) the Parent,
and each such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that no
amendment, waiver or consent shall unless in writing and signed by all the
Lenders (and in the case of clause (e) below, with respect to Section 2.8, and
clause (f) below, any provider of a Lender Hedging Agreement), do any of the
following:
(a) increase the Commitments of the Lenders or subject the Lenders to
any additional obligations;
(b) except as otherwise expressly provided in this Credit Agreement,
reduce the principal of, or interest on, any Note or any Letter of Credit
reimbursement obligations or any fees hereunder;
(c) postpone any date fixed for any payment or mandatory prepayment in
respect of principal of, or interest on, any Note or any Letter of Credit
reimbursement obligations or any fees hereunder;
(d) change the percentage of the Commitments, or any minimum
requirement necessary for the Lenders or the Required Lenders to take any
action hereunder;
(e) amend or waive Section 2.1(d)(vii), Section 2.7, Section 2.8 or
this Section 14.9, or change the definition of Required Lenders;
(f) except as otherwise expressly provided in this Credit Agreement,
and other than in connection with the financing, refinancing, sale or other
disposition of any asset of the Credit Parties permitted under this Credit
Agreement, release any Liens in favor of the Lenders on any material
portion of the Collateral;
(g) except as expressly permitted hereunder, modify the definition of
Borrowing Base or any defined term or component set forth in the definition
thereof such that more credit would be available to the Borrowers as a
result of such modification; provided, that (i) the foregoing shall not
limit the adjustment by the Agent of any reserve implemented by the Agent
and (ii) the foregoing shall not prevent the Agent from restoring any
component of the Borrowing Base which had been lowered by the Agent back to
the value of such component in effect on the Closing Date or to an
intermediate value; or
(h) agree to subordinate the priority of Liens on the Collateral in
favor of the Agent, for the benefit of the Lenders, in favor of any other
creditor of the Credit Parties;
and, provided, further, that no amendment, waiver or consent affecting the
rights or duties of the Agent or the Issuing Bank under any Credit Document
shall in any event be effective, unless in writing and signed by the Agent
and/or the Issuing Bank, as applicable, in addition to the Lenders required
hereinabove to take such action. Notwithstanding any of the foregoing to the
contrary, the consent of the Borrowers shall not be required for any amendment,
modification or waiver of the provisions of Article XIII (other than the
provisions of Section 13.9). In addition, the Borrowers and the Lenders hereby
authorize the Agent to modify this Credit Agreement by unilaterally amending or
supplementing Schedule 1.1A from time to time in the manner requested by the
Borrowers, the Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; provided, however, that the
Agent shall promptly deliver a copy of any such modification to the Borrowers
and each Lender.
14.10 NONLIABILITY OF AGENT AND LENDERS.
The relationship between any Borrower on the one hand and the Lenders and
the Agent on the other hand shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to any Credit
Party. Neither the Agent nor any Lender undertakes any responsibility to any
Borrower to review or inform any Credit Party of any matter in connection with
any phase of such Credit Party's business or operations.
14.11 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender on account of such
Lender's Loans and under any Note or Notes held by it shall be a separate and
independent debt.
14.12 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
14.13 EFFECTIVENESS.
This Credit Agreement shall become effective at such time when all of the
conditions set forth in Section 5.1 have been satisfied or waived by the Lenders
and it shall have been executed by each Borrower and the Agent, and the Agent
shall have received copies hereof (telefaxed or otherwise) which, when taken
together, bear the signatures of each Lender, and thereafter this Credit
Agreement shall be binding upon and inure to the benefit of each Credit Party,
the Agent and each Lender and their respective successors and assigns.
14.14 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement or any
Notes or the other Credit Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
14.15 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Credit Agreement.
14.16 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this Credit
Agreement or in any other Credit Document, the Borrowers, the Agent and the
Lenders hereby agree that all agreements among them under this Credit Agreement
and the other Credit Documents, whether now existing or hereafter arising and
whether written or oral, are expressly limited so that in no contingency or
event whatsoever shall the amount paid, or agreed to be paid, to the Agent or
any
Lender for the use, forbearance, or detention of the money loaned to any
Borrower and evidenced hereby or thereby or for the performance or payment of
any covenant or obligation contained herein or therein, exceed the Highest
Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance any Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the applicable
Borrower. All sums paid or agreed to be paid to the Agent or any Lender for the
use, forbearance, or detention of the Obligations and other indebtedness of the
Borrowers to the Agent or any Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the actual rate of
interest on account of all such indebtedness does not exceed the Highest Lawful
Rate throughout the entire term of such indebtedness. The terms and provisions
of this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrowers, the Agent and the Lenders.
14.17 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that any
Lender or other holder of a Note may have under applicable law, each Lender or
other holder of a Loan or Note shall, if any Event of Default has occurred and
is continuing and whether or not such Lender or such holder has made any demand
or the Obligations of any Borrower are matured, have the right to appropriate
and apply to the payment of the Obligations of such Borrower all deposits
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by such
Lender or other holder, including, without limitation, any and all amounts in
the Cash Concentration Account. Any amount received as a result of the exercise
of such rights shall be reallocated among the Lenders as set forth in Section
3.8. Any Lender exercising its rights under this Section 14.17 shall notify the
Borrowers with reasonable promptness no later than five (5) days after such
exercise.
14.18 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by
the Lenders under this Credit Agreement, for the mutual benefit, directly
and indirectly, of each of the Borrowers and in consideration of the
undertakings of each of the Borrowers to accept joint and several liability
for the obligations of each of them.
(b) Each of the Borrowers jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrowers with respect to the
payment and performance of all of the Obligations, it being the intention
of the parties hereto that all the Obligations shall be
the joint and several obligations of each of the Borrowers without
preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then
in each such event, the other Borrowers will make such payment with respect
to, or perform, such Obligation.
(d) The obligations of each Borrower under the provisions of this
Section 14.18 constitute full recourse obligations of such Borrower,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Credit
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in any Credit Document,
each Borrower hereby waives notice of acceptance of its joint and several
liability, notice of any Loan made under this Credit Agreement, notice of
occurrence of any Event of Default, or of any demand for any payment under
this Credit Agreement, notice of any action at any time taken or omitted by
any Lender under or in respect of any of the Obligations, any requirement
of diligence and, generally, all demands, notices and other formalities of
every kind in connection with this Credit Agreement. Each Borrower hereby
assents to, and waives notice of, any extension or postponement of the time
for the payment of any of the Obligations, the acceptance of any partial
payment thereon, any waiver, consent or other action or acquiescence by any
Lender at any time or times in respect of any default by any Borrower in
the performance or satisfaction of any term, covenant, condition or
provision of this Credit Agreement, any and all other indulgences
whatsoever by any Lender in respect of any of the Obligations, and the
taking, addition, substitution or release, in whole or in part, at any time
or times, of any security for any of the Obligations or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without
limiting the generality of the foregoing, each Borrower assents to any
other action or delay in acting or failure to act on the part of any
Lender, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with the
applicable laws or regulations thereunder which might, but for the
provisions of this Section 14.18, afford grounds for terminating,
discharging or relieving such Borrower, in whole or in part, from any of
its obligations under this Section 14.18, it being the intention of each
Borrower that, so long as any of the Obligations remain unsatisfied, the
obligations of such Borrower under this Section 14.18 shall not be
discharged except by performance and then only to the extent of such
performance. The Obligations of each Borrower under this Section 14.18
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Borrower or any Lender. The joint and
several liability of the Borrowers hereunder shall continue in full force
and effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, membership, constitution or place of
formation of any Borrower or any Lender.
(f) The provisions of this Section 14.18 are made for the benefit of
the Lenders and their respective successors and assigns, and may be
enforced by any such Person from time to time against any of the Borrowers
as often as occasion therefor may arise and without requirement on the part
of any Lender first to marshal any of its claims or to exercise any of its
rights against any of the other Borrowers or to exhaust any remedies
available to it against any of the other Borrowers or to resort to any
other source or means of obtaining payment of any of the Obligations or to
elect any other remedy. The provisions of this Section 14.18 shall remain
in effect until all the Obligations shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Lender upon the insolvency,
bankruptcy or reorganization of any of the Borrowers, or otherwise, the
provisions of this Section 14.18 will forthwith be reinstated in effect, as
though such payment had not been made.
(g) Notwithstanding any provision to the contrary contained herein or
in any other of the Credit Documents, to the extent the joint obligations
of a Borrower shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the
obligations of each Borrower hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state
and including, without limitation, the Bankruptcy Code), after taking into
account, among other things, such Borrower's right of contribution and
indemnification from each other Credit Party under applicable law or the
Contribution Agreement.
14.19 DELEGATION OF AUTHORITY.
Each Borrower and (by execution and delivery of the Guaranty Agreement or
of a joinder thereto and incorporation by reference therein) each Guarantor, if
any, hereby authorizes and appoints the Parent and each of the executive
officers of the Parent, to be its attorneys ("its Attorneys") and in its name
and on its behalf and as its act and deed or otherwise to execute and deliver
all documents and carry out all such acts as are necessary or appropriate in
connection with borrowing Loans and the making of other extensions of credit
hereunder, the granting and perfection of security interests under the Security
Documents, and complying with the terms and provisions hereof and the other
Credit Documents. This delegation of authority and appointment shall be valid
for the duration of the term of this Credit Agreement; provided, however, that
such delegation of authority and appointment shall terminate automatically
without any further act with respect to any executive officer if such executive
officer is no longer an employee of the Parent. Each Borrower and (by execution
and delivery of the Guaranty Agreement or of a joinder thereto and incorporation
by reference therein) each Guarantor, if any, hereby undertakes to ratify
everything which any of its Attorneys shall do in furtherance of this delegation
of authority and appointment.
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IN WITNESS WHEREOF the parties hereto have caused this Credit Agreement to
be executed and delivered by their proper and duly authorized officers as of the
date set forth above.
BORROWERS: WORLD AIRWAYS, INC.
By:
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Name:
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Title:
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NORTH AMERICAN AIRLINES, INC.
By:
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Name:
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Title:
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AGENT AND LENDERS WACHOVIA BANK,
NATIONAL ASSOCIATION,
as Agent and as a Lender
By:
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Name:
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Title:
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