LOAN AND SECURITY AGREEMENT
BY AND AMONG
EVERGREEN INTERNATIONAL AVIATION, INC.
AND
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS BORROWERS,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
XXXXX FARGO FOOTHILL, INC.
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF MAY 13, 2004
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "AGREEMENT"), is
entered into as of May 13, 2004, by and among, on the one hand, the lenders
identified on the signature pages hereof (such lenders, together with their
respective successors and permitted assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "LENDERS"), and XXXXX FARGO
FOOTHILL, INC., a California corporation, as the arranger and administrative
agent for the Lenders (in such capacity, together with its successors and
assigns in such capacity, "AGENT"), and, on the other hand, EVERGREEN
INTERNATIONAL AVIATION, INC., an Oregon corporation ("Parent"), and each of
Parent's Subsidiaries identified on the signature pages hereof (such
Subsidiaries are referred to hereinafter each individually as a "BORROWER", and
individually and collectively, jointly and severally, as the "BORROWERS").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall have
the following definitions:
"ACCOUNT" means an account (as that term is defined in the
Code).
"ACCOUNT DEBTOR" means any Person who is obligated on an
Account, chattel paper, or a General Intangible.
"ACH TRANSACTIONS" means any cash management or related
services (including the Automated Clearing House processing of electronic funds
transfers through the direct Federal Reserve Fedline system) provided by a Bank
Product Provider for the account of Parent or its Subsidiaries.
"ACQUISITION" means any purchase or other acquisition by
Parent or its Subsidiaries of the Stock of any other Person or all or
substantially all of the assets of any other Person.
"ACT" means the Air Transportation Safety and System
Stabilization Act, P.L. 107-42, as the same may be amended from time to time.
"ADDITIONAL DOCUMENTS" has the meaning set forth in SECTION
4.4(C).
"ADMINISTRATIVE BORROWER" has the meaning set forth in SECTION
17.9.
"ADVANCES" has the meaning set forth in SECTION 2.1(A).
"AFFILIATE" means, as applied to any Person, any other Person
who, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Stock, by contract, or otherwise;
PROVIDED, HOWEVER, that, for purposes of the definition of Eligible Accounts and
SECTION 7.13 hereof: (a) any Person which owns directly or indirectly 10% or
more of the Stock having ordinary voting power for the election of directors or
other members of the governing body of a Person or 10% or more of the
partnership or other ownership interests of a Person (other than as a limited
partner of such Person) shall be deemed an Affiliate of such Person, (b) each
director (or comparable manager) of a Person shall be deemed to be an Affiliate
of such Person, and (c) each partnership or joint venture in which a Person is a
partner or joint venturer shall be deemed an Affiliate of such Person.
"AGENT" has the meaning set forth in the preamble to this
Agreement.
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"AGENT ADVANCES" has the meaning set forth in SECTION
2.3(E)(I).
"AGENT-RELATED PERSONS" means Agent, together with its
Affiliates, officers, directors, employees, attorneys, and agents.
"AGENT'S ACCOUNT" means the Deposit Account of Agent
identified on SCHEDULE A-1.
"AGENT'S LIENS" means the Liens granted by Borrowers or their
Subsidiaries to Agent under this Agreement or the other Loan Documents.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"AIR MOBILITY COMMAND" means the Air Mobility Command unit of
the United States Department of the Air Force.
"AIR MOBILITY COMMAND AGREEMENTS" means those certain
agreements identified as (a) contract number F11626-03-D-0024, dated October 1,
2003, between Department of Defense -- Air Mobility Command and the Core
Carriers, and (b) contract number F11626-01-D-0058, dated August 2001, between
Department of Defense -- Air Mobility Command and Evergreen Helicopters, Inc.,
each as in effect on the date hereof and as amended in compliance with the
provisions of this Agreement.
"AIRCRAFT" means any "aircraft" as defined in the Federal Aviation Act, 49
U.S.C. -- Section 40102(a)(6).
"AIRCRAFT COLLATERAL" means the Collateral identified on
SCHEDULE A-2 and any Aircraft, airframes, Engines, Spare Parts or Propellers
hereafter acquired by a Borrower or a Guarantor.
"AIRCRAFT SECURITY AGREEMENT" means one or more aircraft
security agreements executed and delivered by one or more of the Borrowers or
the Guarantors in favor of Agent, in each case, in form and substance
satisfactory to Agent.
"AIRLINES EBITDA" means, with respect to any fiscal period,
Evergreen Airlines' net earnings (or loss), MINUS (to the extent included in
such calculation of Evergreen Airlines' net earnings (or loss)), extraordinary
gains, and interest income, PLUS (to the extent deducted in such calculation of
Evergreen Airlines' net earnings (or loss)) interest expense, income taxes,
non-cash extraordinary charges, depreciation and amortization for such period,
expenses and fees incurred in connection with the consummation of the
transactions contemplated by this Agreement, and non-cash deferred expenses and
fees that are repaid by Borrowers to Existing Agent and the other financial
institutions party to the PNC Credit Agreement on or before the Closing Date, in
each case, as determined in accordance with GAAP.
"APPLICABLE PREPAYMENT PREMIUM" means, as of any date of
determination, an amount equal to (a) during the period from and after the date
of the execution and delivery of this Agreement up to the date that is the first
anniversary of the Closing Date, 3% TIMES the Maximum Revolver Amount, (b)
during the period from and including the date that is the first anniversary of
the Closing Date up to the date that is the second anniversary of the Closing
Date, 2% TIMES the Maximum Revolver Amount, and (c) during the period from and
including the date that is the second anniversary of the Closing Date up to the
date that is 90 days before the Maturity Date, 1% TIMES the Maximum Revolver
Amount; PROVIDED, HOWEVER, that in the event that the Obligations are repaid in
full in cash from the proceeds of a refinancing of the Obligations provided by
Xxxxx Fargo, then the Applicable Prepayment Premium shall equal zero; PROVIDED,
FURTHER, HOWEVER, that if all of the Obligations are prepaid with the proceeds
of a private placement of subordinated debt or equity, an initial public
offering of Parent's Stock or a sale of all or substantially all of the assets
Borrowers, or all or substantially all of the Stock of Parent, the Applicable
Prepayment Premium shall be reduced by 50%.
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"ASSIGNEE" has the meaning set forth in SECTION 14.1(A).
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
Agreement substantially in the form of EXHIBIT A-1.
"AUTHORIZED PERSON" means any officer or employee of
Administrative Borrower.
"AVAILABILITY" means, as of any date of determination, the
amount that Borrowers are entitled to borrow as Advances hereunder (after giving
effect to all then outstanding Obligations (other than Bank Product Obligations)
and all sublimits and reserves then applicable hereunder).
"ASIANA CLAIM" means that breach of contract claim instituted
by Parent against Asiana Airlines, on or about September 19, 2001, in the United
States District Court for the State of Oregon, to recover certain amounts owed
to Parent pursuant to a freighter service agreement, dated on or about January
28, 2000, between Parent and Asiana Airlines.
"BANK PRODUCT" means any financial accommodation extended to
Parent or its Subsidiaries by a Bank Product Provider (other than pursuant to
this Agreement) including: (a) credit cards, (b) credit card processing
services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash
management, including controlled disbursement, accounts or services, or (g)
transactions under Hedge Agreements.
"BANK PRODUCT AGREEMENTS" means those agreements entered into
from time to time by Parent or its Subsidiaries with a Bank Product Provider in
connection with the obtaining of any of the Bank Products.
"BANK PRODUCT OBLIGATIONS" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Administrative
Borrower or its Subsidiaries to any Bank Product Provider pursuant to or
evidenced by the Bank Product Agreements and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, and including all such amounts
that Administrative Borrower or its Subsidiaries are obligated to reimburse to
Agent or any member of the Lender Group as a result of Agent or such member of
the Lender Group purchasing participations from, or executing indemnities or
reimbursement obligations to, a Bank Product Provider with respect to the Bank
Products provided by such Bank Product Provider to Administrative Borrower or
its Subsidiaries.
"BANK PRODUCT PROVIDER" means Xxxxx Fargo or any of its
Affiliates.
"BANK PRODUCT RESERVE" means, as of any date of determination,
the lesser of (a) $5,000,000, and (b) the amount of reserves that Agent has
established (based upon the Bank Product Providers' reasonable determination of
the credit exposure of Administrative Borrower and its Subsidiaries in respect
of Bank Products) in respect of Bank Products then provided or outstanding;
PROVIDED, HOWEVER, that in order to qualify as a Bank Product Reserve, such
reserve must be established at or about the time that the Bank Product Provider
first provides the applicable Bank Product.
"BANKRUPTCY CODE" means title 11 of the United States Code, as
in effect from time to time.
"BASE LIBOR RATE" means the rate per annum, determined by
Agent in accordance with its customary procedures, and utilizing such electronic
or other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/100%), to be the rate at which Dollar deposits (for
delivery on the first day of the requested Interest Period) are offered to major
banks in the London interbank market 2 Business Days prior to the commencement
of the requested Interest Period, for a term and in an amount comparable to the
Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a
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conversion of a Base Rate Loan to a LIBOR Rate Loan) by Administrative Borrower
in accordance with this Agreement, which determination shall be conclusive in
the absence of manifest error.
"BASE RATE" means, the rate of interest announced, from time
to time, within Xxxxx Fargo at its principal office in San Francisco as its
"prime rate", with the understanding that the "prime rate" is one of Xxxxx
Fargo's base rates (not necessarily the lowest of such rates) and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto and is evidenced by the recording thereof after its
announcement in such internal publications as Xxxxx Fargo may designate.
"BASE RATE LOAN" means the portion of the Advances or the Term
Loan that bears interest at a rate determined by reference to the Base Rate.
"BASE RATE MARGIN" means 0.50 percentage points.
"BASE RATE TERM LOAN MARGIN" means 3.00 percentage points.
"BENEFIT PLAN" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which any Borrower or any Subsidiary or ERISA
Affiliate of any Borrower has been an "employer" (as defined in Section 3(5) of
ERISA) within the past six years.
"BOARD OF DIRECTORS" means the board of directors (or
comparable managers) of Parent or any committee thereof duly authorized to act
on behalf of the board of directors (or comparable managers).
"BOOKS" means all of any Person's now owned or hereafter
acquired books and records (including all of their Records indicating,
summarizing, or evidencing their assets (including the Collateral) or
liabilities, all of any Person's Records relating to their business operations
or financial condition, and all of their goods or General Intangibles related to
such information).
"BORROWER" and "BORROWERS" have the respective meanings set
forth in the preamble to this Agreement.
"BORROWER COLLATERAL" means all of each Borrower's now owned
or hereafter acquired right, title, and interest in and to each of the
following:
(a) all of its Accounts,
(b) all of its Books,
(c) all of its commercial tort claims described on SCHEDULE
5.7(D),
(d) all of its Deposit Accounts,
(e) all of its Equipment,
(f) all of its General Intangibles,
(g) all of its Inventory,
(h) all of its Investment Property (including all of its
securities and Securities Accounts),
(i) all of its Negotiable Collateral,
(j) all of its Supporting Obligations,
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(k) money or other assets of each such Borrower that now or
hereafter come into the possession, custody, or control of any member of the
Lender Group, and
(l) the proceeds and products, whether tangible or intangible,
of any of the foregoing, including proceeds of insurance covering any or all of
the foregoing, and any and all Accounts, Books, Deposit Accounts, Equipment,
General Intangibles, Inventory, Investment Property, Negotiable Collateral, Real
Property, Supporting Obligations, money, or other tangible or intangible
property resulting from the sale, exchange, collection, or other disposition of
any of the foregoing, or any portion thereof or interest therein, and the
proceeds thereof.
Notwithstanding anything to the contrary contained in this
definition, the term "Borrower Collateral" shall not include (i) the Stock of
any Excluded Subsidiary (other than Trust) or any Person that is a CFC of a
Borrower solely to the extent that such Stock represents more than 66% of the
total combined voting power of all classes of Stock of such CFC entitled to vote
and solely to the extent that such Stock does not serve as collateral for the
obligations under the Indenture, (ii) any rights or interest in any contract,
lease, permit, license, charter or license agreement covering personal property
of any Borrower if under the terms of such contract, lease, permit, license,
charter or license agreement, or applicable law with respect thereto, the valid
grant of a security interest or lien therein is prohibited as a matter of law or
under the terms of such contract, lease, permit, license, charter or license
agreement and such prohibition has not been waived or the consent of the other
party to such contract, lease, permit, license, charter or license agreement has
not been obtained, or (iii) the Equipment listed on SCHEDULE E-2, PROVIDED,
THAT, the foregoing exclusion shall in no way be construed (a) to apply if any
described prohibition is unenforceable under Section 9-406, 9-407, or 9-408 of
the Code or other applicable law, or (b) to limit, impair, or otherwise affect
the Lender Group's continuing security interests in and liens upon any rights or
interests of any Borrower in or to (x) monies due or to become due under any
described contract, lease, permit, license, charter or license agreement
(including any Accounts), or (y) any proceeds from the sale, license, lease, or
other dispositions of any such contract, lease, permit, license, charter,
license agreement, Stock, or Equipment.
"BORROWER STOCK PLEDGE AGREEMENT" means a stock pledge
agreement, in form and substance satisfactory to Agent, executed and delivered
by each Borrower.
"BORROWING" means a borrowing hereunder consisting of Advances
(or term loans, in the case of the Term Loan) made on the same day by the
Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing
Loan, or by Agent in the case of an Agent Advance, in each case, to
Administrative Borrower.
"BORROWING BASE" means, as of any date of determination, the
result of:
(a) THE LESSER OF
(i) the result of:
(A) 85% of the amount of Eligible
Domestic Accounts, LESS the amount, if any, of the
Domestic Dilution Reserve, PLUS
(B) the result of (I) THE LESSER of
(y) 75% of Eligible Foreign Accounts and (z)
$1,000,000, LESS (II) the amount, if any, of the
Foreign Dilution Reserve, and
(ii) an amount equal to Borrowers'
Collections with respect to Accounts for the
immediately preceding 60 day period, PLUS
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(b) THE LOWER OF
(i) $35,000,000, and
(ii) 85% TIMES the Net Orderly Liquidation
Inventory Value of Borrowers' Eligible Inventory,
MINUS
(c) the sum of (i) the Bank Product Reserve, (ii) the Rent
Reserve, and (iii) the aggregate amount of reserves, if any, established by
Agent under SECTION 2.1(B).
"BUSINESS DAY" means any day that is not a Saturday, Sunday,
or other day on which banks are authorized or required to close in the state of
New York, except that, if a determination of a Business Day shall relate to a
LIBOR Rate Loan, the term "Business Day" also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means, with respect to any Person for
any period, the aggregate of all expenditures by such Person and its
Subsidiaries during such period that are capital expenditures as determined in
accordance with GAAP and reflected as additions to property, plant & equipment
on a consolidated statement of cash flows of such Person, whether such
expenditures are paid in cash or financed, except to the extent that such
expenditures are financed with proceeds of insurance, condemnation awards or
asset sales which are permitted to be used or re-invested by Borrowers pursuant
to the provisions of SECTION 2.4(D)(III)(2).
"CAPITALIZED LEASE OBLIGATION" means that portion of the
obligations under a Capital Lease that is required to be capitalized in
accordance with GAAP.
"CAPITAL LEASE" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"CASH EQUIVALENTS" means (a) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Rating Group ("S&P") or Xxxxx'x Investors Service, Inc.
("Moody's"), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit or
bankers' acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank
that satisfies the criteria described in clause (d) above, or (ii) any other
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any such other bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, and (f)
Investments in money market funds substantially all of whose assets are invested
in the types of assets described in clauses (a) through (e) above.
"CASH MANAGEMENT ACCOUNT" has the meaning set forth in SECTION
2.7(A).
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"CASH MANAGEMENT AGREEMENTS" means those certain cash
management agreements, in form and substance satisfactory to Agent, each of
which is among Parent or one of its Subsidiaries, Agent, and one of the Cash
Management Banks.
"CASH MANAGEMENT BANK" has the meaning set forth in SECTION
2.7(A).
"CFC" means a controlled foreign corporation (as that term is
defined in the IRC).
"CHANGE OF CONTROL" means that (a) Permitted Holders fail to
own and control, directly or indirectly, 50.1% or more of the Stock of Parent
having the right to vote for the election of members of the Board of Directors,
(b) a majority of the members of the Board of Directors do not constitute
Continuing Directors, or (c) any Borrower, Holdings, Parent, or any other
Guarantor ceases to own, directly or indirectly, and control 100% of the
outstanding Stock of each of its Subsidiaries in existence as of the Closing
Date.
"CLOSING DATE" means the date of the making of the initial
Advance (or other extension of credit) hereunder.
"CLOSING DATE BUSINESS PLAN" means the set of Projections of
Borrowers for the fiscal year ending February 28, 2005 on a month by month
basis, in form and substance (including as to scope and underlying assumptions)
reasonably satisfactory to Agent.
"CODE" means the New York Uniform Commercial Code, as in
effect from time to time; PROVIDED, HOWEVER, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection,
priority, or remedies with respect to Agent's Lien on any Collateral is governed
by the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than the State of New York, the term "Code" shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority, or
remedies.
"COLLATERAL" means all assets and interests in assets and
proceeds thereof now owned or hereafter acquired by Administrative Borrower or
its Subsidiaries in or upon which a Lien is granted under any of the Loan
Documents.
"COLLATERAL ACCESS AGREEMENT" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in Parent's or its Subsidiaries' Books, Equipment or
Inventory, in each case, in form and substance satisfactory to Agent.
"COLLECTIONS" means ALL cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds).
"COMMERCIAL TORT CLAIM ASSIGNMENT" has the meaning set forth
in SECTION 4.4(B).
"COMMITMENT" means, with respect to each Lender, its Revolver
Commitment, its Term Loan Commitment, or its Total Commitment, as the context
requires, and, with respect to all Lenders, their Revolver Commitments, their
Term Loan Commitments, or their Total Commitments, as the context requires, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on SCHEDULE C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder, as such amounts may be
reduced or increased from time to time pursuant to assignments made in
accordance with the provisions of SECTION 14.1.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C-1 delivered by the chief financial officer of Parent to
Agent.
"CONTINUING DIRECTOR" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Parent on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
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threatened election contest relating to the election of the directors (or
comparable managers) of Parent and whose initial assumption of office resulted
from such contest or the settlement thereof.
"CONSOLIDATED EBITDA" means, with respect to any fiscal
period, Parent's and its Subsidiaries' consolidated net earnings (or loss),
MINUS (to the extent included in such calculation of Parent's and its
Subsidiaries' consolidated net earnings (or loss)) extraordinary gains, interest
income, and gains with respect to any Non-Wholly Owned Subsidiary of Parent,
PLUS (to the extent deducted in such calculation of Parent's and its
Subsidiaries' consolidated net earnings (or loss)) Interest Expense, income
taxes, non-cash extraordinary charges, non-cash losses with respect to any
Non-Wholly Owned Subsidiary of Parent, depreciation and amortization for such
period, expenses and fees incurred in connection with the consummation of the
transactions contemplated by this Agreement, and non-cash deferred expenses and
fees that are repaid by Borrowers to Existing Agent and the other financial
institutions party to the PNC Credit Agreement on or before the Closing Date, in
each case, as determined in accordance with GAAP.
"CONTROL AGREEMENT" means a control agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by the Parent
or one of its Subsidiaries, Agent, and the applicable securities intermediary
(with respect to a Securities Account) or bank (with respect to a Deposit
Account).
"DAILY BALANCE" means, as of any date of determination and
with respect to any Obligation, the amount of such Obligation owed at the end of
such day.
"DEFAULT" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"DEFAULTING LENDER" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"DEFAULTING LENDER RATE" means (a) for the first 3 days from
and after the date the relevant payment is due, the Base Rate, and (b)
thereafter, the interest rate then applicable to Advances that are Base Rate
Loans (inclusive of the Base Rate Margin applicable thereto).
"DEPOSIT ACCOUNT" means any deposit account (as that term is
defined in the Code).
"DESIGNATED ACCOUNT" means the Deposit Account of
Administrative Borrower identified on SCHEDULE D-1.
"DESIGNATED ACCOUNT BANK" has the meaning ascribed thereto on
SCHEDULE D 1.
"DOMESTIC DILUTION" means, as of any date of determination, a
percentage, based upon the experience of the immediately prior 180 consecutive
days, that is the result of dividing the Dollar amount of (a) bad debt
write-downs, discounts, advertising allowances, credits, or other dilutive items
with respect to Borrowers' Accounts that are not Foreign Accounts, by (b)
Borrowers' xxxxxxxx with respect to such Accounts during such period.
"DOMESTIC DILUTION RESERVE" means, as of any date of
determination, an amount sufficient to reduce the advance rate against Eligible
Domestic Accounts by 1 percentage point for each percentage point by which
Dilution is in excess of 5%.
"DISBURSEMENT LETTER" means an instructional letter executed
and delivered by Borrowers to Agent regarding the extensions of credit to be
made on the Closing Date, the form and substance of which is satisfactory to
Agent.
"DOLLARS" or "$" means United States dollars.
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"ELIGIBLE ACCOUNTS" means Eligible Domestic Accounts and
Eligible Foreign Accounts.
"ELIGIBLE DOMESTIC ACCOUNTS" means those Accounts (other than
Eligible Foreign Accounts) created by one of Borrowers in the ordinary course of
its business, that arise out of its sale of goods or rendition of services, that
comply with each of the representations and warranties respecting Eligible
Accounts made in the Loan Documents, and that are not excluded as ineligible by
virtue of one or more of the excluding criteria set forth below; PROVIDED,
HOWEVER, that such criteria may be revised from time to time by Agent in Agent's
Permitted Discretion to address the results of any audit performed by Agent from
time to time after the Closing Date. In determining the amount to be included,
Eligible Accounts shall be calculated net of customer deposits and unapplied
cash. Eligible Accounts shall not include the following:
(a) Accounts that the Account Debtor has failed to pay within
90 days of original invoice date or which are more than 60 days past due,
(b) Accounts owed by an Account Debtor (or its Affiliates)
where 50% or more of all Accounts owed by that Account Debtor (or its
Affiliates) are deemed ineligible under clause (a) above,
(c) Accounts with respect to which the Account Debtor is an
Affiliate of any Borrower or an employee or agent of any Borrower or any
Affiliate of any Borrower,
(d) Accounts arising in a transaction wherein goods are placed
on consignment or are sold pursuant to a guaranteed sale, a sale or return, a
sale on approval, a xxxx and hold, or any other terms by reason of which the
payment by the Account Debtor may be conditional,
(e) Accounts that are not payable in Dollars,
(f) Accounts with respect to which the Account Debtor either
(i) does not maintain in the United States an office that performs billing and
collection functions, or (ii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or of any department, agency, public corporation, or other
instrumentality thereof, unless (x) the Account is supported by an irrevocable
letter of credit satisfactory to Agent (as to form, substance, and issuer or
domestic confirming bank) that has been delivered to Agent and is directly
drawable by Agent, or (y) the Account is covered by credit insurance in form,
substance, and amount, and by an insurer, satisfactory to Agent,
(g) Accounts with respect to which the Account Debtor is
either (i) the United States or any department, agency, or instrumentality of
the United States (exclusive, however, of Accounts with respect to which the
applicable Borrower has complied, to the reasonable satisfaction of Agent, with
the Assignment of Claims Act, 31 USC ss. 3727), or (ii) any state of the United
States; PROVIDED, that (x) prior to the date that is 90 days after the Closing
Date, the exclusionary criteria set forth in this CLAUSE (G) shall not apply to
any Accounts with respect to which the Air Mobility Command or the United States
Postal Service is the Account Debtor, (y) between the date that is 90 days after
the Closing Date and 120 days after the Closing Date, the exclusionary criteria
set forth in this clause (g) shall not apply to 50% of the amount of Accounts
with respect to which the Air Mobility Command or the United States Postal
Service is the Account Debtor, and (z) between the date that is 121 days after
the Closing Date and 180 days after the Closing Date, the exclusionary criteria
set forth in this clause (g) shall not apply to 25% of the amount of Accounts
with respect to which the Air Mobility Command or the United States Postal
Service is the Account Debtor,
(h) Accounts with respect to which the Account Debtor is a
creditor of any Borrower, has or has asserted a right of setoff, or has disputed
its obligation to pay all or any portion of the Account, to the extent of such
claim, right of setoff, or dispute,
9
(i) Accounts (i) with respect to which the Air Mobility
Command is the Account Debtor, solely to the extent that the total obligations
owing by the Air Mobility Command to Borrowers exceed 60% of all Eligible
Accounts, (ii) with respect to which the United States Postal Service is the
Account Debtor, solely to the extent that the total obligations owing by the
United States Postal Service to Borrowers exceed 40% of all Eligible Accounts,
and (iii) with respect to any other individual Account Debtor whose total
obligations owing to Borrowers exceed 10% of all Eligible Accounts, solely to
the extent of the obligations owing by such Account Debtor to Borrowers in
excess of such percentage (in each case of clauses (i), (ii) and (iii), such
percentages, as applied to a particular Account Debtor, being subject to
reduction by Agent in its Permitted Discretion if the creditworthiness of such
Account Debtor deteriorates); PROVIDED, HOWEVER, that, in each case, the amount
of Eligible Accounts that are excluded because they exceed the foregoing
percentage shall be determined by Agent based on all of the otherwise Eligible
Accounts prior to giving effect to any eliminations based upon the foregoing
concentration limits,
(j) Accounts with respect to which the Account Debtor is
subject to an Insolvency Proceeding, is not Solvent, has gone out of business,
or as to which a Borrower has received notice of an imminent Insolvency
Proceeding or a material impairment of the financial condition of such Account
Debtor,
(k) Accounts with respect to which the Account Debtor is
located in a state or jurisdiction (e.g., New Jersey, Minnesota, and West
Virginia) that requires, as a condition to access to the courts of such
jurisdiction, that a creditor qualify to transact business, file a business
activities report or other report or form, or take one or more other actions,
unless the applicable Borrower has so qualified, filed such reports or forms, or
taken such actions (and, in each case, paid any required fees or other charges),
except to the extent that the applicable Borrower may qualify subsequently as a
foreign entity authorized to transact business in such state or jurisdiction and
gain access to such courts, without incurring any cost or penalty viewed by
Agent to be significant in amount, and such later qualification cures any access
to such courts to enforce payment of such Account,
(l) Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account Debtor's financial
condition,
(m) Accounts that are not subject to a valid and perfected
first priority Agent's Lien,
(n) Accounts with respect to which (i) the goods giving rise
to such Account have not been shipped and billed to the Account Debtor, or (ii)
the services giving rise to such Account have not been performed and billed to
the Account Debtor, or
(o) Accounts that represent the right to receive progress
payments or other advance xxxxxxxx that are due prior to the completion of
performance by the applicable Borrower of the subject contract for goods or
services.
"ELIGIBLE EQUIPMENT" means Equipment of Borrowers consisting
of first quality finished goods (including Equipment that is comprised of fixed
wing Aircraft, rotary wing Aircraft, B747 or DC9 Aircraft, or ground handling
machinery or equipment), that complies with each of the representations and
warranties respecting Eligible Equipment made in the Loan Documents, and that is
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below; PROVIDED, HOWEVER, that such criteria may be revised from time
to time by Agent in Agent's Permitted Discretion to address the results of any
audit or appraisal performed by Agent from time to time after the Closing Date.
An item of Equipment shall not be included in Eligible Equipment if:
(a) a Borrower does not have good, valid, and marketable title
thereto,
10
(b) with respect to Equipment that does not constitute
Aircraft, it is not located at one of the locations in the continental United
States set forth on SCHEDULE E-1 (or in-transit from one such location to
another such location),
(c) it is located on real property leased by a Borrower or in
a contract warehouse, in each case, unless (i) it is subject to a Collateral
Access Agreement executed by the lessor, warehouseman, or other third party, as
the case may be, or (ii) a Rent Reserve has been established with respect to
such location, and unless it is segregated or otherwise separately identifiable
from goods of others, if any, stored on the premises,
(d) it is not subject to a valid and perfected first priority
Agent's Lien,
(e) it is located outside of the coverage area under the
applicable policy of insurance, or
(f) it consists of goods that are obsolete, restrictive or
custom items, packaging or shipping materials, or defective goods.
"ELIGIBLE FOREIGN ACCOUNTS" means any Account created by one
of the Borrowers as to which each of the following is applicable (a) such
Account does not qualify as an Eligible Account solely because the services
giving rise to such Account have not been performed by the applicable Borrower
as of the original invoice date, (b) Agent has a perfected first priority
security interest in such Account, and (c) such Account is owed by an Account
Debtor which does not maintain in the United States an office that performs
billing and collection functions.
"ELIGIBLE INVENTORY" means Inventory of Borrowers consisting
of Spare Parts, fixed wing Aircraft, rotary wing Aircraft, or flyaway kits held
for sale in the ordinary course of Borrowers' business, that complies with each
of the representations and warranties respecting Eligible Inventory made in the
Loan Documents, and that is not excluded as ineligible by virtue of one or more
of the excluding criteria set forth below; provided, however, that such criteria
may be revised from time to time by Agent in Agent's Permitted Discretion to
address the results of any audit or appraisal performed by Agent from time to
time after the Closing Date. An item of Inventory shall not be included in
Eligible Inventory if:
(a) a Borrower does not have good, valid, and marketable title
thereto,
(b) other than flyaway kits, it is not located at one of the
locations in the continental United States set forth on SCHEDULE E-1 or
in-transit from one such location to another such location,
(c) it is located on real property leased by a Borrower or in
a contract warehouse, in each case, unless (i) it is subject to a Collateral
Access Agreement executed by the lessor, warehouseman, or other third party, as
the case may be, or (ii) a Rent Reserve has been established with respect to
such location, and unless it is segregated or otherwise separately identifiable
from goods of others, if any, stored on the premises,
(d) it is not subject to a valid and perfected first priority
Agent's Lien,
(e) it consists of goods returned or rejected by a Borrower's
customers for reasons related to the condition of the goods, or
(f) it consists of goods that are obsolete or slow moving,
restrictive or custom items, work-in-process, raw materials, or goods that
constitute spare parts (other than Spare Parts related to fixed wing Aircraft,
rotary wing Aircraft, or B747 or DC9 Aircraft), packaging and shipping
materials, supplies used or consumed in a Borrower's business, xxxx and hold
goods, defective goods, "seconds," or Inventory acquired on consignment.
11
"ELIGIBLE TRANSFEREE" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of
a Lender and any Lender's Related Funds, (e) so long as no Event of Default has
occurred and is continuing, any other Person approved by Agent and
Administrative Borrower (which approval of Administrative Borrower shall not be
unreasonably withheld, delayed, or conditioned), and (f) upon the occurrence and
during the continuation of an Event of Default, any other Person approved by
Agent.
"ENGINE" means an "aircraft engine" as defined in the Federal
Aviation Act, 49 U.S.C. Section 40102(a)(7).
"ENVIRONMENTAL ACTIONS" means any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or (c)
from or onto any facilities which received Hazardous Materials generated by any
Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest.
"ENVIRONMENTAL LAW" means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy or
rule of common law now or hereafter in effect and in each case as amended, or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, in each case, to the extent
binding on any Borrower or any Subsidiary of a Borrower, relating to the
environment, the effect of the environment on employee health, or Hazardous
Materials, including the Comprehensive Environmental Response Compensation and
Liability Act, 42 USC ss.9601 ET SEQ. ("CERCLA"); the Resource Conservation and
Recovery Act, 42 USC ss.6901 ET SEQ. ("RCRA"); the Federal Water Pollution
Control Act, 33 USC ss. 1251 ET SEQ; the Toxic Substances Control Act, 15 USC
ss. 2601 ET SEQ; the Clean Air Act, 42 USC ss. 7401 ET SEQ.; the Safe Drinking
Water Act, 42 USC ss. 3803 ET SEQ.; the Oil Pollution Act of 1990, 33 USC ss.
2701 ET SEQ.; the Emergency Planning and the Community Right-to-Know Act of
1986, 42 USC ss. 11001 ET SEQ.; the Hazardous Material Transportation Act, 49
USC ss. 1801 ET SEQ.; and the Occupational Safety and Health Act, 29 USC ss.651
ET SEQ. (to the extent it regulates occupational exposure to Hazardous
Materials); any state and local or foreign counterparts or equivalents, in each
case as amended from time to time.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities,
monetary obligations, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all reasonable fees, disbursements
and expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.
"ENVIRONMENTAL LIEN" means any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"EQUIPMENT" means equipment (as that term is defined in the
Code), and includes machinery, machine tools, motors, furniture, furnishings,
fixtures, vehicles (including motor vehicles), computer hardware, tools, parts,
and goods (other than consumer goods, farm products, or Inventory), wherever
12
located, including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA AFFILIATE" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Borrower or a Subsidiary of a Borrower under IRC Section 414(b), (b) any trade
or business subject to ERISA whose employees are treated as employed by the same
employer as the employees of a Borrower or a Subsidiary of a Borrower under IRC
Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412
of the IRC, any organization subject to ERISA that is a member of an affiliated
service group of which a Borrower or a Subsidiary of a Borrower is a member
under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any Person subject to ERISA that is a party to an
arrangement with a Borrower or a Subsidiary of a Borrower and whose employees
are aggregated with the employees of a Borrower or a Subsidiary of a Borrower
under IRC Section 414(o).
"EVENT OF DEFAULT" has the meaning set forth in SECTION 8.
"EVERGREEN AGRICULTURAL" means Evergreen Agricultural
Enterprises, Inc., an Oregon corporation.
"EVERGREEN AIRLINES" means Evergreen International Airlines,
Inc., an Oregon corporation.
"EVERGREEN VINTAGE" means Evergreen Vintage Aircraft, Inc., an
Oregon corporation.
"EXCESS CASH FLOW" means "Excess Cash Flow" as defined in the
Indenture.
"EXCESS CASH FLOW AMOUNT" has the meaning set forth in SECTION
2.4(C)(V).
"EXCLUDED SUBSIDIARIES" means (a) Evergreen Vintage, (b)
Evergreen Agricultural, (c) Xxxx International, a company organized under the
laws of the Cayman Islands, (d) Evergreen International (Europe), a company
organized under the laws of the United Kingdom, (e) Russian American Aviation
Services, a company organized under the laws of Russia, (f) Evergreen
Agricultural Products, LLC, a Delaware corporation, (g) Xxxxx Xxxxx Grazla, LLC,
a Delaware limited liability company, (h) Evergreen Helicopter (PTE) Ltd., a
company organized under the laws of Singapore, (i) Commercial Aviation (PTY),
Ltd., a company organized under the laws of Austria, (j) Evergreen Aviation
Services, Inc., a company organized under the laws of Panama, (k) the Trust
(other than for purposes of SECTION 7.18), and (l) any Immaterial Subsidiary.
"EXCESS AVAILABILITY" means, as of any date of determination,
the amount equal to Availability MINUS the aggregate amount, if any, of all
trade payables of Borrowers and their Subsidiaries aged in excess of their
historical levels with respect thereto and all book overdrafts of Borrowers and
their Subsidiaries in excess of their historical practices with respect thereto,
in each case as determined by Agent in its Permitted Discretion.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
in effect from time to time.
"EXISTING AGENT" means PNC Bank, N.A., as agent for certain
lenders.
"EXTRAORDINARY RECEIPTS" means any Collections received by a
Borrower, a Guarantor or any of their respective Subsidiaries not in the
ordinary course of business (other than (i) proceeds described in SECTION
2.4(C)(II) hereof, or (ii) the payment of any award or compensation for
13
condemnation or taking by eminent domain), including, (a) foreign, United
States, state or local tax refunds paid in connection with or as a result of any
settlement, audit, or amendment to any tax return, (b) pension plan reversions,
(c) proceeds of insurance (other than insurance proceeds related to a casualty
or loss of Collateral), including proceeds of the key man life insurance
policies, (d) judgments, proceeds of settlements or other consideration of any
kind in connection with any cause of action, (e) indemnity payments and (f) any
purchase price adjustment received in connection with any purchase agreement.
"FAA" means the Federal Aviation Administration or any
successor agency or instrumentality thereto.
"FAMILY MEMBER" means, with respect to any individual, any
other individual having a relationship by blood (to the second degree of
consanguinity), marriage, or adoption to such individual.
"FAMILY TRUSTS" means, with respect to any individual, trusts
or other estate planning vehicles established for the benefit of such individual
or Family Members of such individual and in respect of which such individual
serves as trustee or in a similar capacity.
"FEDERAL AVIATION ACT" means Subtitle VII of Title 49 of the
United States Code, as amended from time to time, and the rules and regulations
promulgated thereunder.
"FEDERAL LIEN" has the meaning set forth in SECTION 8.7(A).
"FEE LETTER" means that certain fee letter, dated as of even
date herewith, between Borrowers and Agent, in form and substance reasonably
satisfactory to Agent.
"FINOVA CONSENT" means that certain consent executed by Finova
Capital Corporation, pursuant to which Finova Capital Corporation (i) consents
to the Guaranty to be executed by Trust in favor of Agent, and (ii) consents to
the pledge of the Stock of the Trust in favor of Agent.
"FINOVA DOCUMENTS" means (a) that certain Secured Loan
Agreement, dated as of May 7, 1997, among Finova Capital Corporation as lender,
Wilmington Trust Company, in its capacity as owner trustee of the Trust, as
borrower, and 747 Inc., Xxxxxxx X. Xxxxx and Xxxx, Xxxxxxxxx Inc., as owner
participants, as amended by that certain Amendment Agreement, dated as of May 9,
2003, relative thereto, as further amended by that certain Second Amendment,
dated as of May 13, 2004 relative thereto, and (b) that certain First Priority
Chattel Mortgage and Security Agreement, dated as of May 7, 1997, between Finova
Capital Corporation and Wilmington Trust Company, in its capacity as owner
trustee of the Trust, and all other agreements or documents executed or
delivered in connection therewith, as in effect on the date hereof and as
amended in compliance with the provisions of this Agreement.
"FIXED CHARGES" means with respect to Parent and its
Subsidiaries for any period, the sum, without duplication, of (a) Interest
Expense to the extent paid in cash, (b) principal payments scheduled to be paid
during such period in respect of Indebtedness (including all payments on account
of obligations of Parent or any of its Subsidiaries as a lessee in respect of
Capital Leases and other financed Capital Expenditures), and (c) to the extent
paid in cash by Parent or any of its Subsidiaries, all federal, state, and local
income taxes paid in cash for such period.
"FIXED CHARGE COVERAGE RATIO" means, with respect to Parent
and its Subsidiaries for any period, the ratio of (i) Consolidated EBITDA for
such period MINUS Capital Expenditures made (to the extent not already incurred
in a prior period) or incurred during such period, to (ii) Fixed Charges for
such period.
"FOREIGN ACCOUNTS" means Accounts owed by any Account Debtor
which maintains its chief executive office in Western Europe or Asia.
14
"FOREIGN DILUTION" means, as of any date of determination, a
percentage, based upon the experience of the immediately prior 180 consecutive
days, that is the result of dividing the Dollar amount of (a) bad debt
write-downs, discounts, advertising allowances, credits, or other dilutive items
with respect to Borrowers' Foreign Accounts, by (b) Borrowers' xxxxxxxx with
respect to such Accounts during such period.
"FOREIGN DILUTION RESERVE" means, as of any date of
determination, an amount sufficient to reduce the advance rate against Eligible
Foreign Accounts by 1 percentage point for each percentage point by which
Foreign Dilution is in excess of 5%.
"FUNDING DATE" means the date on which a Borrowing occurs.
"FUNDING LOSSES" has the meaning set forth in SECTION
2.13(B)(II).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"GENERAL INTANGIBLES" means general intangibles (as that term
is defined in the Code), including payment intangibles, contract rights, rights
to payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trade secrets, trademarks,
servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, rights to payment and
other rights under any royalty or licensing agreements, infringement claims,
computer programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, insurance premium rebates, tax refunds, and tax
refund claims and any other personal property other than Accounts, Deposit
Accounts, goods, Investment Property, and Negotiable Collateral.
"GOVERNING DOCUMENTS" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"GOVERNMENTAL AUTHORITY" means any federal, state, local, or
other governmental or administrative body, instrumentality, board, department,
or agency or any court, tribunal, administrative hearing body, arbitration
panel, commission, or other similar dispute-resolving panel or body.
"GROSS ORDERLY LIQUIDATION VALUE" means, as to any asset, the
value of such asset that is estimated to be recoverable in an orderly
liquidation of such asset, such value to be as determined from time to time by a
qualified appraisal company selected by Agent.
"GUARANTOR STOCK PLEDGE AGREEMENT" means a stock pledge
agreement, in form and substance satisfactory to Agent, executed and delivered
by each Guarantor other than the Trust.
"GUARANTORS" means (a) Holdings, (b) Parent, (c) the Trust,
(d) each Subsidiary of Parent that is not a Borrower, and (e) each other person
that guaranties the Obligations, whether pursuant to SECTION 6.15 or otherwise,
and "GUARANTOR" means any one of them.
"GUARANTOR SECURITY AGREEMENT" means one or more security
agreements executed and delivered by each Guarantor (other than the Trust and
Holdings) in favor of Agent, in each case, in form and substance reasonably
satisfactory to Agent.
"GUARANTY" means that certain general continuing guaranty
executed and delivered by each Guarantor in favor of Agent, in form and
substance reasonably satisfactory to Agent.
"HAZARDOUS MATERIALS" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
15
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"HEDGE AGREEMENT" means any and all agreements, or documents
now existing or hereafter entered into by Parent or any of its Subsidiaries that
provide for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency rate
swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Parent's or any of its
Subsidiaries' exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.
"HOLDOUT LENDER" has the meaning set forth in SECTION 15.2(A).
"HOLDINGS" means Evergreen Holdings, Inc., an Oregon
corporation.
"IMMATERIAL SUBSIDIARY" means each Subsidiary of any Borrower
that does not own any assets or that owns assets in an aggregate amount less
than or equal to $10,000.
"INDEBTEDNESS" means (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all obligations as a lessee under Capital Leases, (d) all obligations or
liabilities of others secured by a Lien on any asset of a Person or its
Subsidiaries, irrespective of whether such obligation or liability is assumed,
(e) all obligations to pay the deferred purchase price of assets (other than
trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices), (f) all obligations owing under
Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION
11.3.
"INDEMNIFIED PERSON" has the meaning set forth in SECTION
11.3.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"INDENTURE" means that certain Indenture dated as of May 16,
2003, by and among the Trustee, one or more of the Borrowers or the Guarantors,
as in effect on the date hereof.
"INDENTURE DOCUMENTS" means the Indenture, and the other
material agreements and documents executed or delivered in connection therewith,
as in effect on the date hereof.
"INTERCOMPANY ADVANCE" means loans, advances or transfers of
cash in the ordinary course of business from Parent to one of its Subsidiaries
or from one of Parent's Subsidiaries to Parent or another Subsidiary of Parent
so long as the Parent or the Subsidiary, as applicable, that is acting as the
lender has executed the Intercompany Subordination Agreement.
16
"INTERCOMPANY SUBORDINATION AGREEMENT" means a subordination
agreement executed and delivered by Parent, Borrowers and each of their
Subsidiaries and Agent, the form and substance of which is reasonably
satisfactory to Agent.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor
Agreement dated as of even date herewith by and between Agent and the Trustee,
which is in form and substance reasonably satisfactory to Agent.
"INTEREST EXPENSE" means, for any period, the aggregate of the
interest expense of Parent and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"INTEREST PERIOD" means, with respect to each LIBOR Rate Loan,
a period commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, 3 or 6 months thereafter; PROVIDED, HOWEVER,
that (a) if any Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended (subject to clauses (c)-(e) below) to the
next succeeding Business Day, (b) interest shall accrue at the applicable rate
based upon the LIBOR Rate from and including the first day of each Interest
Period to, but excluding, the day on which any Interest Period expires, (c) any
Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (d) with respect to an Interest Period 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), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, 3 or 6 months after the date on which the Interest Period
began, as applicable, and (e) Borrowers (or Administrative Borrower on behalf
thereof) may not elect an Interest Period which will end after the Maturity
Date.
"INVENTORY" means inventory (as that term is defined in the
Code).
"INVESTMENT" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practice), purchases or other
acquisitions of Indebtedness, Stock, or all or substantially all of the assets
of such other Person (or of any division or business line of such other Person),
and any other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.
"INVESTMENT PROPERTY" means investment property (as that term
is defined in the Code).
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
"ISSUING LENDER" means WFF or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent, agrees, in
such Lender's sole discretion, to become an Issuing Lender for the purpose of
issuing L/Cs or L/C Undertakings pursuant to SECTION 2.12.
"L/C" has the meaning set forth in SECTION 2.12(A).
"L/C DISBURSEMENT" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C UNDERTAKING" has the meaning set forth in SECTION
2.12(A).
17
"LENDER" and "LENDERS" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of SECTION 14.1.
"LENDER GROUP" means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent.
"LENDER GROUP EXPENSES" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by a Borrower or
its Subsidiaries under any of the Loan Documents that are paid, advanced, or
incurred by the Lender Group, (b) actual out-of-pocket fees or charges paid or
incurred by Agent in connection with the Lender Group's transactions with
Borrowers or their Subsidiaries, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record searches
(including tax lien, litigation, and UCC searches and including searches with
the patent and trademark office, the copyright office, or the department of
motor vehicles), filing, recording, publication, appraisal (including periodic
collateral appraisals or business valuations to the extent of the fees and
charges (and up to the amount of any limitation) contained in this Agreement,
real estate surveys, real estate title policies and endorsements, and
environmental audits, (c) costs and expenses incurred by Agent in the
disbursement of funds to or for the account of Borrowers or other members of the
Lender Group (by wire transfer or otherwise), (d) charges paid or incurred by
Agent resulting from the dishonor of checks, (e) reasonable costs and expenses
paid or incurred by the Lender Group to correct any default or enforce any
provision of the Loan Documents, or in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (f) audit fees and expenses of Agent related to
audit examinations of the Parent's and its Subsidiaries' Books to the extent of
the fees and charges (and up to the amount of any limitation) contained in this
Agreement, (g) reasonable costs and expenses of third party claims or any other
suit paid or incurred by the Lender Group in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group's relationship with any Borrower or any Subsidiary
of a Borrower, (h) Agent's and each Lender's reasonable out-of-pocket costs and
expenses (including reasonable attorneys fees) incurred in advising,
structuring, drafting, reviewing, administering, syndicating, or amending the
Loan Documents, and (i) Agent's and each Lender's reasonable out-of-pocket costs
and expenses (including attorneys, accountants, consultants, and other advisors
fees and expenses) incurred in terminating, enforcing (including attorneys,
accountants, consultants, and other advisors fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning any Borrower or any Subsidiary of a Borrower or in exercising rights
or remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action
concerning the Collateral.
"LENDER-RELATED PERSON" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, officers, directors,
employees, attorneys, and agents.
"LETTER OF CREDIT" means an L/C or an L/C Undertaking, as the
context requires.
"LETTER OF CREDIT USAGE" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of
Credit.
"LIBOR DEADLINE" has the meaning set forth in SECTION
2.13(B)(I).
"LIBOR NOTICE" means a written notice in the form of EXHIBIT
L-1.
"LIBOR OPTION" has the meaning set forth in SECTION 2.13(A).
"LIBOR RATE" means, for each Interest Period for each LIBOR
Rate Loan, the rate per annum determined by Agent (rounded upwards, if
necessary, to the next 1/100%) by DIVIDING (a) the Base LIBOR Rate for such
18
Interest Period, by (b) 100% MINUS the Reserve Percentage. The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage.
"LIBOR RATE LOAN" means each portion of an Advance or the Term
Loan that bears interest at a rate determined by reference to the LIBOR Rate.
"LIBOR RATE MARGIN" means 3.00 percentage points.
"LIBOR RATE TERM LOAN MARGIN" means 5.50 percentage points.
"LIEN" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset,
irrespective of whether (a) such interest is based on the common law, statute,
or contract, (b) such interest is recorded or perfected, and (c) such interest
is contingent upon the occurrence of some future event or events or the
existence of some future circumstance or circumstances. Without limiting the
generality of the foregoing, the term "Lien" includes the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also includes reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"LOAN ACCOUNT" has the meaning set forth in SECTION 2.10.
"LOAN DOCUMENTS" means this Agreement, the Aircraft Security
Agreement, the Bank Product Agreements, the Borrower Stock Pledge Agreement, the
Cash Management Agreements, the Control Agreements, the Disbursement Letter, the
Fee Letter, the Finova Consent, the Guarantor Security Agreement, the Guarantor
Stock Pledge Agreement, the Guaranty, the Intercompany Subordination Agreement,
the Intercreditor Agreement, the Letters of Credit, the Mortgages, the Stock
Pledge Agreement, the Tax/Litigation Letter Agreement, the Trademark Security
Agreement, any note or notes executed by a Borrower in connection with this
Agreement and payable to a member of the Lender Group, and any other agreement
entered into, now or in the future, by any Borrower and the Lender Group in
connection with this Agreement.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or financial condition of Borrowers and their Subsidiaries, taken as
a whole, (b) a material impairment of a Borrower's or any of its Subsidiaries'
ability to perform its obligations under the Loan Documents to which it is a
party or of the Lender Group's ability to enforce the Obligations or realize
upon the Collateral, or (c) a material impairment of the enforceability or
priority of the Agent's Liens with respect to the Collateral as a result of an
action or failure to act on the part of a Borrower or a Subsidiary of a
Borrower.
"MATERIAL CONTRACT" means any agreement or contract of any
Borrower, any Guarantor or any Subsidiary of a Borrower or a Guarantor which is
material (or together with related agreements and contracts, is material) to the
business, prospects, operations, financial condition, performance or properties
of Parent and its Subsidiaries, taken as a whole, including without limitation,
the Air Mobility Command Agreement, the Indenture Documents, the FINOVA
Documents, the Xxxxx Employment Agreement, the Trust Agreement, the UPS
Agreement, the USPS Agreement, and any other agreement executed and delivered in
connection therewith.
"MATERIAL ENVIRONMENTAL IMPACT" means $500,000 or greater in
response costs or other costs or penalties under Environmental Laws.
"MATURITY DATE" has the meaning set forth in SECTION 3.4.
"MAXIMUM REVOLVER AMOUNT" means $50,000,000.
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"MAXIMUM TERM LOAN AMOUNT" means, as of any date, the least
of:
(a) $50,000,000,
(b) 80% times the Net Orderly Liquidation Equipment Value of
Borrowers' Eligible Equipment, and (c) the difference between:
(i) an amount equal to (A) for the period from the
Closing Date through February 28,
2005, 1.25 TIMES Borrowers' Consolidated EBITDA for the twelve month period
ending on the last day of the month most recently ended with respect to which
financial reports have been (or were required to be) delivered to Agent pursuant
to SECTION 6.3(A), and (B) for the period from March 1, 2005 through the
Maturity Date, 1.00 TIMES Borrowers' Consolidated EBITDA for the twelve month
period ending on the last day of the month most recently ended with respect to
which financial reports have been (or were required to be) delivered to Agent
pursuant to SECTION 6.3(A), and
(ii) the then extant Revolver Usage.
"MORTGAGE POLICY" has the meaning set forth in SECTION 3.1(V).
"MORTGAGES" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a
Borrower, a Guarantor or a Subsidiary of a Borrower or a Guarantor in favor of
Agent, in form and substance satisfactory to Agent, that encumber the Real
Property Collateral.
"NEGOTIABLE COLLATERAL" means letters of credit, letter of
credit rights, instruments, promissory notes, drafts, documents, and chattel
paper (including electronic chattel paper and tangible chattel paper).
"NET CASH PROCEEDS" means, with respect to any sale or
disposition by any Person or any Subsidiary thereof of property or assets or any
casualty event or condemnation event with respect to the property or assets of
any Person or any Subsidiary thereof, the amount of Collections received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment of deferred consideration) by or on behalf of such Person or
such Subsidiary, in connection therewith after deducting therefrom only (i) the
amount of any Indebtedness secured by any Permitted Lien on any asset (other
than (A) Indebtedness owing to Agent or any Lender under this Agreement or the
other Loan Documents and (B) Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection with such
disposition, (ii) out-of-pocket fees and expenses related thereto incurred by
such Person or such Subsidiary in connection therewith, (iii) taxes paid to any
taxing authorities by such Person or such Subsidiary in connection therewith,
and (iv) the amount of any reserve not to exceed 5% of the aggregate amount of
Collections received from such sale or disposition that is required to be
maintained under GAAP for liabilities incurred by such Person or such Subsidiary
for any indemnification obligation or purchase price adjustment in connection
with such disposition so long as immediately after any portion of such reserve
is used to pay such liabilities, the remaining portion shall constitute Net Cash
Proceeds; and in the case of each of (i), (ii), and (iii), to the extent, but
only to the extent, that the amounts so deducted are, at the time of receipt of
such cash, actually paid to a Person that is not an Affiliate and are properly
attributable to such transaction.
"NET ORDERLY LIQUIDATION INVENTORY VALUE" means the value of
Borrowers' Inventory that is estimated to be recoverable in an orderly
liquidation of such Inventory net of all associated costs and expenses of such
liquidation, such value to be as determined from time to time by a qualified
appraisal company selected by Agent.
20
"NET ORDERLY LIQUIDATION EQUIPMENT VALUE" means the value of
Borrowers' Equipment that is estimated to be recoverable in an orderly
liquidation of such Equipment net of all associated costs and expenses of such
liquidation, such value to be as determined from time to time by a qualified
appraisal company selected by Agent.
"NON-FEDERAL NON-PRIORITY LIEN" has the meaning set forth in
SECTION 8.7(B).
"NON-FEDERAL PRIORITY LIEN" has the meaning set forth in
SECTION 8.7(A).
"NON-WHOLLY OWNED SUBSIDIARY" means, with respect to any
Person, any Subsidiary of such Person with respect to which such Person does not
own (directly or indirectly) 100% of the Stock of such Subsidiary.
"OBLIGATIONS" means (a) all loans (including the Term Loan),
Advances, debts, principal, interest, contingent reimbursement obligations with
respect to outstanding Letters of Credit, premiums, liabilities (including all
amounts charged to Borrowers' Loan Account pursuant hereto), obligations
(including indemnification obligations), fees (including the fees provided for
in the Fee Letter), charges, costs, Lender Group Expenses, lease payments,
guaranties, covenants, and duties of any kind and description owing by Borrowers
to the Lender Group pursuant to or evidenced by the Loan Documents and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including all interest not paid when due and all Lender Group Expenses that
Borrowers are required to pay or reimburse by the Loan Documents, by law, or
otherwise (including any portion of any of the foregoing that accrues after the
commencement of an Insolvency Proceeding, whether or not allowed or allowable in
whole or in part as a claim in any such Insolvency Proceeding), and (b) all Bank
Product Obligations. Any reference in this Agreement or in the Loan Documents to
the Obligations shall include all extensions, modifications, renewals, or
alterations thereof, both prior and subsequent to any Insolvency Proceeding.
"ORIGINATING LENDER" has the meaning set forth in SECTION
14.1(E).
"OVERADVANCE" has the meaning set forth in SECTION 2.5.
"PARENT" has the meaning set forth in the preamble to this
Agreement.
"PARTICIPANT" has the meaning set forth in SECTION 14.1(E).
"PARTICIPANT REGISTER" has the meaning set forth in SECTION
14.1(I).
"PAY-OFF LETTER" means a letter, in form and substance
reasonably satisfactory to Agent, from Existing Agent to Agent respecting the
amount necessary to repay in full all of the obligations of Borrowers and their
Subsidiaries owing to Existing Agent and the other financial institutions party
to that certain Credit, Guaranty, and Security Agreement, dated as of May 16,
2003 (the "PNC CREDIT AGREEMENT"), and the related financing agreement, and
obtain a release of all of the Liens existing in favor of Existing Agent in and
to the assets of Borrowers and their Subsidiaries.
"PERMITTED ACQUISITION" means an Acquisition so long as:
(a) no Default or Event of Default shall have occurred and be
continuing or would result from the consummation of the proposed Acquisition,
(b) after giving effect to the proposed Acquisition, Parent
and its Subsidiaries shall have Availability plus Qualified Cash of at least
$20,000,000,
21
(c) unless the Required Lenders otherwise consent in writing
(such consent not to be unreasonably withheld), (i) the total cash consideration
paid in connection with all Acquisitions consummated since the Closing Date
shall not exceed $5,000,000 in the aggregate, and (ii) the total obligations
assumed in connection with all Acquisitions consummated since the Closing Date
shall not exceed $5,000,000 in the aggregate,
(d) any Indebtedness that is incurred as a result of such
Acquisition is permitted under Section 7.1,
(e) the assets being acquired, or the Person whose Stock is
being acquired, are useful in or engaged in, as applicable, the business of
Parent and its Subsidiaries or a business reasonably related thereto,
(f) Parent has provided Agent with written confirmation,
supported by reasonably detailed calculations, that on a pro forma basis,
created by adding the historical combined financial statements of Parent
(including the combined financial statements of any other Person or assets that
were the subject of a prior Permitted Acquisition during the relevant period) to
the historical consolidated financial statements of the Person to be acquired
(or the historical financial statements related to the assets to be acquired)
pursuant to the proposed Acquisition (adjusted to eliminate expense items that
would not have been incurred and include income items that would have been
recognized, in each case, if the combination had been accomplished at the
beginning of the relevant period; such eliminations and inclusions to be
mutually agreed upon by Parent and the Required Lenders), Borrowers would have
been in compliance with each of the financial covenants in Section 7.18 hereof
for the 12 months ending as of the fiscal quarter ended immediately prior to the
proposed date of consummation of such proposed Acquisition for which there are
available financial statements, and Agent has completed its audit, appraisal,
and standard due diligence with respect to the assets or Person that is to be
the subject of the proposed Acquisition and the results thereof are reasonably
satisfactory to the Required Lenders,
(g) Parent has provided Agent with written notice of the
proposed Acquisition not less than 10 Business Days prior to the anticipated
closing date of the proposed Acquisition,
(h) in the case of an asset Acquisition, the subject assets
are being acquired by one or more of the Borrowers,
(i) in the case of an asset Acquisition, the relevant Borrower
shall have executed and delivered any and all security agreements, financing
statements, fixture filings, and other documentation reasonably requested by the
Required Lenders in order to include the newly acquired assets within the
Collateral,
(j) in the case of an Acquisition of Stock, the subject Stock
is not of a CFC and is being acquired in such Acquisition directly by one of
Borrowers, and
(k) in the case of an Acquisition of Stock, Borrowers shall
have executed and delivered a supplement to the Stock Pledge Agreement in order
to include the Stock being acquired thereunder and shall have delivered to Agent
possession of the original Stock certificates respecting all of the issued and
outstanding shares of Stock of such acquired Person together with stock powers
with respect thereto endorsed in blank, and
(l) in the case of an Acquisition of Stock, Borrowers shall
have caused such acquired Person to execute and deliver a joinder to, at the
election of the Required Lenders: (i) the Guaranty and the Guarantor Security
Agreement, or (ii) this Agreement to make such Person a party hereto, together
with any and all security agreements, financing statements, fixture filings, and
22
other documentation reasonably requested by the Required Lenders to cause such
acquired Person to be obligated with respect to the Obligations and to include
the assets of the acquired Person within the Collateral.
"PERMITTED DISCRETION" means a determination made in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.
"PERMITTED DISPOSITIONS" means (a) sales or other dispositions
of Equipment that is substantially worn, damaged, or obsolete in the ordinary
course of business, (b) sales of Inventory to buyers in the ordinary course of
business, (c) the use or transfer of money or Cash Equivalents in a manner that
is not prohibited by the terms of this Agreement or the other Loan Documents,
(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business, (e)
sales or other dispositions from one Borrower to another Borrower, (f) sales or
other dispositions expressly permitted by SECTION 7.3(A), (g) the sale by
Borrowers of two C130 Aircrafts so long as (i) no Default or Event of Default
has occurred, is continuing, or would result therefrom, (ii) such sale is upon
fair and reasonable terms, (iii) at least 75% of the consideration for each
Aircraft is paid in cash; (iv) Borrowers shall have delivered to Agent a copy of
the agreement, together with all exhibits and schedules thereto, pursuant to
which the proposed sale is to be made (and all other agreements or documents to
be entered into or executed in connection therewith), certified as being true,
correct, and complete by an officer of Parent, in each case, in form and
substance satisfactory to Agent, and (v) the sale shall have been consummated in
accordance with the terms of such agreements, (h) sales of assets in which the
proceeds from each sale are used to replace the assets that are sold so long as
(i) no Default or Event of Default has occurred, is continuing, or would results
therefrom, (ii) at least the greater of (x) 75% of the consideration for such
assets, and (y) the Gross Orderly Liquidation Value of such assets, is paid in
cash, and the remaining portion of the consideration is evidenced by a
promissory note that is delivered to Agent together with an allonge endorsed in
blank, (iii) the amount of proceeds received in respect of all such sales is
less than $25,000,000 in the aggregate during the term of this Agreement, (iv)
Parent delivers a certificate to Agent within 10 days after each sale, stating
that the proceeds from such sale shall be used to replace the assets that were
sold within a period specified in such certificate not to exceed the earlier of
(x) 180 days after the receipt of such proceeds and (y) the Maturity Date (which
certificate shall set forth estimates of the proceeds to be so expended), (v)
proceeds from each sale are not commingled with any other cash and are
immediately deposited in a separate Deposit Account subject to a Control
Agreement in favor of Agent, (vi) if all or any portion of such proceeds are not
used to replace the assets that were sold within the period specified in the
relevant certificate furnished pursuant hereto, such remaining portion shall be
applied to the Obligations in accordance with SECTION 2.4(D)(III) on the last
day of such specified period, and (i) dispositions of assets (other than current
Accounts or Stock) not otherwise permitted in clauses (a) through (h) so long as
(i) no Default or Event of Default has occurred and is continuing or would
result therefrom, (ii) the consideration received for such assets is at least
equal to the fair market value thereof, (iii) at least 75% of the consideration
is paid in cash, (iv) the remaining portion of the consideration is evidenced by
a promissory note that is delivered to Agent together with an allonge endorsed
in blank, and (v) the Gross Orderly Liquidation Value of all such dispositions
is less than $6,000,000 during the term of this Agreement.
"PERMITTED DISTRIBUTIONS" means (a) distributions by any
Person to a Borrower or Parent, (b) distributions by Parent to Holdings, in an
aggregate amount not in excess of $200,000 during any fiscal year of Parent for
the purpose of paying administrative expenses of Holdings so long as (i) no
material portion of Holdings', Parent's, any Borrower's or any of their
respective Subsidiaries' assets has been attached, seized, subjected to a writ
or distress warrant, levied upon, or comes into the possession of any third
Person, (ii) an Insolvency Proceeding has not been commenced by or against
Holdings, Parent, any Borrower or any of their respective Subsidiaries, and
(iii) none of Holdings, Parent, any Borrower or any of their respective
Subsidiaries has been enjoined, restrained, or in any way prevented by court
order from continuing to conduct all or any material part of its business
affairs, and (c) the Permitted Sys-tems Distribution.
23
"PERMITTED HOLDER" means (a) Xxxxxxx X. Xxxxx, his Family
Members, and his Family Trusts, and (b) Ventures Holdings, Inc. so long as all
of the Stock of Ventures Holdings, Inc. is held, directly or indirectly, by one
or more of the Persons listed in clause (a).
"PERMITTED INTERCOMPANY ADVANCE" means an Intercompany Advance
from Parent or any of its Subsidiaries to Parent or any Borrower.
"PERMITTED INVESTMENTS" means (a) Investments in cash and Cash
Equivalents, (b) Investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, (d) Investments received in settlement of amounts due to a
Borrower or any Subsidiary of a Borrower effected in the ordinary course of
business or owing to a Borrower or any Subsidiary of a Borrower as a result of
Insolvency Proceedings involving an Account Debtor or upon the foreclosure or
enforcement of any Lien in favor of a Borrower or any Subsidiary of a Borrower,
(e) Investments by a Borrower or a Guarantor in another Borrower or Guarantor
(other than the Trust) in the form of Stock (including the Permitted Sys-tems
Distribution), (f) Investments by a Borrower or a Guarantor in the Excluded
Subsidiaries in the form of Stock, to the extent in existence as of the Closing
Date, (g) Investments outstanding on the Closing Date and listed on SCHEDULE
P-2, (h) Investments in joint ventures so long as (i) no Default or Event of
Default has occurred and is continuing or would result therefrom, (ii) no cash,
property, or other assets of any Borrower or Guarantor are transferred or
contributed to such joint venture and no Indebtedness of such joint venture is
assumed or guaranteed, (iii) all cash received by the joint venture is deposited
into an account of the joint venture (and not commingled with the cash of any
other Person, including any joint venture partner), (iv) all cash and Cash
Equivalents of the joint venture that is available for distribution to the joint
venture partners is distributed to the joint venture partners within 3 Business
Days of receipt thereof, and (v) Agent shall have a perfected, first priority
security interest in the interest of the joint venture partner that is a
Borrower or Guarantor, (i) any promissory note issued to Parent or any Borrower
in connection with (i) the sale by Borrowers of two C130 Aircrafts pursuant to
the terms and conditions of subsection (g) of the definition of Permitted
Dispositions, and (ii) the sale by Borrowers of assets in which the proceeds
from each sale are used to replace the assets that are sold pursuant to the
terms and conditions of subsection (h) of the definition of Permitted
Dispositions, and (j) unsecured loans made by Borrowers to Evergreen Vintage or
Evergreen Agricultural in an aggregate amount during the term of this Agreement
not to exceed $6,000,000 so long as (i) no Default or Event of Default has
occurred, is continuing, or would result therefrom, (ii) after giving effect to
the proposed loans, Borrowers have Availability plus Qualified Cash of at least
$10,000,000, (iii) each loan is evidenced by a promissory note that is delivered
to Agent, together with an allonge endorsed in blank, (iv) each loan made to
Evergreen Vintage is used solely to operate its business of refurbishing vintage
aircraft that is owned by Evergreen Vintage on the Closing Date and constructing
one Imax Theater, and (v) each loan made to Evergreen Agricultural is not used
to purchase any real property or farms, PROVIDED that such $6,000,000 aggregate
amount shall be increased to $8,000,000 so long as Borrowers achieve EBITDA of
at least $120,000,000 for the 12 month period ending February 28, 2005.
"PERMITTED LIENS" means (a) Liens held by Agent, (b) Liens for
unpaid taxes that either (i) are not yet delinquent, or (ii) do not constitute
an Event of Default hereunder and are the subject of Permitted Protests, (c)
Liens set forth on SCHEDULE P-1, (d) the interests of lessors under operating
leases, (e) purchase money Liens or the interests of lessors under Capital
Leases to the extent that such Liens or interests secure Permitted Purchase
Money Indebtedness and so long as such Lien attaches only to the asset purchased
or acquired and the proceeds thereof, (f) Liens arising by operation of law in
favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of Borrowers' business and not in
connection with the borrowing of money, and which Liens either (i) are for sums
not yet delinquent, or (ii) are the subject of Permitted Protests, (g) Liens on
amounts deposited in connection with obtaining worker's compensation or other
unemployment insurance, (h) Liens on amounts deposited in connection with the
making or entering into of bids, tenders, or leases in the ordinary course of
business and not in connection with the borrowing of money, (i) Liens on amounts
deposited as security for surety or appeal bonds in connection with obtaining
such bonds in the ordinary course of business, (j) Liens resulting from any
judgment or award that is not an Event of Default hereunder, (k) with respect to
24
any Real Property, easements, rights of way, and zoning restrictions that do not
materially interfere with or impair the use or operation thereof, and (l)
customary rights of setoff or banker's Liens on amounts deposited at a
depository institution solely for customary bank charges owed by Parent or any
Borrower to such depository institution and not in connection with the borrowing
of money.
"PERMITTED PROTEST" means the right of Administrative Borrower
or any of its Subsidiaries to protest any Lien (other than any Lien that secures
the Obligations), taxes (other than payroll taxes or taxes that are the subject
of a United States federal tax lien), or rental payment, provided that (a) a
reserve with respect to such obligation is established on the Parent's and its
Subsidiaries' Books in such amount as is required under GAAP, (b) any such
protest is instituted promptly and prosecuted diligently by Administrative
Borrower or any of its Subsidiaries, as applicable, in good faith, and (c) Agent
is satisfied that, while any such protest is pending, there will be no
impairment of the enforceability, validity, or priority of any of the Agent's
Liens.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means, as of any date
of determination, Purchase Money Indebtedness incurred after the Closing Date in
an aggregate amount outstanding at any one time not in excess of $15,000,000.
"PERMITTED SYS-TEMS DISTRIBUTION" the distribution by
Evergreen Airlines of 100% of the Stock of Sys-tems LogistiX, Inc., a Delaware
corporation, to Parent so long as concurrently with such distribution, Parent
executes and delivers to Agent an amendment to the Guarantor Stock Pledge
Agreement or such other documentation as Agent deems necessary in order to
perfect, and continue the perfection of, Agent's Liens on the Stock of Sys-tems
LogistiX, Inc., a Delaware corporation.
"PERSON" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"PNC CREDIT AGREEMENT" has the meaning set forth in the
definition of Pay-Off Letter.
"PROJECTIONS" means Parent's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
basis consistent with Parent's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"PROPELLER" means a "propeller" as defined in the
Federal Aviation Act, 49 U.S.C. Section 40102(a)(36).
"PRO RATA SHARE" means, as of any date of determination:
(a) with respect to a Lender's obligation to make Advances and
receive payments of principal, interest, fees, costs, and expenses with respect
thereto, (i) prior to the Revolver Commitments being terminated or reduced to
zero, the percentage obtained by dividing (y) such Lender's Revolver Commitment,
by (z) the aggregate Revolver Commitments of all Lenders, and (ii) from and
after the time that the Revolver Commitments have been terminated or reduced to
zero, the percentage obtained by dividing (y) the aggregate outstanding
principal amount of such Lender's Advances by (z) the aggregate outstanding
principal amount of all Advances,
(b) with respect to a Lender's obligation to participate in
Letters of Credit, to reimburse the Issuing Lender, and to receive payments of
fees with respect thereto, (i) prior to the Revolver Commitments being
terminated or reduced to zero, the percentage obtained by dividing (y) such
Lender's Revolver Commitment, by (z) the aggregate Revolver Commitments of all
Lenders, and (ii) from and after the time that the Revolver Commitments have
been terminated or reduced to zero, the percentage obtained by dividing (y) the
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aggregate outstanding principal amount of such Lender's Advances by (z) the
aggregate outstanding principal amount of all Advances,
(c) with respect to a Lender's obligation to make the Term
Loan and receive payments of interest, fees, and principal with respect thereto,
(i) prior to the making of the Term Loan, the percentage obtained by dividing
(y) such Lender's Term Loan Commitment, by (z) the aggregate amount of all
Lenders' Term Loan Commitments, and (ii) from and after the making of the Term
Loan, the percentage obtained by dividing (y) the principal amount of such
Lender's portion of the Term Loan by (z) the principal amount of the Term Loan,
and
(d) with respect to all other matters as to a particular
Lender (including the indemnification obligations arising under SECTION 16.7),
the percentage obtained by dividing (i) such Lender's Revolver Commitment PLUS
the unpaid principal amount of such Lender's portion of the Term Loan by (ii)
the aggregate amount of Revolver Commitments of all Lenders PLUS the Term Loan;
PROVIDED, HOWEVER, that in the event the Revolver Commitments have been
terminated or reduced to zero, Pro Rata Share shall be the percentage obtained
by dividing (A) the principal amount of such Lender's Advances PLUS such
Lender's ratable portion of the Risk Participation Liability with respect to
outstanding Letters of Credit PLUS the unpaid principal amount of such Lender's
portion of the Term Loan by (B) the principal amount of all outstanding Advances
PLUS the aggregate amount of the Risk Participation Liability with respect to
outstanding Letters of Credit PLUS the outstanding principal balance of the Term
Loan.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 90 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"QUALIFIED CASH" means, as of any date of determination, the
amount of unrestricted cash and Cash Equivalents of Borrowers and their
Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any
combination thereof, and which such Deposit Account or Securities Account is the
subject of a Control Agreement and is maintained by a branch office of the bank
or securities intermediary located within the United States.
"RCRA" has the meaning set forth in the definition of
Environmental Law.
"REAL PROPERTY" means any estates or interests in real
property now owned or hereafter acquired by any Borrower or a Subsidiary of any
Borrower and the improvements thereto.
"REAL PROPERTY COLLATERAL" means the Real Property identified
on SCHEDULE R-1 and any Real Property hereafter acquired by a Borrower or any
Subsidiary of a Borrower.
"RECORD" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"REGISTERED LOAN" has the meaning set forth in SECTION 2.17.
"REGISTERED NOTE" has the meaning set forth in SECTION 2.17.
"REGULATIONS" means the regulations for Air Carrier Guarantee
Loan Program issued pursuant to the Act, 14 C.F.R. Part 1300, as the same may be
amended from time to time.
"RELATED FUND" means a fund, money market account, investment
account or other account managed by a Lender or an Affiliate of such Lender or
its investment manager.
"RELEVANT FISCAL YEAR" has the meaning set forth in SECTION
2.4(C)(V).
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"REMEDIAL ACTION" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial operation and maintenance activities, or (e) conduct any other
actions with respect to Hazardous Materials authorized by Environmental Laws.
"RENT RESERVE" means, as of any date of determination, with
respect to each leased location that is identified on SCHEDULE E-1 (as
supplemented from time to time in accordance herewith) at which any Borrower or
any Guarantor stores or maintains Inventory or Equipment and as to which a
Collateral Access Agreement has not been received by Agent as of such date, a
reserve in an amount equal to three months rent under the lease or other similar
agreement with respect to such location; provided that so long as no Event of
Default has occurred or is continuing, the aggregate amount of the Rent Reserve
shall not exceed $750,000.
"REPLACEMENT LENDER" has the meaning set forth in SECTION
15.2(A).
"REPORT" has the meaning set forth in SECTION 16.17.
"REQUIRED AVAILABILITY" means that the sum of (a) Excess
Availability, PLUS (b) Qualified Cash exceeds $10,000,000.
"REQUIRED LENDERS" means, at any time, the Required Revolver
Lenders and the Required Term Loan Lenders.
"REQUIRED REVOLVER LENDERS" means, at any time, Lenders who
hold at least 50.1% of the sum of the Revolver Commitment, or if the Revolver
Commitment has been terminated or reduced to zero, the then extant Revolver
Usage.
"REQUIRED TERM LOAN LENDERS" means, at any time, Lenders who
hold at least 50.1% of the then extant principal balance of the Term Loan.
"RESERVE PERCENTAGE" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"REVOLVER COMMITMENT" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on SCHEDULE C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of SECTION 14.1.
"REVOLVER USAGE" means, as of any date of determination, the
sum of (a) the amount of outstanding Advances, PLUS (b) the amount of the Letter
of Credit Usage.
"RISK PARTICIPATION LIABILITY" means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
27
by Borrowers, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"SECURITIES ACCOUNT" means a "securities account" as that term
is defined in the Code.
"SETTLEMENT" has the meaning set forth in SECTION 2.3(F)(I).
"SETTLEMENT DATE" has the meaning set forth in SECTION
2.3(F)(I).
"XXXXX EMPLOYMENT AGREEMENT" means the letter agreement, dated
April 30, 2003, between Parent and Xxxxxxx X. Xxxxx, excluding any amendment or
other modification thereto.
"SOLVENT" means, with respect to any Person on a particular
date, that, at fair valuations, the sum of such Person's assets is greater than
all of such Person's debts.
"SPARE PART" means any "spare part" or "appliance" as defined
in the Federal Aviation Act.
"STOCK" means all shares, options, warrants, interests,
participations, beneficial interests in any trust, or other equivalents
(regardless of how designated) of or in a Person, whether voting or nonvoting,
including common stock, preferred stock, or any other "equity security" (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the SEC under the Exchange Act).
"SUBSIDIARY" of a Person means a corporation, partnership,
limited liability company, trust, or other entity in which that Person directly
or indirectly owns or controls the shares of Stock having ordinary voting power
to elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity; PROVIDED, THAT for the purposes of this Agreement, the Excluded
Subsidiaries shall not constitute Subsidiaries of Parent, any Borrower or any
Guarantor, PROVIDED FURTHER that the Trust shall constitute a Subsidiary of
Parent solely for purposes of calculating compliance with the financial
covenants set froth in SECTION 7.18.
"SUPPORTING OBLIGATION" means a letter-of-credit right or
secondary obligation that supports the payment or performance of an Account,
chattel paper, document, General Intangible, instrument, or Investment Property.
"SWING LENDER" means WFF or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender under SECTION 2.3(D).
"SWING LOAN" has the meaning set forth in SECTION 2.3(D)(I).
"TAXES" has the meaning set forth in SECTION 16.11.
"TAX/LITIGATION LETTER AGREEMENT" means that certain letter
agreement, executed by the Parent and Borrowers, in favor of Agent, regarding
certain tax liens and litigation matters referenced thereto, in form and
substance satisfactory to Agent.
"TERM LOAN" has the meaning set forth in SECTION 2.2(A).
"TERM LOAN AMOUNT" means (a) on the Closing Date, $50,000,000,
and (b) on any date of determination after the Closing Date, the outstanding
principal balance of the Term Loan.
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"TERM LOAN COMMITMENT" means, with respect to each Lender, its
Term Loan Commitment, and, with respect to all Lenders, their Term Loan
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on SCHEDULE C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of SECTION 14.1.
"TERM LOAN LENDER" means any Lender that has a Term Loan
Commitment or, if Term Loan has been funded, that has an outstanding portion of
the Term Loan.
"TOTAL COMMITMENT" means, with respect to each Lender, its
Total Commitment, and, with respect to all Lenders, their Total Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on SCHEDULE C-1 attached hereto or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of SECTION 14.1.
"TRADEMARK SECURITY AGREEMENT" means a trademark security
agreement executed and delivered by each Borrower and Agent, the form and
substance of which is satisfactory to Agent.
"TRUST" means the trust created by the Trust Agreement.
"TRUST AGREEMENT" means the Trust Agreement, dated as of
February 25, 1986, as amended and restated pursuant to the Amended and Restated
Trust Agreement, dated as of August 31, 1987, as amended on August 31, 1988, and
as amended and restated pursuant to the Second Amended and Restated Trust
Agreement, dated as of September 29, 1995, as amended on May 8, 2003, and as
further amended pursuant to the Second Amendment to the Second Amended and
Restated Trust Agreement, dated as of January 14, 2004, and as further amended
pursuant to the Third Amendment to the Second Amended and Restated Trust
Agreement, dated as of May 13, 2004, among Parent and Xxxxxxx X. Xxxxx, as
beneficiaries, and Wilmington Trust Company, not in its individual capacity, but
solely as owner xxxxxxx.xx in existence on the Closing Date and as amended in
compliance with the provisions of this Agreement.
"TRUSTEE" means XX Xxxxxx Trust Company, National Association,
as successor to Bank One, National Association, a national banking association,
as trustee under the Indenture.
"UNDERLYING ISSUER" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the benefit of Borrowers.
"UNDERLYING LETTER OF CREDIT" means a letter of credit that
has been issued by an Underlying Issuer.
"UNITED STATES" means the United States of America.
"UPS AGREEMENT" means that certain Ground Handling Agreement,
dated as of May 9, 1988, between UPS Air Forwarding, Inc. and Evergreen Ground
Logistics Enterprise, Inc., as in effect on the date hereof and as amended in
compliance with the provisions of this Agreement.
"USPS AGREEMENTS" means those certain agreements identified as
(a) contract number SNET-01-GLR, dated August 27, 2001, between the United
States Postal Service and Evergreen Ground Logistics Enterprise, Inc., (b)
contract number SNET-01-SER, dated August 27, 2001 between the United States
Postal Service and Evergreen Ground Logistics Enterprise, Inc., (c) contract
number SNET-01-PR, dated August 27, 2001, between the United States Postal
Service and Evergreen Ground Logistics Enterprise, Inc., (d) contract number
TNET-93-01, dated December 19, 2002, between the United States Postal Service
and Evergreen Ground Logistics Enterprise, Inc., and (e) contract number
DIE-85-04 dated July 1, 2001, between the United States Postal Service and
29
Evergreen Helicopters Alaska, Inc., each as in effect on the date hereof and as
amended in compliance with the provisions of this Agreement.
"VOIDABLE TRANSFER" has the meaning set forth in SECTION 17.6.
"XXXXX FARGO" means Xxxxx Fargo Bank, National Association, a
national banking association.
"WFF" means Xxxxx Fargo Foothill, Inc., a California
corporation.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrowers" or the term "Parent" is used in respect of a financial
covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein, PROVIDED, HOWEVER, that to the extent that the Code is used to define
any term herein and such term is defined differently in different Articles of
the Code, the definition of such term contained in Article 9 shall govern.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms "includes"
and "including" are not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in the other Loan
Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to the
satisfaction or repayment in full of the Obligations shall mean the repayment in
full in cash (or cash collateralization in accordance with the terms hereof) of
all Obligations other than contingent indemnification Obligations and other than
any Bank Product Obligations that, at such time, are allowed by the applicable
Bank Product Provider to remain outstanding and are not required to be repaid or
cash collateralized pursuant to the provisions of this Agreement. Any reference
herein to any Person shall be construed to include such Person's successors and
assigns. Any requirement of a writing contained herein or in the other Loan
Documents shall be satisfied by the transmission of a Record and any Record
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein. For the purposes of this
Agreement, the Air Mobility Command, the United States Postal Service, and each
other department, agency, or instrumentality within the United States government
shall be treated as a separate Person irrespective of whether any such
department, agency, or instrumentality actually constitutes a separate legal
entity.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
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2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and during the
term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances ("ADVANCES")
to Borrowers in an amount at any one time outstanding not to exceed such
Lender's Pro Rata Share of an amount equal TO THE LESSER OF (i) the Maximum
Revolver Amount LESS the Letter of Credit Usage, or (ii) the Borrowing Base LESS
the Letter of Credit Usage.
(b) Anything to the contrary in this SECTION 2.1 notwithstanding, Agent
shall have the right to establish reserves in such amounts, and with respect to
such matters, as Agent in its Permitted Discretion shall deem necessary or
appropriate, against the Borrowing Base, including reserves with respect to (i)
sums that Borrowers are required to pay (such as taxes, assessments, insurance
premiums, or, in the case of leased assets, rents or other amounts payable under
such leases) and have failed to pay under any Section of this Agreement or any
other Loan Document, and (ii) amounts owing by Borrowers or their Subsidiaries
to any Person to the extent secured by a Lien on, or trust over, any of the
Collateral (other than any existing Permitted Lien set forth on SCHEDULE P-1
which is specifically identified thereon as entitled to have priority over the
Agent's Liens), which Lien or trust, in the Permitted Discretion of Agent likely
would have a priority superior to the Agent's Liens (such as Liens or trusts in
favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for AD VALOREM, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral. In addition to the foregoing, Agent shall have the right to have the
Borrowers' Inventory reappraised by a qualified appraisal company selected by
Agent from time to time after the Closing Date for the purpose of re-determining
the Net Orderly Liquidation Inventory Value of Borrowers' Inventory and, as a
result, re-determining the Borrowing Base.
(c) The Lenders with Revolver Commitments shall have no obligation to make
additional Advances hereunder to the extent such additional Advances would cause
the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this SECTION 2.1 may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any time
during the term of this Agreement.
2.2 TERM LOAN. Subject to the terms and conditions of this Agreement, on
the Closing Date each Lender with a Term Loan Commitment agrees (severally, not
jointly or jointly and severally) to make term loans (collectively, the "TERM
LOAN") to Borrowers in an amount equal to such Lender's Pro Rata Share of the
Term Loan Amount. The Term Loan shall be repaid in consecutive monthly
installments, commencing on June 1, 2004 and continuing on the first day of each
month thereafter until paid in full, each in a principal amount equal to
$541,667. Upon ten (10) Business Days prior written notice to Agent, so long as
no Event of Default shall have occurred and be continuing or would result from
such prepayment, and so long as Borrowers have Excess Availability and Qualified
Cash of at least $5,000,000 immediately prior to such prepayment and immediately
after giving effect to any such prepayment, Borrowers may prepay all or a
portion of the Term Loan at any time without premium or penalty. The outstanding
unpaid principal balance and all accrued and unpaid interest under the Term Loan
shall be due and payable on the date of termination of this Agreement, whether
by its terms, by prepayment, or by acceleration. All amounts outstanding under
the Term Loan shall constitute Obligations. Any principal amount of the Term
Loan repaid or prepaid may not be reborrowed.
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by an irrevocable
written request by an Authorized Person delivered to Agent. Such notice must be
31
received by Agent no later than 10:00 a.m. (California time) on the Business Day
prior to the date that is the requested Funding Date specifying (i) the amount
of such Borrowing, and (ii) the requested Funding Date, which shall be a
Business Day; PROVIDED, HOWEVER, that in the case of a request for a Swing Loan
in an amount of $5,000,000, or less, such notice will be timely received if it
is received by Agent no later than 10:00 a.m. (California time) on the Business
Day that is the requested Funding Date. At Agent's election, in lieu of
delivering the above-described written request, any Authorized Person may give
Agent telephonic notice of such request by the required time. In such
circumstances, Borrowers agree that any such telephonic notice will be confirmed
in writing within 24 hours of the giving of such telephonic notice, but the
failure to provide such written confirmation shall not affect the validity of
the request.
(b) AGENT'S ELECTION. Promptly after receipt of a request for a Borrowing
pursuant to SECTION 2.3(A), Agent shall elect, in its discretion, (i) to have
the terms of SECTION 2.3(C) apply to such requested Borrowing, or (ii) if the
Borrowing is for an Advance, to request Swing Lender to make a Swing Loan
pursuant to the terms of SECTION 2.3(D) in the amount of the requested
Borrowing; provided, however, that if Swing Lender declines in its sole
discretion to make a Swing Loan pursuant to SECTION 2.3(D), Agent shall elect to
have the terms of SECTION 2.3(C) apply to such requested Borrowing.
(c) MAKING OF LOANS.
(i) In the event that Agent shall elect to have the terms of this
SECTION 2.3(C) apply to a requested Borrowing as described in SECTION 2.3(B),
then promptly after receipt of a request for a Borrowing pursuant to SECTION
2.3(A), Agent shall notify the Lenders, not later than 1:00 p.m. (California
time) on the Business Day immediately preceding the Funding Date applicable
thereto, by telecopy, telephone, or other similar form of transmission, of the
requested Borrowing. Each Lender shall make the amount of such Lender's Pro Rata
Share of the requested Borrowing available to Agent in immediately available
funds, to Agent's Account, not later than 10:00 a.m. (California time) on the
Funding Date applicable thereto. After Agent's receipt of the proceeds of such
Advances (or the Term Loan, as applicable), Agent shall make the proceeds
thereof available to Administrative Borrower on the applicable Funding Date by
transferring immediately available funds equal to such proceeds received by
Agent to Administrative Borrower's Designated Account; PROVIDED, HOWEVER, that,
subject to the provisions of SECTION 2.3(I), Agent shall not request any Lender
to make, and no Lender shall have the obligation to make, any Advance (or its
portion of the Term Loan) if Agent shall have actual knowledge that (1) one or
more of the applicable conditions precedent set forth in SECTION 3 will not be
satisfied on the requested Funding Date for the applicable Borrowing unless such
condition has been waived, or (2) the requested Borrowing would exceed the
Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender on or prior to the
Closing Date or, with respect to any Borrowing after the Closing Date, prior to
9:00 a.m. (California time) on the date of such Borrowing, that such Lender will
not make available as and when required hereunder to Agent for the account of
Borrowers the amount of that Lender's Pro Rata Share of the Borrowing, Agent may
assume that each Lender has made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may (but shall not be
so required), in reliance upon such assumption, make available to Borrowers on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to Agent in immediately available funds and Agent
in such circumstances has made available to Borrowers such amount, that Lender
shall on the Business Day following such Funding Date make such amount available
to Agent, together with interest at the Defaulting Lender Rate for each day
during such period. A notice submitted by Agent to any Lender with respect to
amounts owing under this subsection shall be conclusive, absent manifest error.
If such amount is so made available, such payment to Agent shall constitute such
Lender's Advance (or portion of the Term Loan, as applicable) on the date of
Borrowing for all purposes of this Agreement. If such amount is not made
available to Agent on the Business Day following the Funding Date, Agent will
notify Administrative Borrower of such failure to fund and, upon demand by
Agent, Borrowers shall pay such amount to Agent for Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the
32
Advances (or portion of the Term Loan, as applicable) composing such Borrowing.
The failure of any Lender to make any Advance (or portion of the Term Loan, as
applicable) on any Funding Date shall not relieve any other Lender of any
obligation hereunder to make an Advance (or portion of the Term Loan, as
applicable) on such Funding Date, but no Lender shall be responsible for the
failure of any other Lender to make the Advance (or portion of the Term Loan, as
applicable) to be made by such other Lender on any Funding Date.
(iii) Agent shall not be obligated to transfer to a Defaulting Lender
any payments made by Borrowers to Agent for the Defaulting Lender's benefit,
and, in the absence of such transfer to the Defaulting Lender, Agent shall
transfer any such payments to each other non-Defaulting Lender member of the
Lender Group ratably in accordance with their Commitments (but only to the
extent that such Defaulting Lender's Advance was funded by the other members of
the Lender Group) or, if so directed by Administrative Borrower and if no
Default or Event of Default had occurred and is continuing (and to the extent
such Defaulting Lender's Advance was not funded by the Lender Group), retain
same to be re-advanced to Borrowers as if such Defaulting Lender had made
Advances to Borrowers. Subject to the foregoing, Agent may hold and, in its
Permitted Discretion, re-lend to Borrowers for the account of such Defaulting
Lender the amount of all such payments received and retained by Agent for the
account of such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents, such Defaulting Lender
shall be deemed not to be a "Lender" and such Lender's Commitment shall be
deemed to be zero. This Section shall remain effective with respect to such
Lender until (x) the Obligations under this Agreement shall have been declared
or shall have become immediately due and payable, (y) the non-Defaulting
Lenders, Agent, and Administrative Borrower shall have waived such Defaulting
Lender's default in writing, or (z) the Defaulting Lender makes its Pro Rata
Share of the applicable Advance and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by Borrowers of their duties and obligations hereunder to Agent or to the
Lenders other than such Defaulting Lender. Any such failure to fund by any
Defaulting Lender shall constitute a material breach by such Defaulting Lender
of this Agreement and shall entitle Administrative Borrower at its option, upon
written notice to Agent, to arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender, such substitute Lender to be acceptable to
Agent. In connection with the arrangement of such a substitute Lender, the
Defaulting Lender shall have no right to refuse to be replaced hereunder, and
agrees to execute and deliver a completed form of Assignment and Acceptance in
favor of the substitute Lender (and agrees that it shall be deemed to have
executed and delivered such document if it fails to do so) subject only to being
repaid its share of the outstanding Obligations (other than Bank Product
Obligations, but including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind whatsoever;
provided however, that any such assumption of the Commitment of such Defaulting
Lender shall not be deemed to constitute a waiver of any of the Lender Groups'
or Borrowers' rights or remedies against any such Defaulting Lender arising out
of or in relation to such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the consent of Swing Lender,
as a Lender, to have the terms of this SECTION 2.3(D) apply to a requested
Borrowing as described in SECTION 2.3(B), Swing Lender as a Lender shall make
such Advance in the amount of such Borrowing (any such Advance made solely by
Swing Lender as a Lender pursuant to this SECTION 2.3(D) being referred to as a
"SWING LOAN" and such Advances being referred to collectively as "SWING LOANS")
available to Borrowers on the Funding Date applicable thereto by transferring
immediately available funds to Administrative Borrower's Designated Account.
Each Swing Loan shall be deemed to be an Advance hereunder and shall be subject
to all the terms and conditions applicable to other Advances, and all payments
on any Swing Loan shall be payable to Swing Lender as a Lender solely for its
own account (and for the account of the holder of any participation interest
with respect to such Swing Loan). Subject to the provisions of SECTION 2.3(I),
Agent shall not request Swing Lender as a Lender to make, and Swing Lender as a
Lender shall not make, any Swing Loan if Agent has actual knowledge that (i) one
33
or more of the applicable conditions precedent set forth in SECTION 3 will not
be satisfied on the requested Funding Date for the applicable Borrowing unless
such condition has been waived, or (ii) the requested Borrowing would exceed the
Availability on such Funding Date. Swing Lender as a Lender shall not otherwise
be required to determine whether the applicable conditions precedent set forth
in SECTION 3 have been satisfied on the Funding Date applicable thereto prior to
making, in its sole discretion, any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's Liens, constitute
Obligations hereunder, and bear interest at the rate applicable from time to
time to Advances that are Base Rate Loans.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrowers and the Lenders, from time
to time in Agent's sole discretion, (1) after the occurrence and during the
continuance of a Default or an Event of Default, or (2) at any time that any of
the other applicable conditions precedent set forth in SECTION 3 have not been
satisfied, to make Advances to Borrowers on behalf of the Lenders that Agent, in
its Permitted Discretion deems necessary or desirable (A) to preserve or protect
the Collateral, or any portion thereof, (B) to enhance the likelihood of
repayment of the Obligations (other than the Bank Product Obligations), or (C)
to pay any other amount chargeable to Borrowers pursuant to the terms of this
Agreement, including Lender Group Expenses and the costs, fees, and expenses
described in SECTION 10 (any of the Advances described in this SECTION 2.3(E)
shall be referred to as "AGENT ADVANCES"); PROVIDED, that notwithstanding
anything to the contrary contained in this SECTION 2.3(E), the aggregate
principal amount of Agent Advances outstanding at any time, when taken together
with the aggregate principal amount of Overadvances made in accordance with
SECTION 2.3(I) hereof outstanding at such time, shall not exceed an amount equal
to the lesser of (x) 10% of the Borrowing Base then in effect and (y)
$5,000,000. Each Agent Advance shall be deemed to be an Advance hereunder,
except that no such Agent Advance shall be eligible to be a LIBOR Rate Loan and
all payments thereon shall be payable to Agent solely for its own account.
(ii) The Agent Advances shall be repayable on demand, secured by the
Agent's Liens granted to Agent under the Loan Documents, constitute Obligations
hereunder, and bear interest at the rate applicable from time to time to
Advances that are Base Rate Loans.
(f) SETTLEMENT. It is agreed that each Lender's funded portion of the
Advances is intended by the Lenders to equal, at all times, such Lender's Pro
Rata Share of the outstanding Advances. Such agreement notwithstanding, Agent,
Swing Lender, and the other Lenders agree (which agreement shall not be for the
benefit of or enforceable by Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Swing Loans, and the Agent Advances shall take
place on a periodic basis in accordance with the following provisions:
(i) Agent shall request settlement ("SETTLEMENT") with the Lenders on
a weekly basis, or on a more frequent basis if so determined by Agent, (1) on
behalf of Swing Lender, with respect to each outstanding Swing Loan, (2) for
itself, with respect to each Agent Advance, and (3) with respect to Borrowers'
or their Subsidiaries' Collections received, as to each by notifying the Lenders
by telecopy, telephone, or other similar form of transmission, of such requested
Settlement, no later than 2:00 p.m. (California time) on the Business Day
immediately prior to the date of such requested Settlement (the date of such
requested Settlement being the "SETTLEMENT DATE"). Such notice of a Settlement
Date shall include a summary statement of the amount of outstanding Advances,
Swing Loans, and Agent Advances for the period since the prior Settlement Date.
Subject to the terms and conditions contained herein (including SECTION
2.3(C)(III)): (y) if a Lender's balance of the Advances (including Swing Loans
and Agent Advances) exceeds such Lender's Pro Rata Share of the Advances
(including Swing Loans and Agent Advances) as of a Settlement Date, then Agent
shall, by no later than 12:00 p.m. (California time) on the Settlement Date,
34
transfer in immediately available funds to a Deposit Account of such Lender (as
such Lender may designate), an amount such that each such Lender shall, upon
receipt of such amount, have as of the Settlement Date, its Pro Rata Share of
the Advances (including Swing Loans and Agent Advances), and (z) if a Lender's
balance of the Advances (including Swing Loans and Agent Advances) is less than
such Lender's Pro Rata Share of the Advances (including Swing Loans and Agent
Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m.
(California time) on the Settlement Date transfer in immediately available funds
to the Agent's Account, an amount such that each such Lender shall, upon
transfer of such amount, have as of the Settlement Date, its Pro Rata Share of
the Advances (including Swing Loans and Agent Advances). Such amounts made
available to Agent under clause (z) of the immediately preceding sentence shall
be applied against the amounts of the applicable Swing Loans or Agent Advances
and, together with the portion of such Swing Loans or Agent Advances
representing Swing Lender's Pro Rata Share thereof, shall constitute Advances of
such Lenders. If any such amount is not made available to Agent by any Lender on
the Settlement Date applicable thereto to the extent required by the terms
hereof, Agent shall be entitled to recover for its account such amount on demand
from such Lender together with interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the Advances, Swing
Loans, and Agent Advances is less than, equal to, or greater than such Lender's
Pro Rata Share of the Advances, Swing Loans, and Agent Advances as of a
Settlement Date, Agent shall, as part of the relevant Settlement, apply to such
balance the portion of payments actually received in good funds by Agent with
respect to principal, interest, fees payable by Borrowers and allocable to the
Lenders hereunder, and proceeds of Collateral. To the extent that a net amount
is owed to any such Lender after such application, such net amount shall be
distributed by Agent to that Lender as part of such next Settlement.
(iii) Between Settlement Dates, Agent, to the extent no Agent Advances
or Swing Loans are outstanding, may pay over to Swing Lender any payments
received by Agent, that in accordance with the terms of this Agreement would be
applied to the reduction of the Advances, for application to Swing Lender's Pro
Rata Share of the Advances. If, as of any Settlement Date, Collections of
Borrowers or their Subsidiaries received since the then immediately preceding
Settlement Date have been applied to Swing Lender's Pro Rata Share of the
Advances other than to Swing Loans, as provided for in the previous sentence,
Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall
pay to the Lenders, to be applied to the outstanding Advances of such Lenders,
an amount such that each Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of the Advances. During the period
between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with
respect to Agent Advances, and each Lender (subject to the effect of agreements
between Agent and individual Lenders) with respect to the Advances other than
Swing Loans and Agent Advances, shall be entitled to interest at the applicable
rate or rates payable under this Agreement on the daily amount of funds employed
by Swing Lender, Agent, or the Lenders, as applicable.
(g) NOTATION. Agent shall record on its books the principal amount of the
Advances (or portion of the Term Loan, as applicable) owing to each Lender,
including the Swing Loans owing to Swing Lender, and Agent Advances owing to
Agent, and the interests therein of each Lender, from time to time and such
records shall, absent manifest error, conclusively be presumed to be correct and
accurate. In addition, each Lender is authorized, at such Lender's option, to
note the date and amount of each payment or prepayment of principal of such
Lender's Advances (or portion of the Term Loan, as applicable) in its books and
records, including computer records.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other than Swing Loans and
Agent Advances) shall be made by the Lenders contemporaneously and in accordance
with their Pro Rata Shares. It is understood that (i) no Lender shall be
responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.
35
(i) OPTIONAL OVERADVANCES. Any contrary provision of this Agreement
notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as
applicable, and Agent or Swing Lender, as applicable, may, but is not obligated
to, knowingly and intentionally, continue to make Advances (including Swing
Loans) to Borrowers notwithstanding that an Overadvance exists or thereby would
be created, , so long as (i) after giving effect to such Advances, the
outstanding Revolver Usage does not exceed the Borrowing Base by more than the
lesser of (x) 10% of the Borrowing Base then in effect and (y) $5,000,000, (ii)
after giving effect to such Advances, the outstanding Revolver Usage (except for
and excluding amounts charged to the Loan Account for interest, fees, or Lender
Group Expenses) does not exceed the Maximum Revolver Amount, (iii) the aggregate
principal amount of Overadvances made pursuant to this SECTION 2.3(I) when taken
together with the aggregate principal amount of Agent Advances made pursuant to
SECTION 2.3(E) does not exceed at any time an amount equal to the lesser of (x)
10% of the Borrowing Base then in effect and (y) $5,000,000, and (iv) at the
time of the making of any such Advance, Agent does not believe, in good faith,
that the Overadvance created by such Advance will be outstanding for more than
90 days. The foregoing provisions are for the exclusive benefit of Agent, Swing
Lender, and the Lenders and are not intended to benefit Borrowers in any way.
The Advances and Swing Loans, as applicable, that are made pursuant to this
SECTION 2.3(I) shall be subject to the same terms and conditions as any other
Advance or Swing Loan, as applicable, except that they shall not be eligible for
the LIBOR Option and the rate of interest applicable thereto shall be the rate
applicable to Advances that are Base Rate Loans under SECTION 2.6(c) hereof
without regard to the presence or absence of a Default or Event of Default.
(A) In the event Agent obtains actual knowledge that the Revolver
Usage exceeds the amounts permitted by the preceding paragraph, regardless of
the amount of, or reason for, such excess, Agent shall notify the Lenders as
soon as practicable (and prior to making any (or any additional) intentional
Overadvances (except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) unless Agent determines that prior
notice would result in imminent harm to the Collateral or its value), and the
Lenders with Revolver Commitments thereupon shall, together with Agent, jointly
determine the terms of arrangements that shall be implemented with Borrowers
intended to reduce, within a reasonable time, the outstanding principal amount
of the Advances to Borrowers to an amount permitted by the preceding paragraph.
In the event Agent or any Lender disagrees over the terms of reduction or
repayment of any Overadvance, the terms of reduction or repayment thereof shall
be implemented according to the determination of the Required Lenders.
(B) Each Lender with a Revolver Commitment shall be obligated to
settle with Agent as provided in SECTION 2.3(F) for the amount of such Lender's
Pro Rata Share of any unintentional Overadvances by Agent reported to such
Lender, any intentional Overadvances made as permitted under this SECTION
2.3(I), and any Overadvances resulting from the charging to the Loan Account of
interest, fees, or Lender Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWERS.
(i) Except as otherwise expressly provided herein, all payments by
Borrowers shall be made to Agent's Account for the account of the Lender Group
and shall be made in immediately available funds, no later than 11:00 a.m.
(California time) on the date specified herein. Any payment received by Agent
later than 11:00 a.m. (California time), shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.
(ii) Unless Agent receives notice from Administrative Borrower prior
to the date on which any payment is due to the Lenders that Borrowers will not
make such payment in full as and when required, Agent may assume that Borrowers
have made (or will make) such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent Borrowers
36
do not make such payment in full to Agent on the date when due, each Lender
severally shall repay to Agent on demand such amount distributed to such Lender,
together with interest thereon at the Defaulting Lender Rate for each day from
the date such amount is distributed to such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION.
(i) Except as otherwise provided with respect to Defaulting Lenders
and except as otherwise provided in the Loan Documents (including agreements
between Agent and individual Lenders), aggregate principal and interest payments
shall be apportioned ratably among the Lenders (according to the unpaid
principal balance of the Obligations to which such payments relate held by each
Lender) and payments of fees and expenses (other than fees or expenses that are
for Agent's separate account, after giving effect to any agreements between
Agent and individual Lenders) shall be apportioned ratably among the Lenders
having a Pro Rata Share of the type of Commitment or Obligation to which a
particular fee relates. All payments shall be remitted to Agent and, except as
specifically provided in PARAGRAPH (B)(III) or SECTION 2.4(D) below, all such
payments, and all proceeds of Collateral received by Agent, shall be applied as
follows:
(A) FIRST, to pay any Lender Group Expenses then due to Agent
under the Loan Documents, until paid in full,
(B) SECOND, to pay any Lender Group Expenses then due to the
Lenders under the Loan Documents, on a ratable basis, until paid in full,
(C) THIRD, to pay any fees then due to Agent (for its separate
accounts, after giving effect to any agreements between Agent and individual
Lenders) under the Loan Documents until paid in full,
(D) FOURTH, to pay any fees then due to any or all of the Lenders
(after giving effect to any agreements between Agent and individual Lenders)
under the Loan Documents, on a ratable basis, until paid in full,
(E) FIFTH, to pay interest due in respect of all Agent Advances,
until paid in full,
(F) SIXTH, ratably to pay interest due in respect of the Advances
(other than Agent Advances), the Swing Loans, and the Term Loan, until paid in
full,
(G) SEVENTH, to pay the principal of all Agent Advances until
paid in full,
(H) EIGHTH, so long as no Event of Default has occurred and is
continuing, ratably to pay all principal amounts then due and payable (other
than as a result of an acceleration thereof) with respect to the Term Loan until
paid in full,
(I) NINTH, to pay the principal of all Swing Loans until paid in
full,
(J) TENTH, so long as no Event of Default has occurred and is
continuing, and at Agent's election (which election Agent agrees will not be
made if an Overadvance would be created thereby), to pay amounts then due and
owing by Parent or its Subsidiaries in respect of Bank Products, until paid in
full,
(K) ELEVENTH, so long as no Event of Default has occurred and is
continuing, to pay the principal of all Advances until paid in full,
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(L) TWELFTH, if an Event of Default has occurred and is
continuing, ratably (i) to pay the principal of all Advances until paid in full,
(ii) to Agent, to be held by Agent, for the ratable benefit of Issuing Lender
and those Lenders having a Revolver Commitment, as cash collateral in an amount
up to 105% of the Letter of Credit Usage until paid in full, and (iii) to Agent,
to be held by Agent, for the benefit of the Bank Product Providers, as cash
collateral in an amount up to the amount of the Bank Product Reserve established
prior to the occurrence of, and not in contemplation of, the subject Event of
Default until Parent's and its Subsidiaries' obligations in respect of Bank
Products have been paid in full or the cash collateral amount has been
exhausted,
(M) THIRTEENTH, if an Event of Default has occurred and is
continuing, to pay the outstanding principal balance of the Term Loan (in the
inverse order of the maturity of the installments due thereunder) until the Term
Loan is paid in full,
(N) FOURTEENTH, to pay any other Obligations (including the
provision of amounts to Agent, to be held by Agent, for the benefit of the Bank
Product Providers, as cash collateral in an amount up to the amount determined
by Agent in its Permitted Discretion as the amount necessary to secure
Borrowers' and its Subsidiaries' obligations in respect of Bank Products), and
(O) FIFTEENTH, to Borrowers (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.
(ii) Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such funds as
it may be entitled to receive, subject to a Settlement delay as provided in
SECTION 2.3(F).
(iii) In each instance, so long as no Event of Default has occurred
and is continuing, this SECTION 2.4(B) shall not apply to any payment made by
Borrowers to Agent and specified by Borrowers to be for the payment of specific
Obligations then due and payable (or prepayable) under any provision of this
Agreement.
(iv) For purposes of the foregoing (other than clause (N)), "paid in
full" means payment of all amounts owing under the Loan Documents according to
the terms thereof, including loan fees, service fees, professional fees,
interest (and specifically including interest accrued after the commencement of
any Insolvency Proceeding), default interest, interest on interest, and expense
reimbursements, except to the extent that default or overdue interest (but not
any other interest) and loan fees, each arising from or related to a default,
are disallowed in any Insolvency Proceeding; PROVIDED, HOWEVER, that for the
purposes of clause (N), "paid in full" means payment of all amounts owing under
the Loan Documents according to the terms thereof, including loan fees, service
fees, professional fees, interest (and specifically including interest accrued
after the commencement of any Insolvency Proceeding), default interest, interest
on interest, and expense reimbursements, whether or not any of the foregoing
would be or is allowed or disallowed in whole or in part in any Insolvency
Proceeding.
(v) In the event of a direct conflict between the priority provisions
of this SECTION 2.4 and other provisions contained in any other Loan Document,
it is the intention of the parties hereto that such priority provisions in such
documents shall be read together and construed, to the fullest extent possible,
to be in concert with each other. In the event of any actual, irreconcilable
conflict that cannot be resolved as aforesaid, the terms and provisions of this
SECTION 2.4 shall control and govern.
(c) MANDATORY PREPAYMENTS.
(i) Immediately upon receipt of notice by Agent that the outstanding
principal balance of the Term Loan exceeds the then extant Maximum Term Loan
Amount, Borrower shall prepay the Term Loan in accordance with CLAUSE (D) below
in an amount equal to such excess.
38
(ii) Immediately upon any voluntary or involuntary sale or disposition
by Parent or any of its Subsidiaries of property or assets (other than sales or
dispositions which qualify as Permitted Dispositions under clauses (b), (c),
(e), and (g)) of the definition of Permitted Dispositions):
(A) If the proceeds are from the sale or disposition of any
Eligible Equipment, Borrowers shall prepay the outstanding Obligations in
accordance with clause (d) below with the Net Cash Proceeds received by such
Person in connection with such sale or disposition in an amount equal to the
lesser of (i) 100% of such Net Cash Proceeds, and (ii) 100% of the Gross
Liquidation Value of such Eligible Equipment based on the most recent appraisal
of such Eligible Equipment. Any remaining Net Cash Proceeds shall be applied as
follows: (A) so long as no Default or Event of Default shall have occurred and
be continuing, (x) 50% of such Net Cash Proceeds shall be retained by Borrower,
and (y) the remaining Net Cash Proceeds shall be used by Borrowers to prepay the
outstanding Obligations in accordance with clause (d) below, and (B) otherwise,
100% of such Net Cash Proceeds shall be used by Borrowers to prepay the
outstanding Obligations in accordance with clause (d) below.
(B) If the proceeds are from the sale or disposition of any other
property or assets, Borrowers shall prepay the outstanding Obligations in
accordance with clause (d) below in an amount equal to 100% of the Net Cash
Proceeds received by such Person in connection with such sale or disposition if
the aggregate amount of Net Cash Proceeds received by Parent and its
Subsidiaries (and not paid to Agent as a prepayment of the Obligations) for all
such sales or dispositions shall exceed $150,000 in any fiscal year.
Nothing contained in this subclause (ii) shall permit Parent or any of its
Subsidiaries to sell or otherwise dispose of any property or assets other than
in accordance with SECTION 7.4.
(iii) Immediately upon the receipt by Parent or any of its
Subsidiaries of any Extraordinary Receipts in excess of $50,000 individually or
$250,000 in the aggregate during any Fiscal Year (other than Extraordinary
Receipts from the Asiana Claim), Borrowers shall prepay the outstanding
Obligations in accordance with clause (d) below in an amount equal to 100% of
such Extraordinary Receipts, net of any reasonable expenses incurred in
collecting such Extraordinary Receipts.
(iv) Immediately upon the issuance or incurrence by Parent or any of
its Subsidiaries of any Indebtedness (other than Indebtedness referred to in
CLAUSES (A), (B), (C), (D), OR (E) of SECTION 7.1), or the sale or issuance by
Parent or any of its Subsidiaries of any shares of its Capital Stock, Borrowers
shall prepay the outstanding principal of the Obligations in accordance with
clause (d) in an amount equal to 100% of the Net Cash Proceeds received by
Parent or its Subsidiaries in connection with such sale, issuance, or
incurrence. The provisions of this subsection (iv) shall not be deemed to be
implied consent to any such sale, issuance, or incurrence otherwise prohibited
by the terms and conditions of this Agreement.
(v) If Parent or any of its Subsidiaries has any Excess Cash Flow for
any fiscal year (the "RELEVANT FISCAL YEAR"), commencing with the fiscal year
ending February 29, 2004, Borrowers shall prepay the outstanding Obligations in
accordance with clause (d) below in an amount (the "EXCESS CASH FLOW AMOUNT")
equal to 75% of such Excess Cash Flow. Such Excess Cash Flow shall be paid on or
before the first day of the second fiscal quarter of the fiscal year following
the Relevant Fiscal Year. Notwithstanding the foregoing, (x) Borrowers shall not
be required to prepay the Obligations with Excess Cash Flow if there are any
Borrowings during (i) the last 5 days of Parent's first fiscal quarter of its
fiscal year immediately following the Relevant Fiscal Year, or (ii) the last 20
Business Days of the Excess Cash Flow Offer (as defined in the Indenture), and
(y) Borrowers shall not be required to prepay the Obligations with Excess Cash
Flow to the extent that Parent would have less than $30,000,000 available to be
borrowed under this Agreement upon consummation of the Excess Cash Flow Offer
(as defined in the Indenture), after giving PRO FORMA effect to the purchase of
Notes (as defined in the Indenture) in the Excess Cash Flow Offer (as defined in
the Indenture). Borrowers shall not be required to prepay the Obligations with
Excess Cash Flow if the Excess Cash Flow Amount is less than $5,000,000.
39
(vi) Immediately upon the receipt by Parent or any of its Subsidiaries
of any insurance proceeds related to a casualty or loss of Collateral or the
payment of any award or compensation for condemnation or taking by eminent
domain, Borrowers shall prepay the outstanding Obligations in accordance with
clause (d) below in an amount equal to 100% of such proceeds or payment, net of
any reasonable expenses incurred in collecting such proceeds or payment.
(d) APPLICATION OF PAYMENTS.
(i) Each prepayment pursuant to subclause (c)(i) above shall be
applied to the outstanding principal amount of Term Loan, until paid in full.
Each such prepayment of the Term Loan shall be applied against the remaining
installments of principal of the Term Loan (if any) in the inverse order of
maturity.
(ii) Each prepayment pursuant to subclause (c)(iii) above shall, (A)
so long as no Event of Default shall have occurred and be continuing, be
applied, first, to the outstanding principal amount of the Term Loan, until paid
in full, second, to the outstanding principal amount of the Advances, until paid
in full, and third, to cash collateralize the Letters of Credit in an amount
equal to 105% of the then extant Letter of Credit Usage, and (B) if an Event of
Default shall have occurred and be continuing, be applied in the manner set
forth in SECTION 2.4(B)(I). Each such prepayment of the Term Loan shall be
applied against the remaining installments of principal of the Term Loan (if
any) in the inverse order of maturity.
(iii) Each prepayment pursuant to subclause (c)(ii) or (c)(vi) above,
shall:
(A) so long as no Event of Default shall have occurred and be
continuing, be applied as follows:
(1) if the proceeds are from any sale or disposition of any
Accounts or Inventory or any insurance policy or condemnation or eminent domain
award or compensation with respect to Inventory, such proceeds shall be applied,
first, to the outstanding principal amount of the Advances, until paid in full,
second, to cash collateralize the Letters of Credit in an amount equal to 105%
of the then extant Letter of Credit Usage, until paid in full, third, to the
outstanding principal amount of Term Loan, until paid in full. Each such
prepayment of the Term Loan shall be applied against the remaining installments
of principal of the Term Loan (if any) in the inverse order of maturity;
(2) subject to clause (3) below, if the proceeds are from
the sale or disposition of any other assets or any insurance policy or
condemnation or eminent domain award or compensation not described in clause (1)
above, such proceeds shall be applied, first, to the outstanding principal
amount of the Term Loan, until paid in full, second, to the outstanding
principal amount of the Advances, until paid in full, and third, to cash
collateralize the Letters of Credit in an amount equal to 105% of the then
extant Letter of Credit Usage; PROVIDED, HOWEVER, that, except during the
continuance of a Default or an Event of Default, such proceeds shall not be
required to be so applied to the extent that such proceeds are used to replace,
repair, or restore the properties or assets in respect of which such proceeds
were paid if (i) either (A) the amount of proceeds received in respect of such
sales, dispositions, insurance policies, or condemnation or eminent domain
awards or compensation are less than $25,000,000 in the aggregate during the
term of this Agreement, or (B) the Required Lenders and Borrowers agree to the
use of such proceeds to replace, repair, or restore the properties or assets in
respect of which such proceeds were paid, (ii) Parent delivers a certificate to
Agent within 10 days after such sale or 30 days after the date of such loss,
destruction, or taking, as the case may be, stating that such proceeds shall be
used to replace, repair, or restore such properties or assets within a period
specified in such certificate not to exceed the earlier of (x) 180 days after
the receipt of such proceeds and (y) the Maturity Date (which certificate shall
set forth estimates of the proceeds to be so expended), and (iii) such proceeds
shall not be commingled with any other cash and shall be immediately deposited
in a separate Deposit Account subject to a Control Agreement in favor of Agent.
If all or any portion of such proceeds not so applied to the prepayment of the
Obligations in accordance with this clause (2) are not used in accordance with
40
the preceding sentence within the period specified in the relevant certificate
furnished pursuant hereto, such remaining portion shall be applied to the
Obligations in accordance with this clause (2) on the last day of such specified
period. Each such prepayment of the Term Loan shall be applied against the
remaining installments of principal of the Term Loan (if any) in the inverse
order of maturity;
(3) if the proceeds are from a sale or disposition of all or
substantially all of the assets or Stock of any Person or any insurance, which
sale, disposition, or proceeds of insurance includes both Accounts or Inventory
and other assets, such proceeds shall be applied as follows: (x) an amount equal
to the net book value of such Accounts and Inventory (determined at the time of
such sale or disposition or event resulting in such insurance proceeds), shall
be applied first, to the outstanding principal amount of the Advances, until
paid in full, and second, to cash collateralize the Letters of Credit, and (y)
the remaining proceeds shall be applied, first, to the outstanding principal
amount of the Term Loan, until paid in full, second, to the outstanding
principal amount of the Advances, until paid in full, and third, to cash
collateralize the Letters of Credit in an amount equal to 105% of the then
extant Letter of Credit Usage, until paid in full, PROVIDED, HOWEVER, that,
except during the continuance of a Default or an Event of Default, such proceeds
shall not be required to be so applied to the extent that such proceeds are used
to replace the assets in respect of which such proceeds were paid if (i) either
(A) the amount of proceeds received in respect of such dispositions are less
than $25,000,000 in the aggregate during the term of this Agreement, or (B) the
Required Lenders decide in their sole discretion to the use of such proceeds to
replace the assets in respect of which such proceeds were paid, (ii) Parent
delivers a certificate to Agent within 10 days after such sale or 30 days after
the date of such disposition, stating that such proceeds shall be used to
replace such assets within a period specified in such certificate not to exceed
the earlier of (x) 180 days after the receipt of such proceeds and (y) the
Maturity Date (which certificate shall set forth estimates of the proceeds to be
so expended), and (iii) such proceeds shall not be commingled with any other
cash and shall be immediately deposited in a separate Deposit Account subject to
a Control Agreement in favor of Agent. If all or any portion of such proceeds
not so applied to the prepayment of the Obligations in accordance with this
clause (3) are not used in accordance with the preceding sentence within the
period specified in the relevant certificate furnished pursuant hereto, such
remaining portion shall be applied to the Obligations in accordance with this
clause (3) on the last day of such specified period. Each such prepayment of the
Term Loan shall be applied against the remaining installments of principal of
the Term Loan (if any) in the inverse order of maturity;
(B) if an Event of Default shall have occurred and be continuing,
be applied in the manner set forth in SECTION 2.4(B)(I).
(iv) Each prepayment pursuant to subclause (c)(iv) or (c)(v) above
shall, (A) so long as no Event of Default shall have occurred and be continuing,
be applied, first, to the outstanding principal amount of the Term Loan, until
paid in full, second, to the outstanding principal amount of the Advances, until
paid in full, and third, to cash collateralization of the Letters of Credit in
an amount equal to 105% of the then extant Letter of Credit Usage, and (B) if an
Event of Default shall have occurred and be continuing, be applied in the manner
set forth in SECTION 2.4(B)(I). Each such prepayment of the Term Loan shall be
applied against the remaining installments of principal of the Term Loan (if
any) in the inverse order of maturity.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrowers to the
Lender Group pursuant to SECTION 2.1 or SECTION 2.12 is greater than any of the
limitations set forth in SECTION 2.1 or SECTION 2.12, as applicable (an
"OVERADVANCE"), Borrowers immediately shall pay to Agent, in cash, the amount of
such excess, which amount shall be used by Agent to reduce the Obligations in
accordance with the priorities set forth in SECTION 2.4(B). In addition,
Borrowers hereby promise to pay the Obligations (including principal, interest,
fees, costs, and expenses) in Dollars in full as and when due and payable under
the terms of this Agreement and the other Loan Documents.
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2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c) below, all Obligations
(except for undrawn Letters of Credit and except for Bank Product Obligations)
that have been charged to the Loan Account pursuant to the terms hereof shall
bear interest on the Daily Balance thereof as follows (i) if the relevant
Obligation is an Advance that is a LIBOR Rate Loan, at a per annum rate equal to
the LIBOR Rate plus the LIBOR Rate Margin, (ii) if the relevant Obligation is a
portion of the Term Loan that is a LIBOR Rate Loan, at a per annum rate equal to
the LIBOR Rate plus the LIBOR Rate Term Loan Margin, (iii) if the relevant
Obligation is a portion of the Term Loan that is a Base Rate Loan, at a per
annum rate equal to the Base Rate plus the Base Rate Term Loan Margin, and (iv)
otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.
The foregoing notwithstanding, at no time shall any portion of the
Obligations (other than Bank Product Obligations) bear interest on the Daily
Balance thereof at a per annum rate less than 4.0%. To the extent that interest
accrued hereunder at the rate set forth herein would be less than the foregoing
minimum daily rate, the interest rate chargeable hereunder for such day
automatically shall be deemed increased to the minimum rate.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the ratable
benefit of the Lenders with a Revolver Commitment, subject to any agreements
between Agent and individual Lenders), a Letter of Credit fee (in addition to
the charges, commissions, fees, and costs set forth in SECTION 2.12(E)) which
shall accrue at a rate equal to 2.50% per annum times the Daily Balance of the
undrawn amount of all outstanding Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the continuation of an
Event of Default (and at the election of Agent or the Required Lenders),
(i) all Obligations (except for undrawn Letters of Credit and except
for Bank Product Obligations) that have been charged to the Loan Account
pursuant to the terms hereof shall bear interest on the Daily Balance thereof at
a per annum rate equal to 2 percentage points above the per annum rate otherwise
applicable hereunder, and
(ii) the Letter of Credit fee provided for above shall be increased to
2 percentage points above the per annum rate otherwise applicable hereunder.
Provided that if, at the time that any amounts due in respect of interest on the
Term Loan are charged to Borrowers' Loan Account, an Event of Default or
Overadvance exists, or would result therefrom, such amounts shall not constitute
Advances but instead shall continue to remain outstanding as amounts due in
respect of the Term Loan and such amounts shall be compounded and added to the
outstanding principal balance of the Term Loan.
(d) PAYMENT. Except as provided to the contrary in SECTION 2.11 or
SECTION 2.13(A), interest, Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
at any time that Obligations or Commitments are outstanding. Borrowers hereby
authorize Agent, from time to time, without prior notice to Borrowers, to charge
all interest and fees (when due and payable), all Lender Group Expenses (as and
when incurred), all charges, commissions, fees, and costs provided for in
SECTION 2.12(E) (as and when accrued or incurred), all fees and costs provided
for in SECTION 2.11 (as and when accrued or incurred), and all other payments as
and when due and payable under any Loan Document (including the amounts due and
payable with respect to the Term Loan and including any amounts due and payable
to the Bank Product Providers in respect of Bank Products up to the amount of
the Bank Product Reserve) to Borrowers' Loan Account, which amounts thereafter
shall constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances hereunder; PROVIDED, that the foregoing shall not in any
way limit the authority of Agent to elect, in its sole discretion, not to so
convert into an Advance any amount of accrued and unpaid interest, fees or
42
Lender Group Expenses that has been charged to the Loan Account and PROVIDED
FURTHER that if Agent charges more than $25,000 to the Loan Account, Agent shall
endeavor to give Parent or one of the Borrowers notice of such charge (but a
non-willful failure of Agent to provide such notice shall not be a breach of
this Agreement and shall not affect the right of Agent to charge the Loan
Account). Any interest not paid when due may be compounded by being charged to
Borrowers' Loan Account as an Advance and, if then paid to the applicable Lender
by being so charged shall thereafter constitute Advances hereunder and shall
accrue interest at the rate then applicable to Advances that are Base Rate Loans
hereunder; PROVIDED, to the extent that such interest is not paid in full in
immediately available funds to the Lenders in accordance with their respective
Pro Rata Shares (whether directly or by being so charged to the Loan Account as
an Advance), such accrued and unpaid interest shall accrue interest (i) in the
case of interest accruing in respect of Advances, at the rate then applicable to
Advances that are Base Rate Loans hereunder, and (ii) in the case of interest
accruing in respect of the Term Loan, at the rate then applicable to portions of
the Term Loan that are Base Rate Loans hereunder.
(e) COMPUTATION. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event shall
the interest rate or rates payable under this Agreement, plus any other amounts
paid in connection herewith, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; PROVIDED, HOWEVER, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, IPSO FACTO, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrowers
in excess of such legal maximum, whenever received, shall be applied to reduce
the principal balance of the Obligations to the extent of such excess.
2.7 CASH MANAGEMENT.
(a) Parent and Borrowers shall and shall cause each of their respective
Subsidiaries to (i) establish and maintain cash management services of a type
and on terms reasonably satisfactory to Agent at one or more of the banks set
forth on SCHEDULE 2.7(A) (each a "CASH MANAGEMENT BANK"), and shall request in
writing and otherwise take such reasonable steps to ensure that all of their and
their respective Subsidiaries' Account Debtors forward payment of the amounts
owed by them directly to such Cash Management Bank, and (ii) deposit or cause to
be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all of their Collections (including those
sent directly by their Account Debtors to Borrowers or their Subsidiaries) into
a bank account in Agent's name (a "CASH MANAGEMENT ACCOUNT") at one of the Cash
Management Banks.
(b) Each Cash Management Bank shall establish and maintain Cash Management
Agreements with Agent and Borrowers, in form and substance reasonably acceptable
to Agent. Each such Cash Management Agreement shall provide, among other things,
that (i) the Cash Management Bank will comply with any instructions originated
by Agent directing the disposition of the funds in such Cash Management Account
without further consent by Borrowers or their Subsidiaries, as applicable, (ii)
the Cash Management Bank has no rights of setoff or recoupment or any other
claim against the applicable Cash Management Account, other than for payment of
its service fees and other charges directly related to the administration of
such Cash Management Account and for returned checks or other items of payment,
and (iii) it will forward by daily sweep all amounts in the applicable Cash
Management Account to the Agent's Account.
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(c) So long as no Default or Event of Default has occurred and is
continuing, Administrative Borrower may amend SCHEDULE 2.7(A) to add or replace
a Cash Management Bank or Cash Management Account; PROVIDED, HOWEVER, that (i)
such prospective Cash Management Bank shall be reasonably satisfactory to Agent,
and (ii) prior to the time of the opening of such Cash Management Account, a
Borrower or its Subsidiary, as applicable, and such prospective Cash Management
Bank shall have executed and delivered to Agent a Cash Management Agreement.
Borrowers (or their Subsidiaries, as applicable) shall close any of their Cash
Management Accounts (and establish replacement cash management accounts in
accordance with the foregoing sentence) promptly and in any event within 30 days
of notice from Agent that the creditworthiness of any Cash Management Bank is no
longer acceptable in Agent's reasonable judgment, or as promptly as practicable
and in any event within 60 days of notice from Agent that the operating
performance, funds transfer, or availability procedures or performance of the
Cash Management Bank with respect to Cash Management Accounts or Agent's
liability under any Cash Management Agreement with such Cash Management Bank is
no longer acceptable in Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash collateral accounts subject
to Control Agreements.
2.8 CREDITING PAYMENTS; FLOAT CHARGE. The receipt of any payment item by
Agent (whether from transfers to Agent by the Cash Management Banks pursuant to
the Cash Management Agreements or otherwise) shall not be considered a payment
on account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day. From and after
the Closing Date, Agent shall be entitled to charge Borrowers for one Business
Day of `clearance' or `float' at the rate then applicable under SECTION 2.6 to
Advances that are Base Rate Loans on all Collections that are received by
Borrowers and their Subsidiaries (regardless of whether forwarded by the Cash
Management Banks to Agent). This across-the-board one Business Day clearance or
float charge on all Collections of Borrowers and their Subsidiaries is
acknowledged by the parties to constitute an integral aspect of the pricing of
the financing of Borrowers and shall apply irrespective of whether or not there
are any outstanding monetary Obligations; the effect of such clearance or float
charge being the equivalent of charging interest on such Collections through the
completion of a period ending one Business Day after the receipt thereof.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances and the
Term Loan, and Issuing Lender is authorized to issue the Letters of Credit,
under this Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person or, without instructions, if
pursuant to SECTION 2.6(d). Administrative Borrower agrees to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Advances requested by Borrowers and made by
Agent or the Lenders hereunder. Unless otherwise agreed by Agent and
Administrative Borrower, any Advance, Agent Advance, or Swing Loan requested by
Borrowers and made by Agent or the Lenders hereunder shall be made to the
Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent shall
maintain an account on its books in the name of Borrowers (the "LOAN ACCOUNT")
on which Borrowers will be charged with the Term Loan, all Advances (including
Agent Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to
Borrowers or for Borrowers' account, the Letters of Credit issued by Issuing
Lender for Borrowers' account, and with all other payment Obligations hereunder
or under the other Loan Documents (except for Bank Product Obligations),
including, accrued interest, fees and expenses, and Lender Group Expenses. In
accordance with SECTION 2.8, the Loan Account will be credited with all payments
44
received by Agent from Borrowers or for Borrowers' account, including all
amounts received in the Agent's Account from any Cash Management Bank. Agent
shall render statements regarding the Loan Account to Administrative Borrower,
including principal, interest, fees, and including an itemization of all charges
and expenses constituting Lender Group Expenses owing, and such statements,
absent manifest error, shall be conclusively presumed to be correct and accurate
and constitute an account stated between Borrowers and the Lender Group unless,
within 30 days after receipt thereof by Administrative Borrower, Administrative
Borrower shall deliver to Agent written objection thereto describing the error
or errors contained in any such statements.
2.11 FEES. Borrowers shall pay to Agent the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter) and shall be apportioned among
the Lenders in accordance with the terms of agreements between Agent and
individual Lenders:
(a) UNUSED LINE FEE. On the first day of each month during the term of this
Agreement, an unused line fee in an amount equal to 0.375% per annum times the
result of (i) the Maximum Revolver Amount, less (ii) the sum of (A) the average
Daily Balance of Advances that were outstanding during the immediately preceding
month, plus (B) the average Daily Balance of the Letter of Credit Usage during
the immediately preceding month,
(b) FEE LETTER FEES. As and when due and payable under the terms of the Fee
Letter, the fees set forth in the Fee Letter, and
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. Audit, appraisal, and
valuation fees and charges as follows (i) a fee of $850 per day, per auditor,
plus out-of-pocket expenses for each financial audit of a Borrower performed by
personnel employed by Agent, (ii) if implemented, a fee of $850 per day, per
applicable individual, plus out of pocket expenses for the establishment of
electronic collateral reporting systems, and (iii) the actual charges paid or
incurred by Agent if it elects to employ the services of one or more third
Persons to perform financial audits of Parent, Borrowers or their respective
Subsidiaries, to establish electronic collateral reporting systems, to appraise
the Collateral, or any portion thereof, or to assess Parent's Borrowers' and
their respective Subsidiaries' business valuation.
2.12 LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement, the Issuing
Lender agrees to issue letters of credit for the account of Borrowers (each, an
"L/C") or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an "L/C UNDERTAKING") with respect to
letters of credit issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be Xxxxx Fargo) for the account of
Borrowers. Each request for the issuance of a Letter of Credit or the amendment,
renewal, or extension of any outstanding Letter of Credit shall be made in
writing by an Authorized Person and delivered to the Issuing Lender and Agent
via hand delivery, telefacsimile, or other electronic method of transmission
reasonably in advance of the requested date of issuance, amendment, renewal, or
extension. Each such request shall be in form and substance satisfactory to the
Issuing Lender in its Permitted Discretion and shall specify (i) the amount of
such Letter of Credit, (ii) the date of issuance, amendment, renewal, or
extension of such Letter of Credit, (iii) the expiration of such Letter of
Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary
of the Underlying Letter of Credit, as applicable), and (v) such other
information (including, in the case of an amendment, renewal, or extension,
identification of the outstanding Letter of Credit to be so amended, renewed, or
extended) as shall be necessary to prepare, amend, renew, or extend such Letter
of Credit. If requested by the Issuing Lender, Borrowers also shall be an
applicant under the application with respect to any Underlying Letter of Credit
that is to be the subject of an L/C Undertaking. The Issuing Lender shall have
no obligation to issue a Letter of Credit if any of the following would result
after giving effect to the issuance of such requested Letter of Credit:
45
(i) the Letter of Credit Usage would exceed the Borrowing Base LESS
the outstanding amount of Advances, or
(ii) the Letter of Credit Usage would exceed $10,000,000, or
(iii) the Letter of Credit Usage would exceed the Maximum Revolver
Amount LESS the outstanding amount of Advances.
Borrowers and the Lender Group acknowledge and agree that certain
Underlying Letters of Credit may be issued to support letters of credit that
already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing
Lender by paying to Agent an amount equal to such L/C Disbursement not later
than 11:00 a.m., California time, on the date that such L/C Disbursement is
made, if Administrative Borrower shall have received written or telephonic
notice of such L/C Disbursement prior to 10:00 a.m., California time, on such
date, or, if such notice has not been received by Administrative Borrower prior
to such time on such date, then not later than 11:00 a.m., California time, on
the Business Day that Administrative Borrower receives such notice, if such
notice is received prior to 10:00 a.m., California time, on the date of receipt,
and, in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans
under SECTION 2.6. To the extent an L/C Disbursement is deemed to be an Advance
hereunder, Borrowers' obligation to reimburse such L/C Disbursement shall be
discharged and replaced by the resulting Advance. Promptly following receipt by
Agent of any payment from Borrowers pursuant to this paragraph, Agent shall
distribute such payment to the Issuing Lender or, to the extent that Lenders
have made payments pursuant to SECTION 2.12(C) to reimburse the Issuing Lender,
then to such Lenders and the Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement pursuant to
SECTION 2.12(A), each Lender with a Revolver Commitment agrees to fund its Pro
Rata Share of any Advance deemed made pursuant to the foregoing subsection on
the same terms and conditions as if Borrowers had requested such Advance and
Agent shall promptly pay to Issuing Lender the amounts so received by it from
the Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitment, the Issuing
Lender shall be deemed to have granted to each Lender with a Revolver
Commitment, and each Lender with a Revolver Commitment shall be deemed to have
purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and
each such Lender agrees to pay to Agent, for the account of the Issuing Lender,
such Lender's Pro Rata Share of any payments made by the Issuing Lender under
such Letter of Credit. In consideration and in furtherance of the foregoing,
each Lender with a Revolver Commitment hereby absolutely and unconditionally
agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro
Rata Share of each L/C Disbursement made by the Issuing Lender and not
reimbursed by Borrowers on the date due as provided in clause (a) of this
Section, or of any reimbursement payment required to be refunded to Borrowers
for any reason. Each Lender with a Revolver Commitment acknowledges and agrees
that its obligation to deliver to Agent, for the account of the Issuing Lender,
an amount equal to its respective Pro Rata Share of each L/C Disbursement made
by the Issuing Lender pursuant to this SECTION 2.12(B) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in SECTION 3 hereof. If any such Lender fails to make
available to Agent the amount of such Lender's Pro Rata Share of each L/C
Disbursement made by the Issuing Lender in respect of such Letter of Credit as
provided in this Section, such Lender shall be deemed to be a Defaulting Lender
and Agent (for the account of the Issuing Lender) shall be entitled to recover
such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.
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(c) Each Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit; PROVIDED, HOWEVER, that no Borrower shall be obligated
hereunder to indemnify for any loss, cost, expense, or liability to the extent
that it is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound
by the Underlying Issuer's regulations and interpretations of any Underlying
Letter of Credit or by Issuing Lender's interpretations of any L/C issued by
Issuing Lender to or for such Borrower's account, even though this
interpretation may be different from such Borrower's own, and each Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrowers' instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability incurred by the
Lender Group under any L/C Undertaking as a result of the Lender Group's
indemnification of any Underlying Issuer; PROVIDED, however, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability to the extent that it is caused by the gross negligence or willful
misconduct of the Issuing Lender or any other member of the Lender Group. Each
Borrower hereby acknowledges and agrees that neither the Lender Group nor the
Issuing Lender shall be responsible for delays, errors, or omissions resulting
from the malfunction of equipment in connection with any Letter of Credit.
(d) Each Borrower hereby authorizes and directs any Underlying Issuer to
deliver to the Issuing Lender all instruments, documents, and other writings and
property received by such Underlying Issuer pursuant to such Underlying Letter
of Credit and to accept and rely upon the Issuing Lender's instructions with
respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred by the
Issuing Lender relating to Underlying Letters of Credit shall be Lender Group
Expenses for purposes of this Agreement and immediately shall be reimbursable by
Borrowers to Agent for the account of the Issuing Lender; it being acknowledged
and agreed by each Borrower that, as of the Closing Date, the issuance charge
imposed by the prospective Underlying Issuer is .825% per annum times the face
amount of each Underlying Letter of Credit, that such issuance charge may be
changed from time to time, and that the Underlying Issuer also imposes a
schedule of charges for amendments, extensions, drawings, and renewals.
(f) If by reason of (i) any change after the Closing Date in any applicable
law, treaty, rule, or regulation or any change in the interpretation or
application thereof by any Governmental Authority, or (ii) compliance by the
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder, or
(ii) there shall be imposed on the Underlying Issuer or the Lender
Group any other condition regarding any Underlying Letter of Credit or any
Letter of Credit issued pursuant hereto; and the result of the foregoing is to
increase, directly or indirectly, the cost to the Lender Group of issuing,
making, guaranteeing, or maintaining any Letter of Credit or to reduce the
amount receivable in respect thereof by the Lender Group, then, and in any such
case, Agent may, at any time within a reasonable period after the additional
cost is incurred or the amount received is reduced, notify Administrative
Borrower, and Borrowers shall pay on demand such amounts as Agent may specify to
be necessary to compensate the Lender Group for such additional cost or reduced
47
receipt, together with interest on such amount from the date of such demand
until payment in full thereof at the rate then applicable to Base Rate Loans
hereunder. The determination by Agent of any amount due pursuant to this
Section, as set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error, be
final and conclusive and binding on all of the parties hereto.
2.13 LIBOR OPTION.
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu of having interest charged
at the rate based upon the Base Rate, Borrowers shall have the option (the
"LIBOR OPTION") to have interest on all or a portion of the Advances or the Term
Loan be charged at a rate of interest based upon the LIBOR Rate. Interest on
LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto, (PROVIDED, HOWEVER, that, subject to the
following clauses (ii) and (iii), in the case of any Interest Period greater
than 3 months in duration, interest shall be payable at 3 month intervals after
the commencement of the applicable Interest Period and on the last day of such
Interest Period), (ii) the occurrence of an Event of Default in consequence of
which the Required Lenders or Agent on behalf thereof have elected to accelerate
the maturity of all or any portion of the Obligations, or (iii) termination of
this Agreement pursuant to the terms hereof. On the last day of each applicable
Interest Period, unless Administrative Borrower properly has exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to request
that Advances or the Term Loan bear interest at a rate based upon the LIBOR Rate
and Agent shall have the right to convert the interest rate on all outstanding
LIBOR Rate Loans to the rate then applicable to Base Rate Loans hereunder.
(b) LIBOR ELECTION.
(i) Administrative Borrower may, at any time and from time to time, so
long as no Event of Default has occurred and is continuing, elect to exercise
the LIBOR Option by notifying Agent prior to 11:00 a.m. (California time) at
least 3 Business Days prior to the commencement of the proposed Interest Period
(the "LIBOR DEADLINE"). Notice of Administrative Borrower's election of the
LIBOR Option for a permitted portion of the Advances or the Term Loan and an
Interest Period pursuant to this Section shall be made by delivery to Agent of a
LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic
notice received by Agent before the LIBOR Deadline (to be confirmed by delivery
to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (California
time) on the same day). Promptly upon its receipt of each such LIBOR Notice,
Agent shall provide a copy thereof to each of the Lenders having a Revolver
Commitment.
(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers.
In connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend,
and hold Agent and the Lenders harmless against any loss, cost, or expense
incurred by Agent or any Lender as a result of (a) the payment of any principal
of any LIBOR Rate Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion of any LIBOR Rate Loan other than on the last day of the Interest
Period applicable thereto, or (c) the failure to borrow, convert, continue or
prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered
pursuant hereto (such losses, costs, and expenses, collectively, "FUNDING
LOSSES"). Funding Losses shall, with respect to Agent or any Lender, be deemed
to equal the amount determined by Agent or such Lender to be the excess, if any,
of (i) the amount of interest that would have accrued on the principal amount of
such LIBOR Rate Loan had such event not occurred, at the LIBOR Rate that would
have been applicable thereto, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period therefor), MINUS (ii) the amount of interest that would accrue
on such principal amount for such period at the interest rate which Agent or
such Lender would be offered were it to be offered, at the commencement of such
period, Dollar deposits of a comparable amount and period in the London
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interbank market. A certificate of Agent or a Lender delivered to Administrative
Borrower setting forth any amount or amounts that Agent or such Lender is
entitled to receive pursuant to this SECTION 2.13 shall be conclusive absent
manifest error.
(iii) Borrowers shall have not more than 5 LIBOR Rate Loans in effect
at any given time. Borrowers only may exercise the LIBOR Option for LIBOR Rate
Loans of at least $1,000,000 and integral multiples of $500,000 in excess
thereof.
(c) PREPAYMENTS. Borrowers may prepay LIBOR Rate Loans at any time;
PROVIDED, HOWEVER, that in the event that LIBOR Rate Loans are prepaid on any
date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required
application by Agent of proceeds of Borrowers' and their Subsidiaries'
Collections in accordance with SECTION 2.4(B) or for any other reason, including
early termination of the term of this Agreement or acceleration of all or any
portion of the Obligations pursuant to the terms hereof, each Borrower shall
indemnify, defend, and hold Agent and the Lenders and their Participants
harmless against any and all Funding Losses in accordance with clause (b)(ii)
above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender
on a prospective basis to take into account any additional or increased costs to
such Lender of maintaining or obtaining any eurodollar deposits or increased
costs, in each case, due to changes in applicable law occurring subsequent to
the commencement of the then applicable Interest Period, including changes in
tax laws (except changes of general applicability in tax laws relating to taxes
measured by or based on net income, profits, or capital) and changes in the
reserve requirements imposed by the Board of Governors of the Federal Reserve
System (or any successor), excluding the Reserve Percentage, which additional or
increased costs would increase the cost of funding loans bearing interest at the
LIBOR Rate; PROVIDED that the LIBOR Rate shall not be adjusted to compensate any
Lender pursuant to this clause (d) for any increased costs incurred more than
180 days prior to the date that such Lender notified the Agent pursuant to the
following sentence of the change in law giving rise to such increased costs;
PROVIDED FURTHER that if the change in law giving rise to such increased costs
is retroactive, then the 180-day period referred to above shall not begin
earlier than the date of effectiveness of the change in law. In any such event,
the affected Lender shall give Administrative Borrower and Agent notice of such
a determination and adjustment and Agent promptly shall transmit the notice to
each other Lender and, upon its receipt of the notice from the affected Lender,
Administrative Borrower may, by notice to such affected Lender (y) require such
Lender to furnish to Administrative Borrower a statement setting forth the basis
for adjusting such LIBOR Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to which such
adjustment is made (together with any amounts due under clause (b)(ii) above).
(ii) In the event that any change in market conditions or any law,
regulation, treaty, or directive, or any change therein or in the interpretation
of application thereof, shall at any time after the date hereof, in the
reasonable opinion of any Lender, make it unlawful or impractical for such
Lender to fund or maintain LIBOR Advances or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and
Administrative Borrower and Agent promptly shall transmit the notice to each
other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are
outstanding, the date specified in such Lender's notice shall be deemed to be
the last day of the Interest Period of such LIBOR Rate Loans, and interest upon
the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate
then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to
elect the LIBOR Option until such Lender determines that it would no longer be
unlawful or impractical to do so.
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to the contrary contained
herein notwithstanding, neither Agent, nor any Lender, nor any of their
49
Participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate. The provisions of this Section shall apply as if each Lender or its
Participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.
2.14 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender determines
that (i) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies, or any
change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender's or
such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof. Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error); PROVIDED THAT the Borrowers
shall not be required to compensate any Lender pursuant to this SECTION 2.14 for
any increased costs incurred more than 180 days prior to the date that such
Lender notified Agent of the change in law giving rise to such reduction;
PROVIDED FURTHER that if the change in law giving rise to such reduction is
retroactive, then the 180-day period referred to above shall not begin earlier
than the date of effectiveness of the change in law. In determining such amount,
such Lender may use any reasonable averaging and attribution methods.
2.15 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each Borrower is accepting joint and several liability hereunder and
under the other Loan Documents in consideration of the financial accommodations
to be provided by the Lender Group under this Agreement, for the mutual benefit,
directly and indirectly, of each Borrower and in consideration of the
undertakings of the other Borrowers to accept joint and several liability for
the Obligations.
(b) Each Borrower, 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 (including, without limitation, any
Obligations arising under this SECTION 2.15), it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of each Borrower without preferences or distinction among them.
(c) If and to the extent that any Borrower 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
2.15 constitute the absolute and unconditional, full recourse Obligations of
each Borrower enforceable against each Borrower to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Advances or Letters of Credit issued under or pursuant to this Agreement,
notice of the occurrence of any Default, Event of Default, or of any demand for
any payment under this Agreement, notice of any action at any time taken or
50
omitted by Agent or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Agreement (except as otherwise provided in this
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 payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders 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 Agreement, any and all other indulgences whatsoever by Agent or Lenders
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 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 Agent or Lender with respect to the failure by any Borrower to comply with
any of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this SECTION 2.15 afford grounds for terminating, discharging or
relieving any Borrower, in whole or in part, from any of its Obligations under
this SECTION 2.15, it being the intention of each Borrower that, so long as any
of the Obligations hereunder remain unsatisfied, the Obligations of each
Borrower under this SECTION 2.15 shall not be discharged except by performance
and then only to the extent of such performance. The Obligations of each
Borrower under this SECTION 2.15 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 Agent
or Lender.
(f) Each Borrower represents and warrants to Agent and Lenders that such
Borrower is currently informed of the financial condition of Borrowers and of
all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further represents
and warrants to Agent and Lenders that such Borrower has read and understands
the terms and conditions of the Loan Documents. Each Borrower hereby covenants
that such Borrower will continue to keep informed of Borrowers' financial
condition, the financial condition of other guarantors, if any, and of all other
circumstances which bear upon the risk of nonpayment or nonperformance of the
Obligations.
(g) Each Borrower waives all rights and defenses arising out of an election
of remedies by Agent or any Lender, even though that election of remedies, such
as a nonjudicial foreclosure with respect to security for a guaranteed
obligation, has destroyed Agent's or such Lender's rights of subrogation and
reimbursement against such Borrower by the operation of Section 580(d) of the
California Code of Civil Procedure or otherwise:
(h) Each Borrower waives all rights and defenses that such Borrower may
have because the Obligations are secured by Real Property. This means, among
other things: (i) Agent and Lenders may collect from such Borrower without first
foreclosing on any Real or Personal Property Collateral pledged by Borrowers.
(ii) If Agent or any Lender forecloses on any Real Property Collateral
pledged by Borrowers:
(A) The amount of the Obligations may be reduced only by the
price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price.
(B) Agent and Lenders may collect from such Borrower even if
Agent or Lenders, by foreclosing on the Real Property Collateral, has destroyed
any right such Borrower may have to collect from the other Borrowers.
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This is an unconditional and irrevocable waiver of any rights and defenses such
Borrower may have because the Obligations are secured by Real Property. These
rights and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d or 726 of the California Code of Civil
Procedure or any similar provisions of any other applicable law.
(i) The provisions of this SECTION 2.15 are made for the benefit of Agent,
Lenders and their respective successors and assigns, and may be enforced by it
or them from time to time against any or all Borrowers as often as occasion
therefor may arise and without requirement on the part of any such Agent,
Lender, successor or assign first to marshal any of its or their claims or to
exercise any of its or their rights against any Borrower or to exhaust any
remedies available to it or them against any Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this SECTION 2.15 shall remain in
effect until all of 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 Agent or Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this SECTION
2.15 will forthwith be reinstated in effect, as though such payment had not been
made.
(j) Each Borrower hereby agrees that it will not enforce any of its rights
of contribution or subrogation against any other Borrower with respect to any
liability incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to Agent or Lenders with respect to any of the Obligations
or any collateral security therefor until such time as all of the Obligations
have been paid in full in cash. Any claim which any Borrower may have against
any other Borrower with respect to any payments to any Agent or Lender hereunder
or under any other Loan Documents are hereby expressly made subordinate and
junior in right of payment, without limitation as to any increases in the
Obligations arising hereunder or thereunder, to the prior payment in full in
cash of the Obligations and, in the event of any insolvency, bankruptcy,
receivership, liquidation, reorganization or other similar proceeding under the
laws of any jurisdiction relating to any Borrower, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in full in
cash before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to any other Borrower therefor.
(k) Each Borrower hereby agrees that, after the occurrence and during the
continuance of any Default or Event of Default, the payment of any amounts due
with respect to the indebtedness owing by any Borrower to any other Borrower is
hereby subordinated to the prior payment in full in cash of the Obligations.
Each Borrower hereby agrees that after the occurrence and during the continuance
of any Default or Event of Default, such Borrower will not demand, xxx for or
otherwise attempt to collect any indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for Agent, and such
Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with SECTION 2.4(B).
2.16 SECURITIZATIONS. Each Borrower hereby acknowledges that the Lenders
and each of their Affiliates may sell or securitize the Borrowings (a
"SECURITIZATION") through the pledge of the Borrowings as collateral security
for loans to such Lenders or their Affiliates or through the sale of the
Borrowings or the issuance of direct or indirect interests in the Borrowings,
which loans to such Lenders or their Affiliate or direct or indirect interests
will be rated by Xxxxx'x, Standard & Poor's or one or more other rating agencies
(the "RATING AGENCIES"). Parent and each Borrower shall cooperate with such
Lenders and their Affiliates to effect the Securitization including, without
limitation, by (a) amending this Agreement and the other Loan Documents, and
executing such additional documents, as reasonably requested by such Lenders in
connection with the Securitization, provided that (i) any such amendment or
additional documentation does not impose additional costs on Borrowers, and (ii)
any such amendment or additional documentation does not adversely affect the
rights, or increase the obligations, of Borrowers under the Loan Documents or
change or affect in a manner adverse to Borrowers the financial terms of the
Borrowings, (b) providing such information as may be reasonably requested by
52
such Lenders in connection with the rating of the Borrowings or the
Securitization, and (c) providing in connection with any rating of the
Borrowings a certificate (i) agreeing to indemnify such Lenders and any of their
Affiliates, any of the Rating Agencies, or any party providing credit support or
otherwise participating in the Securitization (collectively, the "SECURITIZATION
PARTIES") for any losses, claims, damages or liabilities (the "LIABILITIES") to
which such Lenders, their Affiliates or such Securitization Parties may become
subject insofar as the Liabilities arise out of or are based upon a breach of
any of the representations and warranties contained in SECTION 5.19, and (ii)
agreeing to reimburse such Lenders and any of their Affiliates for any legal or
other expenses reasonably incurred by such Persons in connection with defending
the Liabilities.
2.17 REGISTERED NOTES. Borrower agrees to record each Borrowing on the
Register referred to in SECTION 14.1(H). Each Borrowing recorded on the Register
(the "REGISTERED LOAN") may not be evidenced by promissory notes other than
Registered Notes (as defined below). Upon the registration of any Borrowing,
Borrower agrees, at the request of any Lender, to execute and deliver to such
Lender a promissory note, in conformity with the terms of this Agreement, in
registered form to evidence such Registered Loan, in form and substance
satisfactory to such Lender, and registered as provided in SECTION 14.1(H) (a
"REGISTERED NOTE"), payable to the order of such Lender and otherwise duly
completed. Once recorded on the Register, a Registered Loan may not be removed
from the Register so long as it remains outstanding, and a Registered Note may
not be exchanged for a promissory note that is not a Registered Note.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The obligation
of each Lender to make its initial extension of credit provided for hereunder,
is subject to the fulfillment, to the satisfaction of Agent and each Lender (the
making of such initial extension of credit by a Lender being conclusively deemed
to be its satisfaction or waiver of the following), of each of the following
conditions precedent:
(a) the Closing Date shall occur on or before May 13, 2004;
(b) Agent shall have received appropriate financing statements in a form to
be filed in such office or offices as may be necessary or, in the opinion of
Agent, desirable to perfect the Agent's Liens in and to the Collateral;
(c) Agent shall have received each of the following documents, in form and
substance reasonably satisfactory to Agent, duly executed, and each such
document shall be in full force and effect:
(i) the Aircraft Security Agreement,
(ii) the Borrower Stock Pledge Agreement, together with (A) all
certificates representing the shares of Stock pledged thereunder, as well as
Stock powers with respect thereto endorsed in blank, and (B) all promissory
notes pledged thereunder, as well as allonges thereto or other appropriate
transfer certificates endorsed in blank,
(iii) the Cash Management Agreements,
(iv) the Control Agreements (other than the Control Agreements
specified in SECTION 3.2),
(v) the Disbursement Letter,
(vi) the Fee Letter,
(vii) the Finova Consent,
53
(viii) the Guarantor Security Agreement,
(ix) the Guarantor Stock Pledge Agreement, together with (A) all
certificates representing the shares of Stock pledged thereunder, as well as
Stock powers with respect thereto endorsed in blank, and (B) all promissory
notes pledged thereunder, as well as allonges thereto or other appropriate
transfer certificates endorsed in blank,
(x) the Guaranty,
(xi) the Intercompany Subordination Agreement,
(xii) the Intercreditor Agreement,
(xiii) the Mortgage,
(xiv) the Pay-Off Letter, together with termination statements and
other documentation evidencing the termination by Existing Agent of its Liens in
and to the properties and assets of Borrowers and their Subsidiaries, and
(xv) the Tax/Litigation Letter Agreement,
(xvi) the Trademark Security Agreement,
(d) Agent shall have received a certificate from the Secretary of each
Borrower (i) attesting to the resolutions of such Borrower's Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents to which such Borrower is a party, (ii) authorizing
specific officers of such Borrower to execute the same, and (iii) attesting to
the incumbency and signatures of such specific officers of such Borrower;
(e) Agent shall have received copies of each Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of such Borrower;
(f) Agent shall have received a certificate of status with respect to each
Borrower, dated within 10 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of such
Borrower, which certificate shall indicate that such Borrower is in good
standing in such jurisdiction;
(g) Agent shall have received certificates of status with respect to each
Borrower, each dated within 30 days of the Closing Date, such certificates to be
issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of such Borrower) in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Borrower is in good standing in such
jurisdictions;
(h) Agent shall have received a certificate from the Secretary of each
Guarantor (i) attesting to the resolutions of such Guarantor's board of
directors authorizing its execution, delivery, and performance of the Loan
Documents to which such Guarantor is a party, (ii) authorizing specific officers
of such Guarantor to execute the same, and (iii) attesting to the incumbency and
signatures of such specific officers of such Guarantor;
(i) Agent shall have received copies of each Guarantor's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of such Guarantor;
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(j) Agent shall have received a certificate of status with respect to each
Guarantor, dated within 10 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of such
Guarantor, which certificate shall indicate that such Guarantor is in good
standing in such jurisdiction;
(k) Agent shall have received certificates of status with respect to each
Guarantor, each dated within 30 days of the Closing Date, such certificates to
be issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of such Guarantor) in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Guarantor is in good standing in such
jurisdictions;
(l) Parent or any of the Borrowers shall have received a written agreement
executed by Agent and each Lender, in form and substance satisfactory to Agent
and each Lender, regarding Persons that are specifically excluded from being an
Eligible Transferee;
(m) Agent shall have received a certificate of insurance, together with the
endorsements thereto, as are required by SECTION 6.8;
(n) Agent shall have received opinions of Borrowers' and Guarantors'
counsel in form and substance reasonably satisfactory to Agent;
(o) Agent shall have received satisfactory evidence (including a
certificate of the chief financial officer of Parent) that all tax returns
required to be filed by Borrowers and their Subsidiaries have been timely filed
and all taxes upon Borrowers and their Subsidiaries or their properties, assets,
income, and franchises (including Real Property taxes, sales taxes, and payroll
taxes) have been paid prior to delinquency, except such taxes that are the
subject of a Permitted Protest;
(p) Borrowers shall have the Required Availability after giving effect to
the initial extensions of credit hereunder and the payment of all fees and
expenses required to be paid by Borrowers on the Closing Date under this
Agreement or the other Loan Documents;
(q) Agent shall have completed its business, legal, and collateral due
diligence, including (i) a collateral audit, a takeover audit and a review of
Parent's and its Subsidiaries' Books and records and verification of Borrowers'
representations and warranties to the Lender Group, the results of which shall
be satisfactory to Agent, and (ii) an inspection of each of the locations where
Borrowers' and their Subsidiaries' Inventory is located, the results of which
shall be satisfactory to Agent;
(r) Agent shall have received completed reference checks with respect to
Borrowers' senior management, the results of which are satisfactory to Agent in
its sole discretion;
(s) Agent shall have received an appraisal of Borrowers' and their
Subsidiaries' Inventory and an appraisal of Borrowers' and their Subsidiaries'
Equipment (including fixed wing Aircraft, rotary wing Aircraft, or B747 or DC9
Aircraft and other Eligible Equipment), the results of which shall be
satisfactory to Agent;
(t) Agent shall have received Borrowers' Closing Date Business Plan;
(u) Borrowers shall have paid all Lender Group Expenses incurred in
connection with the transactions evidenced by this Agreement;
(v) Agent shall have received a mortgagee title insurance policy (or a
marked commitment to issue the same) for the Real Property Collateral issued by
a title insurance company satisfactory to Agent (the "MORTGAGE Policy") in
amounts satisfactory to Agent assuring Agent that the Mortgage on such Real
55
Property Collateral are valid and enforceable first priority mortgage Liens on
such Real Property Collateral free and clear of all defects and encumbrances
except Permitted Liens, and the Mortgage Policy otherwise shall be in form and
substance satisfactory to Agent;
(w) Agent shall have received title opinions with respect to the Aircraft
Collateral issued by a Person satisfactory to Agent, which indicate that such
Aircraft Collateral is free and clear of all defects and encumbrances except
Permitted Liens, and which are otherwise in form and substance satisfactory to
Agent;
(x) Agent shall have received (i) a certificate executed by an officer of
the Borrowers pursuant to which such officer certifies that (x) the liens listed
on SCHEDULE A to such certificate relate only to the specific equipment listed
on SCHEDULE B to such certificate, and (y) all of the outstanding obligations
underlying or with respect to such liens have been satisfied in full; and (ii)
certificates executed by an officer of the Borrowers pursuant to which such
officer certifies that (x) none of the releases attached thereto as EXHIBIT A
have been altered, and (y) all of the outstanding obligations that relate to the
security agreement referenced therein have been satisfied in full, and otherwise
in form and substance satisfactory to Agent;
(y) Borrowers and each of their Subsidiaries shall have received all
licenses, approvals or evidence of other actions required by any Governmental
Authority in connection with the execution and delivery by Borrowers or their
Subsidiaries of the Loan Document or with the consummation of the transactions
contemplated thereby;
(z) Agent shall have established a system of electronic collateral
reporting in order to provide electronic reporting of each of the items set
forth in SECTION 6.2; and
(aa) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance reasonably satisfactory to Agent.
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to make
Advances (or otherwise extend credit hereunder) is subject to the fulfillment,
on or before the date applicable thereto, of each of the conditions subsequent
set forth below (the failure by Borrowers to so perform or cause to be performed
constituting an Event of Default):
(a) on or before the earlier of (i) 10 days of the date that Agent provides
Borrowers with a form of opinion, or (ii) 20 days of the Closing Date, Borrowers
shall have delivered to Agent an opinion from Aon, Marsh, Willis, or another
broker acceptable to Required Lenders that the certificates of insurance,
together with the endorsements thereto, (i) comply with SECTION 6.8, (ii) are in
such amounts and cover such perils as is customarily provided for aircraft of a
similar nature owned by Persons engaged in the same or similar business as the
Borrowers, (iii) are placed with insurers of recognized reputation and
responsibility, and (iv) are otherwise in form and substance satisfactory to
Required Lenders,
(b) within 30 days of the Closing Date, Borrowers shall have delivered to
Agent file-stamped releases, in form and substance satisfactory to Agent and to
FAA counsel satisfactory to Agent, filed with the FAA that reflect the discharge
of the liens listed on SCHEDULE L-1;
(c) within 30 days of the Closing Date, Agent shall have received searches
reflecting the filing of all financing statements referenced in SECTION 3.1(B);
(d) within 30 days of the Closing Date, Borrowers shall use their best
efforts to deliver to Agent Collateral Access Agreement with respect to all of
locations listed on SCHEDULE 5.5(B)(I);
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(e) within 30 days of the Closing Date, Borrower shall have received a
Control Agreement for each Deposit Account and each Securities Account of each
Borrower and each Guarantor as required by SECTION 7.12;
(f) within 30 days of the Closing Date (and, if being diligently pursued,
within 45 days of the Closing Date), Agent shall have received a phase-I
environmental report, a real estate survey, and a zoning letter with respect to
each parcel composing the Real Property Collateral; the environmental
consultants and surveyors retained for such reports or surveys, the scope of the
reports or surveys, and the results thereof shall be acceptable to Agent;
(g) Borrowers shall have complied, to the reasonable satisfaction of Agent,
with the Assignment of Claims Act, 31 USC ss.3727 (i) with respect to 50% of the
amount of Accounts created by one or more of the Borrowers with respect to which
Air Mobility Command or the United States Postal Service is the Account Debtor,
within 120 days of the Closing Date, (ii) with respect to 75% of the aggregate
amount of Accounts created by one or more of the Borrowers with respect to which
Air Mobility Command or the United States Postal Service is the Account Debtor,
within 150 days of the Closing Date, and (iii) with respect to 100% of the
amount of Accounts created by one or more of the Borrowers with respect to which
Air Mobility Command or the United States Postal Service is the Account Debtor,
within 210 days of the Closing Date.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder at any time
(or to extend any other credit hereunder) shall be subject to the following
conditions precedent:
(a) the representations and warranties contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the date of such extension of credit, as though made on and as of such
date (except to the extent that such representations and warranties relate
solely to an earlier date);
(b) no Default or Event of Default shall have occurred and be continuing on
the date of such extension of credit, nor shall either result from the making
thereof;
(c) no injunction, writ, restraining order, or other order of any nature
restricting or prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority against
any Borrower, Agent, any Lender, or any of their Affiliates; and
(d) no Material Adverse Change shall have occurred.
3.4 TERM. This Agreement shall continue in full force and effect for a term
ending on May __, 2007 (the "MATURITY DATE"). The foregoing notwithstanding, the
Lender Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrowers
with respect to outstanding Letters of Credit and including all Bank Products
Obligations) immediately shall become due and payable without notice or demand
(including (a) either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender, and (b) providing cash collateral (in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Agent for the benefit of the Bank Product
Providers with respect to the Bank Products Obligations). No termination of this
Agreement, however, shall relieve or discharge Borrowers or their Subsidiaries
of their duties, Obligations, or covenants hereunder or under any other Loan
Document and the Agent's Liens in the Collateral shall remain in effect until
all Obligations have been paid in full and the Lender Group's obligations to
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provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been paid in full and the
Lender Group's obligations to provide additional credit under the Loan Documents
have been terminated irrevocably, Agent will, at Borrowers' sole expense,
execute and deliver any termination statements, lien releases, mortgage
releases, re-assignments of trademarks, discharges of security interests, and
other similar discharge or release documents (and, if applicable, in recordable
form) as are reasonably necessary to release, as of record, the Agent's Liens
and all notices of security interests and liens previously filed by Agent with
respect to the Obligations.
3.6 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at any time
upon 90 days prior written notice by Administrative Borrower to Agent, to
terminate this Agreement by paying to Agent, in cash, the Obligations (including
(a) either (i) providing cash collateral to be held by Agent for the benefit of
those Lenders with a Revolver Commitment in an amount equal to 105% of the
Letter of Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender, and (b) providing cash collateral (in an amount
determined by Agent as sufficient to satisfy the reasonably estimated credit
exposure) to be held by Agent for the benefit of the Bank Product Providers with
respect to the Bank Products Obligations), in full, together with the Applicable
Prepayment Premium (to be allocated based upon agreements between Agent and
individual Lenders). If Administrative Borrower has sent a notice of termination
pursuant to the provisions of this Section, then the Commitments shall terminate
and Borrowers shall be obligated to repay the Obligations (including (a) either
(i) providing cash collateral to be held by Agent for the benefit of those
Lenders with a Revolver Commitment in an amount equal to 105% of the Letter of
Credit Usage, or (ii) causing the original Letters of Credit to be returned to
the Issuing Lender, and (b) providing cash collateral (in an amount determined
by Agent as sufficient to satisfy the reasonably estimated credit exposure) to
be held by Agent for the benefit of the Bank Product Providers with respect to
the Bank Products Obligations), in full, together with the Applicable Prepayment
Premium, on the date set forth as the date of termination of this Agreement in
such notice. In the event of the termination of this Agreement and repayment of
the Obligations at any time prior to the Maturity Date, for any other reason,
including (a) termination upon the election of the Required Lenders to terminate
after the occurrence and during the continuation of an Event of Default, (b)
foreclosure and sale of Collateral, (c) sale of the Collateral in any Insolvency
Proceeding, or (d) restructure, reorganization or compromise of the Obligations
by the confirmation of a plan of reorganization or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding, then, in view of the
impracticability and extreme difficulty of ascertaining the actual amount of
damages to the Lender Group or profits lost by the Lender Group as a result of
such early termination, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrowers shall pay the Applicable Prepayment Premium to Agent (to
be allocated based upon agreements between Agent and individual Lenders),
measured as of the date of such termination.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Borrower hereby grants to Agent, for
the benefit of the Lender Group and the Bank Product Providers, a continuing
security interest in all of its right, title, and interest in all currently
existing and hereafter acquired or arising Borrower Collateral in order to
secure prompt repayment of any and all of the Obligations in accordance with the
terms and conditions of the Loan Documents and in order to secure prompt
performance by Borrowers of each of their covenants and duties under the Loan
Documents. The Agent's Liens in and to the Borrower Collateral shall attach to
all Borrower Collateral without further act on the part of Agent or Borrowers.
Anything contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Borrowers and their
Subsidiaries have no authority, express or implied, to dispose of any item or
portion of the Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Borrower Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral, and if
and to the extent that Agent determines that perfection or priority of Agent's
security interest is dependent on or enhanced by possession, the applicable
Borrower, promptly upon the request of Agent, shall endorse and deliver physical
possession of such Negotiable Collateral to Agent.
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4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE COLLATERAL.
At any time after the occurrence and during the continuation of an Event of
Default, Agent or Agent's designee may (a) notify Account Debtors of Borrowers
that Borrowers' Accounts, chattel paper, or General Intangibles have been
assigned to Agent or that Agent has a security interest therein, or (b) collect
Borrowers' Accounts, chattel paper, or General Intangibles directly and charge
the collection costs and expenses to the Loan Account. Each Borrower agrees that
it will hold in trust for the Lender Group, as the Lender Group's trustee, any
of its or its Subsidiaries' Collections that it receives and immediately will
deliver such Collections to Agent or a Cash Management Bank in their original
form as received by such Borrower or its Subsidiaries.
4.4 FILING OF FINANCING STATEMENTS; COMMERCIAL TORT CLAIMS; DELIVERY OF
ADDITIONAL DOCUMENTATION REQUIRED.
(a) Borrowers authorize Agent to file any financing statement necessary or
desirable to effectuate the transactions contemplated by the Loan Documents, and
any continuation statement or amendment with respect thereto (including without
limitation any financing statements that (i) indicate the Borrower Collateral
(A) as all assets of such Borrower or words of similar effect, regardless of
whether any particular asset of such Borrower falls within the scope of Article
9 of the Code or whether any portion of the assets of such Borrower constitute
part of the Borrower Collateral, or (B) as being of an equal or lesser scope or
with greater detail, and (ii) contain any other information required by part 5
of Article 9 of the Code for the sufficiency or filing office acceptance of any
financing statement or amendment, including (x) whether such Borrower is an
organization, the type of organization and any organization identification
number issued to such Borrower, and (y) in the case of a financing statement
filed as a fixture filing or indicating Borrower Collateral as as-extracted
collateral or timber to be cut, a sufficient description of real property to
which the Borrower Collateral relates), in any appropriate filing office without
the signature of Borrowers where permitted by applicable law.
(b) If Borrowers or their Subsidiaries acquire any commercial tort claims
after the date hereof, Borrowers shall promptly (but in any event within 3
Business Days after such acquisition) deliver to Agent a written description of
such commercial tort claim and shall deliver a written agreement, in form and
substance satisfactory to Agent, pursuant to which such Borrower or its
Subsidiary, as applicable, shall grant a perfected security interest in all of
its right, title and interest in and to such commercial tort claim to Agent, as
security for the Obligations (a "COMMERCIAL TORT CLAIM ASSIGNMENT").
(c) At any time upon the request of Agent, Borrowers shall execute or
deliver to Agent and shall cause their Subsidiaries to execute or deliver to
Agent any and all financing statements, original financing statements in lieu of
continuation statements, amendments to financing statements, fixture filings,
security agreements, pledges, assignments, Commercial Tort Claim Assignments,
endorsements of certificates of title, and all other documents (collectively,
the "ADDITIONAL DOCUMENTS") that Agent may request in its Permitted Discretion,
in form and substance reasonably satisfactory to Agent, to create, perfect, and
continue perfected or to better perfect the Agent's Liens in the assets of
Borrowers and their Subsidiaries (whether now owned or hereafter arising or
acquired, tangible or intangible, real or personal), to create and perfect Liens
in favor of Agent in any owned Real Property acquired after the Closing Date,
and in order to fully consummate all of the transactions contemplated hereby and
under the other Loan Documents. To the maximum extent permitted by applicable
law, each Borrower authorizes Agent to execute any such Additional Documents in
the applicable Borrower's name and authorizes Agent to file such executed
Additional Documents in any appropriate filing office. In addition, on a
quarterly basis (and after the occurrence and during the continuance of a
Default or an Event of Default, on such periodic basis as Agent shall require),
Borrowers shall (i) provide Agent with a report of all new material patentable,
copyrightable, or trademarkable materials acquired or generated by any Borrower
or its Subsidiaries during the prior period, (ii) cause all material patents,
copyrights, and trademarks acquired or generated by Borrowers or their
Subsidiaries that are not already the subject of a registration with the
appropriate filing office (or an application therefor diligently prosecuted) to
be registered with such appropriate filing office in a manner sufficient to
impart constructive notice of such Borrower's or such Subsidiary's ownership
thereof, and (iii) cause to be prepared, executed, and delivered to Agent
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supplemental schedules to the applicable Loan Documents to identify such
patents, copyrights, and trademarks as being subject to the security interests
created thereunder; PROVIDED, HOWEVER, that none of Borrowers or their
Subsidiaries shall register with the U.S. Copyright Office any unregistered
copyrights (whether in existence on the Closing Date or thereafter acquired,
arising, or developed) unless (i) the applicable Person provides Agent with
written notice of its intent to register such copyrights not less than 30 days
prior to the date of the proposed registration, and (ii) prior to such
registration, the applicable Person executes and delivers to Agent a copyright
security agreement in form and substance satisfactory to Agent, supplemental
schedules to any existing copyright security agreement, or such other
documentation as Agent reasonably deems necessary in order to perfect and
continue perfected Agent's Liens on such copyrights following such registration.
4.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably makes, constitutes,
and appoints Agent (and any of Agent's officers, employees, or agents designated
by Agent) as such Borrower's true and lawful attorney, with power to (a) if such
Borrower refuses to, or fails timely to execute and deliver any of the documents
described in SECTION 4.4, sign the name of such Borrower on any of the documents
described in SECTION 4.4, (b) at any time that an Event of Default has occurred
and is continuing, sign such Borrower's name on any invoice or xxxx of lading
relating to the Borrower Collateral, drafts against Account Debtors, or notices
to Account Debtors, (c) send requests for verification of Borrowers' or their
Subsidiaries' Accounts, (d) endorse such Borrower's name on any of its payment
items (including all of its Collections) that may come into the Lender Group's
possession, (e) at any time that an Event of Default has occurred and is
continuing, make, settle, and adjust all claims under such Borrower's policies
of insurance and make all determinations and decisions with respect to such
policies of insurance, and (f) at any time that an Event of Default has occurred
and is continuing, settle and adjust disputes and claims respecting Borrowers'
or their Subsidiaries' Accounts, chattel paper, or General Intangibles directly
with Account Debtors, for amounts and upon terms that Agent determines to be
reasonable, and Agent may cause to be executed and delivered any documents and
releases that Agent determines to be necessary. The appointment of Agent as each
Borrower's attorney, and each and every one of its rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have been
fully and finally repaid and performed and the Lender Group's obligations to
extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their
respective officers, employees, or agents) shall have the right, from time to
time hereafter (and so long as no Default or Event of Default has occurred and
is continuing, upon reasonable prior notice and during normal business hours) to
inspect the Parent's and its Subsidiaries' Books and make copies or abstracts
thereof and to check, test, and appraise the Collateral, or any portion thereof,
in order to verify Parent's and its Subsidiaries' financial condition or the
amount, quality, value, condition of, or any other matter relating to, the
Collateral.
4.7 CONTROL AGREEMENTS. Borrowers agree that they will and will cause their
Subsidiaries to take any or all reasonable steps in order for Agent to obtain
control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and 9-107 of the
Code with respect to (subject to the proviso contained in SECTION 7.12) all of
their Securities Accounts, Deposit Accounts, electronic chattel paper,
Investment Property, and letter-of-credit rights. Upon the occurrence and during
the continuance of a Default or Event of Default, Agent may notify any bank or
securities intermediary to liquidate the applicable Deposit Account or
Securities Account or any related Investment Property maintained or held thereby
and remit the proceeds thereof to the Agent's Account.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement, Parent
and each Borrower makes the following representations and warranties to the
Lender Group which shall be true, correct, and complete, in all material
respects, as of the date hereof, and shall be true, correct, and complete, in
all material respects, as of the Closing Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter, as though
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made on and as of the date of such Advance (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Parent and each Borrower and each of their respective
Subsidiaries has good and indefeasible title to, or a valid leasehold interest
in, their personal property assets and good and marketable title to, or a valid
leasehold interest in, their Real Property, in each case, free and clear of
Liens except for Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. As to each Account that is identified by a Borrower
as an Eligible Account in a borrowing base report submitted to Agent, such
Account is (a) a bona fide existing payment obligations of the applicable
Account Debtors created by the sale and delivery of Inventory or the rendition
of services to such Account Debtors in the ordinary course of Borrowers'
business, (b) owed to Borrowers without any known defenses, disputes, offsets,
counterclaims, or rights of return or cancellation, and (c) not excluded as
ineligible by virtue of one or more of the excluding criteria set forth in the
definition of Eligible Accounts.
5.3 ELIGIBLE INVENTORY. As to each item of Inventory that is identified by
Administrative Borrower as Eligible Inventory in a borrowing base report
submitted to Agent, such Inventory is (a) of good and merchantable quality, free
from known defects, and (b) not excluded as ineligible by virtue of one or more
of the excluding criteria set forth in the definition of Eligible Inventory.
5.4 EQUIPMENT. All of the Equipment of Parent, Borrowers and their
respective Subsidiaries is used or held for use in their business and is fit for
such purposes. As to each item of Equipment that is identified in writing by
Administrative Borrower to Agent as Eligible Equipment, such Equipment is (a) of
good and merchantable quality, free from known defects, and (b) not excluded as
ineligible by virtue of one or more of the excluding criteria set forth in the
definition of Eligible Equipment.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. (a) The Inventory and Equipment of
Parent, Borrowers and their respective Subsidiaries are not stored with a
bailee, warehouseman, or similar party and (b) the Inventory and Equipment of
Parent, Borrowers and their respective Subsidiaries (other than their Aircraft
and flyaway kits) are located only at, or in-transit between, the locations
identified on SCHEDULE 5.5(B)(I) (as such Schedule may be updated pursuant to
SECTION 6.9).
5.6 INVENTORY RECORDS. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Subsidiaries' Inventory and the book value thereof.
5.7 STATE OF INCORPORATION; LOCATION OF CHIEF EXECUTIVE OFFICE;
ORGANIZATIONAL IDENTIFICATION NUMBER; COMMERCIAL TORT CLAIMS.
(a) The jurisdiction of organization of Parent, each Borrower and each of
their respective Subsidiaries is set forth on SCHEDULE 5.7(A).
(b) The chief executive office of Parent, each Borrower and each of their
respective Subsidiaries is located at the address indicated on SCHEDULE 5.7(B)
(as such Schedule may be updated pursuant to SECTION 6.9).
(c) Parent's, each Borrower's and each of their respective Subsidiaries'
organizational identification number, if any, are identified on SCHEDULE 5.7(C).
(d) As of the Closing Date, none of Parent, Borrowers and their respective
Subsidiaries hold any commercial tort claims, except as set forth on SCHEDULE
5.7(D).
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
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(a) Each Borrower is duly organized and existing and in good standing under
the laws of the jurisdiction of its organization and qualified to do business in
any state where the failure to be so qualified reasonably could be expected to
result in a Material Adverse Change. The Borrower is an "air carrier" within the
meaning of the Act and holds a certificate under Sections 41102(a)(1) and 41103
of Title 49. Each of Parent, each Borrower and their respective Subsidiaries
engaged in operations as an "air carrier" is a "citizen of the United States" as
defined in Section 40102(a)(15) of Title 49 (a "UNITED STATES CITIZEN") and
holds an air carrier operating certificate issued pursuant to Chapter 447 of
Title 49 for aircraft capable of carrying 10 or more individuals or 6,000 pounds
or more of cargo. Parent, each Borrower and each of their respective
Subsidiaries possess all necessary certificates, franchises, licenses, permits,
rights and concessions and consents which are material to the operation of the
routes flown by it and the conduct of its business and operations as currently
conducted.
(b) Set forth on SCHEDULE 5.8(B), is a complete and accurate description of
the authorized capital Stock of Parent, by class, and, as of the Closing Date, a
description of the number of shares of each such class that are issued and
outstanding. Other than as described on SCHEDULE 5.8(B), there are no
subscriptions, options, warrants, or calls relating to any shares of Parent's
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. Parent is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on SCHEDULE 5.8(C), is a complete and accurate list of
Parent's direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their organization, (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries, and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by Parent. All of the outstanding capital Stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.
(d) Except as set forth on SCHEDULE 5.8(C), there are no subscriptions,
options, warrants, or calls relating to any shares of Parent's Subsidiaries'
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. Neither Parent nor any of its
Subsidiaries is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of Parent's Subsidiaries'
capital Stock or any security convertible into or exchangeable for any such
capital Stock.
(e) Each Borrower is an "eligible borrower" within the meaning of the Act
and the Regulations; no Borrower does has any outstanding delinquent Federal
debt (including tax liabilities); and the Loan Documents and the transactions
contemplated hereby comply with the requirements of the Act and the Regulations.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and performance by such
Borrower of this Agreement and the other Loan Documents to which it is a party
have been duly authorized by all necessary action on the part of such Borrower.
(b) As to each Borrower, the execution, delivery, and performance by such
Borrower of this Agreement and the other Loan Documents to which it is a party
do not and will not (i) violate any provision of federal, state, or local law or
regulation applicable to any Borrower, the Governing Documents of any Borrower,
or any order, judgment, or decree of any court or other Governmental Authority
binding on any Borrower, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
Material Contract of any Borrower, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
Borrower, other than Permitted Liens, or (iv) require any approval of any
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Borrower's interestholders or any approval or consent of any Person under any
material contractual obligation of any Borrower, other than consents or
approvals that have been obtained and that are still in force and effect.
(c) Other than the filing of financing statements, the recording of the
Aircraft Security Agreement with the FAA, and the recordation of the Mortgage,
the execution, delivery, and performance by each Borrower of this Agreement and
the other Loan Documents to which such Borrower is a party do not and will not
require any registration with, consent, or approval of, or notice to, or other
action with or by, any Governmental Authority, other than consents or approvals
that have been obtained and that are still in force and effect.
(d) As to each Borrower, this Agreement and the other Loan Documents to
which such Borrower is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by such Borrower will be the legally valid
and binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, and, upon the filing of
financing statements and the recording of the Aircraft Security Agreement with
the FAA, perfected, and first priority Liens, subject only to Permitted Liens
(f) The execution, delivery, and performance by each Guarantor of the Loan
Documents to which it is a party have been duly authorized by all necessary
action on the part of such Guarantor.
(g) The execution, delivery, and performance by each Guarantor of the Loan
Documents to which it is a party do not and will not (i) violate any provision
of federal, state, or local law or regulation applicable to such Guarantor, the
Governing Documents of such Guarantor, or any order, judgment, or decree of any
court or other Governmental Authority binding on such Guarantor, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of such Guarantor,
(iii) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of such Guarantor, other than Permitted
Liens, or (iv) require any approval of such Guarantor's interestholders or any
approval or consent of any Person under any material contractual obligation of
such Guarantor, other than consents or approvals that have been obtained and
that are still in force and effect. (h) Other than the filing of financing
statements, the recording of the Aircraft Security Agreement with the FAA, and
the recordation of the Mortgage, the execution, delivery, and performance by
each Guarantor of the Loan Documents to which such Guarantor is a party do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority, other than consents
or approvals that have been obtained and that are still in force and effect.
(i) The Loan Documents to which each Guarantor is a party, and all other
documents contemplated hereby and thereby, when executed and delivered by such
Guarantor will be the legally valid and binding obligations of such Guarantor,
enforceable against such Guarantor in accordance with their respective terms,
except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors' rights generally.
5.10 LITIGATION. Other than those matters disclosed on SCHEDULE 5.10 and
other than matters arising after the Closing Date that reasonably could not be
expected to result in a Material Adverse Change, there are no actions, suits, or
proceedings pending or, to the best knowledge of Parent and each Borrower,
threatened against Parent, any Borrower or any of their respective Subsidiaries.
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5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Borrowers and their Subsidiaries or the Guarantors that have been delivered by
Borrowers to the Lender Group have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly in
all material respects, Borrowers' and their Subsidiaries' (or any Guarantor's,
as applicable) financial condition as of the date thereof and results of
operations for the period then ended. There has not been a Material Adverse
Change with respect to Borrowers and their Subsidiaries (or any Guarantor, as
applicable) since the date of the latest financial statements submitted to Agent
on or before the Closing Date.
5.12 FRAUDULENT TRANSFER.
(a) Parent, each Borrower and each of their respective Subsidiaries is
Solvent.
(b) No transfer of property is being made by Parent, any Borrower or any of
their respective Subsidiaries and no obligation is being incurred by Parent, any
Borrower or any of their respective Subsidiaries in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of
Parent, Borrowers or their respective Subsidiaries.
5.13 EMPLOYEE BENEFITS. None of Parent, Borrowers, any of their respective
Subsidiaries, or any of their respective ERISA Affiliates maintains or
contributes to any Benefit Plan.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on SCHEDULE 5.14 and
except for matters that could not reasonably be expected to result in a Material
Environmental Impact, (a) to Parent's and Borrowers' knowledge, none of
Parent's, Borrowers' or their respective Subsidiaries' properties or assets has
ever been used by Parent, Borrowers, their Subsidiaries, or by previous owners
or operators in the disposal of, or to produce, store, handle, treat, release,
or transport, any Hazardous Materials, where such production, storage, handling,
treatment, release or transport was in violation, in any material respect, of
applicable Environmental Law, (b) to Parent's or Borrowers' knowledge, none of
Parent's, Borrowers' or their respective Subsidiaries' properties or assets has
ever been designated or identified as a treatment, storage or disposal facility
under RCRA or any similar state Environmental Law, (c) none of Parent, Borrowers
or any of their respective Subsidiaries have received notice that a Lien arising
under any Environmental Law has attached to any revenues or to any Real Property
owned or operated by Parent, Borrowers or their respective Subsidiaries, and (d)
none of Parent, Borrowers or any of their respective Subsidiaries have received
a summons, citation, notice, or directive from the United States Environmental
Protection Agency or any other federal or state governmental agency concerning
any action or omission by Parent, any Borrower or any of their respective
Subsidiaries resulting in the releasing or disposing of Hazardous Materials into
the environment.
5.15 BROKERAGE FEES. Parent, Borrowers and their respective Subsidiaries
have not utilized the services of any broker or finder in connection with
obtaining financing from the Lender Group under this Agreement and no brokerage
commission or finders fee is payable by Parent, Borrowers or their respective
Subsidiaries in connection herewith.
5.16 INTELLECTUAL PROPERTY. Parent, each Borrower and each of their
respective Subsidiaries owns, or holds licenses in, all trademarks, trade names,
copyrights, patents, patent rights, and licenses that are necessary to the
conduct of its business as currently conducted, and attached hereto as SCHEDULE
5.16 (as updated from time to time) is a true, correct, and complete listing of
all material patents, patent applications, trademarks, trademark applications,
copyrights, and copyright registrations as to which Parent, any Borrower or any
of their respective Subsidiaries is the owner or is an exclusive licensee.
5.17 LEASES. Parent, Borrowers and their respective Subsidiaries enjoy
peaceful and undisturbed possession under all leases material to their business
and to which they are parties or under which they are operating and all of such
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leases are valid and subsisting and no material default by Parent, Borrowers or
their respective Subsidiaries exists under any of them.
5.18 DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Set forth on SCHEDULE 5.18
is a listing of all of Parent's Borrowers' and their respective Subsidiaries'
Deposit Accounts and Securities Accounts, including, with respect to each bank
or securities intermediary (a) the name and address of such Person, and (b) the
account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.
5.19 COMPLETE DISCLOSURE. All factual information (taken as a whole) other
than the Projections furnished by or on behalf of Parent, Borrowers or their
respective Subsidiaries in writing to Agent or any Lender (including all
information contained in the Schedules hereto or in the other Loan Documents)
for purposes of or in connection with this Agreement, the other Loan Documents
or any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Parent,
Borrowers or their respective Subsidiaries in writing to Agent or any Lender
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
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided. On the Closing Date, the Closing Date Projections
represent, and as of the date on which any other Projections are delivered to
Agent, such additional Projections represent Borrowers' good faith best estimate
of their and their Subsidiaries' future performance for the periods covered
thereby (it being understood that projections are subject to uncertainties and
there can be no assurance projections will be realized).
5.20 INDEBTEDNESS. Set forth on SCHEDULE 5.20 is a true and complete list
of all Indebtedness of Parent, each Borrower and each of their respective
Subsidiaries outstanding immediately prior to the Closing Date that is to remain
outstanding after the Closing Date and such Schedule accurately reflects the
aggregate principal amount of such Indebtedness and describes the principal
terms thereof.
5.21 MATERIAL CONTRACTS. Except as set forth on SCHEDULE 5.22, each such
Material Contract (i) is in full force and effect and is binding upon and
enforceable against the Borrower or Guarantor that is a party thereto and, to
the knowledge of Parent and each Borrower, all other parties thereto in
accordance with its terms, and (ii) has not been otherwise amended or modified
except as is permitted by the terms of this Agreement.
6. AFFIRMATIVE COVENANTS.
Parent and each Borrower covenants and agrees that, until termination of
all of the Commitments and payment in full of the Obligations, Parent and each
Borrower shall and shall cause each of their respective Subsidiaries to do all
of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables Parent,
Borrowers and their respective Subsidiaries to produce financial statements in
accordance with GAAP and maintain records pertaining to the Collateral that
contain information as from time to time reasonably may be requested by the
Required Lenders. Parent and the Borrowers also shall keep a reporting system
that shows all additions, sales, claims, returns, and allowances with respect to
their and their respective Subsidiaries' sales.
6.2 COLLATERAL REPORTING. Provide Agent (and if so requested by Agent, with
copies for each Lender) with the following documents at the following times in
form reasonably satisfactory to the Required Lenders:
================================================================================
Weekly (a) a sales journal, collection journal, and
credit register since the last such schedule, a
report regarding credit memoranda that have been
issued since the last such report, and a
calculation of the Borrowing Base as of such
date,
================================================================================
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================================================================================
Monthly (not later than the (b) a detailed calculation of the Borrowing Base
20th day of each month) (including detail regarding those Accounts of
Borrowers that are not Eligible Accounts or
Eligible Inventory),
(c) a detailed aging, by total, of (i) the
Accounts of Borrowers, together with a
reconciliation to the detailed calculation of
the Borrowing Base previously provided to Agent,
and (ii) Accounts, together with a
reconciliation to the general ledger,
(d) Inventory and Equipment reports specifying
the allocated cost Borrowers' and their
Subsidiaries' Inventory,
(e) a (i) summary aging, by vendor, of
Borrowers' and their Subsidiaries' accounts
payable and any book overdraft, including the
outstanding balance owed to any department,
agency, or instrumentality within the United
States government (including the Defense Finance
and Accounting Service), and (ii) a report
listing all checks that have been written but
which have not been sent to the applicable payee
(together with a reconciliation of accounts
payable to the general ledger),
(f) a calculation of Domestic Dilution and
Foreign Dilution for the month most recently
ended,
================================================================================
Upon request by Agent (g) notice of all claims, offsets, or disputes
asserted by Account Debtors with respect to
Borrowers' and their Subsidiaries' Accounts,
(h) a report regarding each Borrower's and each
of its Subsidiaries' accrued, but unpaid, AD
VALOREM, real estate and fuel taxes,
(i) a detailed report regarding Borrowers' and
their Subsidiaries' cash and Cash Equivalents
including an indication of which amounts
constitute Qualified Cash,
(j) a detailed list of each Borrower's and each
of its Subsidiaries' customers,
(k) copies of invoices in connection with
Borrowers' and their Subsidiaries' Accounts,
credit memos, remittance advices, deposit slips,
shipping and delivery documents in connection
with Borrowers' and their Subsidiaries' Accounts
and, for Inventory and Equipment acquired by
Borrowers or their Subsidiaries, purchase orders
and invoices, and
(l) such other reports as to the Collateral or
the financial condition of Borrowers and their
Subsidiaries, as Agent or the Required Lenders
may reasonably request.
=============================== ================================================
In addition, each Borrower agrees to cooperate fully with Agent to
facilitate and implement a system of electronic collateral reporting in order to
provide electronic reporting of each of the items set forth above.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent, with
copies to each Lender:
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(a) as soon as available, but in any event within 30 days (45 days in the
case of a month that is the end of one of Parent's fiscal quarters) after the
end of each month during each of Parent's fiscal years, an unaudited
consolidated and consolidating balance sheet, income statement, and statement of
cash flow covering Parent's and its Subsidiaries' operations during such period,
and
(b) as soon as available, but in any event with 45 days after the end of
each fiscal quarter during each of Parent's fiscal years, a Compliance
Certificate,
(c) as soon as available, but in any event within 105 days after the end of
each of Parent's fiscal years,
(i) consolidated and consolidating financial statements of Parent and
its Subsidiaries for each such fiscal year, audited by independent certified
public accountants reasonably acceptable to Agent and certified, without any
qualifications, (including any (A) "going concern" or like qualification or
exception, (B) qualification or exception as to the scope of such audit, or (C)
qualification which relates to the treatment or classification of any item and
which, as a condition to the removal of such qualification, would require an
adjustment to such item, the effect of which would be to cause any noncompliance
with the provisions of SECTION 7.18), by such accountants to have been prepared
in accordance with GAAP (such audited financial statements to include a balance
sheet, income statement, and statement of cash flow and, if prepared, such
accountants' letter to management),
(ii) a certificate of such accountants addressed to Agent and the
Lenders stating that such accountants do not have knowledge of the existence of
any Default or Event of Default under SECTION 7.18, and
(iii) a Compliance Certificate,
(d) as soon as available, but in any event within 30 days prior to the
start of each of Parent's fiscal years, copies of Borrowers' Projections, in
form and substance (including as to scope and underlying assumptions)
satisfactory to Agent, in its Permitted Discretion, for the forthcoming fiscal
year, month by month, certified by the chief financial officer of Parent as
being such officer's good faith estimate of the financial performance of Parent
and its Subsidiaries during the period covered thereby,
(e) if and when filed by Parent, any Borrower or any of their respective
Subsidiaries,
(i) Form 10-Q quarterly reports, Form 10-K annual reports, and Form
8-K current reports,
(ii) any other filings made by Parent, any Borrower or any of their
respective Subsidiaries with the SEC,
(iii) copies of Parent's, Borrowers' and their respective
Subsidiaries' federal income tax returns, and any amendments thereto, filed with
the Internal Revenue Service, and
(iv) any other information that is provided by Parent to its
shareholders generally,
(f) promptly, but in any event within 5 days after any Borrower has
knowledge of any event or condition that constitutes a Default or an Event of
Default, notice thereof and a statement of the curative action that Borrowers
propose to take with respect thereto,
(g) promptly after the commencement thereof, but in any event within 5 days
after the service of process with respect thereto on Parent, any Borrower or any
of their respective Subsidiaries, notice of all actions, suits, or proceedings
67
brought by or against Parent, any Borrower or any of their respective
Subsidiaries before any Governmental Authority which, if determined adversely to
Parent, such Borrower or such Subsidiary, reasonably could be expected to result
in a Material Adverse Change,
(h) as soon as possible and in any event within 5 days after execution,
receipt or delivery thereof, copies of any material notices that Parent or any
Subsidiary of Parent executes or receives in connection with any Material
Contract,
(i) upon the request of Agent, any other information reasonably requested
relating to the financial condition of Parent, Borrowers or their respective
Subsidiaries.
In addition, Parent agrees that no Subsidiary of Parent will have a fiscal
year different from that of Parent. Parent and Borrowers agree to cooperate with
Agent to allow Agent to consult with their independent certified public
accountants if Agent reasonably requests the right to do so and that, in such
connection, their independent certified public accountants are authorized to
communicate with Agent and to release to Agent whatever financial information
concerning Parent, Borrowers or their respective Subsidiaries that Agent
reasonably may request.
6.4 GUARANTOR REPORTS. Cause each Guarantor to deliver its annual financial
statements at the time when Parent provides its audited financial statements to
Agent, but only to the extent such Guarantor's financial statements are not
consolidated with Parent's financial statements, and copies of all federal
income tax returns as soon as the same are available and in any event no later
than 30 days after the same are required to be filed by law.
6.5 RETURNS. Cause returns and allowances as between Borrowers and their
Subsidiaries and their Account Debtors, to be on the same basis and in
accordance with the usual customary practices of Borrowers and their
Subsidiaries, as they exist at the time of the execution and delivery of this
Agreement.
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of their
properties which are necessary or useful in the proper conduct to their business
in good working order and condition, ordinary wear and tear excepted, and comply
at all times with the provisions of all leases to which it is a party as lessee,
so as to prevent any loss or forfeiture thereof or thereunder.
6.7 TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Parent,
Borrowers, their respective Subsidiaries, or any of their respective assets to
be paid in full, before delinquency or before the expiration of any extension
period, except (i) to the extent that the validity of such assessment or tax
shall be the subject of a Permitted Protest, or (ii) unpaid past due state and
local taxes the late payment of which, in the aggregate, could not reasonably
result in a Material Adverse Change. Parent and Borrowers will and will cause
their respective Subsidiaries to make timely payment or deposit of all tax
payments and withholding taxes required of them by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Agent with proof
satisfactory to Agent indicating that Parent or the applicable Borrower or
Subsidiary has made such payments or deposits.
6.8 INSURANCE.
(a) At Borrowers' expense (i) maintain insurance respecting Parent's, each
Borrower's, and each of their respective Subsidiaries' assets wherever located
covering loss or damage by fire, theft, explosion, and all other hazards and
risks as ordinarily are insured against by other Persons engaged in the same or
similar businesses, (ii) maintain public liability insurance, aircraft public
liability insurance (including passenger legal liability and aircraft war risk
and allied perils insurance in accordance with London form AVN52C (as in effect
on September 1, 2001) or its equivalent form reasonably acceptable to the
Agent), cargo liability insurance, and product liability insurance, and (iii)
maintain, with respect to the Aircraft Collateral, all-risk ground and flight
68
aircraft hull insurance covering each piece of Aircraft Collateral and all-risk
ground coverage of Aircraft engines and parts while removed from the relevant
Aircraft and replaced by similar components (including, without limitation, war
risk and allied perils insurance, including hijacking, governmental confiscation
and expropriation (other than by the government of registry of the relevant
Aircraft) in accordance with London form LSW555B or its equivalent form
reasonably acceptable to the Agent).
(b) All such policies of insurance shall be in such amounts and with such
insurance companies as are reasonably satisfactory to Agent. Contemporaneously
with an audit of Parent, any Borrower, or any of their respective Subsidiaries
or immediately after a request by Agent, Borrowers shall deliver copies of all
such policies to Agent with an endorsement naming Agent as the sole loss payee
(under a satisfactory lender's loss payable endorsement) or additional insured,
as appropriate. Each policy of insurance or endorsement shall contain a clause
requiring the insurer to give: (i) 10 days prior written notice (7 days in the
case of war risk or allied perils coverage) to Agent in the event of
cancellation of the policy as a result of a failure by Parent, a Borrower, or
any of their respective Subsidiaries to pay any insurance premium relative to
such policy, (ii) 30 days prior written notice (7 days in the case of war risk
or allied perils coverage) to Agent in the event of cancellation of the policy
for any other reason. In the event that separate hull all risk and hull war
risks coverage are maintained, each policy of insurance shall contain a 50/50
clause in accordance with Lloyd's Aviation Underwriters' Association Standard
Policy Form AVS 103.
(c) Administrative Borrower shall give Agent prompt notice of any loss over
$100,000 covered by such insurance. Agent shall have the exclusive right to
adjust any losses claimed under any such insurance policies, PROVIDED, HOWEVER,
that so long as (i) no Event of Default has occurred, is continuing, or would
result therefrom, (ii) no material portion of Holdings', Parent's, any
Borrower's or any of their respective Subsidiaries' assets has been attached,
seized, subjected to a writ or distress warrant, levied upon, or comes into the
possession of any third Person, (iii) an Insolvency Proceeding has not been
commenced by or against Holdings, Parent, any Borrower or any of their
respective Subsidiaries, and (iv) none of Holdings, Parent, any Borrower or any
of their respective Subsidiaries has been enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part of
its business affairs, then Borrowers shall have the exclusive right to adjust
any losses claimed under any such insurance policies until such time as the
aggregate amount of all losses claimed under all such policies equals
$25,000,000 during the term of this Agreement. All proceeds from such insurance
or payments by such insurance companies shall be applied in accordance with
SECTION 2.4(D)(III)(A).
(d) Neither Parent nor any Borrower will, nor will it suffer or permit any
of their respective Subsidiaries to, take out separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
under this SECTION 6.8, unless Agent is included thereon as an additional
insured or loss payee under a lender's loss payable endorsement. Administrative
Borrower promptly shall notify Agent whenever such separate insurance is taken
out, specifying the insurer thereunder and full particulars as to the policies
evidencing the same, and copies of such policies promptly shall be provided to
Agent.
6.9 LOCATION OF INVENTORY AND EQUIPMENT. Keep (a) Parent's, Borrowers' and
their respective Subsidiaries' Inventory and Equipment (other than their
Aircraft and flyaway kits) only at the locations identified on SCHEDULE
5.5(B)(I), and (b) Parent's, Borrowers' and their respective Subsidiaries' chief
executive offices only at the locations identified on SCHEDULE 5.7(B); PROVIDED,
HOWEVER, that Administrative Borrower may amend SCHEDULE 5.5(B)(I) and SCHEDULE
5.7 so long as such amendment occurs by written notice to Agent not less than 30
days prior to the date on which such Inventory or Equipment is moved to such new
location or such chief executive office is relocated, so long as such new
location is within the continental United States, and so long as, at the time of
such written notification, either (x) the applicable Borrower provides Agent a
Collateral Access Agreement with respect thereto, or (y) a Rent Reserve is
established with respect to such location.
69
6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Change.
6.11 LEASES. Pay when due all rents and other amounts payable under any
material leases to which Parent, any Borrower or any of their respective
Subsidiaries is a party or by which Parent's, any Borrower's or any of their
respective Subsidiaries' properties and assets are bound, unless (a) such
payments are the subject of a Permitted Protest; or (b) such payments are
prohibited to be made pursuant to the Intercompany Subordination Agreement.
6.12 EXISTENCE. At all times preserve and keep in full force and effect
Parent's, each Borrower's and each of their respective Subsidiaries' valid
existence and good standing and any rights and franchises material to their
businesses, except as otherwise expressly permitted by this Agreement.
6.13 ENVIRONMENTAL.
(a) Keep any property either owned or operated by Parent, any Borrower or
any of their respective Subsidiaries free of any Environmental Liens or post
bonds or other financial assurances sufficient to satisfy the obligations or
liability evidenced by such Environmental Liens, (b) comply, in all material
respects, with Environmental Laws and provide to Agent documentation of such
compliance which Agent reasonably requests, (c) promptly notify Agent of any
release of a Hazardous Material in any reportable quantity from or onto property
owned or operated by Parent, any Borrower or any of their respective
Subsidiaries which reasonably could be expected to result in a Material
Environmental Impact, and take any Remedial Actions required to xxxxx said
release or otherwise to come into compliance with applicable Environmental Law,
and (d) promptly, but in any event within 5 days of its receipt thereof, provide
Agent with written notice of any of the following, which reasonably could be
expected to result in a Material Environmental Impact: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of Parent, any Borrower or any of their respective Subsidiaries, (ii)
commencement of any Environmental Action or notice that an Environmental Action
will be filed against Parent, any Borrower or any of their respective
Subsidiaries, and (iii) notice of a violation, citation, or other administrative
order.
6.14 DISCLOSURE UPDATES. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained, at the time it was
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the affect of
amending or modifying this Agreement or any of the Schedules hereto.
6.15 FORMATION OF SUBSIDIARIES. At the time that any Borrower or any
Guarantor forms any direct or indirect Subsidiary other than an Immaterial
Subsidiary or acquires any direct or indirect Subsidiary other than an
Immaterial Subsidiary after the Closing Date, such Borrower or such Guarantor
shall (a) cause such new Subsidiary to provide to Agent a joinder to this
Agreement or the Guaranty and the Guarantor Security Agreement, together with
such other security documents (including Mortgages with respect to any Real
Property of such new Subsidiary), as well as appropriate financing statements
(and with respect to all property subject to a Mortgage, fixture filings), all
in form and substance satisfactory to Agent (including being sufficient to grant
Agent a first priority Lien (subject to Permitted Liens) in and to the assets of
such newly formed or acquired Subsidiary), (b) provide to Agent a pledge
agreement and appropriate certificates and powers or financing statements,
hypothecating all of the direct or beneficial ownership interest in such new
Subsidiary, in form and substance satisfactory to Agent, and (c) provide to
Agent all other documentation, including one or more opinions of counsel
satisfactory to Agent, which in its opinion is appropriate with respect to the
70
execution and delivery of the applicable documentation referred to above
(including policies of title insurance or other documentation with respect to
all property subject to a Mortgage). Any document, agreement, or instrument
executed or issued pursuant to this SECTION 6.15 shall be a Loan Document.
6.16 FAA MATTERS; CITIZENSHIP. Be an "air carrier" within the meaning of
the Act and hold a certificate under 49 U.S.C. Section 41102(a)(1) as currently
in effect or as may be amended or recodified from time to time. Parent and each
Borrower will, and will cause each of its Subsidiaries that is engaged in
operations as an "air carrier" to, be a United States Citizen holding an air
carrier operating certificate issued pursuant to Chapter 447 of Title 49 for
aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of
cargo. Parent and each Borrower will, and will cause each of its Subsidiaries
to, possess and maintain all necessary consents, franchises, licenses, permits,
rights, authorities and concessions and consents which are material to the
operation of the routes flown by it and the conduct of its business and
operations from time to time.
7. NEGATIVE COVENANTS .Parent, each Borrower, and (for purposes of SECTION
7.18) the Trust covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Parent and Borrowers will
not and will not permit any of their respective Subsidiaries to do any of the
following:
7.1 INDEBTEDNESS. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan Documents,
together with Indebtedness owed to Underlying Issuers with respect to Underlying
Letters of Credit,
(b) Indebtedness set forth on SCHEDULE 5.20,
(c) Permitted Purchase Money Indebtedness,
(d) refinancings, renewals, or extensions of Indebtedness permitted under
clauses (b) and (c) of this SECTION 7.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms and conditions
of such refinancings, renewals, or extensions do not, in Agent's reasonable
judgment, materially impair the prospects of repayment of the Obligations by
Borrowers or materially impair Borrowers' creditworthiness, (ii) such
refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended or add one or more Borrowers as liable with
respect thereto if such additional Borrowers were not liable with respect to the
original Indebtedness, (iii) such refinancings, renewals, or extensions do not
result in a shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, nor are they on terms or conditions, that,
taken as a whole, are materially more burdensome or restrictive to the
applicable Borrower, (iv) if the Indebtedness that is refinanced, renewed, or
extended was subordinated in right of payment to the Obligations, then the terms
and conditions of the refinancing, renewal, or extension Indebtedness must
include subordination terms and conditions that are at least as favorable to the
Lender Group as those that were applicable to the refinanced, renewed, or
extended Indebtedness, and (v) the Indebtedness that is refinanced, renewed, or
extended is not recourse to any Person that is liable on account of the
Obligations other than those Persons which were obligated with respect to the
Indebtedness that was refinanced, renewed, or extended,
(e) endorsement of instruments or other payment items for deposit,
(f) Indebtedness composing Permitted Investments,
(g) the guaranty by any Borrower of Indebtedness incurred by any other
Borrower, which Indebtedness is expressly permitted to be incurred by the other
provisions of this SECTION 7.1,
71
(h) unsecured Indebtedness that is subordinated to the Obligations on terms
satisfactory to Required Lenders in an aggregate principal amount not to exceed
$5,000,000,
(i) unsecured Indebtedness consisting of deferred payment owed to vendors
in connection with the maintenance or overhaul of any Aircraft or Engine that is
incurred in the ordinary course of business and is not in excess, at any time,
of $15,000,000,
(j) Indebtedness in respect of bid, performance, surety bonds or appeal
bonds issued for the account of any Borrower or any of its Subsidiaries in the
ordinary course of business so long as the full amount of such Indebtedness is
supported by an irrevocable letter of credit satisfactory to Agent,
(k) Indebtedness assumed in connection with a Permitted Acquisition of
Stock so long as (i) such Indebtedness does not exceed the amount expressly
permitted to be incurred by the definition of Permitted Acquisition, (ii) such
Indebtedness is not for working capital, (iii) such Indebtedness exists at the
time such Stock is acquired and is not created in anticipation of such Permitted
Acquisition;
(l) a guarantee by one Borrower of another Borrower's unsecured obligations
so long as (i) such unsecured obligations are expressly permitted by the terms
of this Agreement, and (ii) the Borrower that is the beneficiary of the
guarantee has executed the Intercompany Subordination Agreement.
7.2 LIENS. Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced, renewed, or
extended under SECTION 7.1(D) and so long as the replacement Liens only encumber
those assets that secured the refinanced, renewed, or extended Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Other than Permitted Acquisitions, enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its Stock,
PROVIDED, HOWEVER that any Borrower may merge with and into another Borrower.
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).
(c) Convey, sell, lease, license, assign, transfer, or otherwise dispose
of, in one transaction or a series of transactions, all or any substantial part
of its assets unless expressly permitted by SECTION 7.3(A) or SECTION 7.4.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, Permitted
Distributions, or Permitted Investments, convey, sell, lease, license, assign,
transfer, or otherwise dispose of any of the assets of Parent, any Borrower or
any of their respective Subsidiaries.
7.5 CHANGE NAME. Change Parent's, any Borrower's or any of their respective
Subsidiaries' name, organizational identification number, state of organization,
or organizational identity; PROVIDED, HOWEVER, that Parent, a Borrower or any of
their respective Subsidiaries may change its name upon at least 30 days prior
written notice by Administrative Borrower to Agent of such change and so long
as, at the time of such written notification, Parent, such Borrower or such
Subsidiary provides any financing statements necessary to perfect and continue
perfected the Agent's Liens.
7.6 NATURE OF BUSINESS. Make any change in the principal nature of their
business.
72
7.7 PREPAYMENTS AND AMENDMENTS. Except in connection with a refinancing
permitted by SECTION 7.1(D),
(a) Optionally prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of Parent, any Borrower or any of their respective Subsidiaries,
other than (i) the Obligations in accordance with this Agreement, and (ii) so
long as all payments of the Obligations with Excess Cash Flow pursuant to
SECTION 2.4(c)(v) have been made, the Excess Cash Flow payments required to be
made pursuant to Section 4.14 of the Indenture.
(b) Directly or indirectly, amend, modify, alter, increase, or change any
material terms or conditions of any agreement, instrument, document, indenture,
or other writing evidencing or concerning Indebtedness permitted under SECTION
7.1(B) or (C) except (i) any amendment or modification of the Security
Agreement, dated as of May 16, 2003, by and among the Trustee, the Borrowers and
the Guarantors, solely for the purpose of conforming the terms thereof to the
terms of this Agreement, or (ii) any other amendment or modification to the
Indenture Documents that is approved in writing by the Required Lenders.
(c) (i) Amend, modify or otherwise change its Governing Documents,
including by the filing or modification of any certificate of designation, or
any agreement or arrangement entered into by it with respect to any of its Stock
(including any shareholders' agreement), or enter into any new agreement with
respect to any of its Stock or (ii) Amend, modify or otherwise change any
Material Contract, except any such amendments, modifications or changes or any
such new agreements or arrangements pursuant to this paragraph (c) that, either
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Change or are expressly permitted by paragraph (b).
7.8 CHANGE OF CONTROL. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
7.9 CONSIGNMENTS. Other than the consignments listed on SCHEDULE 7.9,
consign any of their Inventory or sell any of their Inventory on xxxx and hold,
sale or return, sale on approval, or other conditional terms of sale.
7.10 DISTRIBUTIONS. Other than Permitted Distributions, make any
distribution or declare or pay any dividends (in cash or other property, other
than common Stock) on, or purchase, acquire, redeem, or retire any of Parent's
or Borrower's Stock, or any Stock of any of their respective Subsidiaries, in
each case of any class, whether now or hereafter outstanding.
7.11 ACCOUNTING METHODS. Modify or change their fiscal year or their method
of accounting (other than as may be required to conform to GAAP) or enter into,
modify, or terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for the
preparation or storage of Parent's, Borrowers' or their respective Subsidiaries'
accounting records without said accounting firm or service bureau agreeing to
provide Agent information regarding Parent's, Borrowers' and their Subsidiaries'
financial condition.
7.12 INVESTMENTS.
(a) Except for Permitted Investments, Permitted Intercompany Advances, and
Permitted Acquisitions, directly or indirectly, make or acquire any Investment,
or incur any liabilities (including contingent obligations) for or in connection
with any Investment; PROVIDED, HOWEVER, that Parent and its Subsidiaries shall
not have Permitted Investments (other than in the Cash Management Accounts) in
Deposit Accounts or Securities Accounts in an aggregate amount in excess of
$50,000 for more than one Business Day at any one time unless Parent or its
Subsidiary, as applicable, and the applicable securities intermediary or bank
have entered into Control Agreements governing such Permitted Investments in
order to perfect (and further establish) the Agent's Liens in such Permitted
Investments. Subject to the foregoing proviso, Parent and Borrowers shall not
and shall not permit their respective Subsidiaries to establish or maintain any
73
Deposit Account or Securities Account unless Agent shall have received a Control
Agreement in respect of such Deposit Account or Securities Account.
(b) Collectively acquire or form more than 5 Immaterial Subsidiaries during
the term of this Agreement.
7.13 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of any Borrower except for
(a) transactions that (i) are in the ordinary course of Borrowers' business,
(ii) are upon fair and reasonable terms, (iii) if they involve one or more
payments by Parent, any Borrower or any of their respective Subsidiaries in
excess of $100,000, are fully disclosed to Agent, and (iv) are no less favorable
to Parent, Borrowers or their respective Subsidiaries, as applicable, than would
be obtained in an arm's length transaction with a non-Affiliate; (b) Investments
in Affiliates that are Permitted Investments; (c) the transactions evidenced by
the agreements set forth on SCHEDULE 7.13 (but excluding any amendment,
restatement, supplement, or modification thereto), and (d) licenses of
intellectual property between or among Borrowers.
7.14 SUSPENSION. Suspend or go out of a substantial portion of their
business.
7.15 COMPENSATION. (a) Pay Xx. Xxxxxxx Xxxxx, in accordance with the Xxxxx
Employment Agreement, more than (i) $3,000,000 per fiscal year, PLUS (ii) an
annual bonus as determined pursuant to the Xxxxx Employment Agreement solely for
the purpose of satisfying any obligations of Xx. Xxxxxxx Xxxxx to the Borrowers
and any taxes incurred by Xx. Xxxxxxx Xxxxx solely as a result of the receipt of
such bonus, or (b) amend, restate, supplement, or otherwise modify the Xxxxx
Employment Agreement.
7.16 USE OF PROCEEDS. Use the proceeds of the Advances and the Term Loan
for any purpose other than (a) on the Closing Date, (i) to repay in full the
outstanding principal, accrued interest, and accrued fees and expenses owing to
Existing Agent, and (ii) to pay transactional fees, costs, and expenses incurred
in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for its general corporate purposes.
7.17 INVENTORY AND EQUIPMENT WITH BAILEES. Store the Inventory or Equipment
of Parent, Borrowers or their respective Subsidiaries at any time now or
hereafter with a bailee, warehouseman, or similar party.
7.18 FINANCIAL COVENANTS.
(a) Fail to maintain or achieve:
(i) MINIMUM CONSOLIDATED EBITDA. Consolidated EBITDA, measured on a
quarter-end basis, of at least the required amount set forth in the following
table for the applicable period set forth opposite thereto:
--------------------------------------------------------------------------------
Applicable Amount Applicable Period
================================================================================
For the 6 month period
$40,000,000 ending August 31, 2004
================================================================================
For the 9 month period
$67,000,000 ending November 30, 2004
================================================================================
74
================================================================================
For the 12 month period
$97,000,000 ending February 28, 2005
================================================================================
For the 12 month period
ending the last day of each
fiscal quarter of Parent
$100,000,000 after February 28, 2005
--------------------------------------------------------------------------------
(ii) MINIMUM AIRLINES EBITDA. Airlines EBITDA, measured on a
quarter-end basis, of at least the required amount set forth in the following
table for the applicable period set forth opposite thereto:
--------------------------------------------------------------------------------
Applicable Amount Applicable Period
================================================================================
For the 6 month period
$33,000,000 ending August 31, 2004
================================================================================
For the 9 month period
$55,000,000 ending November 30, 2004
================================================================================
For the 12 month period
$82,000,000 ending February 28, 2005
================================================================================
For the 12 month period
ending the last day of each
fiscal quarter of Parent
$85,000,000 after February 28, 2005
================================================================================
(iii) FIXED CHARGE COVERAGE RATIO. A Fixed Charge Coverage Ratio,
measured on a quarter-end basis, of at least the required amount set forth in
the following table for the applicable period set forth opposite thereto:
-------------------------------------------------------------------------------
Applicable Ratio Applicable Period
================================================================================
For the 6 month period
1.00:1.00 ending August 31, 2004
================================================================================
For the 9 month period
1.00:1.00 ending November 30, 2004
================================================================================
For the 12 month period
1.10:1.0 ending February 28, 2005
================================================================================
75
================================================================================
For the 12 month period
ending the last day of each
fiscal quarter of Parent
1.15:1.0 after February 28, 2005
-------------------------------------------------------------------------------
(iv) MINIMUM EXCESS AVAILABILITY AND QUALIFIED CASH. Excess
Availability or Qualified Cash at any time of at least $5,000,000.
(b) CAPITAL EXPENDITURES. Make Capital Expenditures in any fiscal year of
Parent in excess of $75,000,000, PROVIDED THAT at least $10,000,000 of such
$75,000,000 must be funded with Indebtedness other than Advances.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "EVENT OF DEFAULT") under this Agreement:
8.1 If Borrowers fail to pay when due and payable or when declared due and
payable, all or any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy Code,
would have accrued on such amounts), fees and charges due the Lender Group,
reimbursement of Lender Group Expenses, or other amounts constituting
Obligations);
8.2 If Parent, Borrowers or any of their respective Subsidiaries:
(a) fail to perform, keep, or observe any term, provision, condition,
covenant, or agreement contained in SECTIONS 2.7, 3.2, 3.3, 4.2, 4.4, 4.6, 6.8,
6.12, 6.15, 6.16 and 7.1 THROUGH 7.18 of this Agreement;
(b) fails or neglects to perform, keep, or observe any term, provision,
covenant, or agreement contained in SECTIONS 4.5, 6.2, 6.3, 6.5, 6.6, 6.7, 6.9,
6.10, 6.11, and 6.14 of this Agreement and such failure continues for a period
of 5 Business Days; or
(c) fails or neglects to perform, keep, or observe any other term,
provision, covenant, or agreement contained in this Agreement, or in any of the
other Loan Documents (giving effect to any grace periods, cure periods, or
required notices, if any, expressly provided for in such Loan Documents); in
each case, other than any such term, provision, covenant, or agreement that is
the subject of another provision of this SECTION 8, in which event such other
provision of this SECTION 8 shall govern), and such failure continues for a
period of 10 Business Days;
PROVIDED that, during any period of time that any such failure or neglect
of Parent, Borrowers, or any of their respective Subsidiaries referred to in
this paragraph exists, even if such failure or neglect is not yet an Event of
Default by virtue of the existence of a grace or cure period or the
pre-condition of the giving of a notice, the Lender Group shall be relieved of
its obligation to extend credit hereunder;
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8.3 If any material portion of Holdings', Parent's, any Borrower's or any
of their respective Subsidiaries' assets is attached, seized, subjected to a
writ or distress warrant, levied upon, or comes into the possession of any third
Person and the same is not discharged before the earlier of 30 days after the
date it first arises or 5 days prior to the date on which such property or asset
is subject to forfeiture by Parent, such Borrower, or such Subsidiary, as
applicable;
8.4 If an Insolvency Proceeding is commenced by Holdings, Parent, any
Borrower or any of their respective Subsidiaries;
8.5 If an Insolvency Proceeding is commenced against Holdings, Parent, any
Borrower or any of their respective Subsidiaries, and any of the following
events occur: (a) Holdings, Parent, the applicable Borrower or Subsidiary
consents to the institution of the Insolvency Proceeding against it, (b) the
petition commencing the Insolvency Proceeding is not timely controverted;
provided, however, that, during the pendency of such period, each member of the
Lender Group shall be relieved of its obligations to extend credit hereunder,
(c) the petition commencing the Insolvency Proceeding is not dismissed within 60
calendar days of the date of the filing thereof; provided, however, that, during
the pendency of such period, each member of the Lender Group shall be relieved
of its obligation to extend credit hereunder, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
Holdings, Parent, any Borrower or any of their respective Subsidiaries, or (e)
an order for relief shall have been entered therein;
8.6 If Holdings, Parent, any Borrower or any of their respective
Subsidiaries is enjoined, restrained, or in any way prevented by court order
from continuing to conduct all or any material part of its business affairs;
8.7 (a) If a notice of Lien is filed of record with respect to Parent's,
any Borrower, or any of their respective Subsidiaries' assets by the United
States or any department, agency, or instrumentality thereof (a "FEDERAL LIEN"),
or by any state, county, municipal, or governmental agency and such state,
county, municipal, or governmental agency Lien has priority over the Liens of
Agent in and to the Collateral or any portion thereof (a "NON-FEDERAL PRIORITY
LIEN");
(b) If a notice of Lien is filed of record with respect to Parent's, any
Borrower's, or any of their respective Subsidiaries' assets by any state,
county, municipal, or governmental agency that is not a Non-Federal Priority
Lien (a "NON-FEDERAL NON-PRIORITY LIEN"); PROVIDED, HOWEVER, that, if the
aggregate amount claimed with respect to any such Non-Federal Non-Priority
Liens, or the combination thereof, is less than $100,000, an Event of Default
shall not occur under this subsection if the claims that are the subject of such
Liens are the subject of Permitted Protests and if the Liens are released,
discharged, or bonded against within 30 days of each such Lien first being filed
of record or, if earlier, at least 5 days prior to the date on which assets that
are subject to such Liens are subject to being sold or forfeited and, in any
such case, Agent shall have the absolute right to establish and maintain a
reserve against the Borrowing Base and the Maximum Revolver Amount in an amount
equal to the aggregate amount of the underlying claims (determined by Agent, in
its Permitted Discretion, and irrespective of any Permitted Protests with
respect thereto and including any penalties or interest that are estimated by
Agent, in its Permitted Discretion, to arise in connection therewith);
8.8 If one or more judgments or orders for the payment of money exceeding
$500,000 in the aggregate shall be rendered against Parent, any Borrower, or any
of their respective Subsidiaries and remain unsatisfied, or the Parent, any
Borrower, or any of their respective Subsidiaries shall agree to the settlement
of any one or more pending or threatened actions, suits or proceedings affecting
any Borrower or Guarantor before any court or other Governmental Authority or
any arbitrator or mediator, providing for the payment of money exceeding
$500,000 in the aggregate, and in the case of any such judgment or order either
(i) enforcement proceedings shall have been commenced by any creditor upon any
such judgment or order, or (ii) there shall be a period of 10 consecutive days
after entry thereof during which a stay of enforcement of any such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
PROVIDED, HOWEVER, that any such judgment, order or settlement shall not give
77
rise to an Event of Default under this SECTION 8.8 if and for so long as (A) the
amount of such judgment, order, or settlement is covered by a valid and binding
policy of insurance between the defendant and the insurer covering full payment
thereof (subject to customary deductibles) and (B) such insurer has been
notified, and has not disputed the claim made for payment, of the amount of such
judgment, order or settlement;
8.9 (a) If there is a default in one or more agreements to which Parent,
any Borrower or any of their respective Subsidiaries is a party (including the
Material Contracts) with one or more third Persons relative to the Indebtedness
of Parent, such Borrower, or such Subsidiary, as applicable, involving an
aggregate amount of $500,000, or more, and such default (a) occurs at the final
maturity of the obligations thereunder, or (b) results in a right by the other
party thereto, irrespective of whether exercised, to accelerate the maturity of
Parent's or the applicable Borrower's or Subsidiary's obligations thereunder;
(b) With respect to all other material agreements (including the Material
Contracts) to which Parent, any Borrower or any of their respective Subsidiaries
is a party with one or more third Persons, if (i) there is a payment default, or
(ii) there is a default (other than a payment default) which results in a
termination of such agreement;
8.10 If Parent, any Borrower or any of their respective Subsidiaries makes
any payment on account of Indebtedness that has been contractually subordinated
in right of payment to the payment of the Obligations, except to the extent such
payment is permitted by the terms of the subordination provisions applicable to
such Indebtedness;
8.11 If any misstatement or misrepresentation exists as of the date when
made or deemed made, in any warranty, representation, statement, or Record made
to the Lender Group by Parent, any Borrower, any Subsidiary of a Borrower, or
any officer, employee, agent, or director of Parent, any Borrower or any
Subsidiary of a Borrower;
8.12 If the obligation of any Guarantor under the Guaranty is limited or
terminated by operation of law or by such Guarantor thereunder;
8.13 If this Agreement or any other Loan Document that purports to create a
Lien, shall, for any reason, fail or cease to create a valid and perfected and,
except to the extent permitted by the terms hereof or thereof, first priority
Lien on or security interest in the Collateral covered hereby or thereby, except
as a result of a disposition of the applicable Collateral in a transaction
permitted under this Agreement; or
8.14 Any provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by Holdings, Parent, any Borrower or any of their respective
Subsidiaries, or a proceeding shall be commenced by Holdings, Parent, any
Borrower or any of their respective Subsidiaries, or by any Governmental
Authority having jurisdiction over Holdings, Parent, any Borrower or any of
their respective Subsidiaries, seeking to establish the invalidity or
unenforceability thereof, or Holdings, Parent, any Borrower or any of their
respective Subsidiaries shall deny that it has any liability or obligation
purported to be created under any Loan Document.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the continuation,
of an Event of Default, the Required Lenders (at their election but without
notice of their election and without demand) may authorize and instruct Agent to
do any one or more of the following on behalf of the Lender Group (and Agent,
acting upon the instructions of the Required Lenders, shall do the same on
behalf of the Lender Group), all of which are authorized by Borrowers:
78
(a) Declare all or any portion of the Obligations, whether evidenced by
this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable;
(b) Cease advancing money or extending credit to or for the benefit of
Borrowers under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other Loan Documents as to any
future liability or obligation of the Lender Group, but without affecting any of
the Agent's Liens in the Collateral and without affecting the Obligations;
(d) Settle or adjust disputes and claims directly with Borrowers' Account
Debtors for amounts and upon terms which Agent considers advisable, and in such
cases, Agent will credit the Loan Account with only the net amounts received by
Agent in payment of such disputed Accounts after deducting all Lender Group
Expenses incurred or expended in connection therewith;
(e) Cause Borrowers to hold all of their returned Inventory in trust for
the Lender Group and segregate all such Inventory from all other assets of
Borrowers or in Borrowers' possession;
(f) Without notice to or demand upon any Borrower, make such payments and
do such acts as Agent considers necessary or reasonable to protect its security
interests in the Collateral. Each Borrower agrees to assemble the Collateral if
Agent so requires, and to make the Collateral available to Agent at a place that
Agent may designate which is reasonably convenient to both parties. Each
Borrower authorizes Agent to enter the premises where the Collateral is located,
to take and maintain possession of the Collateral, or any part of it, and to
pay, purchase, contest, or compromise any Lien that in Agent's determination
appears to conflict with the priority of the Agent's Liens in and to the
Collateral and to pay all expenses incurred in connection therewith and to
charge Borrowers' Loan Account therefor. With respect to any of Borrowers' owned
or leased premises, each Borrower hereby grants Agent a license to enter into
possession of such premises and to occupy the same, without charge, in order to
exercise any of the Lender Group's rights or remedies provided herein, at law,
in equity, or otherwise;
(g) Without notice to any Borrower (such notice being expressly waived),
and without constituting an acceptance of any collateral in full or partial
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of any Borrower
held by the Lender Group (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or the
account of any Borrower held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and deposits of any
Borrower held by the Lender Group, and any amounts received in the Cash
Management Accounts, to secure the full and final repayment of all of the
Obligations;
(i) Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell (in the manner provided for herein) the
Borrower Collateral. Each Borrower hereby grants to Agent a license or other
right to use, without charge, such Borrower's labels, patents, copyrights, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Borrower Collateral, in
completing production of, advertising for sale, and selling any Borrower
Collateral and such Borrower's rights under all licenses and all franchise
agreements shall inure to the Lender Group's benefit;
(j) Sell the Borrower Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including Borrowers' premises) as Agent
determines is commercially reasonable. It is not necessary that the Borrower
Collateral be present at any such sale;
79
(k) Except in those circumstances where no notice is required under the
Code, Agent shall give notice of the disposition of the Borrower Collateral as
follows:
(i) Agent shall give Administrative Borrower (for the benefit of the
applicable Borrower) a notice in writing of the time and place of public sale,
or, if the sale is a private sale or some other disposition other than a public
sale is to be made of the Borrower Collateral, the time on or after which the
private sale or other disposition is to be made; and
(ii) The notice shall be personally delivered or mailed, postage
prepaid, to Administrative Borrower as provided in SECTION 12, at least 10 days
before the earliest time of disposition set forth in the notice; no notice needs
to be given prior to the disposition of any portion of the Borrower Collateral
that is perishable or threatens to decline speedily in value or that is of a
type customarily sold on a recognized market;
(l) Agent, on behalf of the Lender Group may credit bid and
purchase at any public sale;
(m) Agent may seek the appointment of a receiver or keeper to take
possession of all or any portion of the Borrower Collateral or to operate same
and, to the maximum extent permitted by law, may seek the appointment of such a
receiver without the requirement of prior notice or a hearing; and
(n) The Lender Group shall have all other rights and remedies available at
law or in equity or pursuant to any other Loan Document.
The foregoing to the contrary notwithstanding, upon the occurrence of any
Event of Default described in SECTION 8.4 or SECTION 8.5, in addition to the
remedies set forth above, without any notice to Borrowers or any other Person or
any act by the Lender Group, the Commitments shall automatically terminate and
the Obligations then outstanding, together with all accrued and unpaid interest
thereon and all fees and all other amounts due under this Agreement and the
other Loan Documents, shall automatically and immediately become due and
payable, without presentment, demand, protest, or notice of any kind, all of
which are expressly waived by Borrowers.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group under
this Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons (other than taxes
or rent that are the subject of a Permitted Protest), or fails to make any
deposits or furnish any required proof of payment or deposit, all as required
under the terms of this Agreement, then, Agent, in its sole discretion and
without prior notice to any Borrower, may do any or all of the following: (a)
make payment of the same or any part thereof, (b) set up such reserves against
the Borrowing Base or the Maximum Revolver Amount as Agent deems necessary to
protect the Lender Group from the exposure created by such failure, or (c) in
the case of the failure to comply with SECTION 6.8 hereof, obtain and maintain
insurance policies of the type described in SECTION 6.8 and take any action with
respect to such policies as Agent deems prudent. Any such amounts paid by Agent
shall constitute Lender Group Expenses and any such payments shall not
constitute an agreement by the Lender Group to make similar payments in the
future or a waiver by the Lender Group of any Event of Default under this
Agreement. Agent need not inquire as to, or contest the validity of, any such
80
expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any such Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR BORROWER COLLATERAL. Each Borrower
hereby agrees that: (a) so long as Agent complies with its obligations, if any,
under the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Borrower Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Borrower Collateral shall be borne
by Borrowers.
11.3 INDEMNIFICATION. Each Borrower shall pay, indemnify, defend, and hold
the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an "INDEMNIFIED PERSON") harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, and damages, and all reasonable attorneys fees and
disbursements and other costs and expenses actually incurred in connection
therewith or in connection with the enforcement of this indemnification (as and
when they are incurred and irrespective of whether suit is brought), at any time
asserted against, imposed upon, or incurred by any of them (a) in connection
with or as a result of or related to the execution, delivery, enforcement,
performance, or administration (including any restructuring or workout with
respect hereto) of this Agreement, any of the other Loan Documents, or the
transactions contemplated hereby or thereby or the monitoring of Borrowers' and
their Subsidiaries' compliance with the terms of the Loan Documents, and (b)
with respect to any investigation, litigation, or proceeding related to this
Agreement, any other Loan Document, or the use of the proceeds of the credit
provided hereunder (irrespective of whether any Indemnified Person is a party
thereto), or any act, omission, event, or circumstance in any manner related
thereto (all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"). The
foregoing to the contrary notwithstanding, Borrowers shall have no obligation to
any Indemnified Person under this SECTION 11.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person. This provision shall survive the termination of this Agreement and the
repayment of the Obligations. If any Indemnified Person makes any payment to any
other Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.
12. NOTICES. Unless otherwise provided in this Agreement, all notices or
demands by Borrowers or Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Administrative Borrower or Agent, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Borrowers
in care of Administrative Borrower or to Agent, as the case may be, at its
address set forth below:
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If to Administrative Borrower: EVERGREEN INTERNATIONAL AIRLINES, INC.
0000 Xxxxx Xxxx Xxxx
XxXxxxxxxxx, Xxxxxx 00000
Attn: Xxxx Xxxxx, Chief Financial Officer
Fax No.: 000-000-0000
with copies to: SKADDEN, ARPS, SLATE, MEAGER & XXXX LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxxx, Esq.
Fax No.: 000-000-0000
If to Agent: XXXXX FARGO FOOTHILL, INC.
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Manager
Fax No.: 000-000-0000
with copies to: PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No.: 000-000-0000
Agent and Borrowers may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other party. All notices or demands sent in accordance with this SECTION 12,
other than notices by Agent in connection with enforcement rights against the
Borrower Collateral under the provisions of the Code, shall be deemed received
on the earlier of the date of actual receipt or 3 Business Days after the
deposit thereof in the mail. Each Borrower acknowledges and agrees that notices
sent by the Lender Group in connection with the exercise of enforcement rights
against Borrower Collateral under the provisions of the Code shall be deemed
sent when deposited in the mail or personally delivered, or, where permitted by
law, transmitted by telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS
LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, PROVIDED, HOWEVER, THAT
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ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
BORROWERS AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 13(B).
(c) BORROWERS AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND EACH MEMBER OF THE LENDER
GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may assign and delegate to one or more assignees (each an
"ASSIGNEE") that are Eligible Transferees, all, or any ratable part of all, of
the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$5,000,000 (except such minimum amount shall not apply to an Eligible Transferee
that is a Related Fund of a Lender or an Affiliate of a Lender); PROVIDED,
HOWEVER, that Borrowers and Agent may continue to deal solely and directly with
such Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given
to Agent by such Lender and the Assignee, (ii) such Lender and its Assignee have
delivered to Administrative Borrower and Agent an Assignment and Acceptance, and
(iii) the assigning Lender or Assignee has paid to Agent for Agent's separate
account a processing fee in the amount of $5,000. Anything contained herein to
the contrary notwithstanding, the payment of any fees shall not be required if
(x) such assignment is in connection with any merger, consolidation, sale,
transfer, or other disposition of all or any substantial portion of the business
or loan portfolio of such Lender, or (y) the assignee is a Related Fund of a
Lender or an Affiliate of a Lender.
(b) From and after the date that Agent notifies the assigning Lender (with
a copy to Administrative Borrower) that it has received an executed Assignment
and Acceptance and payment of the above-referenced processing fee, (i) 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, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (except
with respect to SECTION 11.3 hereof) and be released from any future obligations
under this 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 Agreement and the other Loan Documents, such Lender shall cease to be
a party hereto and thereto), and such assignment shall effect a novation between
Borrowers and the Assignee; PROVIDED, HOWEVER, that nothing contained herein
shall release any assigning Lender from obligations that survive the termination
of this Agreement, including such assigning Lender's obligations under ARTICLE
16 and SECTION 17.7 of this Agreement. Anything contained in this SECTION
14.1(B) to the contrary notwithstanding, a Lender may assign any or all of its
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rights hereunder to a Related Fund or an Affiliate of such Lender without
delivering an executed Assignment and Acceptance to the Agent, and without the
payment of the above-referenced processing fee; PROVIDED, HOWEVER that (x)
Borrower and Agent may continue to deal solely and directly with the assigning
Lender until such Assignment and Acceptance has been delivered to Agent, and (y)
the failure of such assigning Lender to deliver the Assignment and Acceptance to
Agent shall not affect the legality, validity or binding effect of such
assignment.
(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (1) other than as provided in
such Assignment and Acceptance, such 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 Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(2) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrowers or the
performance or observance by Borrowers of any of their obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (3) such
Assignee confirms that it has received a copy of this Agreement, together with
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,
(4) such Assignee will, independently and without reliance upon Agent, 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 Agreement, (5) such
Assignee appoints and authorizes Agent to take such actions and to exercise such
powers under this Agreement as are delegated to Agent, by the terms hereof,
together with such powers as are reasonably incidental thereto, and (6) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(d) Subject to the last sentence of subsection (b) above, immediately upon
Agent's receipt of the required processing fee payment and the fully executed
Assignment and Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments resulting therefrom.
Promptly thereafter Agent shall notify Administrative Borrower of the addition
of the Assignee and the resulting adjustment of the Commitments resulting
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender PRO TANTO.
(e) Any Lender may at any time, with the written consent of Agent, sell to
one or more commercial banks, financial institutions, or other Persons (a
"PARTICIPANT") participating interests in its Obligations, the Commitment, and
the other rights and interests of that Lender (the "ORIGINATING LENDER")
hereunder and under the other Loan Documents (provided that no written consent
of Agent shall be required in connection with any sale of any such participating
interests by a Lender to an Eligible Transferee); PROVIDED, HOWEVER, that (i)
the Originating Lender shall remain a "Lender" for all purposes of this
Agreement and the other Loan Documents and the Participant receiving the
participating interest in the Obligations, the Commitments, and the other rights
and interests of the Originating Lender hereunder shall not constitute a
"Lender" hereunder or under the other Loan Documents and the Originating
Lender's obligations under this Agreement shall remain unchanged, (ii) the
Originating Lender shall remain solely responsible for the performance of such
obligations, (iii) Borrowers, Agent, and the Lenders shall continue to deal
solely and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating
interest under which the Participant has the right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such Participant is
participating, (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating, (C) release all or
substantially all of the Collateral or guaranties (except to the extent
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expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums, and (v) all amounts
payable by Borrowers hereunder shall be determined as if such Lender had not
sold such participation, except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or the other Loan
Documents or any direct rights as to the other Lenders, Agent, Borrowers, the
Collections of Borrowers or their Subsidiaries, the Collateral, or otherwise in
respect of the Obligations. No Participant shall have the right to participate
directly in the making of decisions by the Lenders among themselves.
(f) In connection with any such assignment or participation or proposed
assignment or participation, a Lender may, subject to the provisions of SECTION
17.7, disclose all documents and information which it now or hereafter may have
relating to Borrowers and their Subsidiaries and their respective businesses.
(g) Any other provision in this Agreement notwithstanding, and in addition
to SECTION 2.16, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S. Treasury Regulation 31, C.F.R. Section 203.24, and such
Federal Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
(h) Agent, on behalf of the Borrowers, shall maintain at its address set
forth in SECTION 12 a copy of each Assignment and Acceptance delivered to it and
a register for the recordation of the names and addresses of Lenders, and the
Commitment of, and certain of the Obligations owing to, each Lender pursuant to
the terms hereof from time to time (the "REGISTER"), provided that, in the case
of an assignment or delegation covered by the last sentence of subsection (b)
above, which is not reflected in the Register, the assignee Lender shall
maintain a comparable Register on behalf of Borrower. The entries in the
Register shall be conclusive and binding for all purposes, and Borrower, Parent,
Agent, and Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.
(i) In the event that a Lender sells participations in the Registered Loan,
such Lender shall maintain a register on which it enters the name of all
participants in the Registered Loans held by it (the "PARTICIPANT REGISTER"). A
Registered Loan (and the Registered Note, if any, evidencing the same) may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each Registered Note shall expressly so provide).
Any participation of such Registered Loan (and the Registered Note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register.
14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; PROVIDED, HOWEVER,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void AB INITIO. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to SECTION 14.1 hereof and, except as expressly required pursuant to
SECTION 14.1 hereof, no consent or approval by any Borrower is required in
connection with any such assignment.
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15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document (other than Bank Product Agreements),
and no consent with respect to any departure by Borrowers therefrom, shall be
effective unless the same shall be in writing and signed by the Required Lenders
(or by Agent at the written request of the Required Lenders) and Administrative
Borrower (on behalf of all Borrowers) and then any such waiver or consent shall
be effective, but only in the specific instance and for the specific purpose for
which given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent
shall, unless in writing and signed by all of the Lenders affected thereby and
Administrative Borrower (on behalf of all Borrowers) and acknowledged by Agent,
do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,
(d) change the Pro Rata Share that is required to take any action
hereunder,
(e) amend or modify this Section or any provision of the Agreement
providing for consent or other action by all Lenders,
(f) other than as permitted by SECTION 16.12, release Agent's Lien in and
to any of the Collateral,
(g) change the definition of "Required Lenders" or "Pro Rata Share",
(h) contractually subordinate any of the Agent's Liens,
(i) release any Borrower or any Guarantor from any obligation for the
payment of money, except as expressly permitted by the terms of this Loan
Agreement,
(j) change the definition of Borrowing Base or the definitions of Eligible
Accounts, Eligible Inventory, Maximum Revolver Amount, Maximum Term Loan Amount,
Term Loan Amount, or change SECTION 2.1(B), or
(k) amend any of the provisions of SECTION 16.
and, PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or Swing
Lender, as applicable, under this Agreement or any other Loan Document. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrowers, shall not require consent by or the agreement of Borrowers.
15.2 REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or Agent hereunder
requires the unanimous consent, authorization, or agreement of all Lenders, and
a Lender ("HOLDOUT LENDER") fails to give its consent, authorization, or
agreement, then Agent, upon at least 5 Business Days prior irrevocable notice to
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the Holdout Lender, may permanently replace the Holdout Lender with one or more
substitute Lenders (each, a "REPLACEMENT LENDER"), and the Holdout Lender shall
have no right to refuse to be replaced hereunder. Such notice to replace the
Holdout Lender shall specify an effective date for such replacement, which date
shall not be later than 15 Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, the Holdout Lender and
each Replacement Lender shall execute and deliver an Assignment and Acceptance,
subject only to the Holdout Lender being repaid its share of the outstanding
Obligations (including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind whatsoever.
If the Holdout Lender shall refuse or fail to execute and deliver any such
Assignment and Acceptance prior to the effective date of such replacement, the
Holdout Lender shall be deemed to have executed and delivered such Assignment
and Acceptance. The replacement of any Holdout Lender shall be made in
accordance with the terms of SECTION 14.1. Until such time as the Replacement
Lenders shall have acquired all of the Obligations, the Commitments, and the
other rights and obligations of the Holdout Lender hereunder and under the other
Loan Documents, the Holdout Lender shall remain obligated to make the Holdout
Lender's Pro Rata Share of Advances and to purchase a participation in each
Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Borrowers of any
provision of this Agreement. Agent's and each Lender's rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby designates
and appoints WFF as its representative under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent to execute and
deliver each of the other Loan Documents on its behalf and to take such other
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Agent agrees to
act as such on the express conditions contained in this SECTION 16. The
provisions of this SECTION 16 (other than the proviso to SECTION 16.11(A)) are
solely for the benefit of Agent, and the Lenders, and Borrowers and their
Subsidiaries shall have no rights as a third party beneficiary of any of the
provisions contained herein. Any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document notwithstanding, Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "Agent" is for convenience only, that WFF is
merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections of Borrowers and their Subsidiaries, and related matters, (b)
execute or file any and all financing or similar statements or notices,
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amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections of
Borrowers and their Subsidiaries as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections of
Borrowers and their Subsidiaries, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrowers, the
Obligations, the Collateral, the Collections of Borrowers and their
Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or any Subsidiary or
Affiliate of any Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Books, Records, or properties of any of Parent, any
of Parent's Subsidiaries or any Affiliates of the Borrowers.
16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrowers or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the requisite Lenders and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a "notice of default." Agent promptly
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will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
SECTION 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
SECTION 9; PROVIDED, HOWEVER, that if an event occurs or a circumstance exists
that materially and imminently threatens the ability of the Lender Group to
realize upon any material part of the Collateral, such as, without limitation,
fraudulent removal, concealment, or abscondment thereof, destruction (other than
to the extent covered by insurance) or material waste thereof, or failure of
Borrowers after reasonable demand to maintain or reinstate adequate casualty
insurance coverage with respect thereto, Agent may take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable; PROVIDED, THAT Agent shall first use commercially
reasonable efforts to contact the Required Lenders regarding the taking of such
action.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the Agent
Related Persons has made any representation or warranty to it, and that no act
by Agent hereinafter taken, including any review of the affairs of Borrowers and
their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person party to a Loan Document, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to Borrowers. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrowers and
any other Person party to a Loan Document. Except for notices, reports, and
other documents expressly herein required to be furnished to the Lenders by
Agent, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
Borrowers and any other Person party to a Loan Document that may come into the
possession of any of the Agent Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the performance and fulfillment of its functions, powers, and obligations
pursuant to the Loan Documents, including court costs, attorneys fees and
expenses, fees and expenses of financial accountants, advisors, consultants, and
appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to this Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
the Collections of Borrowers and their Subsidiaries received by Agent to
reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders. In the event Agent is not reimbursed for
such costs and expenses from the Collections of Borrowers and their Subsidiaries
received by Agent, each Lender hereby agrees that it is and shall be obligated
to pay to or reimburse Agent for the amount of such Lender's Pro Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent Related Persons (to the extent
not reimbursed by or on behalf of Borrowers and without limiting the obligation
of Borrowers to do so), according to their Pro Rata Shares, from and against any
and all Indemnified Liabilities; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment to any Agent Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make an Advance or other extension of credit
hereunder. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for such Lender's Pro Rata Share of any costs or out of pocket
expenses (including attorneys, accountants, advisors, and consultants fees and
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expenses) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.
16.8 AGENT IN INDIVIDUAL CAPACITY. WFF and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though WFF were not Agent hereunder, and, in each case, without notice to or
consent of the other members of the Lender Group. The other members of the
Lender Group acknowledge that, pursuant to such activities, WFF or its
Affiliates may receive information regarding Borrowers or their Affiliates and
any other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include WFF in its individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice to the
Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this SECTION 16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person party to
any Loan Documents as though such Lender were not a Lender hereunder without
notice to or consent of the other members of the Lender Group. The other members
of the Lender Group acknowledge that, pursuant to such activities, such Lender
and its respective Affiliates may receive information regarding Borrowers or
their Affiliates and any other Person party to any Loan Documents that is
subject to confidentiality obligations in favor of Borrowers or such other
Person and that prohibit the disclosure of such information to the Lenders, and
the Lenders acknowledge that, in such circumstances (and in the absence of a
waiver of such confidentiality obligations, which waiver such Lender will use
its reasonable best efforts to obtain), such Lender shall not be under any
obligation to provide such information to them. With respect to the Swing Loans
and Agent Advances, Swing Lender shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though it were
not the sub-agent of Agent.
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16.11 WITHHOLDING TAXES.
(a) All payments made by any Borrower hereunder or under any note or other
Loan Document will be made without setoff, counterclaim, or other defense. In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes, and in the event any
deduction or withholding of Taxes is required, each Borrower shall comply with
the penultimate sentence of this SECTION 16.11(A). "Taxes" shall mean, any
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding any tax imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein measured by or based on the
net income, capital, or profits of Agent, any Lender, or Participant, as
appropriate) and all interest, penalties or similar liabilities with respect
thereto. If any Taxes are so levied or imposed, each Borrower agrees to pay the
full amount of such Taxes and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement, any note, or Loan
Document, including any amount paid pursuant to this SECTION 16.11(A) after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein; provided, however, that Borrowers shall not be
required to increase any such amounts if the increase in such amount payable
results from (i) Agent's, any Lender's, or any Participant's own willful
misconduct or gross negligence (as finally determined by a court of competent
jurisdiction), or (ii) any Lender's or any Participant's failure to comply with
SECTION 16.11(B) or (C). Each Borrower will furnish to Lender as promptly as
possible after the date the payment of any Tax is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by any Borrower.
(b) If a Lender or Participant is entitled to an exemption from or
reduction of United States withholding tax, such Lender or Participant, as
applicable, shall deliver to Agent:
(i) if such Lender or Participant claims an exemption from United
States withholding tax pursuant to its portfolio interest exception, (A) a
statement of such Lender or Participant, as applicable, signed under penalty of
perjury, that it is not a (I) a "bank" as described in Section 881(c)(3)(A) of
the IRC, (II) a 10% shareholder of any Borrower (within the meaning of Section
871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation (within the
meaning of Section 957 of the IRC) related to any Borrower (within the meaning
of Section 864(d)(4)) of the IRC, and (B) a properly completed and executed IRS
Form W-8BEN, before receiving its first payment under this Agreement and at any
other time reasonably requested by Agent or any Borrower;
(ii) if such Lender or Participant, as applicable, claims an exemption
from, or a reduction of, withholding tax under a United States tax treaty,
properly completed and executed IRS Form W-8BEN before receiving its first
payment under this Agreement and at any other time reasonably requested by Agent
or any Borrower;
(iii) if such Lender or Participant, as applicable, claims that
interest paid under this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade or business of
such Lender or Participant, as applicable, two properly completed and executed
copies of IRS Form W-8ECI before receiving its first payment under this
Agreement and at any other time reasonably requested by Agent or any Borrower;
or
(iv) such other form or forms, including IRS Form W-9, as may be
required under the IRC or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding or backup withholding
tax before receiving its first payment under this Agreement and at any other
time reasonably requested by Agent or any Borrower.
Such Lender or Participant, as applicable, agrees promptly to notify Agent
and Administrative Borrower of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
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(c) If a Lender or Participant is entitled to an exemption from withholding
tax in a jurisdiction other than the United States, such Lender or Participant,
as applicable, shall deliver to Agent any such form or forms, as may be required
under the laws of such jurisdiction as a condition to exemption from, or
reduction of, foreign withholding or backup withholding tax before receiving its
first payment under this Agreement and at any other time reasonably requested by
Agent or Administrative Borrower.
Lender or Participant, as applicable, agrees promptly to notify Agent and
Administrative Borrower of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
(d) If any Lender or Participant claims exemption from, or reduction of,
withholding tax and such Lender or Participant, as applicable, sells, assigns,
grants a participation in, or otherwise transfers all or part of the Obligations
of Borrowers to such Lender or Participant, as applicable, such Lender or
Participant, as applicable, agrees to notify Agent and Administrative Borrower
of the percentage amount in which it is no longer the beneficial owner of
Obligations of Borrowers to such Lender or Participant, as applicable. To the
extent of such percentage amount, Agent and Borrowers will treat such Lender's
or Participant's (as applicable) documentation provided pursuant to SECTIONS
16.11(B) or 16.11(C) as no longer valid. With respect to such percentage amount,
such Lender or such Participant, as applicable, shall provide new documentation,
pursuant to SECTIONS 16.11(B) or 16.11(C), if applicable.
(e) If any Lender is entitled to a reduction in the applicable withholding
tax, Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by subsection (b) or (c)
of this SECTION 16.11 are not delivered to Agent, then Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(f) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts paid to or for the account of any Lender due to a failure on the part of
the Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify and hold
Agent harmless for all amounts paid, directly or indirectly, by Agent, as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to Agent under this SECTION 16.11,
together with all costs and expenses (including attorneys fees and expenses).
The obligation of the Lenders under this subsection shall survive the payment of
all Obligations and the resignation or replacement of Agent.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its option and in
its sole discretion, to release any Lien on any Collateral (i) upon the
termination of the Commitments and payment and satisfaction in full by Borrowers
of all Obligations, (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if Administrative
Borrower certifies to Agent that the sale or disposition is permitted under
SECTION 7.4 of this Agreement or the other Loan Documents (and Agent may rely
conclusively on any such certificate, without further inquiry), (iii)
constituting property in which no Borrower or its Subsidiaries owned any
interest at the time the Agent's Lien was granted nor at any time thereafter, or
(iv) constituting property leased to a Borrower or its Subsidiaries under a
lease that has expired or is terminated in a transaction permitted under this
Agreement. Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or
Administrative Borrower at any time, the Lenders will confirm in writing Agent's
authority to release any such Liens on particular types or items of Collateral
pursuant to this SECTION 16.12; PROVIDED, HOWEVER, that (1) Agent shall not be
required to execute any document necessary to evidence such release on terms
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that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrowers in respect of)
all interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders to
assure that the Collateral exists or is owned by Borrowers or is cared for,
protected, or insured or has been encumbered, or that the Agent's Liens have
been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing, except as otherwise provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the express
written consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the written request of Agent, set off against the
Obligations, any amounts owing by such Lender to Borrowers or any deposit
accounts of Borrowers now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
in writing by Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected only by possession or
control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent's request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by Agent to
the Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for
itself by written notice to Agent. Concurrently with each such payment, Agent
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shall identify whether such payment (or any portion thereof) represents
principal, premium, fees, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member of
the Lender Group authorizes and directs Agent to enter into this Agreement and
the other Loan Documents. Each member of the Lender Group agrees that any action
taken by Agent in accordance with the terms of this Agreement or the other Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY; DISCLAIMERS BY
LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to this Agreement,
each Lender:
(a) is deemed to have requested that Agent furnish such Lender, promptly
after it becomes available, a copy of each field audit or examination report
(each a "REPORT" and collectively, "REPORTS") prepared by Agent, and Agent shall
so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i) make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Parent and
its Subsidiaries and will rely significantly upon the Parent's and its
Subsidiaries' Books, as well as on representations of Parent's and its
Subsidiaries' personnel,
(d) agrees to keep all Reports and other material, non-public information
regarding Borrowers and their Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner in accordance
with SECTION 17.7, and
(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any such other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of Borrowers; and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request
of Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrowers, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender's notice to Agent, whereupon Agent promptly shall request of
Administrative Borrower the additional reports or information reasonably
specified by such Lender, and, upon receipt thereof from Administrative
Borrower, Agent promptly shall provide a copy of same to such Lender, and (z)
any time that Agent renders to Administrative Borrower a statement regarding the
Loan Account, Agent shall send a copy of such statement to each Lender.
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16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or
in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in SECTION 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
16.19 BANK PRODUCT PROVIDERS. Each Bank Product Provider shall be deemed a
party hereto for purposes of any reference in a Loan Document to the parties for
whom Agent is acting; it being understood and agreed that the rights and
benefits of such Bank Product Provider under the Loan Documents consist
exclusively of such Bank Product Provider's right to share in payments and
collections out of the Collateral as more fully set forth herein. In connection
with any such distribution of payments and collections, Agent shall be entitled
to assume no amounts are due to any Bank Product Provider unless such Bank
Product Provider has notified Agent in writing of the amount of any such
liability owed to it prior to such distribution.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Borrowers, Agent, and each Lender whose signature is provided
for on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrowers,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
17.5 COUNTERPARTS; ELECTRONIC EXECUTION. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document MUTATIS
MUTANDIS.
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17.6 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment
of the Obligations by any Borrower or any Guarantor or the transfer to the
Lender Group of any property should for any reason subsequently be declared to
be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a "VOIDABLE TRANSFER"), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers and Guarantors automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
17.7 CONFIDENTIALITY. Agent and Lenders each individually (and not jointly
or jointly and severally) agree that material, non-public information regarding
Borrowers and their Subsidiaries, their operations, assets, and existing and
contemplated business plans shall be treated by Agent and the Lenders in a
confidential manner, and shall not be disclosed by Agent and the Lenders to
Persons who are not parties to this Agreement, except: (a) to attorneys for and
other advisors, accountants, auditors, and consultants to any member of the
Lender Group, (b) to Subsidiaries and Affiliates of any member of the Lender
Group (including the Bank Product Providers), provided that any such Subsidiary
or Affiliate shall have agreed to receive such information hereunder subject to
the terms of this SECTION 17.7, (c) as may be required by statute, decision, or
judicial or administrative order, rule, or regulation, (d) as may be agreed to
in advance by Administrative Borrower or its Subsidiaries or as requested or
required by any Governmental Authority pursuant to any subpoena or other legal
process, (e) as to any such information that is or becomes generally available
to the public (other than as a result of prohibited disclosure by Agent or the
Lenders), (f) in connection with any assignment, prospective assignment, sale,
prospective sale, participation or prospective participations, or pledge or
prospective pledge of any Lender's interest under this Agreement, provided that
any such assignee, prospective assignee, purchaser, prospective purchaser,
participant, prospective participant, pledgee, or prospective pledgee shall have
agreed in writing to receive such information hereunder subject to the terms of
this Section, and (g) in connection with any litigation or other adversary
proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents. The provisions of this SECTION 17.7
shall survive for 2 years after the payment in full of the Obligations.
17.8 INTEGRATION. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.9 EVERGREEN AIRLINES AS AGENT FOR BORROWERS. Each Borrower hereby
irrevocably appoints Evergreen Airlines as the borrowing agent and
attorney-in-fact for all Borrowers (the "ADMINISTRATIVE BORROWER") which
appointment shall remain in full force and effect unless and until Agent shall
have received prior written notice signed by each Borrower that such appointment
has been revoked and that another Borrower has been appointed Administrative
Borrower. Each Borrower hereby irrevocably appoints and authorizes the
Administrative Borrower (i) to provide Agent with all notices with respect to
Advances and Letters of Credit obtained for the benefit of any Borrower and all
other notices and instructions under this Agreement and (ii) to take such action
as the Administrative Borrower deems appropriate on its behalf to obtain
Advances and Letters of Credit and to exercise such other powers as are
reasonably incidental thereto to carry out the purposes of this Agreement. It is
understood that the handling of the Loan Account and Collateral of Borrowers in
a combined fashion, as more fully set forth herein, is done solely as an
accommodation to Borrowers in order to utilize the collective borrowing powers
of Borrowers in the most efficient and economical manner and at their request,
and that Lender Group shall not incur liability to any Borrower as a result
hereof. Each Borrower expects to derive benefit, directly or indirectly, from
the handling of the Loan Account and the Collateral in a combined fashion since
the successful operation of each Borrower is dependent on the continued
successful performance of the integrated group. To induce the Lender Group to do
96
so, and in consideration thereof, each Borrower hereby jointly and severally
agrees to indemnify each member of the Lender Group and hold each member of the
Lender Group harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Lender Group by any Borrower or by any third
party whosoever, arising from or incurred by reason of (a) the handling of the
Loan Account and Collateral of Borrowers as herein provided, (b) the Lender
Group's relying on any instructions of the Administrative Borrower, or (c) any
other action taken by the Lender Group hereunder or under the other Loan
Documents, except that Borrowers will have no liability to the relevant
Agent-Related Person or Lender-Related Person under this SECTION 17.9 with
respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as the
case may be.
[Signature pages to follow.]
97
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS AND CONSTRUCTION..............................................1
1.1 Definitions......................................................1
1.2 Accounting Terms................................................30
1.3 Code............................................................30
1.4 Construction....................................................30
1.5 Schedules and Exhibits..........................................30
2. LOAN AND TERMS OF PAYMENT................................................31
2.1 Revolver Advances...............................................31
2.2 Term Loan.......................................................31
2.3 Borrowing Procedures and Settlements............................31
2.4 Payments........................................................36
2.5 Overadvances....................................................41
2.6 Interest Rates and Letter of Credit Fee: Rates,
Payments, and Calculations......................................42
2.7 Cash Management.................................................43
2.8 Crediting Payments; Float Charge................................44
2.9 Designated Account..............................................44
2.10 Maintenance of Loan Account; Statements of Obligations..........44
2.11 Fees............................................................45
2.12 Letters of Credit...............................................45
2.13 LIBOR Option....................................................48
2.14 Capital Requirements............................................50
2.15 Joint and Several Liability of Borrowers........................50
2.16 Securitizations.................................................52
2.17 Registered Notes................................................53
3. CONDITIONS; TERM OF AGREEMENT............................................53
3.1 Conditions Precedent to the Initial Extension of Credit.........53
3.2 Conditions Subsequent to the Initial Extension of Credit........56
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3.3 Conditions Precedent to all Extensions of Credit................57
3.4 Term............................................................57
3.5 Effect of Termination...........................................57
3.6 Early Termination by Borrowers..................................58
4. CREATION OF SECURITY INTEREST............................................58
4.1 Grant of Security Interest......................................58
4.2 Negotiable Collateral...........................................58
4.3 Collection of Accounts, General Intangibles, and
Negotiable Collateral...........................................59
4.4 Filing of Financing Statements; Commercial Tort Claims;
Delivery of Additional Documentation Required...................59
4.5 Power of Attorney...............................................60
4.6 Right to Inspect................................................60
4.7 Control Agreements..............................................60
5. REPRESENTATIONS AND WARRANTIES...........................................60
5.1 No Encumbrances.................................................61
5.2 Eligible Accounts...............................................61
5.3 Eligible Inventory..............................................61
5.4 Equipment.......................................................61
5.5 Location of Inventory and Equipment.............................61
5.6 Inventory Records...............................................61
5.7 State of Incorporation; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims....61
5.8 Due Organization and Qualification; Subsidiaries................62
5.9 Due Authorization; No Conflict..................................62
5.10 Litigation......................................................63
5.11 No Material Adverse Change......................................64
5.12 Fraudulent Transfer.............................................64
5.13 Employee Benefits...............................................64
5.14 Environmental Condition.........................................64
5.15 Brokerage Fees..................................................64
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5.16 Intellectual Property...........................................64
5.17 Leases..........................................................65
5.18 Deposit Accounts and Securities Accounts........................65
5.19 Complete Disclosure.............................................65
5.20 Indebtedness....................................................65
5.21 Material Contracts..............................................65
6. AFFIRMATIVE COVENANTS....................................................65
6.1 Accounting System...............................................65
6.2 Collateral Reporting............................................65
6.3 Financial Statements, Reports, Certificates.....................67
6.4 Guarantor Reports...............................................68
6.5 Returns.........................................................68
6.6 Maintenance of Properties.......................................68
6.7 Taxes...........................................................68
6.8 Insurance.......................................................68
6.9 Location of Inventory and Equipment.............................69
6.10 Compliance with Laws............................................70
6.11 Leases..........................................................70
6.12 Existence.......................................................70
6.13 Environmental...................................................70
6.14 Disclosure Updates..............................................70
6.15 Formation of Subsidiaries.......................................70
6.16 FAA Matters; Citizenship........................................71
7. NEGATIVE COVENANTS.......................................................71
7.1 Indebtedness....................................................71
7.2 Liens...........................................................72
7.3 Restrictions on Fundamental Changes.............................72
7.4 Disposal of Assets..............................................72
7.5 Change Name.....................................................72
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7.6 Nature of Business..............................................72
7.7 Prepayments and Amendments......................................72
7.8 Change of Control...............................................73
7.9 Consignments....................................................73
7.10 Distributions...................................................73
7.11 Accounting Methods..............................................73
7.12 Investments.....................................................73
7.13 Transactions with Affiliates....................................74
7.14 Suspension......................................................74
7.15 Compensation....................................................74
7.16 Use of Proceeds.................................................74
7.17 Inventory and Equipment with Bailees............................74
7.18 Financial Covenants.............................................74
8. EVENTS OF DEFAULT........................................................76
9. THE LENDER GROUP'S RIGHTS AND REMEDIES...................................78
9.1 Rights and Remedies.............................................78
9.2 Remedies Cumulative.............................................80
10.TAXES AND EXPENSES.......................................................80
11.WAIVERS; INDEMNIFICATION.................................................81
11.1 Demand; Protest; etc............................................81
11.2 The Lender Group's Liability for Borrower Collateral............81
11.3 Indemnification.................................................81
12.NOTICES..................................................................81
13.CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER...............................82
14.ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS...............................83
14.1 Assignments and Participations..................................83
14.2 Successors......................................................85
15.AMENDMENTS; WAIVERS......................................................86
15.1 Amendments and Waivers..........................................86
15.2 Replacement of Holdout Lender...................................86
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15.3 No Waivers; Cumulative Remedies.................................87
16.AGENT; THE LENDER GROUP..................................................87
16.1 Appointment and Authorization of Agent..........................87
16.2 Delegation of Duties............................................88
16.3 Liability of Agent..............................................88
16.4 Reliance by Agent...............................................88
16.5 Notice of Default or Event of Default...........................88
16.6 Credit Decision.................................................89
16.7 Costs and Expenses; Indemnification.............................89
16.8 Agent in Individual Capacity....................................90
16.9 Successor Agent.................................................90
16.10 Lender in Individual Capacity...................................90
16.11 Withholding Taxes...............................................91
16.12 Collateral Matters..............................................92
16.13 Restrictions on Actions by Lenders; Sharing of Payments.........93
16.14 Agency for Perfection...........................................93
16.15 Payments by Agent to the Lenders................................93
16.16 Concerning the Collateral and Related Loan Documents............94
16.17 Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information...........94
16.18 Several Obligations; No Liability...............................95
16.19 Bank Product Providers..........................................95
17.GENERAL PROVISIONS.......................................................95
17.1 Effectiveness...................................................95
17.2 Section Headings................................................95
17.3 Interpretation..................................................95
17.4 Severability of Provisions......................................95
17.5 Counterparts; Electronic Execution..............................95
17.6 Revival and Reinstatement of Obligations........................96
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17.7 Confidentiality.................................................96
17.8 Integration.....................................................96
17.9 Evergreen Airlines as Agent for Borrowers.......................96
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Schedule A-1 Agent's Account
Schedule A-2 Aircraft Collateral
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule E-1 Eligible Inventory Locations
Schedule E-2 Excluded Collateral
Schedule L-1 FAA Liens to be Released
Schedule P-1 Permitted Liens
Schedule P-2 Permitted Investments
Schedule R-1 Real Property Collateral
Schedule 2.7(a) Cash Management Banks
Schedule 5.5(b)(i) Locations of Inventory and Equipment
Schedule 5.7(a) States of Organization
Schedule 5.7(b) Chief Executive Offices
Schedule 5.7(c) Organizational Identification Numbers
Schedule 5.7(d) Commercial Tort Claims
Schedule 5.8(b) Capitalization of Borrowers
Schedule 5.8(c) Capitalization of Borrowers' Subsidiaries
Schedule 5.10 Litigation
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.18 Deposit Accounts and Securities Accounts
Schedule 5.20 Permitted Indebtedness
Schedule 5.22 Material Contract Issues
Schedule 7.9 Consignments
SCHEDULE A-1
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as
the account into which Borrowers shall make all payments to Agent for the
benefit of the Lender Group and into which the Lender Group shall make all
payments to Agent under this Agreement and the other Loan Documents; unless and
until Agent notifies Administrative Borrower and the Lender Group to the
contrary, Agent's Account shall be that certain deposit account bearing account
number 323-266193 and maintained by Agent with JPMorgan Chase Bank, 0 Xxx Xxxx
Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA #000000000.
SCHEDULE C-1
COMMITMENTS
============================= ==================== ===================== =====================
LENDER REVOLVER COMMITMENT TERM LOAN COMMITMENT TOTAL COMMITMENT
============================= ==================== ===================== =====================
============================= ==================== ===================== =====================
Xxxxx Fargo Foothill, Inc. $25,000,000 $25,000,000 $50,000,000
============================= ==================== ===================== =====================
============================= ==================== ===================== =====================
Ableco Finance LLC $25,000,000 $25,000,000 $50,000,000
============================= ==================== ===================== =====================
============================= ==================== ===================== =====================
All Lenders $50,000,000 $50,000,000 $100,000,000
============================= ==================== ===================== =====================
