EXHIBIT 4.1
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 22, 1997
among
Aviation Sales Operating Company,
a Delaware corporation
as Borrower
Aviation Sales Company,
a Delaware corporation
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
CITICORP USA, INC.
as Agent
and
CITICORP SECURITIES, INC.
as Arranger
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ARTICLE I
DEFINITIONS
1.01. Certain Defined ....................................................... 2
1.02. Computation of Time Periods............................................41
1.03. Accounting Terms.......................................................41
1.04. Financial Covenant Calculations........................................41
1.05. Other Terms............................................................41
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. Term Loans.............................................................42
2.02. Revolving Credit Facility..............................................43
2.03. Loans Under Acquisition Subfacility....................................47
2.04. Authorized Officers and Agents. .......................................49
2.05. Use of Proceeds of Loans...............................................50
ARTICLE III
LETTERS OF CREDIT
3.01. Letters of Credit. ....................................................51
3.02. Obligations Several. ..................................................58
3.03. Transitional Provisions................................................58
ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.01. Prepayments; Reductions in Revolving Credit
Commitments..........................................................59
4.02. Payments. .............................................................62
4.03. Promise to Repay; Evidence of Indebtedness.............................66
4.04. Proceeds of Collateral; Concentration Account
Arrangements.........................................................67
4.05. Cash Collateral Account................................................68
ARTICLE V
INTEREST AND FEES
5.01. Interest on the Loans and other Obligations............................70
5.02. Fees...................................................................72
5.03. Special Provisions Governing Eurodollar Rate Loans.....................73
5.04. Determination of Applicable Base Rate Margin and
Eurodollar Rate Margin...............................................76
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ARTICLE VI
CONDITIONS TO LOANS AND LETTERS OF CREDIT;
LEASING AFFILIATE LIABILITIES
6.01. Conditions Precedent to the Effectiveness of
Agreement...........................................................77
6.02. Conditions Precedent to All Subsequent Loans and
Letters of Credit. .................................................79
6.03. Additional Conditions Precedent to all Loans Made under
the Acquisition Subfacility.........................................80
6.04. Conditions Precedent to Leasing Affiliate
Liabilities.........................................................80
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01. Representations and Warranties of the Borrower.........................82
ARTICLE VIII
REPORTING COVENANTS
8.01. Financial Statements...................................................93
8.02. Off-Site Inventory Reports.............................................97
8.03. Borrowing Base Certificate; Appraisals.................................97
8.04. Events of Default......................................................98
8.05. Lawsuits...............................................................98
8.06. Insurance..............................................................99
8.07. ERISA Notices..........................................................99
8.08. Environmental Notices. ...............................................101
8.09. Labor Matters.........................................................102
8.10. SEC Reporting.........................................................102
8.11. Hedge Agreements......................................................102
8.12. Other Reports.........................................................103
8.13. Other Information. ...................................................103
ARTICLE IX
AFFIRMATIVE COVENANTS
9.01. Existence, Etc. ......................................................104
9.02. Corporate Powers; Conduct of Business.................................104
9.03. Compliance with Laws, Etc. ...........................................104
9.04. Payment of Taxes and Claims...........................................104
9.05. Insurance.............................................................105
9.06. Inspection of Property; Books and Records;
Discussions........................................................105
9.07. Required Hedge Agreements.............................................106
9.08. Insurance and Condemnation Proceeds...................................106
9.09. ERISA Compliance......................................................107
9.10. Deposit Accounts; Collection Account Agreements.......................107
9.11. Maintenance of Property...............................................108
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9.12. Condemnation..........................................................108
9.13. Future Liens on Real Property. .......................................108
9.14. Consignee/Bailee Letters; Landlord Waivers;
Filings............................................................108
9.15. Intentionally omitted.................................................109
9.16. Future Pledges of Equity Securities; Other Collateral
Documents..........................................................109
ARTICLE X
NEGATIVE COVENANTS
10.01. Indebtedness.........................................................110
10.02. Sales of Assets......................................................111
10.03. Liens................................................................113
10.04. Investments..........................................................114
10.05. Accommodation Obligations............................................115
10.06. Restricted Junior Payments...........................................115
10.07. Conduct of Business..................................................116
10.08. Transactions with Affiliates.........................................116
10.09. Restriction on Fundamental Changes. .................................117
10.10. Sales and Leasebacks.................................................117
10.11. Margin Regulations; Securities Laws..................................117
10.12. ERISA................................................................117
10.13. Issuance of Equity Securities........................................118
10.14. Organizational Documents; Finance Affiliate
Indebtedness......................................................118
10.15. Bank Accounts........................................................119
10.16. Fiscal Year..........................................................119
ARTICLE XI
FINANCIAL COVENANTS
11.01. Interest Coverage Ratio..............................................120
11.02. Fixed Charge Coverage Ratio..........................................120
11.03. Working Capital......................................................120
11.04. Capital Expenditures.................................................120
11.05. Excess Borrowing Availability........................................121
11.06. Leverage Ratio.......................................................121
11.07. Minimum Tangible Net Worth...........................................121
ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.01. Events of Default....................................................122
12.02. Rights and Remedies..................................................127
12.03. Post-Default Withdrawals from the Concentration
Account and Cash Collateral Account...............................129
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ARTICLE XIII
THE AGENT
13.01. Appointment..........................................................130
13.02. Nature of Duties.....................................................130
13.03. Rights, Exculpation, Etc.............................................131
13.04. Reliance.............................................................132
13.05. Indemnification......................................................132
13.06. Agent Individually...................................................133
13.07. Successor Agents.....................................................133
13.08. Relations Among Lenders..............................................133
13.09. Concerning the Collateral and the Loan Documents.....................134
ARTICLE XIV
YIELD PROTECTION
14.01. Taxes................................................................136
14.02. Increased Capital....................................................139
14.03. Changes; Legal Restrictions..........................................139
14.04. Limitation on Additional Amounts Payable by
the Borrower. ....................................................140
14.05. Change in Lending Office.............................................140
14.06. Illegality...........................................................140
14.07. Compensation.........................................................141
ARTICLE XV
MISCELLANEOUS
15.01. Assignments and Participations.......................................142
15.02. Expenses.............................................................144
15.03. Indemnity............................................................146
15.04. Change in Accounting Principles......................................147
15.05. Setoff...............................................................147
15.06. Ratable Sharing......................................................148
15.07. Amendments and Waivers. .............................................149
15.08. Notices..............................................................151
15.09. Survival of Warranties and Agreements................................151
15.10. Failure or Indulgence Not Waiver; Remedies
Cumulative........................................................151
15.11. Marshalling; Payments Set Aside......................................152
15.12. Severability. .......................................................152
15.13. Headings.............................................................152
15.14. Governing Law........................................................152
15.15. Limitation of Liability..............................................152
15.16. Successors and Assigns...............................................153
15.17. Certain Consents and Waivers of the Borrower.........................153
15.18. Counterparts; Effectiveness; Inconsistencies. .......................154
15.19. Limitation on Agreements.............................................154
15.20. Confidentiality......................................................155
15.21. Entire Agreement.....................................................155
15.22. Advice of Counsel....................................................155
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15.23. Amendment and Restatement of 1996 Credit Agreement;
No Novation.......................................................155
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EXHIBITS
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of Collection Account Agreement
Exhibit D -- Forms of Consignee/Bailee Letters and
Landlord Waivers
Exhibit E -- Forms of Notes
E-1 -- Acquisition Loan/Term Loan Notes
E-2 -- Revolving Notes
Exhibit F -- Form of Notice of Borrowing
Exhibit G -- Form of Notice of Conversion/Continuation
Exhibit H -- Pro Forma Balance Sheets
Exhibit I -- List of Closing Documents
Exhibit J -- Form of Intercompany Note
Exhibit K -- Form of Notice Regarding Leasing Affiliate
Liabilities
Exhibit L -- Form of Officer's Certificate to Accompany Reports
Exhibit M -- Form of Letter to Accountants
Exhibit N -- Form of Off-Premises Inventory Report
SCHEDULES
Schedule 1.01.1 -- Aircraft Parts Lease Agreements
Schedule 1.01.2 -- Certain Account Debtors and Foreign
Jurisdictions
Schedule 1.01.3 -- Permitted Parent Indebtedness
Schedule 1.01.4 -- Permitted Equity Securities Options
Schedule 1.01.5 -- Permitted Existing Accommodation
Obligations
Schedule 1.01.6 -- Permitted Existing Indebtedness
Schedule 1.01.7 -- Permitted Existing Investments
Schedule 1.01.8 -- Permitted Existing Liens
Schedule 1.01.9 -- Special Purpose Subsidiary Requirements
Schedule 2.01-C -- 1996 Assignments & Adjustments
Schedule 3.03 -- Letters of Credit Outstanding on Effective
Date
Schedule 7.01-A -- Organizational Documents
Schedule 7.01-C -- Organizational Structure
Schedule 7.01-E -- Governmental Consents
Schedule 7.01-R -- Environmental Matters
Schedule 7.01-S -- ERISA Matters
Schedule 7.01-Y -- Insurance
Schedule 9.07 -- Hedge Agreement
Schedule 10.15 -- Collection Accounts
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amended and Restated Credit Agreement dated as of August
22, 1997 (as amended, supplemented or modified from time to time, the
"Agreement") is entered into among Aviation Sales Operating Company, a Delaware
corporation (the "Borrower"), Aviation Sales Company, a Delaware corporation
(the "Parent"), the institutions from time to time a party hereto as Lenders,
whether by execution of this Agreement or an Assignment and Acceptance, the
institutions from time to time a party hereto as Issuing Banks, whether by
execution of this Agreement or an Assignment and Acceptance, Citicorp
Securities, Inc., a Delaware corporation, in its capacity as arranger, and
Citicorp USA, Inc., a Delaware corporation, in its capacity as agent for the
Lenders and the Issuing Banks hereunder (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower entered into that certain Amended and Restated
Credit Agreement dated as of June 26, 1996, as amended, with Citicorp USA, Inc.,
as agent, Citicorp USA, Inc., National City Commercial Finance, Inc., Congress
Financial Corporation, The Sumitomo Bank, Limited, and Xxxxxx Financial, Inc. as
lenders, and Citibank, N.A., as issuing bank, pursuant to which 1996 Credit
Agreement the aforesaid lenders and issuing bank have made certain extensions of
credit and other financial accommodations to or for the benefit of the Borrower;
WHEREAS, the Borrower is desirous of distributing the Capital Stock of
Aviation Sales Leasing Company, a Delaware corporation and wholly-owned
Subsidiary of the Borrower, to Parent, facilitating the acquisition by Aviation
Sales Leasing Company of certain Persons engaged in the business of leasing
aircraft and aircraft parts to expand its leasing business, and increasing the
Revolving Credit Commitments; and
WHEREAS, in view of the foregoing, the Borrower has requested that the
1996 Credit Agreement be amended and restated and the Agent, Lenders and Issuing
Bank have agreed thereto and the Parent has agreed to become a party to this
Agreement for the purpose of making certain covenants hereunder;
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
1.01. CERTAIN DEFINED TERMS. The following terms used in this Agreement
shall have the following meanings, applicable both to the singular and the
plural forms of the terms defined:
"ACCOMMODATION OBLIGATION" means any Contractual Obligation, contingent
or otherwise, of one Person with respect to any Indebtedness, obligation or
liability of another, if the primary purpose or intent thereof by the Person
incurring the Accommodation Obligation is to provide assurance to the obligee of
such Indebtedness, obligation or liability of another that such Indebtedness,
obligation or liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders thereof will be
protected (in whole or in part) against loss in respect thereof including,
without limitation, direct and indirect guarantees, endorsements (except for
collection or deposit in the ordinary course of busi ness), notes co-made or
discounted, recourse agreements, take-or-pay agreements, keep-well agreements,
agreements to purchase or repurchase such Indebtedness, obligation or liability
or any security therefor or to provide funds for the payment or dis charge
thereof, agreements to maintain solvency, assets, level of income, or other
financial condition, and agreements to make payment other than for value
received. The amount of any Accom modation Obligation shall be equal to the
amount of the Indebtedness, obligation or liability so guaranteed or otherwise
supported; PROVIDED, that (i) if the liability of the Person extending such
guaranty or support is limited with respect thereto to an amount less than the
Indebtedness, obligation or liability guaranteed or supported, or is limited to
recourse against a particular asset or assets of such Person, the amount of the
corresponding Accommodation Obligation shall be limited (in the case of a
guaranty or other support limited by amount) to such lesser amount or (in the
case of a guaranty or other support limited by recourse to a particular asset or
assets) to the higher of the Fair Market Value of such asset or assets at the
date for determination of the amount of the Accommodation Obliga tion or the
value at which such asset or assets would, in con formity with GAAP, be
reflected on or valued for the purposes of preparing a consolidated balance
sheet of such Person as at such determination date; and (ii) if any obligation
or liability is guaranteed or otherwise supported jointly and severally by a
Person and others, then the amount of the obligation or liability of such Person
with respect to such guaranty or other support to be included in the amount of
such Person's Accommodation Obligation shall be the whole principal amount so
guaranteed or otherwise supported.
"ACQUISITION LOAN AVAILABILITY" is defined in SECTION 2.03(a).
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"ACQUISITION LOAN NOTES" means promissory notes executed by Borrower
and delivered to the Revolving Lenders evidencing the Loans made under the
Acquisition Subfacility, as the same may be amended, supplemented, modified or
restated from time to time, and any promissory note issued in substitution
therefor, substantially in the form attached hereto as EXHIBIT X- 0; and
"ACQUISITION LOAN NOTE" means any one of the Acquisition Loan Notes.
"ACQUISITION SUBFACILITY" means a subfacility of the Revolving Credit
Commitments in an aggregate amount of $30,000,000 available for Loans to be made
in connection with Permitted Acquisitions; PROVIDED THAT, at no time, may the
amount of the Loans outstanding under the Acquisition Subfacility PLUS the
amount of the Revolving Loans exceed the Revolving Credit Commitments.
"ACQUISITION SUBFACILITY TERMINATION DATE" means the earlier to occur
of (i) August 21, 1999, (ii) the date on which Loans made under the Acquisition
Subfacility equal $30,000,000, or (iii) the Revolving Credit Termination Date.
"AFFILIATE", as applied to any Person, means any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means (i) the possession, directly or
indirectly, of the power to vote ten percent (10.0%) or more of the Securities
having voting power for the election of directors of such Person or otherwise to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting Securities or by contract or otherwise,
or (ii) the ownership of (a) a general partnership interest or (b) a limited
partnership interest representing ten percent (10.0%) or more of the outstanding
limited partnership interests of a Person.
"AGENT" means Citicorp and each successor agent appointed pursuant to
the terms of ARTICLE XIII of this Agreement.
"AGENT ADVANCE" is defined in SECTION 2.02(C)(I)(B).
"AGREEMENT" is defined in the preamble hereto.
"AIRCRAFT PARTS LEASE AGREEMENT" means an agreement between Borrower,
as lessor, and a Person which is not an Affiliate of the Borrower, as lessee,
pursuant to which Inventory of the Borrower is leased to such Person and
includes, as of the Effective Date, those agreements identified on SCHEDULE
1.01.1 attached hereto.
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"APPRAISALS" means those certain appraisals of Inventory and Equipment
of the Borrower prepared by MB Valuation, Inc. for the Agent and the Lenders
dated July 2, 1997.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance in
substantially the form of EXHIBIT A attached hereto and made a part hereof (with
blanks appropriately completed) delivered to the Agent in connection with an
assignment of a Lender's interest under this Agreement in accordance with the
provisions of SECTION 15.01.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
xx.xx. 101 ET SEQ.), as amended from time to time, and any successor statute.
"BASE EURODOLLAR RATE" means, with respect to any Eurodollar Interest
Period applicable to a Borrowing of Eurodollar Rate Loans, the rate per annum at
which deposits in Dollars are offered by the principal office of Citibank in
London, England to major banks in the London interbank market at approximately
11:00 a.m. (London time) on the Eurodollar Interest Rate Determination Date for
such Eurodollar Interest Period for a period equal to such Eurodollar Interest
Period in an amount substantially equal to the amount of the Eurodollar Rate
Loan to be outstanding to Citicorp for such Eurodollar Interest Period.
"BASE RATE" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall at all
times be equal to the highest of:
(i) the rate of interest announced publicly by
Citibank in New York, New York from time to time, as Citibank's base
rate; and
(ii) the sum (adjusted to the nearest one-quarter of one
percent (0.25%) or, if there is no nearest one-quarter of one percent
(0.25%), to the next higher one-quarter of one percent (0.25%)) of (A)
one-half of one percent (0.50%) per annum PLUS (B) the rate per annum
obtained by dividing (I) the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average (adjusted to the basis of a year
of 360 days) being determined weekly on each Monday (or, if such day is
not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday (or, if such day is not
a Business Day, on the next preceding Business Day) by Citibank on the
basis of such rates reported by certificate of deposit dealers to, and
published by, the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from
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three (3) New York certificate of deposit dealers of recognized
standing selected by Citibank, by (II) a percentage equal to 100% minus
the average of the daily percentages specified during such three-week
period by the Federal Reserve Board (or any successor) for determining
the maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank in respect of liabilities which consist of or which include
(among other liabilities) three-month Dollar nonpersonal time deposits
in the United States PLUS (C) the average during such three-week period
of the annual assessment rates estimated by Citibank for determin ing
the then current annual assessment payable by Citibank to the Federal
Deposit Insurance Corporation (or any successor) for insuring Dollar
deposits of Citibank in the United States; and
(iii) the sum of (A) one-half of one percent (0.50%) per annum
PLUS (B) the Federal Funds Rate in effect from time to time during such
period.
"BASE RATE LOANS" means all Loans which bear interest at a rate
determined by reference to the Base Rate and Base Rate Margin as provided in
SECTION 5.01(a).
"BASE RATE MARGIN" means, as of any date of determination, a per annum
rate equal to the rate set forth below opposite the then applicable Performance
Level set forth below:
PERFORMANCE LEVEL BASE RATE MARGIN
----------------- ----------------
1 0.00%
2 0.25%
3 0.50%
4 0.75%
5 1.00%
6 1.25%
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan or Foreign Employee Benefit Plan) in
respect of which the Borrower or any ERISA Affiliate is, or within the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"BORROWER" is defined in the preamble of this Agreement.
"BORROWING" means a borrowing consisting of Loans of the same type
made, continued or converted on the same day.
"BORROWING BASE" means, as of any date of determina tion, an amount
equal to the sum of (i) seventy-five percent
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(75%) of the face amount of Eligible Receivables (net of maximum discounts,
allowances, retainage and any other amounts deferred with respect thereto), PLUS
(ii) the lesser of (a) up to the respective percentages of the value of Eligible
Inventory included in Inventory Asset Group A, Inventory Asset Group B, and
Inventory Asset Group C, in each case as set forth on the Borrowing Base
Certificate or (b) seventy percent (70%) of the appraised value of Eligible
Inventory included in Inventory Asset Group A, Inventory Asset Group B, and
Inventory Asset Group C, in each case as set forth in appraisals prepared in
form and substance and by appraisers satisfactory to the Requisite Lenders on an
orderly liquidation basis consistent with that methodology used in preparation
of the Appraisals. For purposes of this definition, Eligible Receivables and
Eligible Inventory, in each case and as of any date of determination, shall be
determined after deduction of all Eligibility Reserves then effective with
respect to such items and the value referenced in CLAUSE (ii)(a) shall be
determined on the bases described in the Borrowing Base Certificate as reflected
on the books and records of the Borrower. In each instance, the amounts
described hereinabove shall be designated as such on the Borrowing Base
Certificate dated as of such date of determination.
"BORROWING BASE CERTIFICATE" means a certificate, in substantially the
form of EXHIBIT B attached hereto and made a part hereof, setting forth Eligible
Receivables, Eligible Inventory (including classifications, quantities,
valuations and condition of the Eligible Inventory and the respective advance
percentages with respect thereto), and the calculation of the resultant
Borrowing Base, in each instance, as of the date of such certificate.
"BUSINESS ACTIVITY REPORT" means (A) a Notice of Business Activities
Report from the State of New Jersey Division of Taxation or (B) a Minnesota
Business Activity Report from the Minnesota Department of Revenue.
"BUSINESS DAY" means a day, in the applicable local time, which is not
a Saturday or Sunday or a legal holiday and on which banks are not required or
permitted by law or other govern mental action to close (i) in New York, New
York and (ii) in the case of Letter of Credit transactions for a particular
Issuing Bank, in the place where its office for issuance or administra tion of
the pertinent Letter of Credit is located and (iii) in the case of Eurodollar
Rate Loans, in London, England.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether payable in cash or other Property or accrued as a
liability (but without duplication)) during such period that, in conformity with
GAAP, are required to be included in or reflected by the Parent's or any of its
Subsid iaries' fixed asset accounts as reflected in any of their respective
balance sheets; PROVIDED, HOWEVER, (i) Capital
6
Expenditures shall include, whether or not such a designation would be in
conformity with GAAP, (A) expenditures for the purchase or development of
computer software and systems, (B) that portion of Capital Leases which is
capitalized on the consolidated balance sheet of the Parent and its Subsidiaries
and (C) expenditures for Equipment which is purchased simultaneously with the
trade-in of existing Equipment owned by the Parent or any of its Subsidiaries,
to the extent the gross purchase price of the purchased Equipment exceeds the
book value of the Equipment being traded in at such time; and (ii) Capital
Expenditures shall exclude, whether or not such a designation would be in
conformity with GAAP, (A) expenditures made in con nection with the replacement
or restoration of Property, to the extent reimbursed or financed from insurance
or condemnation proceeds not constituting Net Cash Proceeds of Sale and (B)
expenditures for leased Inventory.
"CAPITAL LEASE" means any lease of any property (whether real, personal
or mixed) by a Person as lessee which, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of that Person.
"CAPITAL STOCK" means, with respect to any Person, any capital stock of
such Person, regardless of class or designation, and all warrants, options,
purchase rights, conversion or ex change rights, voting rights, calls or claims
of any character with respect thereto.
"CASH COLLATERAL" means cash or Cash Equivalents held by the Agent, any
of the Issuing Banks or any of the Lenders as security for the Obligations.
"CASH COLLATERAL ACCOUNT" means an interest bearing account at
Citibank's offices in New York, New York designated by the Agent into which Cash
Collateral shall be deposited. The Cash Collateral Account shall be under the
sole dominion and control of the Agent, PROVIDED THAT all amounts deposited
therein shall be held by the Agent for the benefit of the Holders and shall be
subject to the terms of SECTION 12.03.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; and (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances,
commercial paper, and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Rating Group, a
division of XxXxxx-Xxxx, Inc., or P-1 (or better) by Xxxxx'x Investors Services,
Inc.; PROVIDED, THAT (x) the
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maturities of such Cash Equivalents shall not exceed one year and (y) such Cash
Equivalents shall be maintained in investment and other accounts of the Agent at
Citibank or accounts at other investment banks or financial institutions
acceptable to the Agent and pledged to the Agent as part of the Collateral.
"CASH INTEREST EXPENSE" means, for any Person for any period, total
interest expense, whether paid or accrued, but without duplication, (including
the interest component of Capital Leases but net of the difference between
payments received by such Person and its Subsidiaries on all Hedge Agreements
and payments made by such Person and its Subsidiaries on all Hedge Agreements
other than the initial payments made to enter into such Hedge Agreements) of
such Person and its Subsidiaries, which is payable in cash, all as determined in
conformity with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. xx.xx. 9601 ET SEQ., any amendments
thereto, any successor statutes, and any regulations promulgated thereunder.
"CHANGE OF CONTROL" means (i) with respect to the Parent, the
occurrence of a change in more than fifty percent (50%) of those members of the
Board of Directors of the Parent who are members of such Board of Directors on
the Effective Date, (ii) with respect to the Borrower, (a) the occurrence of a
change in more than fifty percent (50%) of those members of the Board of
Directors of the Borrower who are members of such Board of Directors on the
Effective Date or (b) the Parent ceasing to own and retain voting control of all
issued and outstanding Capital Stock of the Borrower, and (iii) with respect to
Leasing Affiliate, the Parent ceasing to own and retain voting control of all
issued and outstanding Capital Stock of Leasing Affiliate, in the case of any of
(i), (ii), or (iii), without the prior written consent of the Lenders, which
consent shall not be unreasonably withheld.
"CITIBANK" means Citibank, N.A., a national banking association.
"CITICORP" means Citicorp USA, Inc., a Delaware corporation.
"CLAIM" means any claim or demand, by any Person, of whatsoever kind or
nature for any alleged Liabilities and Costs, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"COLLATERAL" means all Property and interests in Prop erty now owned or
hereafter acquired by the Borrower or any Guarantor upon which a Lien is granted
under any of the Loan Documents.
8
"COLLECTION ACCOUNT" means each lock-box and blocked depository account
maintained by the Borrower or any Guarantor subject to a Collection Account
Agreement for the collection of Receivables and other proceeds of Collateral.
"COLLECTION ACCOUNT AGREEMENT" means a written agreement, substantially
in the form attached hereto as EXHIBIT C with such modifications as the Agent,
from time to time, deems acceptable, among the Borrower or a Guarantor, the
Agent, and, as applicable, each of the banks at which the Borrower or a
Guarantor maintains a Collection Account.
"COMMERCIAL LETTER OF CREDIT" means any documentary letter of credit
issued by an Issuing Bank pursuant to SECTION 3.01 for the account of the
Borrower or for the account of any of the Borrower's Subsidiaries or Leasing
Affiliate if the Borrower is jointly and severally liable for reimbursement of
amounts drawn under such letter of credit, which is drawable upon presentation
of documents evidencing the sale or shipment of goods purchased by the Borrower,
such Subsidiary or Leasing Affiliate in the ordinary course of its business.
"COMMISSION" means the Securities and Exchange Commission and any
Person succeeding to the functions thereof.
"COMPLIANCE CERTIFICATE" is defined in SECTION 8.01(d).
"CONCENTRATION ACCOUNT" means the depository account maintained at
Citibank in New York, New York, or such other financial institution designated
for such purpose by the Agent into which collections of Receivables, other
proceeds of Collateral and other amounts are transferred pursuant to the terms
of the Collection Account Agreements or otherwise as described in SECTION 4.04.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, radioactive materials, asbestos (in any form or condition),
polychlorinated biphenyls (PCBs), or any constituent of any such substance or
waste, and includes, but is not limited to, these terms as defined in federal,
state or local laws or regulations.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, security agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument to which that Person is a party or by which it or any of
its properties is bound, or to which it or any of its properties is subject.
"CURE LOANS" is defined in SECTION 4.02(b)(v)(C).
9
"CUSTOMARY PERMITTED LIENS" means
(i) Liens (other than Environmental Liens and Liens in favor
of the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(iii) Liens (other than any Lien in favor of the PBGC)
incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed
money), surety, appeal and performance bonds; PROVIDED that (A) all
such Liens do not in the aggregate materially detract from the value of
the Borrower's or any of its Subsidiaries' assets or Property or
materially impair the use thereof in the operation of their respective
businesses, and (B) all Liens of attachment or judgment and Liens
securing bonds to stay judgments or in connection with appeals do not
secure at any time an aggregate amount exceeding $500,000; and
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of Real Property which do not interfere with
the ordinary conduct of the business of the Borrower or any of its
Subsidiaries.
"DESIGNATED PREPAYMENT" means each mandatory prepayment required by
CLAUSES (I) and (III) of SECTION 4.01(b).
"DISTRIBUTION" means Aviation Sales Bearings Company, a Delaware
corporation and wholly-owned Subsidiary of the Borrower.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
10
"DOLLARS" and "$" mean the lawful money of the United States.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, such
Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrower and the Agent.
"EBITDA" means, for any Person for any period, the amount calculated,
without duplication, for such period as (i) Net Income of such Person, PLUS (ii)
depreciation and amortization expense of such Person and its Subsidiaries, PLUS
(iii) other non-cash expenses of such Person and its Subsidiaries identified to
the Agent, PLUS (iv) Cash Interest Expense of such Person, PLUS (v) federal,
state, and local income taxes deducted from Net Income of such Person in
accordance with GAAP, PLUS (vi) extraordinary losses (and any unusual losses
arising in or outside of the ordinary course of business of such Person and its
Subsidiaries not included in extraordinary losses determined in accordance with
GAAP) which have been included in the determination of Net Income of such Person
MINUS extraordinary gains of such Person and its Subsidiaries, including,
without limitation, any unusual gains arising in or outside of the ordinary
course of business of such Person and its Subsidiaries not included in
extraordinary gains determined in accordance with GAAP which have been included
in the determination of Net Income of such Person.
"EFFECTIVE DATE" is defined in SECTION 6.01.
"ELIGIBILITY RESERVES" means, as of three (3) Business Days after the
date of written notice of any determination thereof to the Borrower by the
Agent, or to the Borrower and the Agent by the Requisite Revolving Lenders, such
amounts as the Agent, or the Requisite Revolving Lenders, as the case may be, in
the exercise of its or their reasonable credit judgment, may from time to time
establish against the gross amounts of Eligible Inventory to reflect material
changes in risks or contingencies arising after the Effective Date which may
affect such items.
"ELIGIBLE ASSIGNEE" means (i) a Lender or any Affiliate thereof; (ii) a
commercial bank having total assets in excess of $2,500,000,000; (iii) the
central bank of any country which is a member of the Organization for Economic
Cooperation and Development; or (iv) a finance company, insurance company, other
financial institution or fund, acceptable to the Agent, which is regularly
engaged in making, purchasing or investing in loans and having total assets in
excess of $300,000,000, and (v) in the cases of Persons described in CLAUSES
(ii) through (iv) above, are consented to by the Borrower, which consent shall
not be
11
unreasonably withheld or delayed (and shall not be required upon the occurrence
and during the continuance of an Event of Default).
"ELIGIBLE INVENTORY" means, as of the date of determination therefor,
all Inventory of the Borrower consisting of commercial aircraft spare parts
which, when scheduled to the Agent on a Borrowing Base Certificate and at all
times thereafter, is included in Inventory Asset Group A, Inventory Asset Group
B, or Inventory Asset Group C, is in the required quantity and in the required
condition as set forth on such Borrowing Base Certificate, and is (i) not Leased
Inventory and is located at Borrower's owned or leased warehouses in the United
States or is (ii) Leased Inventory and:
(a) is stored and maintained in an identifiable, segregated
area disclosed to the Agent in the United States or in a location with
respect to which Borrower has obtained a Hedge Agreement with respect
to the sovereign risk associated with such location on terms
satisfactory to the Agent;
(b) is subject to a first priority perfected Lien in
favor of the Agent for the benefit of the Holders and no
other Liens; and
(c) with respect to which the Agent has obtained a landlord
waiver satisfactory to the Agent or consignee/bailee agreement as
described in SECTION 9.14, if stored and maintained on leased premises
or under a consignment or bailment agreement.
In any event, Eligible Inventory shall not consist of:
(1) goods in transit; or
(2) goods held on consignment or any similar arrangement,
including, without limitation, goods held by the Borrower but owned by
a customer of the Borrower; or
(3) goods (A) with respect to which the Agent does not have a
perfected security interest senior in priority to any other or (B)
which are subject to a Lien in favor of a landlord or bailee; or
(4) goods located on premises with respect to which the Agent
has not received a landlord's waiver, bailee agreement, or consignee
agreement in form and substance satisfactory to the Agent (and
substantially in the applicable form attached as part of EXHIBIT D)
within the time required by the terms of this Agreement.
12
"ELIGIBLE RECEIVABLES" means each Receivable of the Borrower and
Distribution which, when scheduled to the Agent and at all times thereafter, is
not of any of the following types:
(i) it is due or unpaid more than ninety (90) days after the
date of the original invoice issued by the Borrower or Distribution
with respect to the sale giving rise thereto; or
(ii) it arises out of (a) a sale not made in the ordinary
course of the Borrower's or Distribution's business or (b) a sale to a
Person which is an Affiliate of the Borrower or controlled by an
Affiliate of the Borrower; or
(iii) it fails to meet or violates any warranty,
representation or covenant contained in this Agreement or any of the
other Loan Documents relating directly or indirectly to the Receivables
of the Borrower or Distribution; or
(iv) the account debtor (a) is also the Borrower's or
Distribution's supplier or creditor and the Receivable is or may become
subject to any right of setoff by the account debtor, and such account
debtor has not entered into an agreement with the Agent with respect to
the waiver of rights of setoff which is in form and substance
satisfactory to the Agent, or (b) has disputed liability with respect
to such Receivable, or made any claim with respect to any other
Receivable due from such account debtor to the Borrower or
Distribution, in which cases the Receivable shall be ineligible to the
extent of (I) such setoff with respect to which an agreement as
described in CLAUSE (A) above is not in effect, (II) such dispute or
(III) such claim; or
(v) the account debtor has filed a petition for bankruptcy or
any other petition for relief under the Bankruptcy Code or any similar
statute (unless the account debtor is a debtor-in-possession in a
Chapter 11 case and has available debtor-in-possession financing from
sources and under terms reasonably acceptable to the Agent and the
Receivable is entitled to priority under Section 507 of the Bankruptcy
Code as an administrative expense allowed under Section 503(b) of the
Bankruptcy Code), made an assignment for the benefit of creditors, or
if any petition or other application for relief under the Bankruptcy
Code or any similar statute has been filed against the account debtor,
or if the account debtor has failed, suspended its business operations,
become insolvent, suffered a
13
receiver or a trustee to be appointed for any of its assets or
affairs; or
(vi) the sale is to an account debtor outside the United
States, unless (a) the account debtor's obligations (or that portion of
such obligations which is acceptable to the Agent) with respect to such
sale is secured by a letter of credit, guaranty or eligible bankers'
acceptance having terms, and from such issuers and confirmation banks,
as are acceptable to the Agent or (b) such account debtor is identified
on SCHEDULE 1.01.2 or otherwise acceptable to the Agent as confirmed to
the Borrower in writing or (c) such account debtor is located in a
foreign jurisdiction identified on SCHEDULE 1.01.2 or otherwise
acceptable to the Agent as confirmed to the Borrower in writing; or
(vii) the sale is on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, or any other repurchase
or return basis; or
(viii) the Agent believes, in the exercise of its reasonable
credit judgment, or the Requisite Revolving Lenders believe, in the
exercise of their reasonable credit judgment, that collection of such
Receivable is insecure or that such Receivable may not be paid by
reason of the account debtor's financial inability to pay; or
(ix) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower or
Distribution, as applicable, assigns its right to payment of such
Receivable to the Agent pursuant to the Assignment of Claims Act of
1940, as amended, (31 U.S.C. ss. 3727); or
(x) the Inventory of the Borrower or Distribution, the sale of
which has given rise to such Receivable, has not been shipped and
delivered to the account debtor by the Borrower or Distribution, as
applicable, and accepted by the account debtor or the services, the
performance of which has given rise to such Receivable, have not been
performed by the Borrower or Distribution, as applicable, and accepted
by the account debtor; or
(xi) the Receivable(s) of the respective account debtor
exceed(s) a credit limit determined by the Agent, in the exercise of
its reasonable credit judgment, or determined by the Requisite
Revolving Lenders, in the exercise of their reasonable credit judgment,
or determined by the Requisite Revolving
14
Lenders, in the exercise of their reasonable credit judgment, at any
time or times hereafter, in which case such Receivable(s) shall be
ineligible to the extent such Receivable(s) exceed(s) such limit; or
(xii) the Agent does not have a senior, perfected security
interest in such Receivable or such Receivable is subject to a Lien
which is not permitted under SECTION 10.03; or
(xiii) the account debtor is located in the state of New
Jersey or Minnesota and the Borrower or Distribution, as applicable,
has not filed and maintained effective (unless exempt from the
requirements for filing) a current Business Activity Report with the
appropriate Governmental Authority in the states of Minnesota and/or
New Jersey, as applicable; or
(xiv) it is owing by an account debtor for which fifty percent
(50%) or more of the Receivables owing by such account debtor to the
Borrower are due or unpaid more than ninety (90) days after the date of
the original invoices issued by the Borrower or Distribution with
respect to the sales giving rise thereto.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to any federal, state or local law,
ordinance, rule, regulation, Permit, license or other binding determination of
any Governmental Authority relating to, imposing liability or standards
concerning, or otherwise addressing, the environment, health and/or safety,
including, but not limited to the Clean Air Act, the Clean Water Act, CERCLA,
RCRA, any so-called "Superfund" or "Superlien" law, the Toxic Substances Control
Act, OSHA, and applicable public health codes, each as from time to time in
effect.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental, Health or Safety
Requirement of Law, or (ii) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACTS" means any applicable Requirement
of Law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the transfer, sale, lease or closure of any Property or
deed or title for any Property for environmental reasons, including, but not
limited to, any so-called "Industrial Site Recovery Acts" or "Responsible
Property Transfer Acts".
15
"EQUIPMENT" means, with respect to any Person, all of such Person's
present and future (i) equipment, including, without limitation, machinery,
manufacturing, distribution, selling, data processing and office equipment,
assembly systems, tools, molds, dies, fixtures, appliances, furniture,
furnishings, vehicles, vessels, aircraft, aircraft engines, and trade fixtures,
(ii) other tangible personal property (other than such Person's Inventory), and
(iii) any and all accessions, parts and appurtenances attached to any of the
foregoing or used in connection therewith, and any substitutions therefor and
replacements, products and proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C. xx.xx. 1000 ET SEQ., any amendments thereto, any successor statutes, and
any regulations or guidance promulgated thereunder.
"ERISA AFFILIATE" means (i) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Internal Revenue Code) as the Borrower; (ii) a partnership or other trade or
business (whether or not incorporated) which is under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Borrower; and
(iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Internal Revenue Code) as the Borrower, any corporation
described in CLAUSE (I) above or any partnership or trade or business described
in CLAUSE (II) above.
"EURODOLLAR AFFILIATE" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under the
heading "Eurodollar Affiliate" on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such Affiliate of a
Lender as it may from time to time specify by written notice to the Borrower and
the Agent.
"EURODOLLAR INTEREST PAYMENT DATE" means (i) with respect to any
Eurodollar Rate Loan, the last day of each Eurodollar Interest Period applicable
to such Loan and (ii) with respect to any Eurodollar Interest Period in excess
of three (3) calendar months, the last day of each three (3) calendar month
interval during such Eurodollar Interest Period.
"EURODOLLAR INTEREST PERIOD" is defined in SECTION 5.03 (b).
"EURODOLLAR INTEREST RATE DETERMINATION DATE" is defined in SECTION
5.03(c).
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the
office or offices of such Lender (if any) set forth below such Lender's name
under the heading "Eurodollar Lending
16
Office" on the signature pages hereof or on the Assignment and Acceptance by
which it became a Lender or such office or offices of such Lender as it may from
time to time specify by written notice to the Borrower and the Agent.
"EURODOLLAR RATE" means, with respect to any Eurodollar Interest Period
applicable to a Eurodollar Rate Loan, an interest rate per annum obtained by
dividing (i) the Base Eurodollar Rate applicable to that Eurodollar Interest
Period by (ii) a percentage equal to 100% MINUS the Eurodollar Reserve
Percentage in effect on the relevant Eurodollar Interest Rate Determination
Date.
"EURODOLLAR RATE LOANS" means those Loans which bear interest at a rate
determined by reference to the Eurodollar Rate and the Eurodollar Rate Margin as
provided in SECTION 5.01(a).
"EURODOLLAR RATE MARGIN" means, as of any date of determination, a per
annum rate equal to the rate set forth below opposite the then applicable
Performance Level set forth below:
PERFORMANCE LEVEL EURODOLLAR RATE MARGIN
----------------- ----------------------
1 1.50%
2 1.75%
3 2.00%
4 2.25%
5 2.50%
6 2.75%
"EURODOLLAR RESERVE PERCENTAGE" means, for any day, that percentage
which is in effect on such day, as prescribed by the Federal Reserve Board for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York, New York with deposits exceeding Five
Billion Dollars ($5,000,000,000) in respect of "Eurocurrency Liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Rate Loans is determined or
any category of extensions of credit or other assets which includes loans by a
non-United States office of any bank to United States residents.
"EVENT OF DEFAULT" means any of the occurrences set forth in SECTION
12.01 after the expiration of any applicable grace period, as expressly provided
in SECTION 12.01.
"FAIR MARKET VALUE" means, with respect to any asset, the value of the
consideration obtainable in a sale of such asset in the open market, assuming a
sale by a willing seller to a willing purchaser dealing at arm's length and
arranged in an
17
orderly manner over a reasonable period of time, each having reasonable
knowledge of the nature and characteristics of such asset, neither being under
any compulsion to act, and, if in excess of $250,000, as determined in an
appraisal of such asset, PROVIDED THAT for purposes of SECTION 10.02 such
appraisal was performed relatively contemporaneously with such sale by an
independent third party appraiser and the basic assumptions underlying such
appraisal have not materially changed since the date thereof.
"FEDERAL FUNDS RATE" means, for any period, a fluctu ating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day in New York, New York, for the next preceding
Business Day) in New York, New York by the Federal Reserve Bank of New York, or
if such rate is not so published for any day which is a Business Day in New
York, New York, the average of the quotations for such day on such transactions
received by the Agent from three federal funds brokers of recog nized standing
selected by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any Governmental Authority succeed ing to its functions.
"FEE LETTER" means that certain fee letter addressed to Citicorp
Securities, Inc. from the Borrower dated August 22, 1997.
"FINANCE AFFILIATE" means Aviation Sales Finance Company, a Delaware
corporation and wholly-owned Subsidiary of the Parent.
"FINANCE AFFILIATE INDEBTEDNESS" means Indebtedness of the Borrower
owing to Finance Affiliate under that certain promissory note dated June 26,
1996 in the principal amount of $48,592,500 and that certain promissory note
dated July 26, 1996 in the principal amount of $7,288,875.
"FINANCIAL STATEMENTS" means (i) statements of income and retained
earnings, statements of cash flow, and balance sheets, (ii) such other financial
statements as the Parent and/or and its Subsidiaries shall routinely and
regularly prepare and (iii) such other financial statements as the Agent or the
Requisite Lenders may from time to time reasonably specify.
"FISCAL YEAR" means the fiscal year of the Parent and its Subsidiaries
for accounting and tax purposes, which shall be the 52-week period ending on the
last Saturday of each calendar year.
18
"FIXED CHARGE COVERAGE RATIO" means, for any Person for any period, the
ratio of (a) the amount calculated as (i) EBITDA of such Person MINUS (ii) all
taxes paid in cash during such period by such Person and its Subsidiaries MINUS
(iii) the aggregate amount of Capital Expenditures made in cash during such
period by such Person and its Subsidiaries to (b) the sum of (i) the aggregate
amount of interest paid in cash on Indebtedness of such Person and its
Subsidiaries during such period (net of amounts under Hedge Agreements and
interest income, in each case actually received, without duplication) PLUS (ii)
the aggregate amount of scheduled payments of principal of Funded Debt of such
Person during such period.
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as
defined in Section 3(3) of ERISA which is main tained or contributed to for the
benefit of the employees of the Borrower, any of its Subsidiaries, or any of its
ERISA Affiliates and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
"FOREIGN SUBSIDIARY" means any Subsidiary of the Borrower which is
domiciled outside of the United States of America and its states, districts and
possessions.
"FRONTING FEE" is defined in SECTION 5.02(a).
"FUNDED DEBT" means, with respect to any Person, Indebtedness of such
Person and its Subsidiaries for borrowed money (determined in accordance with
GAAP), including, without limitation, Indebtedness under Capital Leases.
"FUNDING DATE" means, with respect to any Loan, the date of funding of
such Loan.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the American Institute of Certified Public
Accountants' Accounting Principles Board and Financial Accounting Standards
Board or in such other statements by such other entity as may be in general use
by significant segments of the accounting profession as in effect on the date
hereof (unless otherwise specified herein as in effect on another date or
dates).
"GENERAL INTANGIBLES" means, with respect to any Person, all of such
Person's present and future (i) general intangibles, (ii) rights, interests,
choses in action, causes of action, claims and other intangible property of
every kind and nature (other than Receivables), (iii) corporate and other
business records, (iv) loans, royalties, and other obligations receivable, (v)
trademarks, registered trademarks, trademark applications, service marks,
registered service marks, service xxxx applications, patents, registered
patents, patent applications, trade names, rights of use of any name, labels,
fictitious names, inventions, designs, trade secrets, computer
19
programs, software, printouts and other computer materials, goodwill,
registrations, copyrights, copyright applications, permits, licenses,
franchises, customer lists, credit files, correspondence, and advertising
materials, (vi) customer and supplier contracts, firm sale orders, rights under
license and franchise agreements, rights under tax sharing agreements, and other
contracts and contract rights, (vii) interests in partnerships and joint
ventures, (viii) tax refunds and tax refund claims, (ix) right, title and
interest under leases, subleases, licenses and concessions and other agreements
relating to property, (x) deposit accounts (general or special) with any bank or
other financial institution, (xi) credits with and other claims against third
parties (including carriers and shippers), (xii) rights to indemnification and
with respect to support and keep-well agreements, (xiii) reversionary interests
in pension and profit sharing plans and reversionary, beneficial and residual
interests in trusts, (xiv) proceeds of insurance of which such Person is
beneficiary, (xv) letters of credit, guarantees, Liens, security interests and
other security held by or granted to such Person, (xvi) uncertificated
securities, and (xvii) dividends and distributions and claims with respect to
dividends and distributions.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political sub division thereof and any entity exercising
executive, legisla tive, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTOR" means any of the Parent, Finance Affiliate, Leasing
Affiliate, and each Subsidiary of the Borrower or Parent which is not a Foreign
Subsidiary.
"HEDGE AGREEMENT" means any agreement, including, without limitation,
interest rate exchange, swap, collar or cap agreement, interest rate future or
option contract, currency swap agreement, currency future or option contract,
and other similar agreement, evidencing an agreement or arrangement intended to
protect against fluctuation in interest rates and/or foreign exchange rates,
conversion rates for conversion of foreign currencies to Dollars, or inability
of any foreign Person to transfer Dollars to a Person in the United States.
"HOLDER" means any Person entitled to enforce any of the Obligations,
whether or not such Person holds any evidence of Indebtedness, including,
without limitation, the Agent, each Lender and each Issuing Bank.
"INDEBTEDNESS", as applied to any Person, means, at any time, without
duplication, (a) all indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any accrued interest, fees
and
20
charges relating thereto, (ii) under profit payment agreements or in respect of
obligations to redeem, repurchase or exchange any Securities of such Person or
to pay dividends in respect of any stock, (iii) with respect to letters of
credit issued for such Person's account, (iv) to pay the deferred purchase price
of property or services, except accounts payable and accrued expenses arising in
the ordinary course of business, (v) in respect of Capital Leases, (vi) which
are Accommodation Obligations or (vii) under warranties and indemnities; (b) all
indebtedness, obligations or other liabilities of such Person or others secured
by a Lien on any property of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by such Person, all as of such time; (c)
all indebtedness, obligations or other liabilities of such Person in respect of
Hedge Agreements, net of liabilities owed to such Person by the counterparties
thereon; (d) all preferred stock subject (upon the occurrence of any contingency
or otherwise) to mandatory redemp tion; (e) all ERISA obligations currently due
and payable; and (f) all contingent Contractual Obligations with respect to any
of the foregoing.
"INDEMNIFIED MATTERS" is defined in SECTION 15.03.
"INDEMNITEES" is defined in SECTION 15.03.
"INTEREST COVERAGE RATIO" means, for any period, the ratio of (i) the
Borrower's EBITDA to (ii) the Borrower's Cash Interest Expense.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any successor
statute and any regulations or guidance promulgated thereunder.
"INVENTORY" means, with respect to any Person, all of such Person's
present and future (i) inventory, (ii) goods, merchandise and other personal
property furnished or to be furnished under any contract of service or intended
for sale or lease, and all consigned goods and all other items which have
previously constituted Equipment of such Person but are then currently being
held for sale or lease in the ordinary course of such Person's business, (iii)
raw materials, work-in-process and finished goods, (iv) materials and supplies
of any kind, nature or description used or consumed in such Person's business or
in connection with the manufacture, production, packing, shipping, advertising,
finishing or sale of any of the property described in CLAUSES (I) through (III)
above, (v) goods in which such Person has a joint or other interest or right of
any kind (including, without limitation, goods in which such Person has an
interest or right as consignee), and (vi) goods which are returned to or
repossessed by such Person; in each case whether in the possession of such
Person, a bailee, a consignee, or any other Person for sale, storage, transit,
processing, use or
21
otherwise, and any and all documents for or relating to any of
the foregoing.
"INVENTORY ASSET GROUP A" means a classification of Borrower's
Inventory including those aircraft spare parts (identified by full and complete
part number) of which there has been a sale of at least a quantity of one (1) in
the two, three, four or more year period immediately preceding the date of
designation of such Inventory as such on a given Borrowing Base Certificate and
of which there remains a quantity of at least one (1) in Borrower's Inventory.
"INVENTORY ASSET GROUP B" means a classification of Borrower's
Inventory including aircraft spare parts for use on a Stage 3 Aircraft or engine
but which are not part of Inventory Asset Group A.
"INVENTORY ASSET GROUP C" means a classification of Borrower's
Inventory including those aircraft spare parts which have either a quoted sales
value greater than $25,000 per unit or no quoted activity but a catalog value
greater than $50,000 per unit and which are not part of Inventory Asset Group A
or Inventory Asset Group B.
"INVESTMENT" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person, (ii) any purchase by that Person of all
or substantially all of the assets of a business conducted by another Person,
and (iii) any loan, advance (other than deposits with financial institu tions
available for withdrawal on demand, prepaid expenses, accounts receivable,
advances to employees and similar items made or incurred in the ordinary course
of business) or capital contribution by that Person to any other Person,
including all Indebtedness to such Person arising from a sale of property by
such Person other than in the ordinary course of its business. The amount of any
Investment shall be the original cost of such Investment, plus the cost of all
additions thereto less the amount of any return of capital or principal to the
extent such return is in cash with respect to such Investment without any
adjustments for increases or decreases in value or write-ups, write-downs or
write-offs with respect to such Investment.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"ISSUING BANKS" means Citibank and each Lender designated as an
"Issuing Bank" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became a Lender and each other Lender
approved by the Agent and the Borrower who has agreed to become an Issuing Bank
for the purpose of issuing Letters of Credit pursuant to SECTION 3.01.
22
"LEASED INVENTORY" means Inventory of the Borrower which is subject to
an Aircraft Parts Lease Agreement.
"LEASING AFFILIATE" means Aviation Sales Leasing Company, a Delaware
corporation and, from and after the consummation of the Leasing Transfer, a
wholly-owned Subsidiary of the Parent.
"LEASING AFFILIATE GUARANTY" means that certain Amended and Restated
Guaranty dated as of the Effective Date executed and delivered by Leasing
Affiliate, as a Guarantor.
"LEASING AFFILIATE LIABILITIES" means, as of the date of determination
thereof, an amount equal to the sum of (i) the principal amount of intercompany
loans and advances made by the Borrower to Leasing Affiliate and outstanding as
of such date of determination PLUS (ii) the amount of Letter of Credit
Obligations as of such date of determination attributable to Letters of Credit
issued or requested for the account of Leasing Affiliate PLUS (iii) the amount
of Accommodation Obligations of the Borrower as of such date of determination
with respect to Indebtedness of Leasing Affiliate PLUS (iv) the unpaid sale
price of Inventory of the Borrower sold or otherwise transferred to Leasing
Affiliate or a Subsidiary of Leasing Affiliate determined at the value
attributed to such Inventory after application of the advance rates applicable
thereto on the then most recent Borrowing Base Certificate.
"LEASING TRANSFER" means the distribution of 100% of the issued and
outstanding Capital Stock of Leasing Affiliate by Borrower to Parent effective
on the Effective Date.
"LENDER" means, as of the Effective Date, each financial institution
which is a signatory hereto as a Lender and, at any other given time, each
financial institution which is a party hereto as a Lender, whether as a
signatory hereto or pursuant to an Assignment and Acceptance.
"LENDER AFFILIATE" means any financial institution that directly or
indirectly controls or is controlled by or is under common control with a
Lender.
"LETTER OF CREDIT" means any Commercial Letter of Credit or Standby
Letter of Credit.
"LETTER OF CREDIT FEE" is defined in SECTION 5.02(a).
"LETTER OF CREDIT OBLIGATIONS" means, at any particular time, the sum
of (i) all outstanding Reimbursement Obligations, PLUS (ii) the aggregate
undrawn face amount of all outstanding Letters of Credit, PLUS (iii) the
aggregate face amount of all Letters of Credit requested by the Borrower but not
yet issued (unless the request for an unissued Letter of Credit has been
23
denied by the designated Issuing Bank as referenced in SECTION 3.01(c)(i)).
"LETTER OF CREDIT REIMBURSEMENT AGREEMENT" means, with respect to a
Letter of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken together) as
the Issuing Bank from which the Letter of Credit is requested may employ in the
ordinary course of business for its own account, with such modifications thereto
as may be agreed upon by the Issuing Bank and the Borrower and as are not
materially adverse (in the judgment of the Issuing Bank and Agent) to the
interests of the Lenders; PROVIDED, HOWEVER, in the event of any conflict
between the terms of any Letter of Credit Reimbursement Agreement and this
Agreement, the terms of this Agreement shall control.
"LIABILITIES AND COSTS" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive damages,
economic damages, consequential damages, treble damages, intentional, willful or
wanton injury, damage or threat to the environment, natural resources or public
health or welfare, costs and expenses (including, without limitation, attorney,
expert and consulting fees and costs and fees and costs associated with any
investigation, feasibility or Remedial Action studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale or other title retention agreement, deposit
arrangement, security interest, encumbrance (including, without limitation,
easements, rights-of-way, zoning restrictions and the like), lien (statutory or
other and including, without limitation, any Environmental Lien), preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever in respect of any property of a Person, whether granted
voluntarily or imposed by law, and includes the interest of a lessor under a
Capital Lease or under any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement or similar notice (other than a financing statement filed by a "true"
lessor pursuant to ss. 9-408 of the Uniform Commercial Code), naming the owner
of such property as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
"LOAN ACCOUNT" is defined in SECTION 4.03(b).
"LOAN DOCUMENTS" means this Agreement, the Notes, Hedge Agreements to
which any Lender or any Affiliate of a Lender is a party, and all other
instruments, agreements and written Contractual Obligations between any
Guarantor, the Borrower or any of its Subsidiaries and any of the Agent, any
Lender or any
24
Issuing Bank delivered to either the Agent, such Lender or such Issuing Bank
pursuant to or in connection with the transactions contemplated hereby.
"LOANS" means all Term Loans, Revolving Loans, and Loans made under the
Acquisition Subfacility.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation U and Regulation G.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (i) the
financial condition, operations, assets or prospects of the Borrower or the
Borrower and the Guarantors taken as a whole, (ii) the ability of the Borrower
or any Guarantor to perform its respective obligations under the Loan Documents,
or (iii) the ability of the Lenders, the Issuing Banks or the Agent to enforce
any of the Loan Documents.
"MAXIMUM REVOLVING CREDIT AMOUNT" means, at any particular time, the
amount equal to the lesser of (i) the sum of (a) the Revolving Credit
Commitments at such time PLUS (b) the outstanding principal balance of the Term
Loans at such time, MINUS the sum of (c) the Term Loan Reserve at such time PLUS
(d) the Texas Tax Reserve at such time, if such Texas Tax Reserve exceeds
$200,000, and (ii) the Borrowing Base at such time MINUS the sum of (a) the Term
Loan Reserve at such time PLUS (b) the Texas Tax Reserve at such time, if such
Texas Tax Reserve exceeds $200,000.
"MIS" means computerized management information system for recording
and maintenance of information regarding purchases, sales, aging,
categorization, and locations of Inventory, creation and aging of Receivables,
and accounts payable (including agings thereof).
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA (other than a Foreign Employee Benefit Plan) which is, or
within the immediately preceding six (6) years was, contributed to by either the
Borrower or any ERISA Affiliate or in respect of which the Borrower or any ERISA
Affiliate has assumed any liability.
"NET CASH PROCEEDS OF ISSUANCE OF EQUITY SECURITIES OR INDEBTEDNESS"
means net cash proceeds (including cash, equivalents readily convertible into
cash, and such proceeds of any notes received as consideration or any other
non-cash consideration) received by the Parent, the Borrower, any of the
Borrower's Subsidiaries, or Finance Affiliate at any time after the Effective
Date on account of the issuance of (i) equity Securities of the Parent, (ii)
equity Securities of the Borrower or Finance Affiliate to any Person other than
the Parent, (iii) equity Securities of any Subsidiary of the Borrower to any
Person other than the Borrower, (iv) Indebtedness (other than
25
Indebtedness permitted under SECTION 10.01) of the Borrower or any of its
Subsidiaries, or (v) Indebtedness (other than Indebtedness described on SCHEDULE
1.01.3 attached hereto and made a part hereof) of the Parent, in each case net
of all transaction costs and underwriters' discounts with respect thereto.
Notwithstanding the foregoing, such net cash proceeds received by the Parent on
account of the issuance of equity Securities of the Parent and the issuance of
Indebtedness of the Parent which are used by the Parent to pay cash
consideration to consummate a Permitted Parent Acquisition or to make a capital
contribution to either Leasing Affiliate or the Borrower within one hundred
eighty (180) days after Parent's receipt of such net cash proceeds shall not be
included in the definition of "Net Cash Proceeds of Issuance of Equity
Securities or Indebtedness".
"NET CASH PROCEEDS OF SALE" means (i) proceeds received by the
Borrower, any of its Subsidiaries, or Finance Affiliate in cash (including cash,
equivalents readily convertible into cash, and such proceeds of any notes
received as consideration or any other non-cash consideration) from the sale,
assignment or other disposition of (but not the lease or license of) any
Property, other than sales permitted under CLAUSES (b), (c)(ii)(a), and (d) of
SECTION 10.02, net of (A) the costs of sale, assignment or other disposition,
(B) any income, franchise, transfer or other tax liability arising from such
transaction and (C) amounts applied to the repayment of Indebtedness (other than
the Obligations) secured by a Lien permitted by SECTION 10.03 on the asset
disposed of, if such net proceeds arise from any individual sale, assignment or
other disposition or from any group of related sales, assignments or other
dispositions; and (ii) to the extent provided in SECTION 9.08, proceeds of
insurance on account of the loss of or damage to any such Property or
Properties, and payments of compensation for any such Property or Properties
taken by condemnation or eminent domain.
"NET INCOME" means, for any Person for any period, the net earnings (or
loss) after taxes of such Person and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in conformity
with GAAP.
"1994 CREDIT AGREEMENT" means that certain Credit Agreement dated as of
December 2, 1994 among ASC Acquisition Partners, L.P., Citicorp USA, Inc.,
Citicorp Securities, Inc., Citibank, N.A., Sanwa Business Credit Corporation,
Congress Financial Corporation, and Ryoshin Leasing (USA) Inc., as amended.
"1996 CREDIT AGREEMENT" means that certain Amended and Restated Credit
Agreement dated as of June 26, 1996 among the Borrower, Citicorp USA, Inc., as
agent, Citibank, N.A., as issuing bank, and certain financial institutions a
party thereto as lenders, as amended.
26
"NON PRO RATA LOAN" is defined in SECTION 4.02(b)(v).
"NOTE" means a promissory note in the form attached hereto as EXHIBIT E
payable to a Lender, evidencing certain of the Obligations of the Borrower to
such Lender and executed by the Borrower as required by SECTION 4.03(a), as the
same may be amended, supplemented, modified or restated from time to time;
"NOTES" means, collectively, all of such Notes outstanding at any given time.
"NOTICE OF BORROWING" means a notice substantially in the form of
EXHIBIT F attached hereto and made a part hereof.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of EXHIBIT G attached hereto and made a part hereof.
"OBLIGATIONS" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Agent, any
Lender, any Issuing Bank, any Affiliate of the Agent, any Lender or any Issuing
Bank, or any Person entitled to indemnification pursuant to SECTION 15.03 of
this Agreement, of any kind or nature, present or future, arising under this
Agreement, the Notes or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by reason of an extension of credit, opening or amendment of a
Letter of Credit or payment of any draft drawn thereunder, loan, guaranty,
indemnification, foreign exchange contract, Hedge Agreement or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired. The term includes, without limitation, all interest,
charges, expenses, fees, attorneys' fees and disbursements and any other sum
chargeable to the Borrower under this Agreement or any other Loan Document.
"OFFICER'S CERTIFICATE" means a certificate executed on behalf of
Borrower by its president, chief financial officer, or treasurer.
"OPERATING LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which is not
a Capital Lease.
"ORGANIZATIONAL DOCUMENTS" means, with respect to any corporation,
limited liability company, or partnership (i) the articles/certificate of
incorporation (or the equivalent organizational documents) of such corporation
or limited liability company, (ii) the partnership agreement executed by the
partners in the partnership, (iii) the by-laws (or the equivalent governing
documents) of the corporation, limited liability company or partnership, and
(iv) any document setting forth the
27
designation, amount and/or relative rights, limitations and preferences of any
class or series of such corporation's Capital Stock or such limited liability
company's or partnership's equity or ownership interests.
"OSHA" means the Occupational Safety and Health Act of 1970, 29 U.S.C.
xx.xx. 651 ET SEQ., any amendments thereto, any successor statutes and any
regulations or guidance promulgated thereunder.
"PARENT" means Aviation Sales Company, a Delaware corporation, and
owner of all outstanding Capital Stock of Borrower, Finance Affiliate and, from
and after the consummation of the Leasing Transfer, Leasing Affiliate.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"PERFORMANCE LEVEL 1" means that level of financial performance of the
Borrower and its Subsidiaries, on a consolidated basis, measured as of the end
of a fiscal quarter of the Borrower, at which the ratio of Funded Debt of the
Borrower to EBITDA of the Borrower for the then most recently ended four (4)
fiscal quarter period of the Borrower is less than or equal to 1.75 : 1.0.
"PERFORMANCE LEVEL 2" means that level of financial performance of the
Borrower and its Subsidiaries, on a consolidated basis, measured as of the end
of a fiscal quarter of the Borrower, at which the ratio of Funded Debt of the
Borrower to EBITDA of the Borrower for the then most recently ended four (4)
fiscal quarter period of the Borrower is greater than 1.75 : 1.0 and less than
or equal to 2.50 : 1.0.
"PERFORMANCE LEVEL 3" means that level of financial performance of the
Borrower and its Subsidiaries, on a consolidated basis, measured as of the end
of a fiscal quarter of the Borrower, at which the ratio of Funded Debt of the
Borrower to EBITDA of the Borrower for the then most recently ended four (4)
fiscal quarter period of the Borrower is greater than 2.50 : 1.0 and less than
or equal to 3.0 : 1.0.
"PERFORMANCE LEVEL 4" means that level of financial performance of the
Borrower and its Subsidiaries, on a consolidated basis, measured as of the end
of a fiscal quarter of the Borrower, at which the ratio of Funded Debt of the
Borrower to EBITDA of the Borrower for the then most recently ended four (4)
fiscal quarter period of the Borrower is greater than 3.0 : 1.0 and less than or
equal to 4.0 to 1.0.
"PERFORMANCE LEVEL 5" means that level of financial performance of the
Borrower and its Subsidiaries, on a consolidated basis, measured as of the end
of a fiscal quarter of
28
the Borrower, at which the ratio of Funded Debt of the Borrower to EBITDA of the
Borrower for the then most recently ended four (4) fiscal quarter period of the
Borrower is greater than 4.0 to 1.0 and less than or equal to 5.0 to 1.0.
"PERFORMANCE LEVEL 6" means that level of financial performance of the
Borrower and its Subsidiaries, on a consolidated basis, measured as of the end
of a fiscal quarter of the Borrower, at which the ratio of Funded Debt of the
Borrower to EBITDA of the Borrower for the then most recently ended four (4)
fiscal quarter period of the Borrower is greater than 5.0 to 1.0.
"PERMITS" means any permit, approval, authorization license, variance,
or permission required from a Governmental Authority or other Person under an
applicable Requirement of Law.
"PERMITTED ACQUISITION" means any acquisition of the equity Securities,
assets (other than Property acquired in the ordinary course of business) or
operations of any Person domiciled in the United States of America by the
Borrower or merger of any such Person with and into the Borrower (with the
Borrower being the surviving corporation) or with a direct Subsidiary of the
Borrower, other than a Foreign Subsidiary, using proceeds of Loans made under
the Acquisition Subfacility or Net Cash Proceeds of Issuance of Equity
Securities or Indebtedness (to the extent permissible under SECTION
4.01(b)(iii)) to pay the purchase price therefor and related fees and expenses;
PROVIDED THAT such acquisition is made at a time when, after giving effect to
such acquisition and the related financing thereof:
(i) no Event of Default or Potential Event of Default exists or would
occur;
(ii) on an historical, PRO FORMA consolidated basis giving effect to
the acquisition for the twelve (12) consecutive months immediately
preceding the acquisition closing date neither the ratio of Funded Debt
of the Borrower to EBITDA of the Borrower shall exceed 4.0 : 1.0 nor
the ratio of Funded Debt of the Parent to EBITDA of the Parent shall
exceed 6.0 : 1.0;
(iii) the Person which is the subject of such acquisition shall be
engaged in the business of manufacture, repair or distribution of
aircraft spare parts, related engineering or inventory management
services, aircraft parts leasing, or other similar business activities
that are complimentary to Borrower's business as of the Effective Date;
(iv) no equity Securities of the Borrower, Finance Affiliate, Leasing
Affiliate, or any Subsidiary of the
29
Borrower or Finance Affiliate shall comprise any part of the
acquisition purchase price or related fees and expenses;
(v) in the event of an acquisition of equity Securities of a Person, a
merger in which the acquired Person is the surviving corporation, or
the formation of a Person for the purpose of consummating an
acquisition, such Person shall become a Guarantor upon consummation of
such equity Securities acquisition, merger, or formation and xxxxx x
Xxxx against substantially all of the assets of such Person to the
Agent for the benefit of the Holders to secure the Obligations and such
guarantee;
(vi) in the event of an acquisition of assets of any Person, no Liens,
other than Liens securing the Obligations and Customary Permitted
Liens, shall exist against the assets acquired;
(vii) in the event of an acquisition of equity Securities of a Person
or formation of a Person for the purpose of consummating an
acquisition, no Liens, other than Liens securing the Obligations, shall
exist against the equity Securities acquired or of the Person so
formed; and
(viii) Borrower shall have delivered to (a) the Agent and all Lenders a
copy of the letter of intent, if executed, promptly following its
execution and (b) the Agent and its counsel such instruments and
documents with respect to such acquisition as they shall reasonably
request by no later than the date of the Notice of Borrowing delivered
in connection with a Borrowing of Loans under the Acquisition
Subfacility requested with respect to such acquisition.
"PERMITTED PARENT ACQUISITION" means
(i) any acquisition of the equity Securities of any Person domiciled in
the United States by the Parent or a direct Subsidiary of the Parent
formed after the Effective Date for the express purpose of consummating
such acquisition and
(ii) any acquisition of the assets or operations of any Person
domiciled in the United States of America by a Subsidiary of a direct
Subsidiary of the Parent formed after the Effective Date for the
express purpose of consummating such acquisition,
in either event, using equity Securities of the Parent, cash proceeds of equity
Securities of the Parent, or cash proceeds of Indebtedness of the Parent to pay
the purchase price therefor and related fees and expenses; PROVIDED THAT such
acquisition is made at a time when, after giving effect to such acquisition and
the related financing thereof:
30
(a) no Event of Default or Potential Event of Default exists or would
occur;
(b) the Person which is the subject of such acquisition shall be
engaged in the business of manufacture, repair or distribution of
aircraft spare parts, related engineering or inventory management
services, aircraft leasing, engine parts leasing, aircraft parts
leasing, or other similar business activities that are complimentary to
Borrower's business as of the Effective Date;
(c) no equity Securities of the Borrower, Finance Affiliate, Leasing
Affiliate, or any Subsidiary of the Borrower or Finance Affiliate shall
comprise any part of the acquisition purchase price or payment of
related fees and expenses;
(d) in the event of an acquisition of equity Securities of a Person or
the formation of a Person as a direct Subsidiary of the Parent for the
purpose of consummating an acquisition by a merger the result of which
is that the Parent would be the holder of equity Securities of the
surviving Person in the merger, such Person the equity Securities of
which are acquired or such newly formed direct Subsidiary of the
Parent, as applicable, shall become a Guarantor upon consummation of
such equity Securities acquisition or formation and xxxxx x Xxxx
against substantially all of the assets of such Person to the Agent for
the benefit of the Holders to secure the Obligations and such
guarantee;
(e) in the event of an acquisition of equity Securities of a Person or
formation of a Person for the purpose of consummating an acquisition,
no Liens, other than Liens securing the Obligations, shall exist
against the equity Securities acquired or of the Person so formed; and
(f) Borrower shall have delivered to (1) the Agent and all Lenders a
copy of the letter of intent with respect to the subject acquisition,
if executed, promptly following its execution and (2) the Agent and its
counsel a list of closing documents entered into in connection with the
subject acquisition on the closing date for such acquisition and,
promptly after the Agent's request therefor, copies of such instruments
and documents with respect to such acquisition as the Agent shall
reasonably request.
In no event shall an acquisition be deemed a Permitted Parent Acquisition if a
direct Subsidiary of Parent formed or acquired in connection with such
acquisition incurs, or permits to continue after the closing date of such
acquisition, any Indebtedness for which such Subsidiary is or becomes obligated
or if any property or assets of such Subsidiary are subject to any Lien other
than Liens securing the Obligations.
31
"PERMITTED EQUITY SECURITIES OPTIONS" means the subscriptions, options,
warrants, rights, convertible securities and other agreements or commitments
relating to the issuance of equity Securities of the Parent identified as such
on SCHEDULE 1.01.4.
"PERMITTED EXISTING ACCOMMODATION OBLIGATIONS" means those
Accommodation Obligations of the Borrower identified as such on SCHEDULE 1.01.5.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebted ness of the
Borrower and its Subsidiaries identified as such on SCHEDULE 1.01.6.
"PERMITTED EXISTING INVESTMENTS" means those Invest ments of the
Borrower identified as such on SCHEDULE 1.01.7.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.01.8.
"PERSON" means any natural person, corporation, limited liability
company, limited partnership, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity, any other
non-governmental entity, and any Governmental Authority.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA
(other than a Foreign Employee Benefit Plan) in respect of which the Borrower or
any ERISA Affiliate is, or within the immediately preceding six (6) years was,
an "employer" as defined in Section 3(5) of ERISA or the Borrower or any ERISA
Affiliate has assumed any liability.
"POTENTIAL EVENT OF DEFAULT" means an event which, with the giving of
notice or the lapse of time, or both, would consti tute an Event of Default.
"PROCESS AGENT" is defined in SECTION 15.17(a).
"PRO FORMA" means, collectively, the unaudited pro forma opening
consolidated and consolidating balance sheets of the Parent and its Subsidiaries
attached hereto as EXHIBIT H, prepared in accordance with GAAP, dated the
Effective Date, and giving effect to the extensions of credit contemplated
hereby and the Leasing Transfer.
"PROJECTIONS" means the respective consolidated and consolidating
financial projections (including, without limitation, capital expenditure
budget) of (i) the Parent and its Subsidiaries and (ii) the Borrower and its
Subsidiaries, in each
32
instance, together with related assumptions, prepared by the Borrower and dated
as of the Effective Date.
"PROPERTY" means any Real Property or personal prop erty, plant,
building, facility, structure, underground storage tank or unit, Equipment,
Inventory, General Intangible, Receivable, or other asset owned, leased or
operated by the Borrower or any Guarantor, as applicable, (including any surface
water thereon, and soil and groundwater thereunder).
"PRO RATA SHARE" means, with respect to any Lender, the percentage
obtained by dividing (i) the sum of the outstanding principal balance of such
Lender's Term Loan and such Lender's Revolving Credit Commitment (in each case,
as adjusted from time to time in accordance with the provisions of this
Agreement or any Assignment and Acceptance to which such Lender is a party) by
(ii) the aggregate outstanding principal amount of all of the Term Loans and the
Revolving Credit Commitments (notwithstanding the termination of any Revolving
Credit Commitments).
"PROTECTIVE ADVANCE" is defined in SECTION 13.09(a).
"RCRA" means the Resource Conservation and Recovery Act of 1976, 42
U.S.C. /section/ 6901 ET SEQ., any amendments thereto, any successor statutes,
and any regulations promulgated thereunder.
"REAL PROPERTY" means, with respect to any Person, all of such Person's
present and future right, title and interest (including, without limitation, any
leasehold estate) in (i) any plots, pieces or parcels of land, (ii) any
improvements, buildings, structures and fixtures now or hereafter located or
erected thereon or attached thereto of every nature whatsoever (the rights and
interests described in CLAUSES (i) and (ii) above being the "Premises"), (iii)
all easements, rights of way, gores of land or any lands occupied by streets,
ways, alleys, passages, sewer rights, water courses, water rights and powers,
and public places adjoining such land, and any other interests in property
constituting appurtenances to the Premises, or which hereafter shall in any way
belong, relate or be appurtenant thereto, (iv) all hereditaments, gas, oil,
minerals (with the right to extract, sever and remove such gas, oil and
minerals), and easements, of every nature whatsoever, located in or on the
Premises and (v) all other rights and privileges thereunto belonging or
appertaining and all extensions, additions, improvements, betterments, renewals,
substitutions and replace ments to or of any of the rights and interests
described in CLAUSES (iii) and (iv) above.
"RECEIVABLES" means, with respect to any Person, all of such Person's
present and future (i) accounts, (ii) contract rights, chattel paper,
instruments, documents, deposit accounts, and other rights to payment of any
kind, whether or not arising out of or in connection with the sale or lease of
goods or the
33
rendering of services, and whether or not earned by performance, (iii) any of
the foregoing which are not evidenced by instruments or chattel paper, (iv)
intercompany receivables, and any security documents executed in connection
therewith, (v) proceeds of any letters of credit or insurance policies on which
such Person is named as beneficiary, (vi) claims against third parties for
advances and other financial accommodations and any other obligations whatsoever
owing to such Person, (vii) rights in and to all security agreements, leases,
guarantees, instruments, securities, documents of title and other contracts
securing, evidencing, supporting or otherwise relating to any of the foregoing,
together with all rights in any goods, merchandise or Inventory which any of the
foregoing may represent, and (viii) rights in returned and repossessed goods,
merchandise and Inventory which any of the same may represent, including,
without limitation, any right of stoppage in transit.
"REGISTER" is defined in SECTION 15.01(c).
"REGULATION A" means Regulation A of the Federal Reserve Board as in
effect from time to time.
"REGULATION G" means Regulation G of the Federal Reserve Board as in
effect from time to time.
"REGULATION T" means Regulation T of the Federal Reserve Board as in
effect from time to time.
"REGULATION U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"REGULATION X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"REIMBURSEMENT DATE" is defined in SECTION 3.01(d)(i)(a).
"REIMBURSEMENT OBLIGATIONS" means the aggregate non-contingent
reimbursement or repayment obligations of the Borrower with respect to amounts
drawn under Letters of Credit.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, dumping, injection, deposit, disposal, abandonment, or discarding of
barrels, containers or other receptacles, discharge, emptying, escape,
dispersal, leaching or migration into the indoor or outdoor environment or into
or out of any Property, including the movement of Contaminants through or in the
air, soil, surface water, groundwater or Property.
"REMEDIAL ACTION" means actions required to (i) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(ii) prevent the Release or threat of Release or minimize the further Release of
Contaminants; or
34
(iii) investigate and determine if a remedial response is needed and to design
such a response and post-remedial investigation, monitoring, operation and
maintenance and care.
"REPLACEMENT PROCEEDS" means the amount of (i) proceeds of insurance
paid on account of the loss of or damage to any Property and awards of
compensation for Property taken by condemnation or eminent domain to the extent
actually used to replace, rebuild or restore the Property so lost, damaged or
taken, PROVIDED THAT (a) Borrower shall have delivered written notice to the
Agent that it or its applicable Subsidiary intends to so replace, rebuild or
restore such Property and (b) the Borrower or such applicable Subsidiary of the
Borrower replaces or commences the restoration or rebuilding of such Property
within 180 days after the Agent's receipt of the proceeds of such insurance
payment or condemnation award and (ii) insurance paid on account of a business
interruption occurrence to the extent actually used in the restoration or
conduct of the business interrupted.
"REPORTABLE EVENT" means any of the events described in Section 4043(b)
of ERISA and the regulations promulgated thereunder as in effect from time to
time other than an event for which the thirty (30) day notice requirement has
been waived by the PBGC.
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws
or other organizational or governing docu ments of such Person, and any law,
rule or regulation, or deter mination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations G, T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or Permit or any Environmental, Health or
Safety Requirement of Law.
"REQUISITE LENDERS" means Lenders whose Pro Rata Shares, in the
aggregate, are greater than fifty percent (50%); PROVIDED, HOWEVER, that, in the
event any of the Revolving Lenders shall have failed to fund its Revolving Loan
Pro Rata Share of any Revolving Loan requested by the Borrower which Revolving
Lenders are obligated to fund under the terms of this Agreement and any such
failure has not been cured, then for so long as such failure continues,
"REQUISITE LENDERS" means Lenders (excluding all Revolving Lenders whose failure
to fund their respective Revolving Loan Pro Rata Shares of such Revolving Loans
have not been so cured) whose Pro Rata Shares represent more than fifty percent
(50%) of the aggregate Pro Rata Shares of such Lenders; PROVIDED, FURTHER,
HOWEVER, that, in the event that the
35
Revolving Credit Commitments have been terminated pursuant to the terms of this
Agreement, "REQUISITE LENDERS" means Lenders (without regard to such Lenders'
performance of their respective obligations hereunder) whose aggregate ratable
shares (stated as a percentage) of the aggregate outstanding principal balance
of all Loans are greater than fifty percent (50%).
"REQUISITE REVOLVING LENDERS" means Revolving Lenders whose Revolving
Loan Pro Rata Shares, in the aggregate, are greater than fifty percent (50%);
PROVIDED, HOWEVER, that, in the event any of the Revolving Lenders shall have
failed to fund its Revolving Loan Pro Rata Share of any Revolving Loan requested
by the Borrower which Revolving Lenders are obligated to fund under the terms of
this Agreement and any such failure has not been cured, then for so long as such
failure continues, "REQUISITE REVOLVING LENDERS" means Revolving Lenders
(excluding all Revolving Lenders whose failure to fund their respective
Revolving Loan Pro Rata Shares of such Revolving Loans have not been so cured)
whose Revolving Loans represent more than fifty percent (50%) of the aggregate
Revolving Loan Pro Rata Shares of such Revolving Lenders; PROVIDED, FURTHER,
HOWEVER, that, in the event that the Revolving Credit Commitments have been
terminated pursuant to the terms of this Agreement, "REQUISITE REVOLVING
LENDERS" means Revolving Lenders (without regard to such Revolving Lenders'
performance of their respective obligations hereunder) whose aggregate ratable
shares (stated as a percentage) of the aggregate outstanding principal balance
of all Revolving Loans are greater than fifty percent (50%).
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any equity Securities of the
Borrower or any of its Subsidiaries now or hereafter outstanding, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Securities of the Borrower or
any of its Subsidiaries now or hereafter outstanding, (iii) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to,
the Finance Affiliate Indebtedness or any other Indebtedness owing at any time
to any Affiliate of the Borrower, (iv) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire equity Securities of the Borrower or any of
its Subsidiaries now or hereafter outstanding, and (v) any fees or other
remuneration paid to Parent, Finance Affiliate, or any Subsidiary of the
Borrower by the Borrower or any Guarantor.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the
amount by which the Maximum Revolving Credit Amount at such time exceeds the sum
of (i) the Revolving Credit Obligations at such time PLUS (ii) the outstanding
balance of
36
Protective Advances at such time PLUS (iii) the Loans which have been made, as
of such time, under the Acquisition Subfacility.
"REVOLVING CREDIT COMMITMENT" means, with respect to any Revolving
Lender, the obligation of such Lender to make Revolving Loans and Loans under
the Acquisition Subfacility and to participate in Letters of Credit pursuant to
the terms and conditions of this Agreement, in an aggregate amount at any time
outstanding which shall not exceed the principal amount set forth on the
signature page of this Agreement signed by such Lender next to "Revolving Credit
Commitment" thereon or on the signature page of the Assignment and Acceptance by
which it became a Lender, as modified from time to time pursuant to the terms of
this Agreement, or to give effect to any applicable Assignment and Acceptance,
and "REVOLVING CREDIT COMMITMENTS" means the aggregate principal amount of the
Revolving Credit Commitments of all the Revolving Lenders, the maximum amount of
which shall be $106,428,571.40, as reduced from time to time pursuant to SECTION
4.01.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum
of (i) the outstanding principal amount of the Revolving Loans at such time,
PLUS (ii) the Letter of Credit Obligations at such time.
"REVOLVING CREDIT TERMINATION DATE" means the earlier to occur of (i)
July 31, 2002 (or, if not a Business Day, the next preceding Business Day) and
(ii) the date of termination of the Revolving Credit Commitments pursuant to the
terms of this Agreement.
"REVOLVING LENDERS" means those Lenders having a Revolving Credit
Commitment; and "REVOLVING LENDER" means one of the Revolving Lenders,
individually.
"REVOLVING LOAN" is defined in SECTION 2.02(a)(II).
"REVOLVING LOAN PRO RATA SHARE" means, with respect to any Revolving
Lender, the percentage obtained by dividing (i) the amount of such Revolving
Lender's Revolving Credit Commitment (as adjusted from time to time in
accordance with the provisions of this Agreement or any Assignment and
Acceptance to which such Revolving Lender is a party) by (ii) the aggregate
amount of the Revolving Credit Commitments (notwithstanding the termination of
such Revolving Credit Commitments).
"REVOLVING NOTES" means promissory notes executed by Borrower and
delivered to the Revolving Lenders evidencing the Revolving Loans, as the same
may be amended, supplemented, modified or restated from time to time, and any
promissory note issued in substitution therefor, substantially in the form
attached hereto as EXHIBIT E-2; and "REVOLVING NOTE" means any one of the
Revolving Notes.
37
"SECURITIES" means any stock, shares, voting trust certificates,
limited partnership certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities", including, without
limitation, any "security" as such term is defined in Section 8-102 of the
Uniform Commercial Code, or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include the Notes or any other evidence of the
Obligations.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"SOLVENT", when used with respect to any Person, means that at the time
of determination:
(i) the Fair Market Value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"SPECIAL PURPOSE SUBSIDIARY" means a Subsidiary of Leasing Affiliate
formed for the sole purpose of leasing Inventory of such Subsidiary and which
conforms to all of the criteria set forth on SCHEDULE 1.01.9.
"STAGE 3 AIRCRAFT" means aircraft which is in compliance with the Stage
3 noise levels prescribed in Section C36.5(a)(3) of Appendix C of Part 36 of
Title 14 of the Code of Federal Regulations.
"STANDBY LETTER OF CREDIT" means any letter of credit issued by an
Issuing Bank pursuant to SECTION 3.01 for the account of the Borrower, or for
the account of Leasing Affiliate or any Subsidiary of the Borrower if the
Borrower is jointly and
38
severally liable for reimbursement of amounts drawn under such letter of credit,
which is not a Commercial Letter of Credit.
"SUBSIDIARY" of a Person means any corporation, limited liability
company, general or limited partnership, trust, or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
with respect to such entity are at the time directly or indirectly owned or
controlled by such Person, one or more of the other subsidiaries of such Person
or any combination thereof, or in the case of an entity which is a partnership,
of which such Person is a general partner.
"TANGIBLE NET WORTH" means the amount calculated as (i) the
consolidated net worth of the Borrower and its Subsidiaries MINUS (ii) the
consolidated intangibles of the Borrower and its Subsidiaries, including,
without limitation, goodwill, trademarks, tradenames, copyrights, patents,
patent applications, licenses and rights in any thereof and other items treated
as intangibles in accordance with GAAP.
"TAXES" is defined in SECTION 14.01(a).
"TERM LENDER" means each Lender which is the holder of a Term Note;
"TERM LENDERS" means, collectively, all holders of Term Notes.
"TERM LOAN PRO RATA SHARE" means, (i) with respect to any Term Lender,
the percentage obtained by dividing (a) the principal amount of such Term
Lender's Term Loan (as adjusted from time to time in accordance with the
provisions of this Agreement or any Assignment and Acceptance to which such Term
Lender is a party) by (b) the aggregate principal amount of all of the Term
Loans.
"TERM LOAN RESERVE" means, at any time, a reserve in an amount equal to
the sum of (i) the then outstanding balance of the Term Loans and interest
accrued and unpaid thereon PLUS (ii) the then outstanding balance of Loans made
under the Acquisition Subfacility and interest accrued and unpaid thereon.
"TERM LOAN TERMINATION DATE" means the earlier of (i) July 31, 2002 and
(ii) the date of acceleration of the Obligations pursuant to SECTION 12.02.
"TERM LOANS" means the term loans evidenced by the Term Notes, the
aggregate principal amount of which equals $18,571,428.60 on the Effective Date,
as reduced from time to time thereafter pursuant to SECTIONS 2.01(d) or 4.01;
and "TERM LOAN" means any one of the Term Loans evidenced by a Term Note.
39
"TERM NOTES" means promissory notes executed by the Borrower and
delivered to the Term Lenders evidencing the sum of (i) the outstanding
principal balance on the Effective Date of the "Term Loans" made under the 1994
Credit Agreement PLUS (ii) the outstanding principal balance on the Effective
Date of the loans made under the 1996 Credit Agreement and evidenced by the
"Acquisition Loan Notes", as the same may be amended, supplemented, modified or
restated from time to time, and any promissory note issued in substitution
therefor, substantially in the form attached hereto as EXHIBIT E-1; and "TERM
NOTE" means any one of the Term Notes.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which the Borrower or such ERISA Affiliate
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessa tion of operations which results in the termination of employment of 20%
of Benefit Plan participants who are employees of the Borrower or any ERISA
Affiliate; (iii) the imposition of an obli gation on the Borrower or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which could reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Benefit Plan; or (vi) the
partial or complete withdrawal of the Borrower or any ERISA Affiliate from a
Multiemployer Plan.
"TEXAS TAX RESERVE" means, at any time, a reserve in an amount equal to
the taxes payable by Borrower under the statutes of the State of Texas with
respect to which a tax lien attaches to Property of the Borrower located in the
State of Texas pursuant to ss. 32.01 of the Texas Tax Code, which amount shall
be determined by the Borrower as of the date of each Borrowing Base Certificate
and, if in excess of $200,000, disclosed by the Borrower thereon.
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Borrower in connection with the execution and delivery of the Loan Documents and
consummation of the Leasing Transfer.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as enacted
in the State of New York, as it may be amended from time to time.
"UNUSED COMMITMENT FEE" is defined in SECTION 5.02(b)(i).
40
"WORKING CAPITAL" means, as at any date of determina tion, the excess,
if any, of (i) the Borrower's and its Subsidiaries consolidated current assets,
except cash and Cash Equivalents, over (ii) the Borrower's and its Subsidiaries
consolidated current liabilities, except current maturities of long-term debt,
current maturities of the Revolving Credit Obligations, and current maturities
of the Obligations with respect to Loans made under the Acquisition Subfacility
as of such date.
1.02. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, PROVIDED that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03. ACCOUNTING TERMS. Subject to SECTION 15.04, for purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
1.04. FINANCIAL COVENANT CALCULATIONS. Notwithstanding any requirements
under GAAP, calculations made with respect to (a) the definitions of "EBITDA",
"Net Income", "Fixed Charge Coverage Ratio", and "Interest Coverage Ratio" and
(b) determination of compliance with the financial covenants set forth in
ARTICLE XI, unless otherwise agreed as described in SECTION 15.04, each shall be
made without regard to changes in requirements under GAAP which become effective
after the Effective Date.
1.05. OTHER TERMS. All other terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the Uniform Commercial Code to the extent the same are defined therein.
41
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. TERM LOANS. (a) AMOUNT OF TERM LOANS. The principal balance of
"Term Loans" made under the 1994 Credit Agreement and outstanding on the
Effective Date is $14,571,428.60 and the principal balance outstanding on the
Effective Date under the "Acquisition Loan Notes" issued under the 1996 Credit
Agreement is $4,000,000, which "Term Loans" and "Loans" outstanding under such
"Acquisition Loan Notes" shall continue as Term Loans hereunder and, in each
case, shall be subject to and governed by the terms and provisions of this
Agreement and are re-evidenced by the Term Notes; and the "Lenders" under the
1996 Credit Agreement upon their receipt of payment of the amounts referenced in
SECTION 2.01(c) shall be deemed to have made such assignments of their
respective "Term Loans" and "Loans" outstanding under such "Acquisition Loan
Notes" as are required to effect the Term Lenders under this Agreement becoming
the obligees with respect to the Term Loans hereunder in accordance with their
respective Term Loan Pro Rata Shares.
(b) Intentionally omitted.
(c) ALLOCATION OF TERM LOANS. On the Effective Date, each Term Lender
which was not a "Term Lender" under the 1996 Credit Agreement shall deposit an
amount equal to its Term Loan with the Agent at its office in New York, New
York, in immediately available funds. Subject to the fulfillment of the
conditions precedent set forth in SECTION 6.01, the Agent shall make such
amounts received by it available to the "Lenders" under the 1996 Credit
Agreement at the Agent's office in New York, New York on the Effective Date and
shall disburse such proceeds to such "Lenders" under the 1996 Credit Agreement
as are necessary to effect the assignments referenced in SECTION 2.01(a) and
applicable adjustments related thereto as identified on SCHEDULE 2.01-C attached
hereto and made a part hereof. The failure of any such Term Lender to deposit
the amount described above with the Agent on the Effective Date shall not
relieve any other such Term Lender of its obligations hereunder to make its
required deposit with respect to Term Loans on the Effective Date. In the event
the conditions precedent set forth in SECTION 6.01 are not fulfilled or duly
waived as of the Effective Date, the Agent shall promptly return, by wire
transfer of immediately available funds, the amount deposited by each Term
Lender to such Term Lender.
(d) REPAYMENT OF THE TERM LOANS. (i) The Term Loans shall be repayable
in twenty (20) consecutive quarterly installments, the first nineteen (19) of
which shall be in the amount of $928,569.00 each and shall be due on the last
day of each consecutive three calendar month period commencing on October 30,
1997 with a final installment in the amount of
42
$928,617.58 due on July 31, 2002, unless the Term Loan Termination Date earlier
occurs.
(ii) In addition to the scheduled payments on the Term Loans, the
Borrower may make voluntary prepayments as and when described in SECTION
4.01(a)(i) and shall make the mandatory prepayments required in SECTION 4.01(b),
for credit against such scheduled payments on the Term Loans pursuant to the
provisions of SECTION 4.01(a)(ii) or SECTION 4.01(b)(vii), as applicable.
2.02. REVOLVING CREDIT FACILITY. (a) OUTSTANDING BALANCE ON THE
EFFECTIVE DATE; AVAILABILITY. (i) The principal balance of the "Revolving Loans"
made under the 1996 Credit Agreement and outstanding on the Effective Date is
$48,703,759.78 and shall continue as Revolving Loans hereunder and shall be
subject to and governed by the terms and provisions of this Agreement and are
re-evidenced by the Revolving Notes; and the "Revolving Lenders" under the 1996
Credit Agreement, upon their receipt of payment of the amounts referenced on
SCHEDULE 2.01-C shall be deemed to have made such assignments of their
respective "Revolving Loans" as are required to effect the Revolving Lenders
under this Agreement becoming the obligees with respect to the Revolving Loans
hereunder in accordance with their respective Revolving Loan Pro Rata Shares.
(ii) Subject to the terms and conditions set forth in this Agreement,
each Revolving Lender hereby severally and not jointly agrees to make revolving
loans, in Dollars (each individually, a "Revolving Loan" and, collectively, the
"Revolving Loans") to the Borrower from time to time during the period from the
Effective Date to the Business Day next preceding the Revolving Credit
Termination Date, in an amount not to exceed such Revolving Lender's Revolving
Loan Pro Rata Share of the Revolving Credit Availability at such time. All
Revolving Loans comprising the same Borrowing under this Agreement shall be made
by the Revolving Lenders simultaneously and proportionately to their then
respective Revolving Loan Pro Rata Shares, it being understood that no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make a Revolving Loan hereunder nor shall the Revolving Credit
Commitment of any Revolving Lender be increased or decreased as a result of any
such failure. Subject to the provisions of this Agreement, the Borrower may
repay any outstanding Revolving Loan on any day which is a Business Day and any
amounts so repaid may be reborrowed, up to the amount available under this
SECTION 2.02(a) at the time of such Borrowing, through the Business Day next
preceding the Revolving Credit Termination Date; PROVIDED, HOWEVER, the Borrower
shall, without notice or demand of any kind, immediately make such repayments of
the Revolving Loans to the extent necessary to reduce the aggregate outstanding
principal amount of the Revolving Loans to an amount less than or equal to the
difference between the then Maximum Revolving Credit Amount and the Letter of
Credit Obligations as of such time.
43
Each requested Borrowing of Revolving Loans funded on any Funding Date for
Revolving Loans shall be in a principal amount of at least $1,000,000 and in
integral multiples of $100,000 in excess of that amount.
(b) NOTICE OF BORROWING. When the Borrower desires to borrow under this
SECTION 2.02, it shall deliver to the Agent a Notice of Borrowing, signed by it,
(i) no later than 11:00 a.m. (New York time) on the proposed Funding Date, in
the case of a Borrowing of Base Rate Loans, and (ii) no later than 11:00 a.m.
(New York time) at least three (3) Business Days in advance of the proposed
Funding Date therefor, in the case of a Borrowing of Eurodollar Rate Loans. Such
Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be
a Business Day), (ii) the amount of the proposed Borrowing, (iii) the Revolving
Credit Availability as of the date of such Notice of Borrowing, and (iv)
instructions for the disbursement of the proceeds of the proposed Borrowing, and
shall be accompanied by the then most recently delivered Borrowing Base
Certificate duly completed and signed by the Borrower's chief financial officer,
chief executive officer or controller in compliance with SECTION 8.03. In lieu
of delivering such a Notice of Borrowing (except with respect to a Borrowing of
Revolving Loans on the Effective Date), the Borrower may give the Agent
telephonic notice of any proposed Borrowing by the time required under this
SECTION 2.02(b), if the Borrower confirms such notice by delivery of the
required Notice of Borrowing to the Agent by facsimile transmission promptly,
but in no event later than 5:00 p.m. (New York time) on the same day, the
original of which facsimile copy shall be delivered to the Agent within three
(3) days after the date of such transmission. Any Notice of Borrowing (or
telephonic notice in lieu thereof) given pursuant to this SECTION 2.02(b) shall
be irrevocable.
(c) MAKING OF REVOLVING LOANS. (i) Promptly after receipt of a Notice
of Borrowing under SECTION 2.02(b) (or telephonic notice in lieu thereof), the
Agent, at its option and in its sole discretion, shall do either of the
following:
(A) The Agent shall notify each Revolving Lender by telecopy,
or other similar form of transmission, of the proposed Borrowing. Each
Revolving Lender shall deposit an amount equal to its Revolving Loan
Pro Rata Share of the amount requested by the Borrower to be made as
Revolving Loans with the Agent at its office in New York, New York, in
immediately available funds, (A) on the Effective Date with respect to
the Borrowing of Revolving Loans on such date specified in the initial
Notice of Borrowing and (B) not later than 1:00 p.m. (New York time) on
any other Funding Date for Revolving Loans. Subject to the fulfillment
of the conditions precedent set forth in SECTION 6.01 or SECTION 6.02,
as applicable, the Agent shall make the proceeds of such amounts
received by it available to the Borrower at the Agent's office in New
York, New York on such Funding Date
44
(or on the date received if later than such Funding Date) and shall
disburse such proceeds in accordance with the Borrower's disbursement
instructions set forth in the applicable Notice of Borrowing. The
failure of any Revolving Lender to deposit the amount described above
with the Agent on the applicable Funding Date shall not relieve any
other Revolving Lender of its obligations hereunder to make its
Revolving Loan on such Funding Date. In the event the conditions
precedent set forth in SECTION 6.01 or 6.02, as applicable, are not
fulfilled as of the proposed Funding Date for any Borrowing, the Agent
shall promptly return, by wire transfer of immediately available funds,
the amount deposited by each Revolving Lender to such Revolving Lender.
or
(B) Subject to the fulfillment of the conditions precedent set
forth in SECTION 6.01 or SECTION 6.02, as applicable, the Agent shall,
PROVIDED THAT the requested Borrowing is of an amount which is less
than the amount of Citicorp's unused Commitment (after taking into
account all other then outstanding Agent Advances) as of the Funding
Date for such Borrowing, advance the amount of the proposed Borrowing
(an "Agent Advance") to the Borrower out of the Agent's own funds. The
Lenders, upon notice (in the form provided for in CLAUSE (A) above)
from the Agent as to the amount required to do so, shall remit to the
Agent on a weekly or more frequent basis that amount which is necessary
to conform each Lender's Revolving Loans outstanding at such time to
its Revolving Loan Pro Rata Share thereof. Each Lender shall make
available the amount required from it as aforesaid to the Agent in
Dollars and in immediately available funds not later than 1:00 p.m.
(New York time) on the day such notice is given by the Agent. In the
event of the making of any such Agent Advance, each Lender's share of
the interest allocable thereto shall be adjusted as necessary to
account for the period of time the same is outstanding from the Agent.
Any payment by a Lender to the Agent pursuant to this CLAUSE (B) shall
constitute a Revolving Loan to the Borrower and an assignment by
Citicorp of a portion of its Revolving Loans to such Lender equal to
the amount of the payment received by the Agent from such Lender.
(ii) In connection with the funding of Revolving Loans pursuant to
SECTION 2.02(c)(i)(a), unless the Agent shall have been notified by any
Revolving Lender on the Business Day immediately preceding the applicable
Funding Date in respect of any Borrowing of Revolving Loans that such Revolving
Lender does not intend to fund its Revolving Loan requested to be made on such
Funding Date, the Agent may assume that such Revolving Lender has funded its
Revolving Loan and is depositing the proceeds thereof with the Agent on the
Funding Date therefor, and
45
the Agent in its sole discretion may, but shall not be obligated to, disburse a
corresponding amount to the Borrower on the applicable Funding Date. If the
Revolving Loan proceeds corresponding to that amount are advanced to the
Borrower by the Agent but are not in fact deposited with the Agent by such
Revolving Lender on or prior to the applicable Funding Date or a Lender's
Revolving Loan Pro Rata Share of an Agent Advance is not remitted to the Agent
as and when required pursuant to SECTION 2.02(c)(i)(b), the Revolving Lender not
making such deposit or remitting such amount agrees to pay, and in addition the
Borrower agrees to repay, to the Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date such amount
is disbursed to or for the benefit of the Borrower until the date such amount is
paid or repaid to the Agent, (A) in the case of the Borrower, at the interest
rate applicable to such Borrowing and (B) in the case of such Revolving Lender,
at the Federal Funds Rate for the first three (3) Business Days, and thereafter
at the interest rate applicable to such Borrowing. If such Revolving Lender
shall pay to the Agent the corresponding amount, the amount so paid shall
constitute such Revolving Lender's Revolving Loan, and if both such Revolving
Lender and the Borrower shall pay and repay such corresponding amount, the Agent
shall promptly pay to the Borrower such corresponding amount. This SECTION
2.02(c)(ii) does not relieve any Revolving Lender of its obligation to make its
Revolving Loan on any applicable Funding Date as and when required under SECTION
2.02(c)(i)(a) or to remit its Revolving Loan Pro Rata Share of any Agent Advance
as and when required under SECTION 2.02(c)(i)(b).
(d) REVOLVING CREDIT TERMINATION DATE. Unless earlier terminated in
accordance with the provisions of SECTION 4.01, the Revolving Credit Commitments
shall terminate on the Revolving Credit Termination Date. Each Revolving
Lender's obligation to make Revolving Loans shall terminate on the Business Day
next preceding the Revolving Credit Termination Date. All outstanding Revolving
Credit Obligations shall be paid in full (or, in the case of unmatured Letter of
Credit Obligations, provision for payment in cash shall be made to the
satisfaction of the Issuing Banks and the Requisite Revolving Lenders) (i) if
the Revolving Credit Commitments are terminated pursuant to SECTION 4.01, on the
Revolving Credit Termination Date, and (ii) otherwise, on the earlier to occur
of (A) July 31, 2002 or, if not a Business Day, the next preceding Business Day,
and (B) the date of acceleration of the Obligations pursuant to SECTION 12.02.
(e) MAXIMUM REVOLVING CREDIT FACILITY. Notwithstanding anything in this
Agreement to the contrary, in no event shall the aggregate principal Revolving
Credit Obligations exceed the lesser of (i) the Maximum Revolving Credit Amount
and (ii) $106,428,571.40, such amount in CLAUSE (ii) being reduced by the amount
of each permanent reduction of the Revolving Credit Commitments made pursuant to
SECTION 4.01(a) and SECTION 4.01(b).
46
(f) Intentionally omitted.
2.03. LOANS UNDER ACQUISITION SUBFACILITY. (a) AMOUNT. Subject to the
terms and conditions set forth in this Agreement, each Revolving Lender hereby
severally and not jointly agrees to make Loans, in Dollars, to the Borrower from
time to time during the period from the Effective Date to the Business Day next
preceding the Acquisition Subfacility Termination Date in an amount not to
exceed such Revolving Lender's Revolving Loan Pro Rata Share of the lesser of
(i) the undrawn amount of the Acquisition Subfacility and (ii) the Revolving
Credit Commitments then in effect MINUS the Revolving Credit Obligations (such
lesser amount being referred to as the "Acquisition Loan Availability");
PROVIDED THAT, after giving effect to such Loans, the Revolving Credit
Availability is no less than $2,000,000.
(b) NOTICE OF BORROWING. When the Borrower desires to borrow under this
SECTION 2.03, it shall deliver to the Agent a Notice of Borrowing, signed by it,
no later than 11:00 a.m. (New York time) on the fifth (5th) Business Day
immediately preceding the proposed Funding Date. Such Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount of the proposed Borrowing, (iii) the Revolving Credit Availability and
the Acquisition Loan Availability as of the date of such Notice of Borrowing,
and (iv) instructions for disbursement of the proceeds of such proposed
Borrowing. Any Notice of Borrowing given pursuant to this SECTION 2.03(b) shall
be irrevocable unless the Borrower informs the Agent by telecopy or other
writing no later than the proposed Funding Date that the Permitted Acquisition
with respect to which such Notice of Borrowing applies will not or has not
closed on the proposed Funding Date and thereby withdraws such Notice of
Borrowing, in which event Agent shall promptly notify the Revolving Lenders by
telecopy, or other similar form of transmission, of Borrower's withdrawal of
such Notice of Borrowing and, (A) if the Revolving Lenders have not theretofore
deposited their respective Revolving Credit Pro Rata Share of the requested
Loans with the Agent, the Revolving Lenders shall thereupon have no obligation
to make any Loan under such Notice of Borrowing, (B) if the Revolving Lenders
have theretofore deposited their respective Revolving Credit Pro Rata Share of
the requested Loans with the Agent and the Agent has not yet made the requested
Loans available to the Borrower, the Agent shall thereupon return the amount
deposited by each Revolving Lender in connection with such requested Loans to
the respective Revolving Lenders, and (C) if the requested Loans have been
disbursed to the Borrower, the Borrower shall repay such Loans by no later than
the Business Day immediately succeeding the Business Day on which such Loans
were disbursed, whereupon the Acquisition Subfacility shall be deemed undrawn to
the extent of the Loans so repaid. In the event either CLAUSE (B) or CLAUSE (C)
above are applicable, the Borrower shall reimburse the Agent and Lenders for any
expenses incurred by them in connection therewith, shall pay all amounts
chargeable under the provisions
47
of ARTICLE XIV, and shall pay all interest accrued with respect to such Loans at
the rate applicable thereto, (X) in the case of CLAUSE (B), on the Business Day
immediately following the date on which such notice of withdrawal of the related
Notice of Borrowing is delivered and (Y) in the case of CLAUSE (C), on the date
such Loans are due and payable as aforesaid.
(c) MAKING OF LOANS UNDER ACQUISITION SUBFACILITY. (i) Promptly after
receipt of a Notice of Borrowing under SECTION 2.03(b) (or telephonic notice in
lieu thereof), the Agent shall notify each Revolving Lender by telecopy, or
other similar form of transmission, of the proposed Borrowing. Each Revolving
Lender shall deposit an amount equal to its Revolving Loan Pro Rata Share of the
amount requested by the Borrower to be made as Loans under the Acquisition
Subfacility with the Agent at its office in New York, New York, in immediately
available funds not later than 11:00 a.m. (New York time) on the Funding Date
therefor. Subject to the fulfillment of the conditions precedent set forth in
SECTION 6.02 and SECTION 6.03, the Agent shall make the proceeds of such amounts
received by it available to the Borrower at the Agent's office in New York, New
York and shall disburse such proceeds in accordance with the Borrower's
disbursement instructions set forth in the applicable Notice of Borrowing. The
failure of any Revolving Lender to deposit the amount described above with the
Agent on the applicable Funding Date shall not relieve any other Revolving
Lender of its obligations hereunder to make its Loan under the Acquisition
Subfacility on such Funding Date. In the event the conditions precedent set
forth in SECTION 6.02 or SECTION 6.03 are not fulfilled as of the proposed
Funding Date for any such Borrowing, the Agent shall promptly return, by wire
transfer of immediately available funds, the amount deposited by each Revolving
Lender to such Revolving Lender.
(ii) Unless the Agent shall have been notified by any Revolving Lender
on the Business Day immediately preceding the applicable Funding Date in respect
of any Borrowing of Loans under the Acquisition Subfacility that such Revolving
Lender does not intend to fund its Loan under the Acquisition Subfacility
requested to be made on such Funding Date, the Agent may assume that such
Revolving Lender has funded such Loan and is depositing the proceeds thereof
with the Agent on the Funding Date therefor, and the Agent in its sole
discretion may, but shall not be required to, disburse a corresponding amount to
the Borrower on the applicable Funding Date. If the Loan proceeds corresponding
to that amount are advanced to the Borrower by the Agent but are not in fact
deposited with the Agent by such Revolving Lender on or prior to the applicable
Funding Date, such Revolving Lender agrees to pay, and in addition the Borrower
agrees to repay, to the Agent forthwith on demand such corresponding amount,
together with interest thereon, for each day from the date such amount is
disbursed to or for the benefit of the Borrower until the date such amount is
paid or repaid to the Agent, (A) in the case of
48
the Borrower, at the interest rate applicable to such Borrowing and (B) in the
case of such Revolving Lender, at the Federal Funds Rate for the first three (3)
Business Days, and thereafter at the interest rate applicable to such Borrowing.
If such Revolving Lender shall pay to the Agent the corresponding amount, the
amount so paid shall constitute such Revolving Lenders' Loan under the
Acquisition Subfacility, and if both such Revolving Lender and the Borrower
shall pay and repay such corresponding amount, the Agent shall promptly pay to
the Borrower such corresponding amount. This SECTION 2.03(c)(ii) does not
relieve any Revolving Lender of its obligation to make its Loan under the
Acquisition Subfacility on any applicable Funding Date.
(d) ACQUISITION LOAN NOTES; REPAYMENT OF LOANS UNDER ACQUISITION
SUBFACILITY. (i) On the Funding Date for each Loan made under the Acquisition
Subfacility, the Borrower shall execute and deliver to the Agent Acquisition
Loan Notes payable to the respective Revolving Lenders in a principal amount
equal to the respective Revolving Lender's Revolving Loan Pro Rata Share of the
Loans requested to be made on such Funding Date under the Acquisition
Subfacility, which Notes the Agent shall promptly deliver to the respective
Revolving Lenders. On the Funding Date for each such Loan, the Revolving Credit
Commitments shall be permanently reduced by the aggregate principal amount of
all such Loans made on such Funding Date.
(ii) Except as otherwise provided in SECTION 2.03(b)(C), each Loan made
under the Acquisition Subfacility shall be repayable in consecutive equal
quarterly installments, each due on the same dates as the Term Loan installments
are due commencing on the first such installment due date after the Funding Date
for such Loan with a final payment on July 31, 2002, unless the Revolving Loan
Termination Date earlier occurs.
2.04. AUTHORIZED OFFICERS AND AGENTS. On the Effective Date the
Borrower shall deliver, and from time to time thereafter the Borrower may
deliver, to the Agent an Officer's Certificate setting forth the names of the
Borrower's officers, employees and agents authorized to request Loans and
Letters of Credit, in each instance containing a specimen signature of each such
officer, employee or agent. The president of the Borrower shall also be
authorized to act for the Borrower in respect of all other matters relating to
the Loan Documents. The Agent, Lenders and Issuing Banks shall be entitled to
rely conclusively on such officer's, employee's or agent's authority to request
such Loan or Letter of Credit until the Agent, Lenders and Issuing Banks receive
written notice to the contrary. None of the Agent, the Lenders, or the Issuing
Banks shall have any duty to verify the authenticity of the signature appearing
on any such Officer's Certificate, written Notice of Borrowing or any other
document, and, with respect to an oral request for such a Loan or Letter of
Credit, the Agent shall have no duty to verify the identity of any person
representing himself or herself as one of
49
the Borrower's officers, employees or agents authorized to make such request or
otherwise to act on behalf of the Borrower. None of the Agent, any Lender or any
Issuing Bank shall incur any liability to the Borrower or any other Person in
acting upon any telephonic or facsimile notice referred to above which the
Agent, such Lender, or such Issuing Bank believes to have been given by a duly
authorized officer or other person authorized to borrow on behalf of the
Borrower.
2.05. USE OF PROCEEDS OF LOANS. The proceeds of the Loans shall be used
to pay the Transaction Costs, for working capital in the ordinary course of
business of the Borrower and its Subsidiaries, for Permitted Acquisitions, and
for other lawful general corporate purposes of the Borrower and its Subsidiaries
not prohibited by the terms of this Agreement, including, without limitation,
the making of advances to Leasing Affiliate to the extent permitted in SECTION
10.04.
50
ARTICLE III
LETTERS OF CREDIT
3.01. LETTERS OF CREDIT. Subject to the terms and conditions set forth
in this Agreement, each Issuing Bank hereby severally agrees to issue for the
account of the Borrower, or for the account of any of the Borrower's
Subsidiaries or Leasing Affiliate, if the Borrower is jointly and severally
liable for reimbursement of amounts drawn under such Letter of Credit, one or
more Letters of Credit, subject to the following provisions:
(a) TYPES AND AMOUNTS. An Issuing Bank shall not have any obligation to
issue, amend or extend, and shall not issue, amend or extend, any Letter of
Credit at any time:
(i) if the aggregate Letter of Credit Obligations with
respect to such Issuing Bank, after giving effect to the issuance,
amendment or extension of the Letter of Credit requested hereunder,
shall exceed any limit imposed by law or regulation upon such Issuing
Bank;
(ii) if the Issuing Bank receives written notice from the
Agent at or before 11:00 a.m. (New York time) on the date of the
proposed issuance, amendment or extension of such Letter of Credit that
(A) immediately after giving effect to the issuance, amendment or
extension of such Letter of Credit, (I) the Letter of Credit
Obligations at such time would exceed $15,000,000, or (II) the
Revolving Credit Obligations at such time would exceed the Maximum
Revolving Credit Amount at such time, or (B) one or more of the
conditions precedent contained in SECTIONS 6.01 or 6.02, as applicable,
would not on such date be satisfied, unless such conditions are
thereafter satisfied and written notice of such satisfaction is given
to the Issuing Bank by the Agent (it being understood that an Issuing
Bank shall not otherwise be required to determine that, or take notice
whether, the conditions precedent set forth in SECTIONS 6.01 or 6.02,
as applicable, have been satisfied), or (III) with respect to a Letter
of Credit to be issued for the account of Leasing Affiliate, the
Leasing Affiliate Liabilities would exceed $20,000,000;
(iii) if the expiration date therefor is later than the
earlier of (A) the date one (1) year after the date of issuance
(without regard to any automatic renewal provisions thereof) or (B) the
Business Day next preceding the scheduled Revolving Credit Termination
Date; or
51
(iv) if the requested Letter of Credit is in a currency other
than Dollars and Borrower has not obtained a Hedge Agreement with
respect thereto satisfactory to the Agent.
(b) CONDITIONS. In addition to being subject to the satisfaction of the
conditions precedent contained in SECTIONS 6.01 and 6.02, as applicable, the
obligation of an Issuing Bank to issue, amend or extend any Letter of Credit is
subject to the satisfaction in full of the following conditions:
(i) if the Issuing Bank so requests, the Borrower or,
in the case of Letters of Credit issued for the account of any
Subsidiary of the Borrower or Leasing Affiliate, the Borrower and such
Subsidiary or the Borrower and Leasing Affiliate, as applicable, shall
have executed and delivered to such Issuing Bank and the Agent a Letter
of Credit Reimbursement Agreement and such other documents and
materials as may be required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion.
(c) ISSUANCE OF LETTERS OF CREDIT. (i) The Borrower shall give an
Issuing Bank and the Agent written notice that it has selected such Issuing Bank
to issue a Letter of Credit not later than 11:00 a.m. (New York time) on the
third (3rd) Business Day preceding the requested date for issuance thereof under
this Agreement, or such shorter notice as may be acceptable to such Issuing Bank
and the Agent. Such notice shall be irrevocable unless and until such request is
denied by the applicable Issuing Bank and shall specify (A) that the requested
Letter of Credit is either a Commercial Letter of Credit or a Standby Letter of
Credit, (B) that such Letter of Credit is solely for the account of the
Borrower, that such Letter of Credit is for the account of the Borrower and
Leasing Affiliate, jointly and severally, or that such Letter of Credit is for
the account of the Borrower and a Subsidiary of the Borrower, jointly and
severally, providing the name of the Subsidiary of the Borrower which is jointly
and severally applying for such Letter of Credit, (C) the stated amount of the
Letter of Credit requested, (D) the effective date (which shall be a Business
Day) of issuance of such Letter of Credit, (E) the date on which such Letter of
Credit is to expire (which shall be a Business Day and no later than the
Business Day immediately preceding the scheduled Revolving Credit Termination
Date), (F) the Person for whose benefit such Letter of Credit is to be issued,
(G) other relevant terms of such Letter of Credit, (H) the Revolving Credit
Availability at such time, and (I) the amount of the then outstanding Letter of
Credit Obligations. Such Issuing Bank shall notify the Agent immediately upon
receipt of a written notice from the Borrower requesting that a Letter of
52
Credit be issued, or that an existing Letter of Credit be extended or amended
and, upon the Agent's request therefor, send a copy of such notice to the Agent.
(ii) The Issuing Bank shall (A) give the Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of the issuance,
amendment or extension of a Letter of Credit and (B) promptly after issuance
thereof, provide the Agent with a copy of each Letter of Credit issued and each
amendment thereto.
(d) REIMBURSEMENT OBLIGATIONS; DUTIES OF ISSUING BANKS. (i)
Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement:
(A) the Borrower shall reimburse, or cause its
Subsidiary or Leasing Affiliate, as applicable, for whose account a
Letter of Credit is issued to reimburse, the Issuing Bank for amounts
drawn under such Letter of Credit, in Dollars, no later than the date
(the "Reimbursement Date") which is the earlier of (I) the time
specified in the applicable Letter of Credit Reimbursement Agreement
and (II) one (1) Business Day after the Borrower receives written
notice from the Issuing Bank that payment has been made under such
Letter of Credit by the Issuing Bank; and
(B) all Reimbursement Obligations with respect to any
Letter of Credit shall bear interest at the rate applicable in
accordance with SECTION 5.01(a) from the date of the relevant drawing
under such Letter of Credit until the Reimbursement Date and thereafter
at the rate applicable in accordance with SECTION 5.01(c).
(ii) The Issuing Bank shall give the Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of all drawings
under a Letter of Credit issued under this Agreement and the payment (or the
failure to pay when due) by the Borrower or its Subsidiary or Leasing Affiliate,
as applicable, on account of a Reimbursement Obligation.
(iii) No action taken or omitted in good faith by an Issuing Bank under
or in connection with any Letter of Credit issued under this Agreement shall put
such Issuing Bank under any resulting liability to any Lender, the Borrower, any
of the Borrower's Subsidiaries, or Leasing Affiliate, or, so long as it is not
issued in violation of SECTION 3.01(a), relieve any Revolving Lender of its
obligations hereunder to such Issuing Bank. Solely as between the Issuing Banks
and the Lenders, in determining whether to pay under any such Letter of Credit,
the respective Issuing Bank shall have no obligation to the Lenders other than
to confirm that any documents required to be delivered under a respective Letter
of Credit appear to have been delivered
53
and that they appear on their face to comply with the requirements of such
Letter of Credit.
(e) PARTICIPATIONS. (i) Immediately upon issuance by an Issuing Bank of
any Letter of Credit in accordance with the procedures set forth in this SECTION
3.01, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased and received from that Issuing Bank, without recourse
or warranty, an undivided interest and participation in such Letter of Credit
and the related Letter of Credit Reimbursement Agreement to the extent of such
Revolving Lender's Revolving Loan Pro Rata Share, including, without limitation,
all rights of the Issuing Bank with respect to obligations of the Borrower with
respect thereto (other than amounts owing to the Issuing Bank under SECTION
3.01(g)) and any security therefor and guaranty pertaining thereto.
(ii) If any Issuing Bank makes any payment under any Letter of Credit
issued under this Agreement and the Borrower, the Subsidiary of the Borrower for
whose account such Letter of Credit was issued, or Leasing Affiliate, as
applicable, does not repay such amount to the Issuing Bank on the Reimbursement
Date, the Issuing Bank shall promptly notify the Agent, which shall promptly
notify each Revolving Lender, and each Revolving Lender shall promptly and
unconditionally pay to the Agent for the account of such Issuing Bank, in
immediately available funds, the amount of such Revolving Lender's Revolving
Loan Pro Rata Share of such payment (net of that portion of such payment, if
any, made by such Revolving Lender in its capacity as an Issuing Bank), and the
Agent shall promptly pay to the Issuing Bank such amounts received by it, and
any other amounts received by the Agent for the Issuing Bank's account, pursuant
to this SECTION 3.01(e). If a Revolving Lender does not make its Revolving Loan
Pro Rata Share of the amount of such payment available to the Agent, such
Revolving Lender agrees to pay to the Agent for the account of the Issuing Bank,
forthwith on demand, such amount together with interest thereon, for the first
three (3) Business Days after the date such payment was first due at the Federal
Funds Rate, and thereafter at the interest rate then applicable in accordance
with SECTION 5.01(a). The failure of any Revolving Lender to make available to
the Agent for the account of an Issuing Bank its Revolving Loan Pro Rata Share
of any such payment shall neither relieve any other Revolving Lender of its
obligation hereunder to make available to the Agent for the account of such
Issuing Bank such other Revolving Lender's Revolving Loan Pro Rata Share of any
payment on the date such payment is to be made nor increase the obligation of
any other Revolving Lender to make such payment to the Agent.
(iii) Whenever an Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to which the Agent
has previously received payments from any Revolving Lender for the account of
such Issuing Bank
54
pursuant to this SECTION 3.01(e), such Issuing Bank shall promptly pay to the
Agent and the Agent shall promptly pay to such Revolving Lender an amount equal
to such Revolving Lender's Revolving Loan Pro Rata Share thereof. Each such
payment shall be made by such Issuing Bank or the Agent, as the case may be, on
the Business Day on which such Person receives the funds paid to such Person
pursuant to the preceding sentence, if received prior to 11:00 a.m. (New York
time) on such Business Day, and otherwise on the next succeeding Business Day.
(iv) Upon the request of any Lender, an Issuing Bank shall furnish such
Lender copies of any Letter of Credit or Letter of Credit Reimbursement
Agreement to which such Issuing Bank is party and such other documentation as
reasonably may be requested by such Lender.
(v) The obligations of a Revolving Lender to make payments to the Agent
for the account of any Issuing Bank with respect to a Letter of Credit issued
under this Agreement shall be irrevocable, shall not be subject to any
qualification or exception whatsoever except willful misconduct or gross
negligence of such Issuing Bank, and shall be honored in accordance with this
ARTICLE III (irrespective of the satisfaction of the conditions described in
SECTIONS 6.01 and 6.02, as applicable) under all circumstances, including,
without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of
this Agreement or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of a
beneficiary named in a Letter of Credit (or any Person for whom any
such transferee may be acting), the Agent, the Issuing Bank, any
Lender, or any other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions between
the account party and beneficiary named in any Letter of Credit);
(C) any draft, certificate or any other document
presented under the Letter of Credit having been determined to be
forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(D) the surrender or impairment of any security
for the performance or observance of any of the terms of any of the
Loan Documents;
55
(E) any failure by that Issuing Bank to make any
reports required pursuant to SECTION 3.01(h) or the inaccuracy of
any such report; or
(F) the occurrence of any Event of Default or Potential
Event of Default.
(f) PAYMENT OF REIMBURSEMENT OBLIGATIONS. (i) The Borrower
unconditionally agrees to pay, or cause Leasing Affiliate or the Borrower's
Subsidiary for whose account a Letter of Credit is issued, as applicable, to
pay, to each Issuing Bank, in Dollars, the amount of all Reimbursement
Obligations, interest and other amounts payable to such Issuing Bank under or in
connection with the Letters of Credit when such amounts are due and payable,
irrespective of any claim, setoff, defense or other right which the Borrower,
Leasing Affiliate, or such Subsidiary of the Borrower may have at any time
against any Issuing Bank or any other Person.
(ii) In the event any payment by the Borrower, Leasing Affiliate, or
such Subsidiary received by an Issuing Bank with respect to a Letter of Credit
and distributed by the Agent to the Revolving Lenders on account of their
participations is thereafter set aside, avoided or recovered from such Issuing
Bank in connection with any receivership, liquidation or bankruptcy proceeding,
each Revolving Lender which received such distribution shall, upon demand by
such Issuing Bank, contribute such Revolving Lender's Revolving Loan Pro Rata
Share of the amount set aside, avoided or recovered together with interest at
the rate required, if any, to be paid by such Issuing Bank upon the amount
required to be repaid by it.
(g) ISSUING BANK CHARGES. The Borrower shall pay, or cause Leasing
Affiliate, or the Borrower's Subsidiary for whose account a Letter of Credit is
issued, as applicable, to pay, to each Issuing Bank, solely for its own account,
the standard charges assessed by such Issuing Bank in connection with the
issuance, administration, amendment and payment or cancellation of Letters of
Credit and such compensation in respect of such Letters of Credit for the
Borrower's, Leasing Affiliate's, or such Subsidiary's account, as applicable, as
may be agreed upon by the Borrower and such Issuing Bank from time to time.
(h) ISSUING BANK REPORTING REQUIREMENTS. Each Issuing Bank shall, no
later than the tenth (10th) Business Day following the last day of each calendar
month, provide to the Agent, the Borrower, and each Revolving Lender separate
schedules for Commercial Letters of Credit and Standby Letters of Credit issued
as Letters of Credit, in form and substance reasonably satisfactory to the
Agent, setting forth the aggregate Letter of Credit Obligations outstanding to
it at the end of each month and, to the extent not otherwise provided in
accordance with the provisions of SECTION 3.01(c)(ii), any information requested
by
56
the Agent or the Borrower relating to the date of issue, account party, amount,
expiration date and reference number of each Letter of Credit issued by it.
(i) INDEMNIFICATION; EXONERATION. (i) In addition to all other amounts
payable to an Issuing Bank, the Borrower hereby agrees to defend, indemnify, and
save the Agent, each Issuing Bank and each Lender harmless from and against any
and all claims, demands, liabilities, penalties, damages, losses (other than
loss of profits), costs, charges and expenses (including reasonable attorneys'
fees but excluding taxes) which the Agent, such Issuing Bank or such Lender may
incur or be subject to as a consequence, direct or indirect, of (A) the issuance
of any Letter of Credit other than as a result of the gross negligence or
willful misconduct of the Issuing Bank, as determined by a court of competent
jurisdiction, or (B) the failure of the Issu ing Bank issuing a Letter of Credit
to honor a drawing under such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future DE JURE or DE
FACTO government or Governmental Authority.
(ii) As between the Borrower, Leasing Affiliate, and any of the
Borrower's Subsidiaries for whose account a Letter of Credit is issued, as
applicable, on the one hand and the Agent, the Lenders and the Issuing Banks on
the other hand, the Borrower assumes all risks of the acts and omissions of, or
misuse of Letters of Credit by, the respective beneficiaries of the Letters of
Credit. In furtherance and not in limitation of the foregoing, subject to the
provisions of the Letter of Credit Reimbursement Agreements, the Issuing Banks
and the Lenders shall not be responsible for: (A) the form, validity, legality,
suffi ciency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of the Letters of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity, legality or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) failure of the beneficiary of a Letter of Credit
to comply duly with conditions required in order to draw upon such Letter of
Credit; (D) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (E) errors in interpretation of technical terms; (F)
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit or of the proceeds thereof;
(G) the misapplication by the beneficiary of a Letter of Credit of the proceeds
of any drawing under such Letter of Credit; and (H) any consequences arising
from causes beyond the control of the Agent, the Issuing Banks or the Lenders.
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3.02 OBLIGATIONS SEVERAL. The obligations of each Issuing Bank and each
Revolving Lender under this ARTICLE III are several and not joint, and no
Issuing Bank or Revolving Lender shall be responsible for the obligation to
issue Letters of Credit or participation obligation hereunder, respectively, of
any other Issuing Bank or Revolving Lender.
3.03 TRANSITIONAL PROVISIONS. SCHEDULE 3.03 contains a schedule of
certain "Letters of Credit" issued under the 1994 Credit Agreement and the 1996
Credit Agreement which remain outstanding on the Effective Date. Such letters of
credit shall automatically and without further action of the parties hereto be
converted to Letters of Credit and be deemed issued pursuant to this SECTION
3.03 and subject to the provisions of this Agreement other than the provisions
of SECTION 5.02(a) pertaining to the payment of a Fronting Fee upon issuance;
the undrawn face amount of such Letters of Credit shall be included in the
calculation of Letter of Credit Obligations; and all liabilities with respect
thereto shall constitute Obligations.
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ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.01. PREPAYMENTS; REDUCTIONS IN REVOLVING CREDIT COMMITMENTS.
(a) VOLUNTARY PREPAYMENTS/REDUCTIONS. (i) NOTICE. The Borrower may,
upon at least three (3) Business Days' prior written notice to the Agent (which
the Agent shall promptly transmit to each Lender), at any time and from time to
time, prepay the Term Loans or Loans made under the Acquisition Subfacility, in
whole or in part. Any notice of prepayment given to the Agent under this SECTION
4.01(a)(i) shall specify the date (which shall be a Business Day) of prepayment
and the aggregate principal amount of the prepayment. When notice of prepayment
is delivered as provided herein, the principal amount of the Term Loans or Loans
made under the Acquisition Subfacility specified in the notice shall become due
and payable on the prepayment date specified in such notice. The Borrower may
repay Revolving Loans, without prior written notice to the Agent or any Lender,
at any time and from time to time.
(ii) AMOUNT; APPLICATION. Unless the aggregate outstanding principal
balance of the Term Loans or the outstanding principal balance of Loans made
under the Acquisition Subfacility and evidenced by Acquisition Loan Notes of an
even date is to be prepaid in full, voluntary prepayments of the Term Loans or
such Loans made under the Acquisition Subfacility shall be in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of that
amount. Each voluntary prepayment of the Term Loans shall be allocated ratably
to the Term Loans based on the then outstanding principal balance thereof and
then applied ratably to the unpaid installments of such Term Loans in the
inverse order of maturity until paid in full. Each voluntary prepayment of such
Loans made under the Acquisition Subfacility shall be allocated ratably to such
Loans based on the then outstanding principal balance thereof and then applied
ratably to the unpaid installments of such Loans in the inverse order of
maturity until paid in full.
(iii) VOLUNTARY REVOLVING CREDIT COMMITMENT REDUCTIONS. The Borrower,
upon at least three (3) Business Days' prior written notice to the Agent (which
the Agent shall promptly transmit to each Lender), shall have the right, at any
time and from time to time, to terminate in whole or permanently reduce in part
the Revolving Credit Commitments; PROVIDED THAT the Borrower shall have made
whatever payment may be required to reduce the Revolving Credit Obligations to
an amount less than or equal to the Revolving Credit Commitments as reduced or
terminated. Any partial reduction of the Revolving Credit Commitments shall be
in an aggregate minimum amount of $500,000 and integral multiples of $100,000 in
excess of that amount, and shall reduce the Revolving Credit Commitment of each
Revolving Lender proportionately in
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accordance with its Revolving Loan Pro Rata Share. Any notice of termination or
reduction given to the Agent under this SECTION 4.01(a)(iii) shall specify the
date (which shall be a Business Day) of such termination or reduction and, with
respect to a partial reduction, the aggregate principal amount thereof. When
notice of termination or reduction is delivered as provided herein, the
principal amount of the Revolving Loans specified in the notice shall become due
and payable on the date specified in such notice.
(b) MANDATORY PREPAYMENTS/REDUCTIONS.
(i) NET CASH PROCEEDS OF SALE. Immediately upon the receipt by the
Borrower or any Subsidiary of the Borrower of any Net Cash Proceeds of Sale, the
Borrower shall make or cause to be made a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such Net Cash
Proceeds of Sale.
(ii) Intentionally omitted.
(iii) NET CASH PROCEEDS OF ISSUANCE OF EQUITY SECURITIES OR
INDEBTEDNESS. Immediately upon the receipt by the Parent, the Borrower or any
Subsidiary of the Borrower of any Net Cash Proceeds of Issuance of Equity
Securities or Indebtedness, the Borrower shall make or cause to be made a
mandatory prepayment in an amount equal to one hundred percent (100%) of such
Net Cash Proceeds of Issuance of Equity Securities or Indebtedness.
Notwithstanding the foregoing, (A) in the event the subject issuance of equity
Securities (I) does not result in a failure by the Borrower to comply with the
provisions of ARTICLE XI and (II) the proceeds of such issuance are used by the
Borrower to consummate a Permitted Acquisition or purchase of Inventory, that
portion of the Net Cash Proceeds of Issuance of Equity Securities used by the
Borrower for the purposes described in CLAUSE (A)(II) within ten (10) Business
Days after Borrower's or Borrower's Subsidiary's receipt of such proceeds shall
not be subject to the requirement for a mandatory prepayment under this CLAUSE
(iii); and (B) with respect to issuance of Indebtedness, (I) PROVIDED THAT all
Lenders have consented to the subject issuance of Indebtedness, and the terms
and conditions pertaining thereto, and (II) the proceeds of such issuance of
Indebtedness are used by the Borrower to consummate a Permitted Acquisition,
that portion of the Net Cash Proceeds of Issuance of Indebtedness used by the
Borrower for the purposes described in CLAUSE (B)(II) within ten (10) Business
Days after Borrower's or Borrower's Subsidiary's receipt of such proceeds shall
not be subject to the requirement for a mandatory prepayment under this CLAUSE
(iii).
(iv) INSUFFICIENT COLLATERAL. Borrower shall, immediately and without
notice or demand of any kind, make such repayments of the Loans to the extent
necessary to reduce the amount equal to the sum of (A) the outstanding principal
amount of the Revolving Credit Obligations PLUS (B) the outstanding
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principal amount of the Term Loans PLUS (C) the outstanding principal amount of
the Loans made under the Acquisition Subfacility to an amount not to exceed the
Borrowing Base.
(v) NO WAIVER OR CONSENT. Nothing in this SECTION 4.01(b) shall be
construed to constitute the Lenders' consent to any transaction referenced in
CLAUSES (i) and (iii) above which is not expressly permitted by ARTICLE X or the
consent of all Lenders referenced in CLAUSE (iii)(B), as applicable.
(vi) NOTICE. The Borrower shall give the Agent prior written notice or
telephonic notice promptly confirmed in writing (each of which the Agent shall
promptly transmit to each Lender), when a Designated Prepayment will be made
(which date of prepayment shall be no later than the date on which such
Designated Prepayment becomes due and payable pursuant to this SECTION 4.01(b)).
(vii) APPLICATION OF PREPAYMENTS. (A) Designated Prepayments shall be
allocated and applied to the Obligations as follows:
(I) the amount of each Designated Prepayment shall be applied
ratably to the unpaid installments of the Term Loans in the inverse
order of maturity until paid in full;
(II) following the payment in full of the Term Loans, the
remaining balance of each Designated Prepayment shall be applied
ratably to the Loans made under the Acquisition Subfacility and applied
to the unpaid installments thereof in the inverse order of maturity
until paid in full;
(III) following the payment in full of the Loans made under
the Acquisition Subfacility, the remaining balance of each Designated
Prepayment shall be applied to the outstanding Revolving Loans and, if
such Designated Prepayment is made from either Net Cash Proceeds of
Sale or Net Cash Proceeds of Issuance of Equity Securities or
Indebtedness, shall permanently reduce the Revolving Credit Commitment
of each Revolving Lender proportionately in accordance with its
Revolving Loan Pro Rata Share of such Designated Prepayment; and
(IV) following the payment in full of the Revolving Loans, the
remaining balance of each Designated Prepayment shall be applied to the
Letter of Credit Obligations (or, to the extent such Letter of Credit
Obligations are contingent, deposited in the Cash Collateral Account to
provide Cash Collateral in respect of such Letter of Credit
Obligations).
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(B) Prepayments required by SECTION 4.01(b)(iv) shall be
allocated and applied FIRST to the Revolving Loans ratably based on the then
outstanding principal balance thereof until paid in full, SECOND ratably to the
unpaid installments of the Term Loans in the inverse order of maturity until
paid in full, and LASTLY ratably to the unpaid installments of the Loans made
under the Acquisition Subfacility until paid in full.
4.02. PAYMENTS. (a) MANNER AND TIME OF PAYMENT. All payments of
principal of and interest on the Loans and Reimburse ment Obligations and other
Obligations (including, without limitation, fees and expenses) which are payable
to the Agent, the Lenders or any Issuing Bank shall be made without condition or
reservation of right, and, with respect to payments made other than from
application of deposits in the Concentration Account, in immediately available
funds, delivered to the Agent (or, in the case of Reimbursement Obligations, to
the pertinent Issuing Bank) not later than 1:00 p.m. (New York time) on the date
and at the place due, to such account of the Agent (or such Issuing Bank) as it
may designate, for the account of the Agent, the Lenders or such Issuing Bank,
as the case may be; and funds received by the Agent, including, without
limitation, funds in respect of any Revolving Loans to be made on that date, not
later than 1:00 p.m. (New York time) on any given Business Day shall be credited
against payment to be made that day and funds received by the Agent after that
time shall be deemed to have been paid on the next succeeding Business Day.
Payments actually received by the Agent for the account of the Lenders or the
Issuing Banks, or any of them, shall be paid to them by the Agent promptly after
receipt thereof.
(b) APPORTIONMENT OF PAYMENTS. (i) Subject to the provisions of SECTION
4.01 and SECTION 4.02(b)(v), all payments of principal and interest in respect
of outstanding Loans, all payments in respect of Reimbursement Obligations, all
payments of fees and all other payments in respect of any other Obligations,
shall be allocated among such of the Lenders and Issuing Banks as are entitled
thereto, in proportion to their respective Pro Rata Shares, Term Loan Pro Rata
Shares, Revolving Loan Pro Rata Shares, or otherwise as provided herein. Except
as provided in SECTION 4.02(b)(ii) with respect to payments and proceeds of
Collateral received after the occurrence of an Event of Default, all such
payments and any other amounts received by the Agent from or for the benefit of
the Borrower shall be applied:
(A) FIRST, to pay principal of and interest on any portion of
the Revolving Loans and Loans made under the Acquisition Subfacility
which the Agent may have advanced on behalf of any Revolving Lender
other than Citicorp for which the Agent has not then been reimbursed by
such Revolving Lender or the Borrower,
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(B) SECOND, to pay principal of and interest on any Protective
Advance for which the Agent or Revolving Lenders have not then been
reimbursed by the Borrower,
(C) THIRD, to pay the principal of the Term Loans,
Loans made under the Acquisition Subfacility, and Revolving Loans then
due and payable in the order described hereinbelow and interest on such
Loans then due and payable, ratably, based on the then outstanding
balances of such Loans,
(D) FOURTH, to pay all other Obligations then due and
payable, ratably, and
(E) FIFTH, as the Borrower so designates.
All payments of principal and interest in respect of Loans pursuant to CLAUSE
(C) shall be applied FIRST, to the Term Loans (to installments and accrued
interest thereon then due and payable, ratably, in accordance with the Term
Lenders' respective Term Loan Pro Rata Shares), SECOND, to the Loans made under
the Acquisition Subfacility (to installments and accrued interest thereon then
due and payable, ratably, in accordance with the Revolving Lenders' respective
Revolving Loan Pro Rata Shares), and THIRD, Revolving Loans and accrued interest
thereon ratably, in accordance with the Revolving Lenders' respective Revolving
Loan Pro Rata Shares.
(ii) After the occurrence of an Event of Default and while the same
is continuing, the Agent shall apply all payments in respect of any Obligations
and all proceeds of Collateral in the following order:
(A) FIRST, to pay principal of and interest on any
portion of the Revolving Loans and Loans made under the Acquisition
Subfacility which the Agent may have advanced on behalf of any
Revolving Lender other than Citicorp for which the Agent has not then
been reimbursed by such Revolving Lender or the Borrower;
(B) SECOND, to pay principal of and interest on any Protective
Advance for which the Agent or Revolving Lenders have not then been
reimbursed by the Borrower;
(C) THIRD, to pay Obligations in respect of any fees then due
to the Agent, Lenders and Issuing Banks and any expense reimbursements
or indemnities then due to the Agent;
(D) FOURTH, to pay principal of and interest on Letter
of Credit Obligations (or, to the extent such Obligations are
contingent, deposited in the Cash Collateral Account to provide Cash
Collateral in respect of such Obligations);
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(E) FIFTH, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(F) SIXTH, to pay interest due in respect of the Loans,
ratably, in accordance with the Lenders' respective Pro Rata Shares;
(G) SEVENTH, to the ratable payment or prepayment of
principal outstanding on all Loans with application to installments on
the Term Loans and Loans made under the Acquisition Subfacility in the
inverse order of maturity;
(H) EIGHTH, to the ratable payment of Hedge Agreements to
which any of the Lenders or any Affiliate of any of the Lenders is a
party; and
(I) NINTH, to the ratable payment of all other Obligations.
The order of priority set forth in this SECTION 4.02(b) and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Agent, the Lenders, the Issuing Banks and other Holders as
among themselves.
(iii) The Agent, in its sole discretion subject only to the terms of
this SECTION 4.02(b)(iii), may pay from the proceeds of Revolving Loans made to
the Borrower hereunder, whether made following a request by the Borrower
pursuant to SECTION 2.02 or this SECTION 4.02(b)(iii), all amounts payable by
the Borrower hereunder when due, including, without limitation, amounts payable
with respect to payments of principal, interest, Reimbursement Obligations and
fees and all reimbursements for expenses pursuant to SECTION 15.02. The Borrower
hereby irrevocably authorizes the Revolving Lenders to make Revolving Loans, in
each case, upon notice from the Agent as described in the following sentence for
the purpose of paying principal, interest, Reimbursement Obligations and fees
due from the Borrower, reimbursing expenses pursuant to SECTION 15.02 and paying
any and all other amounts due and payable by the Borrower hereunder or under the
Notes, and agrees that all such Revolving Loans so made shall be deemed to have
been requested by it pursuant to SECTION 2.02 as of the date of the
aforementioned notice. The Agent shall request Revolving Loans on behalf of the
Borrower as described in the preceding sentence by notifying the Revolving
Lenders by telecopy, telegram or other similar form of transmission (which
notice the Agent shall thereafter promptly transmit to the Borrower), of the
amount and Funding Date of the proposed Borrowing and that such Borrowing is
being requested on the Borrower's behalf pursuant to this SECTION 4.02(b)(iii).
On the proposed Funding Date for such Revolving Loan, the Revolving Lenders
shall make the requested Revolving Loans in accordance
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with the procedures and subject to the conditions specified in SECTION 2.02.
(iv) Subject to SECTION 4.02(b)(v), the Agent shall promptly distribute
to each Lender and Issuing Bank at its primary address set forth on the
appropriate signature page hereof or the signature page to the Assignment and
Acceptance by which it became a Lender or Issuing Bank, or at such other address
as a Lender, an Issuing Bank or other Holder may request in writing, such funds
as such Person may be entitled to receive hereunder; PROVIDED THAT the Agent
shall under no circumstances be bound to inquire into or determine the validity,
scope or priority of any interest or entitlement of any Holder and may suspend
all payments or seek appropriate relief (including, without limitation,
instructions from the Requisite Lenders or an action in the nature of
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby.
(v) In the event that any Revolving Lender fails to fund its Revolving
Loan Pro Rata Share of any Revolving Loan or Loan under the Acquisition
Subfacility requested by the Borrower which such Revolving Lender is obligated
to fund under the terms of this Agreement (the funded portion of such Loan being
hereinafter referred to as a "Non Pro Rata Loan"), until the earlier of such
Revolving Lender's cure of such failure and the termination of the Revolving
Credit Commitments, the proceeds of all amounts thereafter repaid to the Agent
by the Borrower and otherwise required to be applied to such Revolving Lender's
share of all other Obligations pursuant to the terms of this Agreement shall be
advanced to the Borrower by the Agent on behalf of such Revolving Lender to
cure, in full or in part, such failure by such Revolving Lender, but shall
nevertheless be deemed to have been paid to such Revolving Lender in
satisfaction of such other Obligations. Notwithstanding anything in this
Agreement to the contrary:
(A) the foregoing provisions of this SECTION 4.02(b)(v) shall
apply only with respect to the proceeds of payments of Obligations;
(B) a Revolving Lender shall be deemed to have cured its
failure to fund its Revolving Loan Pro Rata Share of any Revolving Loan
or Loan under the Acquisition Subfacility at such time as an amount
equal to such Revolving Lender's original Revolving Loan Pro Rata Share
of the requested principal portion of such Loan is fully funded to the
Borrower, whether made by such Revolving Lender itself or by operation
of the terms of this SECTION 4.02(b)(v), and whether or not the Non Pro
Rata Loan with respect thereto has been repaid;
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(C) amounts advanced to the Borrower to cure, in full or in
part, any such Revolving Lender's failure to fund its Revolving Loan
Pro Rata Share of any Revolving Loan or Loan under the Acquisition
Subfacility ("Cure Loans") shall bear interest at the rate in effect
from time to time pursuant to the terms of SECTION 5.01; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions of the
Borrower as to its desired application, all repayments of principal
which, in accordance with the other terms of this SECTION 4.02, would
be applied to the outstanding Revolving Loans and Loans made under the
Acquisition Subfacility shall be applied FIRST, ratably to all such
Loans constituting Non Pro Rata Loans, SECOND, ratably to such Loans
other than those constituting Non Pro Rata Loans or Cure Loans and,
THIRD, ratably to such Loans constituting Cure Loans.
(c) PAYMENTS ON NON-BUSINESS DAYS. Whenever any pay ment to be made by
the Borrower hereunder or under the Notes is stated to be due on a day which is
not a Business Day, the payment shall instead be due on the next succeeding
Business Day, and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
4.03. PROMISE TO REPAY; EVIDENCE OF INDEBTEDNESS.
(a) PROMISE TO REPAY. The Borrower hereby agrees to pay when due the
principal amount of each Loan which is made to it, and further agrees to pay all
unpaid interest accrued thereon, in accordance with the terms of this Agreement
and the Notes. The Borrower shall execute and deliver to each Lender on the
Effective Date one or more promissory notes, in form and substance acceptable to
the Agent and such Lender, evidencing the Loans made by such Lender and
thereafter shall execute and deliver such other promissory notes as are
necessary to evidence Loans owing to the Lenders (i) which are Loans made under
the Acquisition Subfacility or (ii) after giving effect to any assignment
thereof pursuant to SECTION 15.01, all in form and substance acceptable to the
Agent and in substantially the form attached hereto as EXHIBIT E, as applicable.
On the Effective Date, the "Term Notes" executed and delivered under the terms
of the 1996 Credit Agreement shall be returned to the Borrower and the Term
Notes executed and delivered by the Borrower hereunder substituted therefor.
(b) LOAN ACCOUNT. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of the Borrower to such Lender resulting from each Loan owing to
such Lender from time to time, including the amount of principal and interest
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payable and paid to such Lender from time to time hereunder and under the Notes.
(c) CONTROL ACCOUNT. The Register maintained by the Agent pursuant to
SECTION 15.01(c) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder, the type of Loan comprising such
Borrowing, (ii) the effective date and amount of each Assignment and Acceptance
delivered to and accepted by it and the parties thereto, (iii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder or under the Notes, and (iv) the amount of any
sum received by the Agent from the Borrower hereunder and each Lender's share
thereof. All entries in the Register shall be made in accordance with the
Agent's customary accounting practices as in effect from time to time.
(d) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error;
in the event there are discrepancies between the Register and any individual
Loan Account, entries in the Register shall govern.
4.04. PROCEEDS OF COLLATERAL; CONCENTRATION ACCOUNT ARRANGEMENTS. (a)
ESTABLISHMENT. The Borrower shall establish and maintain depository accounts and
shall cause its Subsidiaries to establish and maintain depository accounts
subject to Collection Account Agreements into which all collections of
Receivables shall be deposited and promptly transferred directly to the
Concentration Account. Borrower shall cause all proceeds of Collateral to be
deposited in the Concentration Account or pursuant to other similar arrangements
for the collection of such amounts established by the Borrower and the Agent.
All collections of Receivables and proceeds of Collateral which are received
directly by the Borrower or any Subsidiary of the Borrower shall be deemed to
have been received by the Borrower or such Subsidiary of the Borrower as the
Agent's trustee and, upon the Borrower's or such Subsidiary's receipt thereof,
the Borrower shall immediately transfer or cause to be transferred, all such
amounts into the Concentration Account in their original form. All collections
of Receivables and proceeds of other Collateral deposited in the Concentration
Account as described above shall be deemed to have been received by the Agent
and will be held by the Agent, for the benefit of the Holders, as Cash
Collateral for the Obligations, subject to the rights of the Borrower set forth
in SECTION 4.04(b) and the rights of the Agent set forth in SECTION 12.03.
(b) PRE-DEFAULT WITHDRAWALS FROM CONCENTRATION ACCOUNT. The Agent
shall, so long as no Event of Default shall have occurred and be continuing or
unwaived, from time to time, (i) apply funds in the Concentration Account (A)
promptly after
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deposit therein to payment of the outstanding Revolving Loans, (B) to payment of
other Obligations as they become due and payable, (ii) invest funds on deposit
in the Concentration Account and accrued interest thereon, after giving effect
to the aforesaid payments, reinvest proceeds of any such investments which may
mature or be sold, and invest interest or other income received from such
investments, in such Cash Equivalents as the Borrower may select, and (iii) upon
the Borrower's request therefor, transfer funds on deposit in the Concentration
Account after giving effect to the payments described in CLAUSE (i) above to
Borrower's or its Subsidiaries' designated accounts. Such funds, interest,
proceeds, or income which are not so disbursed, invested or reinvested shall be
deposited and held in the Concentration Account for the benefit of the Holders
as provided in SECTION 4.04(a). None of the Agent, any Lender or any Issuing
Bank shall be liable to the Borrower or any Subsidiary of the Borrower for, or
with respect to, any decline in value of amounts on deposit in the Concentration
Account which shall have been invested pursuant to this SECTION 4.04(b). Cash
Equivalents from time to time purchased and held pursuant to this SECTION
4.04(b) shall constitute Cash Collateral and shall, for purposes of this
Agreement, be deemed to be part of the funds held in the Concentration Account
in amounts equal to their respective outstanding principal amounts.
(c) REASONABLE CARE. The Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Concentration Account and
shall be deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own like property,
it being understood that the Agent shall not have any responsibility for taking
any steps necessary to preserve rights against any parties with respect to any
such funds but may do so at its option. In the event the Agent takes any such
steps, it shall provide the Borrower with prompt written notice thereof. All
reasonable expenses incurred in connection therewith shall be for the sole
account of the Borrower and shall constitute Obligations hereunder.
4.05. CASH COLLATERAL ACCOUNT. (a) INVESTMENTS. If requested by the
Borrower, the Agent shall, so long as no Event of Default shall have occurred
and be continuing, from time to time invest funds on deposit in the Cash
Collateral Account and accrued interest thereon, reinvest proceeds of any such
investments which may mature or be sold, and invest interest or other income
received from any such Investments, in each case in such Cash Equivalents as the
Borrower may select. Such funds, interest, proceeds or income which are not so
invested or reinvested in Cash Equivalents shall, except as otherwise provided
in SECTION 4.05(b) and SECTION 12.03, be deposited and held by the Agent in the
Cash Collateral Account. None of the Agent, any Lender or any Issuing Bank shall
be liable to the Borrower for, or with respect to, any decline in value of
amounts
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on deposit in the Cash Collateral Account which shall have been invested
pursuant to this SECTION 4.05(a) at the direction of the Borrower. Cash
Equivalents from time to time purchased and held pursuant to this SECTION
4.05(a) shall constitute Cash Collateral and shall, for purposes of this
Agreement, be deemed to be part of the funds held in the Cash Collateral Account
in amounts equal to their respective outstanding principal amounts.
(b) WITHDRAWAL RIGHTS. Neither the Borrower nor any Person or entity
claiming on behalf of or through the Borrower shall have any right to withdraw
any of the funds held in the Cash Collateral Account, except that, upon the
later to occur of (i) the expiration or termination of all of the Letters of
Credit in accordance with their respective terms and (ii) the payment in full in
cash of the Obligations, any funds remaining in the Cash Collateral Account
shall be returned by the Agent to the Borrower or paid to whomever may be
legally entitled thereto.
(c) ADDITIONAL DEPOSITS. If at any time the Agent determines that any
funds held in the Cash Collateral Account are subject to any interest, right,
claim or Lien of any Person other than the Agent, the Borrower will, forthwith
upon demand by the Agent, pay to the Agent, as additional funds to be deposited
and held in the Cash Collateral Account, an amount equal to the amount of funds
subject to such interest, right, claim or Lien.
(d) REASONABLE CARE. The Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account and
shall be deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own like property,
it being understood that the Agent shall not have any responsibility for taking
any necessary steps to preserve rights against any parties with respect to any
such funds but may do so at its option. In the event the Agent takes any such
steps, it shall provide the Borrower with prompt written notice thereof. All
reasonable expenses incurred in connection therewith shall be for the sole
account of the Borrower and shall constitute Obligations hereunder.
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ARTICLE V
INTEREST AND FEES
5.01. INTEREST ON THE LOANS AND OTHER OBLIGATIONS. (a) RATE OF
INTEREST. All Loans and the outstanding principal balance of all other
Obligations shall bear interest on the unpaid principal amount thereof from the
date such Loans are made and such other Obligations are incurred until paid in
full, except as otherwise provided in SECTION 5.01(c) or SECTION 14.06, as
follows:
(i) If a Base Rate Loan, at a rate per annum equal to the sum
of (A) the Base Rate, as in effect from time to time as interest
accrues PLUS (B) the applicable Base Rate Margin; and
(ii) If a Eurodollar Rate Loan, at a rate per annum equal to
the sum of (A) the Eurodollar Rate determined for the applicable
Eurodollar Interest Period PLUS (B) the applicable Eurodollar Rate
Margin.
The applicable basis for determining the rate of interest on the Loans shall be
selected by the Borrower at the time a Notice of Borrowing or a Notice of
Conversion/Continuation is delivered by the Borrower to the Agent; PROVIDED,
HOWEVER, that the Borrower may not select the Eurodollar Rate as the applicable
basis for determining the rate of interest on such Loan if at the time of such
selection an Event of Default or a Potential Event of Default would occur or has
occurred and is continuing. If on any day any Loan is outstanding with respect
to which notice has not been timely delivered to the Agent in accordance with
the terms of this Agreement specifying the basis for determining the rate of
interest on that day, then for that day interest on that Loan shall be
determined by reference to the Base Rate.
(b) INTEREST PAYMENTS. (i) Interest accrued on each Base Rate Loan
shall be payable in arrears (A) on the first day of each calendar month (for the
immediately preceding calendar month), commencing on the first such day
following the making of such Loan, (B) upon conversion thereof to a Eurodollar
Rate Loan, and (C) if not theretofore paid in full, at maturity (whether by
acceleration or otherwise) of such Loan.
(ii) Interest accrued on each Eurodollar Rate Loan shall be payable in
arrears (A) on each Eurodollar Interest Payment Date applicable to such Loan and
(B) if not theretofore paid in full, at maturity (whether by acceleration or
otherwise) of such Loan.
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(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on the first day of each calendar
month, commencing on the first such day following the incurrence of such
Obligation, (B) upon repayment thereof in full or in part, and (C) if not
theretofore paid in full, at the time such other Obligation becomes due and
payable (whether by acceleration or otherwise).
(c) DEFAULT INTEREST. Notwithstanding the rates of interest specified
in SECTION 5.01(a), effective immediately upon the occurrence of an Event of
Default, and for as long thereafter as such Event of Default shall be continuing
unwaived, the principal balance of all Loans and of all other Obligations, shall
bear interest at a rate which is two percent (2.0%) per annum in excess of the
rate of interest specified in SECTION 5.01(a)(i).
(d) COMPUTATION OF INTEREST. Interest on all Obliga tions shall be
computed on the basis of the actual number of days elapsed in the period during
which interest accrues and a year of 360 days. In computing interest on any
Loan, the date of the making of the Loan shall be included and the date of
payment shall be excluded; PROVIDED, HOWEVER, if a Loan is repaid on the same
day on which it is made, one (1) day's interest shall be paid on such Loan.
(e) CONVERSION OR CONTINUATION. (i) The Borrower shall have the option
(A) to convert at any time all or any part of outstanding Base Rate Loans to
Eurodollar Rate Loans; (B) to convert all or any part of outstanding Eurodollar
Rate Loans having Eurodollar Interest Periods which expire on the same date to
Base Rate Loans on such expiration date; or (C) to continue all or any part of
an outstanding Eurodollar Rate Loan at the expiry of the applicable Eurodollar
Interest Period, and the succeeding Eurodollar Interest Period of such continued
Loans shall commence on such expiration date; PROVIDED, HOWEVER, no such
outstanding Loan may be continued as, or be converted into, a Eurodollar Rate
Loan (1) if the continuation of, or the conversion into, would violate any of
the provisions of SECTION 5.03 or (2) if an Event of Default or a Potential
Event of Default would occur or has occurred and is continuing unwaived. Any
conversion into or continuation of Eurodollar Rate Loans under this SECTION
5.01(e) shall be in a minimum amount of $1,000,000 and in integral multiples of
$100,000 in excess of that amount except in the case of a conversion into or a
continuation of an entire Borrowing or Non-Pro Rata Loans.
(ii) To convert or continue a Loan under SECTION 5.01(e)(i), the
Borrower shall deliver a Notice of Conversion/Continuation to the Agent no later
than 11:00 a.m. (New York time) at least three (3) Business Days in advance of
the proposed conversion/continuation date. A Notice of Conversion/Continuation
shall specify (A) the proposed
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conversion/continuation date (which shall be a Business Day), (B) the principal
amount of the Loan to be converted/continued, (C) whether such Loan shall be
converted and/or continued, and (D) in the case of a conversion to, or
continuation of, a Eurodollar Rate Loan, the requested Eurodollar Interest
Period. In lieu of delivering a Notice of Conversion/Continuation, the Borrower
may give the Agent telephonic notice of any proposed conversion/continuation by
the time required under this SECTION 5.01(e)(ii), and such notice shall be
confirmed in writing delivered to the Agent by facsimile transmission promptly
(but in no event later than 5:00 p.m. (New York time) on the same day), the
original of which facsimile copy shall be delivered to the Agent within three
(3) days after the date of such transmission. Promptly after receipt of a Notice
of Conversion/Continuation under this SECTION 5.01(e)(ii) (or telephonic notice
in lieu thereof), the Agent shall notify each Lender by telecopy, or other
similar form of transmission, of the proposed conversion/continuation. Any
Notice of Conversion/Continuation for conversion to, or continuation of, a Loan
(or telephonic notice in lieu thereof) shall be irrevocable, and the Borrower
shall be bound to convert or continue in accordance therewith.
5.02. FEES. (a) LETTER OF CREDIT FEE. In addition to any charges paid
pursuant to SECTION 3.01(g), the Borrower shall pay (i) to the Issuing Bank, a
fee (the "Fronting Fee") accruing at a rate equal to one-quarter of one percent
(0.25%) per annum on the undrawn face amount of each outstanding Letter of
Credit issued by such Issuing Bank, payable quarterly, in arrears, on the first
day of each calendar quarter (for the immediately preceding calendar quarter)
and (ii) to the Agent, for the account of the Revolving Lenders based on their
respective Revolving Loan Pro Rata Shares, a fee (the "Letter of Credit Fee")
accruing at a rate equal to the Eurodollar Rate Margin applicable from time to
time on the undrawn face amount of each outstanding Letter of Credit, payable
quarterly, in arrears, on the first day of each calendar quarter (for the
immediately preceding calendar quarter); PROVIDED, HOWEVER, upon the occurrence
of an Event of Default, and for so long thereafter as such Event of Default
shall be continuing, the rate at which the (A) Fronting Fee shall accrue and be
payable shall be equal to two and one-quarter percent (2.25%) per annum and (B)
Letter of Credit Fee shall accrue and be payable shall be equal to four and
three-quarters percent (4.75%) per annum.
(b) UNUSED COMMITMENT FEE. (i) The Borrower shall pay to the Agent, for
the account of the Revolving Lenders in accordance with their respective
Revolving Loan Pro Rata Shares, a fee (the "Unused Commitment Fee"), accruing at
the rate of one-half of one percent (0.50%) per annum on the average daily
amount by which the Revolving Credit Commitments exceed the sum of (A) the
outstanding principal amount of the Revolving Loans, PLUS (B) the outstanding
Reimbursement Obligations, PLUS (C) the aggregate undrawn face amount of all
outstanding Letters of Credit, for the
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period commencing on the Effective Date and ending on the Revolving Credit
Termination Date, such Unused Commitment Fee being payable (I) monthly, in
arrears, commencing on the first day of the calendar month next succeeding the
Effective Date and (II) on the Revolving Credit Termination Date.
(ii) Notwithstanding the foregoing, in the event that any Revolving
Lender fails to fund its Revolving Loan Pro Rata Share of any Revolving Loan
requested by the Borrower which such Revolving Lender is obligated to fund under
the terms of this Agreement, (A) such Revolving Lender shall not be entitled to
any Unused Commitment Fees with respect to its Revolving Credit Commitment until
such failure has been cured in accordance with SECTION 4.02(b)(v)(B) and (B)
until such time, the Unused Commitment Fee shall accrue in favor of the
Revolving Lenders which have funded their respective Revolving Loan Pro Rata
Shares of such requested Revolving Loan, shall be allocated among such
performing Revolving Lenders ratably based upon their relative Revolving Credit
Commitments, and shall be calculated based upon the average amount by which the
aggregate Revolving Credit Commitments of such performing Revolving Lenders
exceeds the sum of (1) the outstanding principal amount of the Revolving Loans
owing to such performing Revolving Lenders, PLUS (2) the outstanding
Reimbursement Obligations owing to such performing Revolving Lenders, PLUS (3)
the aggregate participation interests of such performing Revolving Lenders
arising pursuant to SECTION 3.01(e) with respect to undrawn and outstanding
Letters of Credit.
(c) OTHER FEES. The Borrower shall pay to the Agent in addition to any
other fee referenced in this Agreement those certain fees described in the 1996
Fee Letter.
(d) CALCULATION AND PAYMENT OF FEES. All of the above fees shall be
calculated on the basis of the actual number of days elapsed in a 360 day year.
All such fees shall be payable in addition to, and not in lieu of, interest,
compensation, expense reimbursements, indemnification and other Obligations.
Fees shall be payable to the Agent at its office in New York, New York in
immediately available funds. All fees shall be fully earned and nonrefundable
when paid. All fees specified or referred to (directly or by reference to an
agreement pursuant to which such fees are payable) in this Agreement due to the
Agent, any Issuing Bank or any Lender shall bear interest, if not paid when due,
at the interest rate described in SECTION 5.01(c), shall constitute Obligations
and shall be secured by all of the Collateral.
5.03. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS. With respect
to Eurodollar Rate Loans:
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(a) AMOUNT OF EURODOLLAR RATE LOANS. Each Eurodollar Rate Loan shall be
for a minimum amount of $1,000,000 and in integral multiples of $100,000 in
excess of that amount.
(b) DETERMINATION OF EURODOLLAR INTEREST PERIOD. By giving notice as
set forth in SECTION 2.02(b) or SECTION 2.03(b) (with respect to a Borrowing of
Eurodollar Rate Loans) or SECTION 5.01(e) (with respect to a conversion into or
continuation of Eurodollar Rate Loans), the Borrower shall have the option,
subject to the provisions of this SECTION 5.03, to select an interest period
(each a "Eurodollar Interest Period") to apply to the Loans described in such
notice, subject to the following provisions:
(i) The Borrower may only select, as to a particular Borrowing
of Eurodollar Rate Loans, a Eurodollar Interest Period of one (1),
three (3), six (6), or, if available to all Lenders, nine (9) or twelve
(12) months in duration;
(ii) In the case of immediately successive Eurodollar Interest
Periods applicable to a Borrowing of Eurodollar Rate Loans, each
successive Eurodollar Interest Period shall commence on the day on
which the next preceding Eurodollar Interest Period expires;
(iii) If any Eurodollar Interest Period would otherwise expire
on a day which is not a Business Day, such Eurodollar Interest Period
shall be extended to expire on the next succeeding Business Day if the
next succeeding Business Day occurs in the same calendar month, and if
there will be no succeeding Business Day in such calendar month, the
Eurodollar Interest Period shall expire on the immediately preceding
Business Day;
(iv) The Borrower may not select a Eurodollar Interest Period
as to any Revolving Loan or Loan made under the Acquisition Subfacility
if such Eurodollar Interest Period terminates later than the scheduled
Revolving Credit Termination Date;
(v) The Borrower may not select a Eurodollar Interest Period
as to any Term Loan if such Eurodollar Interest Period terminates later
than the scheduled Term Loan Termination Date;
(vi) The Borrower may not select a Eurodollar Interest Period
with respect to any portion of principal of a Loan which extends beyond
a date on which the Borrower is required to make a scheduled payment of
such portion of principal; and
(vii) There shall be no more than eight (8) Eurodollar
Interest Periods in effect at any one time.
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(c) DETERMINATION OF INTEREST RATE. As soon as practicable on the
second Business Day prior to the first day of each Eurodollar Interest Period
(the "Eurodollar Interest Rate Determination Date"), the Agent shall determine
(pursuant to the procedures set forth in the definition of "Eurodollar Rate")
the interest rate which shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable Eurodollar Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to the Borrower and to each Lender. The Agent's
determination shall be presumed to be correct, absent manifest error, and shall
be binding upon the Borrower.
(d) INTEREST RATE UNASCERTAINABLE, INADEQUATE OR UNFAIR. In the event
that at least one (1) Business Day before the Eurodollar Interest Rate
Determination Date:
(i) the Agent is advised by Citibank that deposits in Dollars
(in the applicable amounts) are not being offered by Citibank in the
London interbank market for such Eurodollar Interest Period; or
(ii) the Agent determines that adequate and fair means do not
exist for ascertaining the applicable interest rates by reference to
which the Eurodollar Rate then being determined is to be fixed; or
(iii) the Requisite Lenders advise the Agent that the
Eurodollar Rate for Eurodollar Rate Loans comprising such Borrowing
will not adequately reflect the cost to such Requisite Lenders of
obtaining funds in Dollars in the London interbank market in the amount
substantially equal to such Lenders' Eurodollar Rate Loans in Dollars
and for a period equal to such Eurodollar Interest Period;
then the Agent shall forthwith give notice thereof to the Borrower, whereupon
(until the Agent notifies the Borrower that the circumstances giving rise to
such suspension no longer exist) the right of the Borrower to elect to have
Loans bear interest based upon the Eurodollar Rate shall be suspended and each
outstanding Eurodollar Rate Loan shall be converted into a Base Rate Loan on the
last day of the then current Eurodollar Interest Period therefor,
notwithstanding any prior election by the Borrower to the contrary.
(e) BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of, its Eurodollar
Lending Office or Eurodollar Affiliate or its other offices or Affiliates. No
Lender shall be entitled, however, to receive any greater amount under ARTICLE
XIV as a result of the transfer of any such Eurodollar Rate Loan to any office
(other than such Eurodollar Lending Office) or any Affiliate (other than such
Eurodollar Affiliate) than such Lender
75
would have been entitled to receive immediately prior thereto, unless (i) the
transfer occurred at a time when circumstances giving rise to the claim for such
greater amount did not exist and (ii) such claim would have arisen even if such
transfer had not occurred.
(f) AFFILIATES NOT OBLIGATED. No Eurodollar Affiliate or other
Affiliate of any Lender shall be deemed a party to this Agreement or shall have
any liability or obligation under this Agreement.
5.04. DETERMINATION OF APPLICABLE BASE RATE MARGIN AND EURODOLLAR RATE
MARGIN. The Base Rate Margin and Eurodollar Rate Margin applicable for the
period commencing on the Effective Date and ending on March 31, 1998 shall be
determined based on Performance Level 2. The Base Rate Margin and Eurodollar
Rate Margin applicable for the period commencing on April 1, 1998 and ending on
July 31, 1998 shall be determined based on Borrower's compliance with
Performance Levels 1 through 6, PROVIDED, HOWEVER, in no event shall the Base
Rate Margin and Eurodollar Rate Margin for such period exceed those determined
based on Performance Level 3. The Base Rate Margin and Eurodollar Rate Margin
applicable from time to time after August 31, 1998 shall be determined on the
date the Financial Statements for each fiscal quarter of the Borrower are due
pursuant to SECTION 8.01(b), commencing with the Financial Statements for the
fiscal quarter ending June 30, 1998, by reference to Borrower's compliance with
Performance Levels 1 through 6 as of the end of each fiscal quarter and be
effective during the period commencing on the first day of the month in which
such Financial Statements for the preceding fiscal quarter are due and ending on
the last day of the first month of the next fiscal quarter for which such
determination is made.
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ARTICLE VI
CONDITIONS TO LOANS AND LETTERS OF CREDIT;
LEASING AFFILIATE LIABILITIES
6.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF AGREEMENT. This
Agreement shall become effective upon and be subject to the satisfaction by
11:00 a.m. (New York time) on August 22, 1997 (the "Effective Date") of all of
the following conditions precedent:
(a) DOCUMENTS. The Agent shall have received on or before the Effective
Date all of the following:
(i) this Agreement, the Notes and all other agreements,
documents and instruments relating to the loan and other credit
transactions contemplated by this Agreement and described in the List
of Closing Documents attached hereto as EXHIBIT I and made a part
hereof, each duly executed where appropriate and in form and substance
satisfactory to the Agent; without limiting the foregoing, the Borrower
hereby directs its counsel, Xxxxx, Xxxxx & Xxxxxx, its special New York
counsel, Paul, Hastings, Xxxxxxxx & Xxxxxx, and its special Florida
counsel, Akerman, Senterfitt & Xxxxxx, P.A., to prepare and deliver to
the Agent, the Lenders and the Issuing Banks, the opinions referred to
in such List of Closing Documents;
(ii) the Pro Forma and Projections, together with a business
plan for (A) the Parent and its Subsidiaries and (B) the Borrower and
its Subsidiaries, in each instance, for the period commencing on the
Effective Date and ending on the fourth anniversary thereof, each in
form and substance satisfactory to the Agent;
(iii) an Officer's Certificate executed and delivered on
behalf of the Borrower certifying that all conditions precedent have
been met and no Potential Event of Default or Event of Default has
occurred or is continuing;
(iv) a Borrowing Base Certificate dated August 15, 1997
adequately supporting the Loans outstanding as of, and requested to be
made on, the Effective Date;
(v) the Appraisals; and
(vi) such additional documentation as the Agent
may reasonably request.
(b) THE LEASING TRANSFER. The Lenders shall be satisfied in all
material respects (i) with the terms, form and
77
substance of the Leasing Transfer and the documentation related thereto and (ii)
that the Leasing Transfer was made in compliance with all applicable laws and
regulatory approval requirements and all contractual approval and consent
requirements related thereto.
(c) NO LEGAL IMPEDIMENTS. No law, regulation, order, judgment or decree
of any Governmental Authority shall, and the Agent shall not have received any
notice that litigation is pending or threatened which is likely to, (i) enjoin,
prohibit or restrain (A) this Agreement becoming effective as of the Effective
Date or the making of the Revolving Loans and/or the issuance of Letters of
Credit requested to be made or issued, as applicable, on the Effective Date or
(B) the consummation of the Leasing Transfer, or (ii) result in a Material
Adverse Effect.
(d) FINANCIAL STATEMENTS. The Lenders shall be satisfied with the
audited Financial Statements of the Parent for its fiscal year ending December
31, 1996 and related reports and management letters of the Parent's independent
certified public accountants, the interim Financial Statements of the Parent for
the first two fiscal quarters of 1997, and the financial information relating to
the Parent, Borrower, and the Borrower's Subsidiaries provided to the Agent and
Lenders under the 1996 Credit Agreement.
(e) NO CHANGE IN CONDITION. No material adverse change shall have
occurred (as certified to the Agent and the Lenders by the respective chief
financial officers) in the business, assets, management, operations, financial
condition or prospects of the Borrower or Leasing Affiliate since December 31,
1996. The Lenders shall be satisfied that no such material adverse change shall
result from the consummation of the Leasing Transfer.
(f) INTERIM LIABILITIES AND EQUITY. Since December 31, 1996, neither
the Borrower nor any Guarantor shall have (i) entered into any material (as
determined in good faith by the Agent) commitment or transaction, including,
without limitation, transactions for borrowings and capital expenditures, which
are not in the ordinary course of such Person's business, except with respect to
the consummation of the Leasing Transfer and other transactions contemplated
hereby, (ii) declared or paid any distribution or dividend other than the
distribution effecting the Leasing Transfer, (iii) established or assumed any
obligations with respect to compensation or employee benefit plans other than
plans with respect to the Permitted Equity Securities Options, or (iv) redeemed,
repurchased, or issued any equity Securities.
(g) NO LOSS OF MATERIAL AGREEMENTS AND LICENSES. Since December 31,
1996, no Permit, agreement, lease, or license which, in the judgment of the
Agent, is material to the business,
78
operations or employee relations of the Borrower or any Guarantor shall have
been terminated, modified, revoked, breached, or declared to be in default.
(h) NO DEFAULT. No Event of Default or Potential Event of Default shall
have occurred and be continuing unwaived under the 1996 Credit Agreement.
(i) NO LITIGATION. Agent shall have reviewed all litigation pending or
threatened against the Borrower and/or any Guarantor and determined to its
satisfaction that no Material Adverse Effect will, or is reasonably likely to,
result from the existence thereof.
(j) CAPITAL STRUCTURE, OFFICERS AND SENIOR MANAGEMENT OF PARENT AND ITS
SUBSIDIARIES. The corporate and capital structure of the Parent and its
Subsidiaries shall be satisfactory to the Lenders and the composition of such
Persons' Boards of Directors and corporate officers/senior management shall not
have changed since March 31, 1997.
(k) REPRESENTATIONS AND WARRANTIES. All of the repre sentations and
warranties contained in SECTION 7.01 and in any of the other Loan Documents
shall be true and correct in all material respects on and as of the Effective
Date.
(l) FEES AND EXPENSES PAID. There shall have been paid to the Agent,
for the accounts of (i) the lenders and issuing bank under the 1996 Credit
Agreement, as applicable, all fees and expenses accrued and payable through the
Effective Date under or in connection with the 1996 Credit Agreement and (ii)
the Lenders, Issuing Banks, and the Agent, as applicable, all fees and expenses
due and payable on or before the Effective Date, including, without limitation,
fees payable in accordance with the terms of the Fee Letter.
6.02. CONDITIONS PRECEDENT TO ALL SUBSEQUENT LOANS AND LETTERS OF
CREDIT. The obligation of each Lender to make any Loan requested to be made by
it on any Funding Date and the agreement of each Issuing Bank to issue any
Letter of Credit on any date is subject to the following conditions precedent as
of each such date, both before and after giving effect to the Loans to be made
and/or the Letter of Credit to be issued on such date:
(a) REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of the Borrower contained in SECTION 7.01 and in any other Loan
Document (other than representations and warranties which expressly speak as of
a different date) shall be true and correct in all material respects.
(b) NO DEFAULTS. No Event of Default or Potential Event of Default
shall have occurred and be continuing or would
79
result from the making of the requested Loan or issuance of the requested
Letter of Credit.
(c) NO LEGAL IMPEDIMENTS. No law, regulation, order, judgment or decree
of any Governmental Authority shall, and the Agent shall not have received from
any Lender or Issuing Bank notice that, in the judgment of such Lender or
Issuing Bank, litigation is pending or threatened which is likely to, enjoin,
prohibit or restrain, or impose or result in the imposition of any material
adverse condition upon, (i) such Lender's making of the requested Loan or
participation in the requested Letter of Credit or (ii) such Issuing Bank's
issuance of the requested Letter of Credit.
(d) NO MATERIAL ADVERSE EFFECT. No event shall have occurred since the
date of this Agreement which has resulted, or is reasonably likely to result, in
a Material Adverse Effect.
(e) LEASING AFFILIATE. The conditions set forth in SECTION 6.04 shall
have been satisfied or waived in accordance with SECTION 15.07, if the proceeds
of the Loans requested will be used to make loans or advances to Leasing
Affiliate or if the Letter of Credit requested is to be issued for the account
of Leasing Affiliate.
Each submission by the Borrower to the Agent of a Notice of Borrowing with
respect to any Loan, each acceptance by the Borrower of the proceeds of each
Loan made hereunder, each submission by the Borrower to an Issuing Bank of a
request for issuance of a Letter of Credit and the issuance of such Letter of
Credit, shall constitute a representation and warranty by the Borrower as of the
Funding Date in respect of such Loan and the date of issuance of such Letter of
Credit, that all the conditions contained in this SECTION 6.02 have been
satisfied or waived in accordance with SECTION 15.07.
6.03. ADDITIONAL CONDITIONS PRECEDENT TO ALL LOANS MADE UNDER THE
ACQUISITION SUBFACILITY. The obligation of each Revolving Lender to make any
Loan requested to be made by it under the Acquisition Subfacility is also
subject to an Officer's Certificate having been executed and delivered by the
president or treasurer of the Borrower to the Agent concurrent with the Notice
of Borrowing delivered in connection with such requested Borrowing stating that
the proceeds of such Loan shall be used solely to pay part or all of the
purchase price for a Permitted Acquisition and to pay fees and expenses
attendant thereto.
6.04. CONDITIONS PRECEDENT TO LEASING AFFILIATE LIABILITIES. The
Borrower shall not make any loans or other advances to Leasing Affiliate, incur
any Accommodation Obligations with respect to Indebtedness of Leasing Affiliate,
or enter into any transactions with Leasing Affiliate otherwise permissible
under SECTION 10.08, and the Issuing Bank shall have
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no obligation to issue or continue any Letter of Credit for the account of
Leasing Affiliate unless, as of the date of the making of such loan or other
advance, incurrence of such Accommodation Obligation, consummation of such
transaction, or proposed issuance or continuation of such Letter of Credit, and
after giving effect thereto, all of the following conditions contained in this
SECTION 6.04 have been satisfied or waived in accordance with SECTION 15.07:
(a) MINIMUM NET WORTH. The net worth of the Parent and its Subsidiaries
shall be equal to at least $50,000,000.
(b) AGREEMENTS AND INSTRUMENTS. All loans and advances made by the
Borrower to Leasing Affiliate shall be evidenced by a promissory note in the
form attached hereto as EXHIBIT J and made a part hereof; no obligation of
Leasing Affiliate to the Borrower arising out of (i) any Accommodation
Obligations of the Borrower with respect to Indebtedness of Leasing Affiliate,
(ii) any Letter of Credit issued for the account of Leasing Affiliate, or (iii)
any transaction described in SECTION 10.08 shall be subordinated in right of
payment or otherwise to any claim of any Person against Leasing Affiliate or its
property other than claims in favor of the Holders and Agent for the benefit of
the Holders.
(c) MAXIMUM LEASING AFFILIATE LIABILITIES. The Leasing Affiliate
Liabilities shall not exceed $20,000,000 at any time outstanding.
(d) NOTICE TO AGENT. The Borrower shall have delivered a written
notice, in the form attached hereto as EXHIBIT K and made a part hereof, to the
Agent by no later than the day on which, as applicable, each loan or advance is
made by the Borrower to Leasing Affiliate, each Letter of Credit is requested to
be issued for the account of Leasing Affiliate, and each Accommodation
Obligation is incurred by the Borrower with respect to Indebtedness of Leasing
Affiliate.
(e) NO DEFAULT. No Event of Default or Potential Event of Default shall
have occurred or be continuing unwaived.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. In order to
induce the Lenders and the Issuing Banks to enter into this Agreement and to
make the Loans and the other financial accommodations to the Borrower and to
issue the Letters of Credit described herein, the Borrower hereby represents and
warrants to each Lender, each Issuing Bank and the Agent that the following
statements are true, correct and complete:
(a) ORGANIZATION; POWERS. (i) The Borrower and each Guarantor is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Borrower is duly qualified to do business and is
in good standing under the laws of the states of Texas, Florida, California,
Oklahoma, and Washington, and of each other jurisdiction in which failure to be
so qualified and in good standing will result, or is reasonably likely to
result, in a Material Adverse Effect. Leasing Affiliate is duly qualified to do
business and is in good standing under the laws of the state of Florida and of
each other jurisdiction in which failure to be so qualified and in good standing
will result, or is reasonably likely to result, in a Material Adverse Effect.
Parent is duly qualified to do business and is in good standing under the laws
of the state of Florida and of each other jurisdiction in which failure to be so
qualified and in good standing will result, or is reasonably likely to result,
in a Material Adverse Effect. Distribution is duly qualified to do business and
is in good standing under the laws of the state(s) of Florida and Georgia and of
each other jurisdiction in which failure to be so qualified and in good standing
will result, or is reasonably likely to result, in a Material Adverse Effect.
Finance Affiliate and each Guarantor not specifically referenced hereinabove is
duly qualified to do business and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing will
result, or is reasonably likely to result, in a Material Adverse Effect. Each of
the Borrower and Guarantors (A) has filed and maintained effective (unless
exempt from the requirements for filing) a current Business Activity Report with
the appropriate Governmental Authority in the states of Minnesota and New
Jersey, (B) is a corporation for federal income tax purposes, and (C) has all
requisite corporate power and authority to own, operate and encumber its
Property and to conduct its business as presently conducted and as proposed to
be conducted in connection with and following the consummation of the
transactions contemplated by this Agreement. Distribution is the sole Subsidiary
of the Borrower.
(ii) True, correct and complete copies of the Organizational Documents
identified on SCHEDULE 7.01-A attached hereto have been delivered to the Agent,
each of which is in full
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force and effect, has not been modified or amended except to the extent
indicated therein or as may be permitted pursuant to SECTION 10.14 and, to the
best of the Borrower's knowledge, there are no defaults under such
Organizational Documents and no events which, with the passage of time or giving
of notice or both, would constitute a default under such Organizational
Documents.
(b) AUTHORITY. (i) The Borrower and each Guarantor has the requisite
power and authority (A) to execute, deliver and perform each of the Loan
Documents which are required to be executed on behalf of such Person as required
by this Agreement on or prior to the Effective Date and (B) to file or record
the Loan Documents which have been filed or recorded by it as required by this
Agreement on or prior to the Effective Date, with any Governmental Authority.
(ii) The execution, delivery, performance and filing or recording, as
the case may be, of each of the agreements or documents which are required to be
executed, filed or recorded by or on behalf of the Borrower and the Guarantors
in connection with the Leasing Transfer, or which have been executed, filed or
recorded by or on behalf of the Borrower or Guarantors as required by this
Agreement on or prior to the Effective Date and to which the Borrower or any
Guarantor is party and the consummation of the transactions contemplated thereby
are within such Person's, as applicable, corporate powers, have been duly
authorized by all necessary corporate action and such authorization has not been
rescinded. No other corporate action or proceedings on the part of the Borrower
or any Guarantor are necessary to consummate such transactions.
(iii) Each of the Loan Documents to which the Borrower or any Guarantor
is a party (A) has been duly executed, delivered, filed or recorded, as the case
may be, on behalf of such Person, as applicable, (B) where applicable, creates
valid and perfected first Liens in the Collateral covered thereby (except for
Customary Permitted Liens which might be senior to the Liens granted under the
Loan Documents) securing the payment of all of the obligations purported to be
secured thereby, (C) constitutes such Person's, as applicable, legal, valid and
binding obligation, enforceable against such Person, as applicable, in
accordance with its terms, and (D) is in full force and effect and no material
term or condition thereof has been amended, modified or waived from the terms
and conditions contained therein as delivered to the Agent without the prior
written consent of the Lenders required to consent to such amendment,
modification or waiver. All parties to the Loan Documents have performed and
complied with all the terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such parties on or
before the Effective Date, all filings and recordings and other actions which
are necessary or desirable to perfect and protect the Liens granted pursuant to
the Loan Documents and preserve
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their required priority have been duly taken, and no Potential Event of Default,
Event of Default or breach of any covenant by any such party exists thereunder.
(c) CORPORATE AFFILIATES; OWNERSHIP OF EQUITY SECURITIES. SCHEDULE
7.01-C attached hereto (i) contains a diagram indicating the corporate structure
of the Parent and each Person in which the Parent holds a direct or indirect
partnership, joint venture, or other equity interest and indicates the nature of
such interest with respect to each Person included in such diagram; and (ii)
accurately sets forth (A) the correct legal name of such Person, the
jurisdiction of its incorporation or organization and the jurisdictions in which
it is qualified to transact business as a foreign corporation or otherwise, and
(B) the authorized, issued and outstanding shares or interests of each class of
equity Securities of the Parent and each such Person, and, with respect to
Subsidiaries of the Parent, the owners of such shares or interests. None of such
issued and outstanding Securities is subject to any vesting, redemption, or
repurchase agreement, and there are no warrants or options (other than Permitted
Equity Securities Options) outstanding with respect to such Securities. The
outstanding Capital Stock of the Borrower and each Guarantor is duly authorized,
validly issued, fully paid and nonassessable and is not Margin Stock, are free
and clear of all Liens, except for Liens granted pursuant to the Loan Documents,
are not subject to any option or purchase rights, conversion or exchange rights,
call, commitment or claim of any right, title or interest therein or thereto,
and have been issued in compliance with all applicable Requirements of Law.
(d) NO CONFLICT. The execution, delivery and perfor xxxxx of each of
the Loan Documents to which the Borrower or any Guarantor is a party do not and
will not (i) conflict with the Organizational Documents of such Person a party
thereto, (ii) to the best of Borrower's and each Guarantor's knowledge,
constitute a tortious interference with any Contractual Obligation of any Person
or conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law or Contractual
Obligation of the Borrower or any Guarantor or require termination of any
Contractual Obligation, the consequences of which violation, breach, default or
termination, singly or in the aggregate, will result, or is reasonably likely to
result, in a Material Adverse Effect or may subject the Agent, any of the
Lenders or any of the Issuing Banks to any liability, (iii) result in or require
the creation or imposition of any Lien whatsoever upon any of the Property or
assets of the Borrower or such Guarantor, other than Liens contemplated by the
Loan Documents, or (iv) require any approval of the shareholders of such Person.
(e) GOVERNMENTAL CONSENTS. Except as set forth on SCHEDULE 7.01-E
attached hereto, the execution, delivery and
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performance of each of the Loan Documents and agreements and documents relating
to the Leasing Transfer to which the Borrower or any Guarantor is a party do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by any Governmental Authority, except (i)
filings, consents or notices which have been made, obtained or given and (ii)
filings necessary to create or perfect security interests in the Collateral.
(f) GOVERNMENTAL REGULATION. Neither the Borrower nor any Guarantor is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, or the Investment Company Act of
1940, or any other federal or state statute or regulation which limits its
ability to incur indebtedness or its ability to consummate the transactions
contemplated by the Loan Documents.
(g) RESTRICTED JUNIOR PAYMENTS. During the period commencing on their
respective dates of incorporation and ending on the Effective Date, neither the
Borrower nor any Guarantor directly or indirectly declared, ordered, paid or
made, or set apart any sum or Property for, any payment or distribution which
would constitute a Restricted Junior Payment under this Agreement, or agreed to
do so, except the distribution effecting the Leasing Transfer.
(h) FINANCIAL POSITION. Complete and accurate copies of the following
Financial Statements, materials and other information have been delivered to the
Agent: (i) the Pro Forma and Projections, (ii) the audited financial statements
of the Parent for the Fiscal Year ended on December 31, 1996, (iii) the
agreements and documents pertaining to the Leasing Transfer, and (iv) all
financial reporting required during the period December 31, 1996 through the
Effective Date under the 1996 Credit Agreement. All financial statements
included in such materials were prepared in all material respects in conformity
with GAAP, except as otherwise noted therein, and fairly present in all material
respects the respective financial positions, and the results of operations and
cash flows for each of the periods covered thereby of the applicable Person as
at the respective dates thereof. Neither the Borrower nor any Guarantor has, as
of the Effective Date, any Accommodation Obligation, contingent liability or
liability for any taxes, long-term leases or commitments, not disclosed in
writing to the Agent and the Lenders prior to the Effective Date.
(i) PRO FORMA FINANCIALS. The Pro Forma fairly presents on a PRO FORMA
basis the consolidated and consolidating financial condition of the Parent and
its Subsidiaries and the Borrower and its Subsidiaries as of the Effective Date
and reflects on a PRO FORMA basis those liabilities reflected in the notes
thereto and resulting from consummation of the transactions contemplated hereby
and the payment or accrual of all Transaction
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Costs. The Projections and the assumptions expressed in the Pro Forma are
reasonable based on the information available to the Borrower at the time so
furnished.
(j) INDEBTEDNESS. SCHEDULE 1.01.5 sets forth all Indebtedness for
borrowed money of the Borrower and the respective Guarantors as of the Effective
Date; there are no defaults in the payment of principal or interest on any
Indebtedness of the Borrower or the Guarantors and no payments under such
Indebtedness have been deferred or extended beyond their stated maturity (except
as disclosed on such SCHEDULE).
(k) LITIGATION; ADVERSE EFFECTS. There is no action, suit, proceeding,
Claim, investigation or arbitration before or by any Governmental Authority or
private arbitrator pending or, to the knowledge of the Borrower, threatened
against the Borrower or any Guarantor or any of their respective Property (i)
challenging the validity or the enforceability of the Leasing Transfer or the
Loan Documents, (ii) which will, or is reasonably likely to, result in any
Material Adverse Effect, or (iii) under the Racketeering Influenced and Corrupt
Organizations Act or any similar federal or state statute or law under any
jurisdiction outside of the United States where such Person is a defendant in a
criminal indictment that provides for the forfeiture of assets to any
Governmental Authority as a criminal penalty. There is no material loss
contingency within the meaning of GAAP which has not been reflected in the
Financial Statements of the Parent and its Subsidiaries. Neither the Borrower
nor any Guarantor is subject to or in default with respect to any final
judgment, writ, injunction, restraining order or order of any nature, decree,
rule or regulation of any court or Governmental Authority which will, or is
reasonably likely to, result in a Material Adverse Effect.
(l) Intentionally omitted.
(m) NO MATERIAL ADVERSE EFFECT. Since December 31, 1996, there has
occurred no event with respect to the Borrower or any Guarantor which has
resulted, or is reasonably likely to result, in a Material Adverse Effect.
(n) PAYMENT OF TAXES. All tax returns and reports of the Borrower and
each Guarantor required to be filed have been timely filed or the filing date
therefor has been properly extended, and all taxes, assessments, fees and other
charges of Governmental Authorities thereupon and upon or relating to their
respective Properties, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid, except to the extent
(i) such taxes, assessments, fees and other charges are being contested in good
faith by an appropriate proceeding diligently pursued as permitted by the terms
of SECTION 9.04 and (ii) non-payment of the amounts thereof would not,
individually or in the aggregate, result in a Material
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Adverse Effect. The Borrower has no knowledge of any proposed tax assessment
against the Borrower or any Guarantor, or any Property of any of them, that
will, or is reasonably likely to, result in a Material Adverse Effect.
(o) PERFORMANCE. Neither the Borrower nor any Guarantor has received
any notice, citation, or allegation, nor has actual knowledge, that (i) any of
them is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to any of them, (ii) any of the Property of any such Person is in
violation of any Requirement of Law, or (iii) any condition exists which, with
the giving of notice or the lapse of time or both, would constitute a default
with respect to any such Contractual Obligation, in each case, except where such
default or defaults, if any, will not, or is not reasonably likely to, result in
a Material Adverse Effect.
(p) DISCLOSURE. The representations and warranties of the Borrower
contained in the Loan Documents, and all certificates and other documents
delivered to the Agent pursuant to the terms thereof, do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. The Borrower has not
intentionally withheld any fact from the Agent, the Issuing Banks or the Lenders
in regard to any matter which will, or is reasonably likely to, result in a
Material Adverse Effect.
(q) REQUIREMENTS OF LAW. Each of the Borrower and respective Guarantors
is in compliance with all Requirements of Law applicable to it and its
respective business, in each case where the failure to so comply individually or
in the aggregate will, or is reasonably likely to, result in a Material Adverse
Effect.
(r) ENVIRONMENTAL MATTERS. (i) Except as disclosed on SCHEDULE 7.01-R
attached hereto:
(A) the operations of the Borrower and each Guarantor and their
respective Properties comply in all material respects with all applicable
Environmental, Health or Safety Requirements of Law;
(B) the Borrower and each Guarantor has obtained all environmental,
health and safety Permits necessary for its respective operations and
Properties, and all such Permits are in good standing and the Borrower and each
Guarantor are currently in material compliance with all terms and conditions of
such Permits;
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(C) neither the Borrower nor any Guarantor, nor any of their present or
past Property or operations, are subject to or the subject of any judicial or
administrative proceeding, order, judgment, decree, dispute, negotiations,
agreement, or settlement respecting (I) any Environmental, Health or Safety
Requirements of Law, (II) any Remedial Action, (III) any Claims or Liabilities
and Costs arising from the Release or threatened Release of a Contaminant into
the environment, or (IV) any violation of or liability under any Environmental,
Health or Safety Requirement of Law that the Borrower or such Guarantor
reasonably believes will result in an expenditure over $250,000;
(D) neither the Borrower nor any Guarantor has filed any notice under
any applicable Requirement of Law (I) reporting a Release of a Contaminant, (II)
under Section 103(c) of CERCLA, indicating past or present treatment, storage or
disposal of a hazardous waste, as that term is defined under 40 C.F.R. Part 261
or any state equivalent; or (III) reporting a violation of any applicable
Environmental, Health or Safety Requirement of Law;
(E) none of the present or past Property of the Borrower or any
Guarantor is listed or proposed for listing on the National Priorities List
("NPL") pursuant to CERCLA or on the Comprehensive Environmental Response
Compensation Liability Information System List ("CERCLIS") or any similar state
list of sites requiring Remedial Action;
(F) neither the Borrower nor any Guarantor has sent or directly
arranged for the transport of any waste to any current or proposed NPL site,
CERCLIS or any similar state list of sites requiring Remedial Action;
(G) there is not now in connection with or resulting from Borrower's or
any Guarantor's operations, nor, to Borrower's knowledge, has there ever been on
or in any of the Property (I) any treatment, recycling, storage or disposal of
any hazardous waste requiring a Permit under 40 C.F.R. Parts 264 and 265 or any
state equivalent,(II) any landfill, waste pile, underground storage tank or
surface impoundment, (III) any asbestos-containing material; or (IV) a Release
of any polychlorinated biphenyls (PCB) used in hydraulic oils, electrical
transformers or other Equipment;
(H) neither the Borrower nor any Guarantor has received any notice or
Claim to the effect that it is or may be liable to any Person as a result of the
Release or threatened Release of a Contaminant into the environment;
(I) to the Borrower's knowledge, there have been no Releases of any
Contaminants to the environment from any Property except in compliance with
Environmental, Health or Safety Requirements of Law, or which have not been
corrected to the satisfaction of the appropriate Governmental Authorities;
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(J) to the Borrower's knowledge, neither the Borrower nor any Guarantor
has any contingent liability in connection with any Release or threatened
Release of any Contaminants into the environment;
(K) no Environmental Lien has attached to any Property; and
(L) none of the Property is subject to any Environmental Property
Transfer Act, or to the extent such acts are applicable to any such Property,
the Borrower has fully complied with the requirements of such acts.
(ii) the Borrower and each Guarantor is conducting and will continue to
conduct its respective business and operations in an environmentally responsible
manner in material compliance with Environmental, Health or Safety Requirements
of Law and neither the Borrower nor any Guarantor has been, nor has any reason
to believe that it will be, subject to Liabilities and Costs arising out of or
relating to environmental, health or safety matters that have or will result in
cash expenditures by the Borrower or Guarantor in excess of $250,000 in the
aggregate for any calendar year ending after the Effective Date.
(s) ERISA. None of the Borrower, any Guarantor, or any ERISA Affiliate
maintains or contributes to any Benefit Plan or Multiemployer Plan other than
those listed on SCHEDULE 7.01-S attached hereto. Each Plan which is intended to
be qualified under Section 401(a) of the Internal Revenue Code as currently in
effect either (i) has received a favorable determination letter from the IRS
that the Plan is so qualified or (ii) an application for determination of such
tax-qualified status will be made to the IRS prior to the end of the applicable
remedial amendment period under Section 401(a) of the Internal Revenue Code as
currently in effect, and the Borrower, the Guarantors, or an ERISA Affiliate
shall diligently seek to obtain a determination letter with respect to such
application. Except as identified on SCHEDULE 7.01-S, neither the Borrower nor
any Guarantor maintains or contributes to any employee welfare benefit plan
within the meaning of Section 3(1) of ERISA which provides benefits to employees
after termination of employment other than as required by Section 601 of ERISA.
The Borrower and each of the Guarantors are in compliance in all material
respects with the responsibilities, obligations and duties imposed on it by
ERISA and the Internal Revenue Code with respect to all Plans. No Benefit Plan
has incurred any accumulated funding deficiency (as defined in Sections
302(a)(2) of ERISA and 412(a) of the Internal Revenue Code) whether or not
waived. Neither the Borrower nor any ERISA Affiliate nor any fiduciary of any
Plan which is not a Multiemployer Plan (i) has engaged in a nonexempt prohibited
transaction described in Sections 406 of ERISA or 4975 of the Internal Revenue
Code or (ii) has taken or failed to take any action which would constitute or
result in a Termination Event.
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Neither the Borrower nor any ERISA Affiliate has any potential liability under
Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA. Neither the Borrower nor
any ERISA Affiliate has incurred any liability to the PBGC which remains
outstanding other than the payment of premiums, and there are no premium
payments which have become due which are unpaid. Schedule B to the most recent
annual report filed with the IRS with respect to each Benefit Plan and furnished
to the Agent is complete and accurate in all material respects. Since the date
of each such Schedule B, there has been no material adverse change in the
funding status or financial condition of the Benefit Plan relating to such
Schedule B. Neither the Borrower nor any ERISA Affiliate has (i) failed to make
a required contribution or payment to a Multiemployer Plan or (ii) made a
complete or partial withdrawal under Sections 4203 or 4205 of ERISA from a
Multiemployer Plan. Neither the Borrower nor any ERISA Affiliate has failed to
make a required installment or any other required payment under Section 412 of
the Internal Revenue Code on or before the due date for such installment or
other payment. Neither the Borrower nor any ERISA Affiliate is required to
provide security to a Benefit Plan under Section 401(a)(29) of the Internal
Revenue Code due to a Benefit Plan amendment that results in an increase in
current liability for the plan year. Except as disclosed on SCHEDULE 7.01-S,
neither the Borrower nor any Guarantor, by reason of the transactions
contemplated hereby, has any obligation to make any payment to any employee
pursuant to any Plan or existing contract or arrangement. The Borrower has given
to the Agent copies of all of the following: each Benefit Plan and related trust
agreement (including all amendments to such Plan and trust) in existence or
committed to as of the Effective Date and in respect of which the Borrower or
any ERISA Affiliate is currently an "employer" as defined in section 3(5) of
ERISA, and the most recent summary plan description, actuarial report,
determination letter issued by the IRS and Form 5500 filed in respect of each
such Benefit Plan in existence; a listing of all of the Multiemployer Plans with
the aggregate amount of the most recent annual contributions required to be made
by the Borrower and all ERISA Affiliates to each such Multiemployer Plan, any
information which has been provided to the Borrower or an ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan and the collective
bargaining agreement pursuant to which such contribution is required to be made;
and as to each employee welfare benefit plan within the meaning of Section 3(1)
of ERISA which provides benefits to employees of the Borrower or any Guarantor
after termination of employment other than as required by Section 601 of ERISA,
the most recent summary plan description for such plan and the aggregate amount
of the most recent annual payments made to terminated employees under each such
plan.
(t) LABOR MATTERS. Neither the Borrower nor any Guarantor is a party to
any collective bargaining agreement.
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(u) SECURITIES ACTIVITIES. Neither the Borrower nor any Guarantor is
engaged in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(v) SOLVENCY. After giving effect to this Agreement, the Leasing
Transfer and related transactions and transfers, the Loans to be made and the
Letters of Credit to be issued on the Effective Date or such other date as Loans
requested hereunder are made or Letters of Credit requested hereunder are
issued, and the disbursement of the proceeds of such Loans pursuant to the
Borrower's instructions, the Borrower and each Guarantor is Solvent.
(w) PATENTS, TRADEMARKS, PERMITS, ETC.; GOVERNMENT APPROVALS. (i) The
Borrower and each Guarantor, as applicable, owns, is licensed or otherwise has
the lawful right to use, or has all Permits, patents, trademarks, trade names,
copyrights, technology, know-how, permits and processes used in or necessary for
the conduct of its respective business as currently conducted which are material
to its condition (financial or otherwise), operations, performance and
prospects. No claims are pending or, to the best of Borrower's knowledge
following diligent inquiry, threatened that the Borrower or any Guarantor is
infringing or otherwise adversely affecting the rights of any Person with
respect to such Permits and other governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how, permits and processes, except for
such claims and infringements as do not, in the aggregate, give rise to any
liability on the part of the Borrower or any Guarantor which will, or is
reasonably likely to, result in a Material Adverse Effect.
(ii) The consummation of the transactions contemplated by the Loan
Documents will not impair the ownership of or rights under (or the license or
other right to use, as the case may be) any Permits and governmental approvals,
patents, trademarks, trade names, copyrights, technology, know-how, permits or
processes by the Borrower or any Guarantor in any manner which will, or is
reasonably likely to, result in a Material Adverse Effect.
(x) ASSETS AND PROPERTIES. The Borrower and each Guarantor has good and
marketable title to all of the assets and Property (tangible and intangible)
owned by it (except insofar as marketability may be limited by any laws or
regulations of any Governmental Authority affecting such assets), and all such
assets and Property are free and clear of all Liens, except Liens securing the
Obligations and Liens permitted under SECTION 10.03. Substantially all of the
assets and Property owned by, leased to, or used by the Borrower and/or the
Guarantors is in adequate operating condition and repair, ordinary wear and tear
excepted (other than Inventory classified as "AR", "R", and "BER"), is free and
clear of any known defects except such defects as do not
91
substantially interfere with the continued use thereof in the conduct of normal
operations, and is able to serve the function for which they are currently being
used, except in each case where the failure of such asset to meet such
requirements would not, or is not reasonably likely to, result in a Material
Adverse Effect. Neither this Agreement nor any other Loan Document, nor any
transaction contemplated under any such agreement, will affect any right, title
or interest of the Borrower or any Guarantor in and to any of such assets in a
manner that would, or is reasonably likely to, result in a Material Adverse
Effect.
(y) INSURANCE. SCHEDULE 7.01-Y attached hereto accurately sets forth as
of the Effective Date all insurance policies and programs currently in effect
with respect to the respective Property and assets and business of the Borrower
and Guarantors, specifying for each such policy and program, (i) the amount
thereof, (ii) the risks insured against thereby, (iii) the name of the insurer
and each insured party thereunder, (iv) the policy or other identification
number thereof, (v) the expiration date thereof, (vi) the annual premium with
respect thereto, and (vii) a list of claims and awards made thereunder during
the immediately preceding three (3) calendar years. Borrower has delivered to
the Agent copies of all such insurance policies. Such insurance policies and
programs are currently in full force and effect, in compliance with the
requirements of SECTION 9.05 and are in amounts sufficient to cover the
replacement value of the respective Property and assets of the Borrower and
Guarantors.
(z) THE LEASING TRANSFER. All conditions precedent to, and all consents
necessary to permit, the consummation of the Leasing Transfer pursuant to the
agreements and documents relating thereto have been satisfied or delivered, or
waived with the prior written consent of the Agent, and no material breach of
any term or provision of any such agreement or document has occurred and no
action has been taken by any competent authority which restrains, prevents or
imposes material adverse conditions upon, or seeks to restrain, prevent or
impose material adverse conditions upon, the consummation of the Leasing
Transfer, or the funding of any Loans and issuance of any Letters of Credit
hereunder. As of the Effective Date, the Leasing Transfer has been consummated.
(aa) PLEDGE OF SECURITIES. The grant and perfection of the security
interest in the equity Securities of Borrower, Borrower's Subsidiaries, Leasing
Affiliate and Finance Affiliate as contemplated by the Loan Documents is not
made in violation of any Requirement of Law.
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ARTICLE VIII
REPORTING COVENANTS
The Borrower, and to the extent specifically stated herein below the
Parent, covenants and agrees that so long as any Revolving Credit Commitments
are outstanding and thereafter until payment in full of all of the Obligations
(other than indemnities not yet due), unless the Requisite Lenders shall
otherwise give their prior written consent thereto:
8.01. FINANCIAL STATEMENTS. The Parent and the Borrower shall maintain,
and cause each of the other Guarantors to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of consolidated and consolidating Financial Statements in
conformity with GAAP and each of the Financial Statements described below shall
be prepared from such system and records. The Borrower shall deliver or cause to
be delivered to the Agent and the Lenders:
(a) MONTHLY REPORTS. From and after any written request therefor by the
Agent to the Borrower, as soon as practicable, and in any event within thirty
(30) days after the end of each calendar month, (i) the consolidated and
consolidating balance sheets of (A) the Parent and its Subsidiaries as at the
end of such period, and (B) to the extent the same are routinely and regularly
prepared, Leasing Affiliate and its Subsidiaries and the Borrower and its
Subsidiaries as at the end of such period and (ii) the related consolidated and
consolidating statements of income, shareholders' equity and cash flow of (A)
the Parent and its Subsidiaries for such calendar month and (B) to the extent
the same are routinely and regularly prepared, Leasing Affiliate and its
Subsidiaries and the Borrower and its Subsidiaries for such calendar month,
setting forth in each case in comparative form the corresponding figures for the
corresponding calendar month of the previous Fiscal Year certified by the chief
financial officer of the Borrower as fairly presenting the consolidated and
consolidating financial position, as applicable, of the Parent and its
Subsidiaries, Leasing Affiliate and its Subsidiaries, and the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flow for the calendar months indicated in accordance with GAAP, subject to
normal year end adjustments.
(b) QUARTERLY REPORTS. As soon as practicable, and in any event within
forty-five (45) days after the end of each fiscal quarter in each Fiscal Year,
the consolidated and consolidating balance sheets of (i) the Parent and its
Subsidiaries as at the end of such period and the related consolidated and
consolidating statements of income, shareholders' equity and cash flow of the
Parent and its Subsidiaries and (ii) to the extent the same are routinely and
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regularly prepared, Leasing Affiliate and its Subsidiaries and the Borrower and
its Subsidiaries as at the end of such period and the related respective
consolidated and consolidating statements of income, shareholders' equity and
cash flow of Leasing Affiliate and its Subsidiaries and the Borrower and its
Subsidiaries for such fiscal quarter, the period commencing on the Effective
Date and ending on September 30, 1997, and thereafter for the period from the
beginning of the then current Fiscal Year to the end of such fiscal quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the financial forecast for the current Fiscal Year delivered on the
Effective Date or pursuant to SECTION 8.01(f), as applicable, certified by the
chief financial officer of the Borrower as fairly presenting the respective
consolidated and consolidating financial positions, as applicable, of the Parent
and its Subsidiaries, Leasing Affiliate and its Subsidiaries, and the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in accordance with GAAP,
subject to normal year end adjustments. For purposes of SECTIONS 8.01(a),
8.01(b), and 8.01(c), comparisons required to be made during the period
commencing on the Effective Date and ending on December 31, 1997 shall be made
to the corresponding figures for the corresponding periods set forth in the
consolidating balance sheets of the Parent delivered to the Agent and the
Lenders under the 1996 Credit Agreement. Notwithstanding the foregoing, in the
event (i) the filing of the Parent's Form 10-Q with the Commission with respect
to any fiscal quarter is delayed for any reason and Borrower has provided Agent
with written notice of such delay by the due date for the reports required for
such quarter under this CLAUSE (b) and (ii) Borrower shall deliver either the
required reports or interim good faith estimates of the information required to
be reported under this CLAUSE (b) within fifty-five (55) days after the end of
such fiscal quarter, upon delivery of such required reports or interim estimates
within such period the Borrower shall be deemed to have complied with the
requirements of this CLAUSE (b) with respect to such quarter PROVIDED THAT
Borrower delivers the required reporting substantially concurrently with
Parent's filing of its Form 10-Q with the Commission.
(c) ANNUAL REPORTS. As soon as practicable, and in any event within
ninety (90) days after the end of each Fiscal Year, (i) the consolidated and
consolidating balance sheets of (A) the Parent and its Subsidiaries as at the
end of such Fiscal Year and (B) to the extent the same are routinely and
regularly prepared, Leasing Affiliate and its Subsidiaries and the Borrower and
its Subsidiaries as at the end of such Fiscal Year and (ii) the related
consolidated and consolidating statements of income, shareholders' equity and
cash flow of (A) the Parent and its Subsidiaries and (B) to the extent the same
are routinely and regularly prepared, Leasing Affiliate and its Subsidiaries and
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the Borrower and its Subsidiaries for such Fiscal Year, setting forth in each
case in comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the financial forecast for the current Fiscal
Year delivered on the Effective Date or pursuant to SECTION 8.01(f), as
applicable, and (ii) a report on such Financial Statements of the Parent and its
Subsidiaries of Xxxxxx Xxxxxxxx LLP or other independent certified public
accountants acceptable to the Agent, which report shall be unqualified and shall
state that such Financial Statements fairly present the consolidated and
consolidating financial position of the Parent and its Subsidiaries and, to the
extent included in the Parent's annual Financial Statements, Leasing Affiliate
and its Subsidiaries and the Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in conformity with GAAP applied on a basis consistent with prior years
(except for changes with which Xxxxxx Xxxxxxxx LLP or any such other independent
certified public accountants, if applicable, shall concur and which shall have
been disclosed in the notes to the Financial Statements) and that the
examination by such accountants in connection with such Financial Statements has
been made in accordance with generally accepted auditing standards.
Notwithstanding the foregoing, in the event (A) the filing of the Parent's
annual report with the Commission with respect to any Fiscal Year is delayed for
any reason and Borrower has provided Agent with written notice of such delay by
the due date for the reports required for such Fiscal Year under this CLAUSE (c)
and (B) Borrower shall deliver either the required reports or interim good faith
estimates of the information required to be reported under this CLAUSE (c)
within one hundred (100) days after the end of each Fiscal Year, upon delivery
of such required reports or interim estimates within such period the Borrower
shall be deemed to have complied with the requirements of this CLAUSE (c) with
respect to such Fiscal Year PROVIDED THAT Borrower delivers the required
reporting substantially concurrently with Parent's filing of its annual report
with the Commission.
(d) OFFICER'S CERTIFICATE. Together with each delivery of any Financial
Statement pursuant to this SECTION 8.01, (i) an Officer's Certificate on behalf
of the Borrower substantially in the form of EXHIBIT L attached hereto and made
a part hereof, stating that the Person signatory thereto has reviewed the terms
of the Loan Documents, and has made, or caused to be made under his/her
supervision, a review in reasonable detail of the transactions and financial
condition of the Borrower and its Subsidiaries during the accounting period
covered by such Financial Statements, that such review has not disclosed the
existence during or at the end of such accounting period, and that such Person
does not have knowledge of the existence as at the date of such Officer's
Certificate, of any condition or event which constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence
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thereof and what action the Borrower, any Guarantor, or any Subsidiary of the
Borrower has taken, is taking and proposes to take with respect thereto; and
(ii) a certificate (the "Compliance Certificate"), signed by the Borrower's
chief financial officer, setting forth calculations (with such specificity as
the Agent may reasonably request) for the period then ended which demonstrate
compliance, when applicable, with the provisions of ARTICLE XI and SECTION
12.01(o)(ii)(G)-(K).
(e) ACCOUNTANT'S STATEMENT AND PRIVITY LETTER. Together with each
delivery of the Financial Statements referred to in SECTION 8.01(c), a written
statement, in form and substance satisfactory to the Agent, of the firm of
independent certified public accountants giving the report thereon (i) stating
that their audit examination has included a review of the terms of this
Agreement as it relates to accounting matters, (ii) stating whether, in
connection with their audit examination, any condition or event which
constitutes an Event of Default or Potential Event of Default has come to their
attention, and if such condition or event has come to their attention,
specifying the nature and period of existence thereof; PROVIDED THAT such
accountants shall not be liable by reason of any failure to obtain knowledge of
any such condition or event that would not be disclosed in the course of their
audit examination, and (iii) stating that based on their audit examination
nothing has come to their attention which causes them to believe that the
information contained in either or both of the certificates delivered therewith
pursuant to SECTION 8.01(d) (as the information contained in such certificates
relates to the covenants set forth in ARTICLE XI and Events of Default set forth
in SECTION 12.01(o)(ii)(G)-(K)) is not correct or that the matters set forth in
the Compliance Certificate delivered therewith pursuant to SECTION 8.01(d)(ii)
for the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement. The statement referred to above shall be accompanied by (x) a
copy of the management letter or any similar report delivered to the Borrower or
to any officer or employee thereof by such accountants in connection with such
Financial Statements and (y) a letter in substantially the form of EXHIBIT M
attached hereto and made a part hereof from the Parent to such accountants
informing such accountants that the Lenders are relying upon the Financial
Statements audited by such accountants and delivered to the Agent and the
Lenders pursuant to SECTION 8.01(c) and that a primary intent of the Parent in
having such Financial Statements audited is to induce the Lenders to continue to
make Loans to the Borrower under this Agreement. The Agent and each Lender may,
with the written consent of the Borrower (which consent shall not be
unreasonably withheld or delayed), communicate directly with such accountants.
(f) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
practicable and in any event not later than thirty (30) days prior to the
commencement of each Fiscal Year for each
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of the Fiscal Years ending in 1997 and thereafter, (i) a quarterly budget for
such Fiscal Year; (ii) an annual business plan for such Fiscal Year,
substantially in the form of the business plan heretofore delivered to the Agent
and the Lenders, accompanied by a report reconciling all changes and departures
from the business plan delivered to the Agent and the Lenders for the preceding
Fiscal Year; and (iii) a plan and financial forecast, prepared in accordance
with the Parent's and Borrower's normal accounting procedures applied on a
consistent basis, for each succeeding Fiscal Year until the scheduled Revolving
Credit Termination Date, including, without limitation, (A) forecasted
consolidated and consolidating balance sheets and statements of cash flow of the
Parent and its Subsidiaries, Leasing Affiliate and its Subsidiaries, and the
Borrower and its Subsidiaries for each Fiscal Year, (B) forecasted consolidated
and consolidating balance sheets, statements of earnings and retained earnings,
and cash flow of the Parent and its Subsidiaries, Leasing Affiliate and its
Subsidiaries, and the Borrower and its Subsidiaries for and as of the end of
each fiscal quarter of the immediately succeeding Fiscal Year and for and as of
the end of each such Fiscal Year thereafter, (C) the amount of forecasted
Capital Expenditures for such Fiscal Year, and (D) forecasted compliance with
the provisions of ARTICLE XI and SECTION 12.01(o)(ii)(G)- (K).
8.02. OFF-SITE INVENTORY REPORTS. On the Effective Date, the Borrower
shall deliver to the Agent and the Lenders a report detailing information
regarding bailed, consigned and field warehoused Inventory of the Borrower and
its Subsidiaries in the form of EXHIBIT N attached hereto and made a part
hereof, and, promptly after the addition or termination of any bailment,
consignment or field warehousing arrantements, the Borrower shall deliver to the
Agent and the Lenders an update of such report.
8.03. BORROWING BASE CERTIFICATE; APPRAISALS. (a) BORROWING BASE
CERTIFICATE. The Borrower shall provide the Agent and the Revolving Lenders (i)
on the Effective Date (dated August 15, 1997), and (ii) on the Monday closest to
the first and fifteenth day of each calendar month or, if such Monday is not a
Business Day, the immediately succeeding Business Day (and, with respect to
CLAUSE (ii), more often if requested by the Agent or the Requisite Revolving
Lenders), with a Borrowing Base Certificate, together with a calculation of the
Texas Tax Reserve as of the date thereof if such Texas Tax Reserve exceeds
$200,000 and such supporting documents as the Agent deems desirable, all
certified as being true and correct by the chief financial officer, chief
executive officer, or controller of the Borrower. All Borrowing Base
Certificates shall set forth information regarding Receivables on a semi-monthly
basis and information regarding Inventory on a monthly basis.
(b) APPRAISALS. On each anniversary of the Effective Date (or, if
requested by the Agent, semi-annually), the Borrower
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shall provide the Agent and the Lenders with an appraisal of Borrower's and its
Subsidiaries' Inventory prepared by an independent appraiser satisfactory to the
Agent and on the same basis as the Appraisal.
8.04. EVENTS OF DEFAULT. Promptly upon any of the chief executive
officer, chief operating officer, chief financial officer, treasurer or
controller of the Borrower obtaining knowledge (a) of any condition or event
which constitutes an Event of Default or Potential Event of Default, or becoming
aware that any Lender or the Agent has given any notice with respect to a
claimed Event of Default or Potential Event of Default under this Agreement, (b)
that any Person has given any notice to the Borrower or any Guarantor or taken
any other action with respect to a claimed default or event or condition of the
type referred to in SECTION 12.01(e), or (c) of any condition or event which has
resulted, or is reasonably likely to result, in a Material Adverse Effect or
affect the value of, or the Agent's interest in, the Collateral in any material
respect, the Borrower shall deliver to the Agent and the Lenders an Officer's
Certificate specifying (i) the nature and period of existence of any such
claimed default, Event of Default, Potential Event of Default, condition or
event, (ii) the notice given or action taken by such Person in connection
therewith, and (iii) what action the Borrower has taken, is taking and proposes
to take with respect thereto.
8.05. LAWSUITS. (a) INSTITUTION OF PROCEEDINGS. Promptly upon the
Borrower obtaining knowledge of the institution of, or written threat of, any
action, suit, proceeding, governmental investigation or arbitration against or
affecting the Borrower, any Guarantor, or any Property not previously disclosed
pursuant to SECTION 7.01(k), which action, suit, proceeding, governmental
investigation or arbitration exposes, or in the case of multiple actions, suits,
proceedings, governmental investigations or arbitrations arising out of the same
general allegations or circumstances which expose, in the Borrower's reasonable
judgment, the Borrower and/or any Guarantor to liability in an amount
aggregating $1,000,000 or more (exclusive of claims covered by insurance
policies of the Borrower and Guarantors unless the insurers of such claims have
disclaimed coverage or reserved the right to disclaim coverage on such claims),
the Borrower shall give written notice thereof to the Agent and the Lenders and
provide such other information as may be reasonably available to enable each
Lender and the Agent and its counsel to evaluate such matters.
(b) QUARTERLY REPORTS. As soon as practicable and in any event within
forty-five (45) days after the end of each fiscal quarter of the Borrower, the
Borrower shall provide a written quarterly report to the Agent and the Lenders
covering the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration (not previ-
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ously reported) against or affecting the Borrower, any Guarantor, or any
Property not previously disclosed by the Borrower to the Agent and the Lenders,
and shall provide such other information at such time as may be reasonably
available to enable each Lender and the Agent and its counsel to evaluate such
matters.
(c) ADDITIONAL REPORTS UPON REQUEST. In addition to the requirements
set forth in CLAUSES (a) and (b) of this SEC TION 8.05, the Borrower upon
request of the Agent or the Requisite Lenders shall promptly give written notice
of the status of any action, suit, proceeding, governmental investigation or
arbitration covered by a report delivered pursuant to either of such CLAUSES (a)
or (b) and provide such other information as may be reasonably available to it
to enable each Lender and the Agent and its counsel to evaluate such matters.
8.06. INSURANCE. As soon as practicable and in any event by the last
day of February in each calendar year, the Borrower shall deliver to the Agent
and the Lenders (a) a report in form and substance reasonably satisfactory to
the Agent and the Lenders outlining (i) all material insurance coverage main
tained as of the date of such report by the Borrower and Guarantors and the
duration of such coverage and (ii) the claims and awards, if any, made under
such insurance for the twelve (12) calendar month period then ending and (b)
evidence that all premiums with respect to such coverage have been paid when
due.
8.07. ERISA NOTICES. The Borrower shall deliver or cause to be
delivered to the Agent and the Lenders, at the Borrower's expense, the following
information and notices as soon as reasonably possible, and in any event:
(a) within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of the chief financial officer of the
Borrower describing such Termination Event and the action, if any,
which the Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto, and when known, any action taken
or threatened by the IRS, DOL or PBGC with respect thereto;
(b) within ten (10) Business Days after the Borrower knows or
has reason to know that an assessment of a prohibited transaction
excise tax under Section 4975 of the Internal Revenue Code has
occurred, a statement of the chief financial officer of the Borrower
describing such transaction and the action which the Borrower or any
ERISA Affiliate has taken, is taking or proposes to take with respect
thereto;
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(c) within three (3) Business Days after the filing of the
same with the DOL, IRS or PBGC, copies of each annual report (form 5500
series), including Schedule B thereto, filed with respect to each
Benefit Plan;
(d) within three (3) Business Days after receipt by the
Borrower or any ERISA Affiliate of each actuarial report for any
Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(e) within three (3) Business Days after the filing of the
same with the IRS, a copy of each funding waiver request filed with
respect to any Benefit Plan and all communications received by the
Borrower or any ERISA Affiliate with respect to such request;
(f) within three (3) Business Days after the occurrence any
material increase in the benefits of any existing Benefit Plan or the
establishment of any new Benefit Plan or the commencement of
contributions to any Benefit Plan to which the Borrower or any ERISA
Affiliate was not previously contributing, notification of such
increase, establishment or commencement;
(g) within three (3) Business Days after the Borrower or any
ERISA Affiliate receives notice of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit
Plan, copies of each such notice;
(h) within three (3) Business Days after the Borrower or any
Guarantor receives notice of any unfavorable determination letter from
the IRS regarding the qualification of a Plan under Section 401(a) of
the Internal Revenue Code, copies of each such notice and letter;
(i) within three (3) Business Days after the Borrower or any
ERISA Affiliate receives notice from a Multiemployer Plan regarding the
imposition of with drawal liability, copies of each such notice;
(j) within three (3) Business Days after the Borrower or any
ERISA Affiliate fails to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of
such failure; and
(k) within three (3) Business Days after the Borrower or any
ERISA Affiliate knows (A) a
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Multiemployer Plan has been terminated, (B) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer
Plan, or (C) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan.
For purposes of this SECTION 8.07, the Borrower and any ERISA Affiliate shall be
deemed to know all facts known by the Administrator of any Plan of which the
Borrower or any ERISA Affiliate is the plan sponsor.
8.08. ENVIRONMENTAL NOTICES. (a) The Borrower shall notify the Agent
and the Lenders in writing, promptly upon the Borrower's learning thereof, of
any:
(i) notice or claim to the effect that the Borrower or any
Guarantor is or may be liable to any Person as a result of the Release
or threatened Release of any Contaminant into the environment which
could reasonably result in an expenditure by the Borrower and/or any
Guarantor over $500,000;
(ii) notice that the Borrower or any Guarantor is subject to
investigation by any Governmental Authority evaluating whether any
Remedial Action is needed to respond to the Release or threatened
Release of any Contaminant into the environment which could reasonably
result in an expenditure by the Borrower and/or any Guarantor over
$500,000;
(iii) notice that any Property is subject to an Environmental
Lien;
(iv) notice to the Borrower or any Guarantor of any material
violation of any Environmental, Health or Safety Requirement of Law;
(v) condition which might reasonably result in a material
violation of any Environmental, Health or Safety Requirement of Law;
(vi) commencement or threat of any judicial or administrative
proceeding alleging a material violation by the Borrower or any
Guarantor (or any predecessor in interest thereof) of any
Environmental, Health or Safety Requirement of Law;
(vii) new or proposed changes to any existing Environmental,
Health or Safety Requirement of Law that could result in a Material
Adverse Effect;
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(viii) any proposed acquisition of stock, assets, real estate,
or leasing of property, or any other action by the Borrower or any
Guarantor that could subject the Borrower or any Guarantor to
environmental, health or safety Liabilities and Costs which could
reasonably result in an expenditure by the Borrower and/or any
Guarantor over $500,000; or
(ix) any filing or report made by the Borrower or any
Guarantor with any Governmental Authority with respect to any
unpermitted Release or threatened Release of a Contaminant which could
reasonably result in an expenditure by the Borrower and/or any
Guarantor over $500,000.
(b) Within sixty (60) days after the end of each Fiscal Year, the
Borrower shall submit to the Agent and the Lenders a report summarizing the
status of environmental, health or safety compliance, hazard or liability issues
identified in notices required pursuant to SECTION 8.08(a), disclosed on
SCHEDULE 7.01-S, or identified in any notice or report required herein, which
report shall include, with respect to any Real Property leased or acquired
during the period covered by such report, the results of an annual inspection of
the Property with respect to whether it contains any asbestos-containing
material and, in the event any Property does contain any asbestos-containing
material, what actions will be taken to eliminate or remediate the same.
8.09. LABOR MATTERS. The Borrower shall notify the Agent and the
Lenders in writing, promptly upon the Borrower's learning thereof, of (i) any
material labor dispute to which the Borrower or any Guarantor may become a
party, including, without limitation, any strikes, lockouts or other grievances
relating to Borrower's or any Guarantor's plants and other facilities and (ii)
any liability relating to its employees incurred with respect to the closing of
any plant or other facility of the Borrower or any Guarantor.
8.10. SEC REPORTING. Promptly after the same are available, the
Borrower shall deliver to the Agent and the Lenders copies of all Financial
Statements, reports and notices, registration statements and proxy statements or
other filings, if any, sent or made available generally by the Borrower, Parent
and/or any other Guarantor to its respective Securities holders or filed with
the Commission or other securities exchange.
8.11. HEDGE AGREEMENTS. The Borrower shall provide to the Agent,
promptly upon the execution by the Borrower, Leasing Affiliate, or any
Subsidiary of the Borrower or Leasing Affiliate, of any Hedge Agreement, written
notice of the notional amount thereof.
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8.12. OTHER REPORTS. The Borrower shall deliver or cause to be
delivered to the Agent and the Lenders (a) the written notices described in
Section 6 of that certain Trademark Security Agreement dated as of December 2,
1994 and executed by ASC Acquisition Partners, L.P. as and when described
therein, (b) the statement of collateral described in Section 2.02(b) of that
certain Aircraft Mortgage and Security Agreement dated as of October 8, 1996 and
executed by the Borrower and Agent as and when described therein, (c) copies of
all press releases made available generally by the Parent or any of its
Subsidiaries to the public concerning material developments in the business of
such Person(s), and (d) reports, if any, submitted to the Parent or any of its
Subsidiaries or their respective boards of directors by such Person's
independent public accountants, including, without limitation, any management
report prepared in connection with the annual audit.
8.13. OTHER INFORMATION. Promptly upon receiving a request therefor
from the Agent or the Requisite Lenders, the Borrower shall prepare and deliver
to the Agent and the Lenders such other information with respect to the
Borrower, the Guarantors, or the Collateral, including, without limitation,
schedules identifying and describing the Collateral and any dispositions
thereof, as from time to time may be reasonably requested by the Agent or the
Requisite Lenders.
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ARTICLE IX
AFFIRMATIVE COVENANTS
Borrower, and to the extent specifically stated hereinbelow the Parent,
covenants and agrees that so long as any Revolving Credit Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than indemnities not yet due), unless the Requisite Lenders shall
otherwise give prior written consent:
9.01. EXISTENCE, ETC. The Borrower shall at all times maintain, and
cause each of its Subsidiaries to maintain, its corporate existence and preserve
and keep, or cause to be preserved and kept, in full force and effect their
respective rights and franchises material to their respective businesses.
9.02. CORPORATE POWERS; CONDUCT OF BUSINESS. The Borrower shall, and
shall cause each of its Subsidiaries to, qualify and remain qualified to do
business and maintain its good standing in each jurisdiction in which the nature
of its business and the ownership of its Property requires it to be so qualified
and in good standing.
9.03. COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause
each of its Subsidiaries to, (a) comply with all Requirements of Law and all
restrictive covenants affecting it or its business, Property, assets or
operations, and (b) obtain as needed all Permits necessary for its operations
and maintain such Permits in good standing, except in the case where
noncompliance with either CLAUSE (a) or (b) above is not reasonably likely to
result in a Material Adverse Effect.
9.04. PAYMENT OF TAXES AND CLAIMS. The Borrower shall, and shall cause
each of its Subsidiaries to, file all tax returns and reports as and when
required by the related Governmental Authority and pay (a) all taxes,
assessments and other governmental charges imposed upon it or on any of its
Property or assets or in respect of any of its franchises, business, income or
Property before any penalty or interest accrues thereon and (b) all Claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by SECTION 10.03) upon any of the
Property or assets of the Borrower or any Subsidiary of the Borrower, prior to
the time when any penalty or fine shall be incurred with respect thereto;
PROVIDED, HOWEVER, that no such taxes, assessments and governmental charges
referred to in CLAUSE (a) above or Claims referred to in CLAUSE (b) above need
be paid if being contested in good faith by appropriate pro ceedings diligently
instituted and conducted and if such reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made therefor.
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9.05. INSURANCE. The Borrower or Parent shall maintain in full force
and effect the insurance policies and programs listed on SCHEDULE 7.01-Y or
substantially similar policies and programs or other policies and programs as
are acceptable to the Agent. All such policies and programs shall be maintained
with insurers acceptable to the Agent. Each certificate and policy relating to
Property damage, boiler and machinery and/or business interruption coverage
shall contain an endorsement, in form and substance acceptable to the Agent,
showing loss payable to the Agent, for the benefit of the Holders, and, if
required by the Agent, naming the Agent as an additional insured under such
policy. Each certificate and policy relating to coverage other than the
foregoing shall, if required by the Agent, contain an endorsement naming the
Agent as an additional insured under such policy. Such endorsement or an
independent instrument furnished to the Agent shall provide that the insurance
companies will give the Agent at least thirty (30) days' written notice before
any such policy or policies of insurance shall be altered adversely to the
interests of the Holders or cancelled and that no act, whether willful or
negligent, or default of the Borrower or any other Person shall affect the right
of the Agent to recover under such policy or policies of insurance in case of
loss or damage. In the event the Borrower or Parent at any time or times
hereafter shall fail to obtain or maintain any of the policies or insurance
required herein or to pay any premium in whole or in part relating thereto, then
the Agent, without waiving or releasing any obligations or resulting Event of
Default hereunder, may at any time or times thereafter (but shall be under no
obligation to do so) obtain and maintain such policies of insurance and pay such
premiums and take any other action with respect thereto which the Agent deems
advisable. All sums so disbursed by the Agent shall constitute Protective
Advances hereunder and be part of the Obligations, payable as provided in this
Agreement.
9.06. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The
Borrower and Parent shall permit, and shall cause each of their respective
Subsidiaries to permit, any authorized representative(s) designated by either
the Agent or any Lender to visit and inspect, whether by access to Borrower's,
Parent's or their respective Subsidiaries' MIS or otherwise, any of the
Property, to examine, audit, check and make copies of the Borrower's, Parent's
and their respective Subsidiaries' financial and accounting records, books,
journals, orders, receipts and any correspondence (other than privileged
correspondence with legal counsel) and other data relating to their respective
businesses or the transactions contemplated hereby or referenced herein
(including, without limitation, in connection with environmental compliance,
hazard or liability), and to discuss their affairs, finances and accounts with
their management personnel and independent certified public accountants, all
upon reasonable written notice and at such reasonable times during normal
business hours, as often as may be reasonably requested. Each
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such visitation and inspection (i) by or on behalf of any Lender shall be at
such Lender's expense and (ii) by or on behalf of the Agent shall be at the
Borrower's expense. The Borrower and Parent shall keep and maintain, and cause
each of their respective Subsidiaries to keep and maintain, in all material
respects on its MIS and otherwise proper books of record and account in which
entries in conformity with GAAP shall be made of all dealings and transactions
in relation to its respective businesses and activities, including, without
limitation, transactions and other dealings with respect to the Collateral. If
an Event of Default has occurred and is continuing and the Obligations have been
accelerated pursuant to SECTION 12.02(a), the Borrower and Parent, upon the
Agent's request in connection with efforts to enforce the rights and remedies of
the Agent, the Lenders and the Issuing Banks under the Loan Documents, shall
turn over, and cause each of their respective Subsidiaries to turn over, any
such records requested by the Agent to the Agent or its representatives;
PROVIDED, HOWEVER, that the Borrower and Parent may, in their discretion, retain
copies of such records.
9.07. REQUIRED HEDGE AGREEMENTS. The Borrower shall maintain the Hedge
Agreement identified on SCHEDULE 9.07 attached hereto in full force and effect
until its expiry on December 2, 1997. Thereafter, in the event three-month LIBOR
exceeds a rate equal to 6.72% per annum for a period of thirty (30) consecutive
Business Days, the Borrower shall enter into Hedge Agreements within sixty (60)
calendar days after the end of such thirty (30) Business Day period containing
terms by which the Borrower is protected against three-month LIBOR exceeding a
rate equal to nine percent (9%) per annum for a minimum period of the lesser of
(a) three (3) years and (b) one year less than the then remaining term of this
Agreement as to an aggregate notional amount of not less than the amount equal
to fifty percent (50%) of the then outstanding aggregate principal balance of
the Loans, which Hedge Agreements shall otherwise be reasonably acceptable to
the Agent and purchased from a Lender, an Affiliate of a Lender or such other
Person reasonably acceptable as a credit matter to the Agent. The Borrower shall
determine to its own satisfaction whether such Hedge Agreements are sufficient
to provide protection and to meet the needs of the Borrower and such other
obligors and none of the Agent, the Issuing Banks or the Lenders shall have any
obligation or accountability with respect thereto or any obligation to propose,
quote or enter into any Hedge Agreement.
9.08. INSURANCE AND CONDEMNATION PROCEEDS. The Borrower or the Parent,
as applicable, having directed, or having caused Subsidiaries of the Parent
whose property or interests in property comprise part of the Collateral, if
applicable, to direct all insurers under policies of Property damage, boiler and
machinery and business interruption insurance and payors of any condemnation
claim or award relating to the Property to pay all proceeds payable under such
policies or with respect to such
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claim or award directly to the Agent, for the benefit of the Holders, the
Borrower and Parent hereby agree that, in no case shall such proceeds be payable
to the Borrower AND the Agent or to any Guarantor AND the Agent. The Agent
shall, upon receipt of such proceeds, apply all of the proceeds so received in
repayment of the Obligations in the manner set forth in SECTION 4.01(b)(vii)(B).
Notwithstanding the foregoing, in the event proceeds of insurance or
condemnation claims or awards received by the Agent under property damage,
boiler and machinery policies or business interruption insurance policies (i) is
less than $500,000, Agent shall, upon receipt of such proceeds and PROVIDED THAT
no Event of Default or Potential Event of Default shall have occurred and
continue unwaived, remit the amount so received to the Borrower or a Guarantor,
as applicable or (ii) constitutes Replacement Proceeds, Agent shall, upon
receipt of such proceeds and PROVIDED THAT no Event of Default or Potential
Event of Default shall have occurred and continue unwaived, hold the amount so
received as Cash Collateral for the Obligations, subject to the Borrower's or a
Guarantor's, as applicable, right to withdraw amounts from such Cash Collateral
upon its request therefor to restore, rebuild or replace the Property subject to
such insurance payment or condemnation award. Notwithstanding the foregoing, in
the case of an insurance payment or condemnation award in an amount greater than
$1,000,000, if (i) the Agent receives notice from the Borrower that it or a
Guarantor, as applicable, does not intend to restore, rebuild or replace the
Property subject to such insurance payment or condemnation award, (ii) the
Borrower or the applicable Guarantor fails to replace or commence the
restoration or rebuilding of such Property within six months after the Agent's
receipt of the proceeds of such insurance payment or condemnation award, or
(iii) upon completion of the restoration, rebuilding or replacement of such
Property, the unused proceeds from such insurance payment or condemnation award
exceed $500,000, then (x) upon the occurrence of either of the events described
in CLAUSES (i) or (ii) above, all such proceeds, and (y) upon the occurrence of
either of the events described in CLAUSE (iii) above, such excess, shall
constitute Net Cash Proceeds of Sale received by the Borrower or a Guarantor and
shall be applied to the Obligations pursuant to the terms of SECTION 4.01(b).
9.09. ERISA COMPLIANCE. The Borrower shall, and shall cause each of the
Guarantors and its/their ERISA Affiliates to, establish, maintain and operate
all Plans to comply in all material respects with the provisions of ERISA, the
Internal Revenue Code, all other applicable laws, and the regulations and
interpretations thereunder and the respective requirements of the governing
documents for such Plans.
9.10. DEPOSIT ACCOUNTS; COLLECTION ACCOUNT AGREEMENTS. The Borrower
shall, and shall cause each of the Guarantors to, maintain in full force and
effect Collection Account Agreements with respect to each of their respective
depository accounts into
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which collections of Receivables and other proceeds of Collateral are deposited.
9.11. MAINTENANCE OF PROPERTY. The Borrower shall, and shall cause each
of the Guarantors to, maintain in all material respects all of its owned and
leased Property in good, safe and insurable condition and repair, and not
permit, commit or suffer any waste or abandonment of any such Property and from
time to time shall make or cause to be made all material repairs, renewal and
replacements thereof, including, without limitation, any capital improvements
which may be required; PROVIDED, HOWEVER, that such Property may be altered or
renovated in the ordinary course of Borrower's or a Guarantor's business.
9.12. CONDEMNATION. Immediately upon learning of the institution of any
proceeding for the condemnation or other tak ing of any of the owned or leased
Real Property of the Borrower or any Guarantor, the Borrower shall notify the
Agent of the pendency of such proceeding, and permit the Agent to participate in
any such proceeding, and from time to time will deliver to the Agent all
instruments reasonably requested by the Agent to permit such participation.
9.13. FUTURE LIENS ON REAL PROPERTY. Upon the request of the Agent or
Requisite Lenders, the Borrower and Parent shall, and shall cause the other
Guarantors to, execute and deliver to the Agent, for the benefit of the Holders,
immediately upon the acquisition or leasing by the Borrower, Parent or any other
Guarantor of any Real Property on which any Inventory of the Borrower or any
Guarantor is located, a mortgage, deed of trust, assignment or other appropriate
instrument evidencing a Lien upon such Real Property, lease or interest,
together with such title insurance policies (mortgagee's form), certified
surveys, appraisals, and local counsel opinions with respect thereto and such
other agreements, documents and instruments which the Agent deems necessary or
desirable, the same to be in form and substance acceptable to the Agent and to
be subject only to (a) Liens permitted under SECTION 10.03 and (b) such other
Liens as the Agent and Lenders may reasonably approve, it being understood that
the granting of such additional security for the Obligations is a material
inducement to the execution and delivery of this Agreement by each Lender and
the Issuing Bank.
9.14. CONSIGNEE/BAILEE LETTERS; LANDLORD WAIVERS; FILINGS. The
Borrower and Parent shall, and shall cause each of the other Guarantors to,
obtain consignee or bailee letters or landlord waivers (as applicable)
substantially in the form attached hereto as EXHIBIT D from each consignee or
bailee of Inventory of the Borrower and/or a Guarantor (separately or in the
aggregate) having a minimum value (at the lower of cost or market) of $500,000
and each landlord for premises on which Inventory of the Borrower and/or
Guarantors (separately or in the aggregate) having a minimum value (at the lower
of cost or
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market) of $500,000, promptly upon delivery of such Inventory to such consignee,
bailee or premises, and (ii) cause to be executed and delivered to the Agent
concurrently with execution and delivery of such consignee or bailee letter, UCC
financing statements in form and substance satisfactory to the Agent, naming the
Agent as secured party, with respect to such Inventory located on the premises
of such consignee or bailee.
9.15. Intentionally omitted.
9.16. FUTURE PLEDGES OF EQUITY SECURITIES; OTHER COLLATERAL DOCUMENTS.
(a) The Borrower and Parent shall, and shall cause each of its respective
Subsidiaries (other than Subsidiaries of Leasing Affiliate) to, execute and
deliver to the Agent for the benefit of the Holders, concurrently with the
issuance of any equity Securities to the Borrower, the Parent, or such
Subsidiary of the Borrower or Parent in connection with any Investment made by
such Person, or formation or acquisition of a Subsidiary, a pledge of (i) all of
the equity Securities issued to or acquired by such Person, if the Person
formed, acquired or in which an Investment is made is not a Foreign Subsidiary,
and (ii) 65% of the equity Securities of any Foreign Subsidiary.
(b) The Borrower and Parent shall, and shall cause its respective
Subsidiaries to, execute and deliver to the Agent, for the benefit of the
Holders, an aircraft mortgage and security agreement, naming the Agent as
secured party, concurrently with the Borrower's, Parent's, or such
Subsidiaries', as applicable, acquisition of any aircraft or aircraft engines
registered with the Federal Aviation Administration; and the Borrower and Parent
shall cause all direct Subsidiaries of the Borrower or Parent, as applicable, to
execute and deliver to the Agent guarantees, security agreements and other Loan
Documents related to Collateral owned by such Subsidiaries concurrently with
such Persons' becoming direct Subsidiaries of the Borrower or Parent, in each
instance consistent with the Loan Documents executed and delivered on or before
the Effective Date.
(c) Notwithstanding the foregoing, nothing in this SECTION 9.16 shall
permit the Borrower or Parent or any Subsidiary of the Borrower to make any
Investment not otherwise permitted by SECTION 10.04 or SECTION 12.01(o)(ii).
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ARTICLE X
NEGATIVE COVENANTS
Borrower covenants and agrees that it shall comply with the following
covenants so long as any Revolving Credit Commitments are outstanding and
thereafter until payment in full of all of the Obligations (other than
indemnities not yet due), unless the Requisite Lenders shall otherwise give
prior written consent:
10.01. INDEBTEDNESS. The Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness for trade payables, wages and other accrued
expenses incurred in the ordinary course of business, whether or not
evidenced by notes;
(c) Intentionally omitted;
(d) Permitted Existing Indebtedness and any extensions,
renewals, refundings or replacements of Permitted Existing Indebtedness
(other than the Finance Affiliate Indebtedness), PROVIDED THAT any such
extension, renewal, refunding or replacement is in an aggregate
principal amount not greater than the principal amount of, and is on
terms no less favorable to the Borrower or the applicable Subsidiary
than the terms of, the Permitted Existing Indebtedness so extended,
renewed, refunded or replaced;
(e) to the extent permitted by ARTICLE XI and in any event in
an aggregate amount not to exceed $5,000,000 at any time, Indebtedness
with respect to Capital Leases and purchase money Indebtedness incurred
to finance the acquisition of fixed assets, and Indebtedness incurred
to refinance such Capital Leases and purchase money Indebtedness;
PROVIDED, HOWEVER, prior to incurring Capital Lease obligations owing
to any one lessor or group of affiliated or related lessors or purchase
money Indebtedness owing to any one holder or group of affiliated or
related holders thereof, which in either case aggregate(s) more than
$500,000, the Borrower shall obtain from such lessor(s) or holder(s) a
duly executed intercreditor agreement in form and substance
satisfactory to the Agent;
(f) Indebtedness in respect of taxes, assess ments,
governmental charges and Claims for labor,
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materials or supplies, to the extent that payment thereof is not
required pursuant to SECTION 9.04;
(g) Indebtedness constituting Accommodation Obligations
permitted by SECTION 10.05;
(h) Intentionally omitted;
(i) Indebtedness in respect of profit sharing plans to the
extent permitted under SECTION 10.04;
(j) Indebtedness in respect of the Hedge Agreements (i)
required or permitted under SECTION 9.07 and (ii) in respect of foreign
exchange contracts containing terms reasonably acceptable to the Agent
and purchased from a Lender, an Affiliate of a Lender or such other
Person as is reasonably acceptable as a credit matter to the Agent;
PROVIDED, HOWEVER, that the aggregate notional amount (as advised to
the Agent by the counterparty(ies) to Hedge Agreements and confirmed by
the Borrower) of all Hedge Agreements in respect of foreign exchange
contracts at any given time shall not exceed $25,000,000;
(k) Indebtedness with respect to reasonable warranties and
indemnities made under any agreements for asset sales permitted under
SECTION 10.02 and Contractual Obligations of the Borrower or its
Subsidiaries entered into in the ordinary course of their respective
businesses;
(l) Indebtedness under appeal bonds in connection with
judgments which do not result in an Event of Default or a Potential
Event of Default or any other breach hereunder, PROVIDED that the
aggregate amount of all such Indebtedness does not exceed $2,000,000;
(m) Indebtedness arising from intercompany loans from the
Borrower to any Subsidiary of the Borrower which is a Guarantor; and
(n) in addition to the Indebtedness permitted by CLAUSES (a)
through (m) above, other unsecured Indebtedness in an aggregate amount
not to exceed $2,000,000 at any time outstanding.
10.02. SALES OF ASSETS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, sell, assign, transfer, lease, convey or otherwise
dispose of any of its Property, whether now owned or hereafter acquired, or any
income or profits therefrom, or enter into any agreement to do so, except:
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(a) the sale of Property outside of the ordinary course of
such Person's business for consideration not less than the Fair Market
Value thereof so long as (i) any non-cash consideration resulting from
such sale shall be pledged or assigned to the Agent, for the benefit of
the Holders, pursuant to an instrument in form and substance acceptable
to the Agent and (ii) the Borrower complies with the mandatory
prepayment provisions set forth in SECTION 4.01(b) and the conditions
to the release of Collateral described in SECTION 13.09(c);
(b) the sale of Inventory in the ordinary course of business
of the Borrower or any Subsidiary of the Borrower to Persons who are
not Affiliates of such Persons;
(c) the disposition of Equipment if (i) such Equipment is
obsolete or no longer useful in the ordinary course of business of the
Borrower or the applicable Subsidiary of the Borrower, PROVIDED THAT
the aggregate Fair Market Value of all such Equipment disposed of in
any Fiscal Year shall not exceed $500,000, or (ii) within six (6)
months after such disposition, an amount equal to the proceeds
therefrom is either (A) used to finance the purchase of replacement
Equipment and the seller thereof delivers to the Agent evidence of such
use and that the replacement Equipment is free and clear of all Liens
except those created under the Loan Documents or (B) delivered to the
Agent for application to the repayment of the Obligations pursuant to
the mandatory prepayment provisions set forth in SECTION 4.01(b);
(d) the sale of Investments in Cash Equivalents permitted
pursuant to SECTION 10.04(a); and
(e) the sale or other transfer of Inventory in the ordinary
course of Borrower's business, prior to the occurrence of an Event of
Default, to Leasing Affiliate or any of its Subsidiaries which
Inventory either (i) is purchased after the Effective Date by the
Borrower acting as a purchasing agent for Leasing Affiliate or one of
its Subsidiaries or (ii) is Inventory of the Borrower as of the
Effective Date and, after giving effect to the sale or transfer thereof
to Leasing Affiliate or one of its Subsidiaries, the aggregate amount
of Leasing Affiliate Liabilities does not exceed $20,000,000.
Notwithstanding anything in this Agreement to the contrary, no Property of the
Borrower shall be sold, assigned, transferred, leased, or conveyed, directly or
indirectly, to any Subsidiary of Borrower without the prior written consent of
all Lenders and
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delivery to the Agent of a Borrowing Base Certificate reflecting any adjustment
to the Borrowing Base occasioned by such transfer, assignment, transfer, lease,
or conveyance.
10.03. LIENS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of their respective Property or assets
except:
(a) Liens created pursuant to the Loan Documents;
(b) Permitted Existing Liens;
(c) Customary Permitted Liens;
(d) purchase money Liens (including the interest of a lessor
under a Capital Lease or an Operating Lease having substantially the
same economic effect and Liens to which any Property is subject at the
time of the Borrower's or such Subsidiary's purchase thereof) with
respect to purchases of fixed assets, securing an amount not to exceed
$1,000,000 in the aggregate at any time or from time to time; PROVIDED
THAT (A) such Liens shall not apply to any Property other than that
purchased or subject to such Capital Lease and (B) with respect to
Liens securing Capital Lease obligations owing to any one lessor or
group of affiliated or related lessors or purchase money Indebtedness
owing to any one holder or group of affiliated or related holders
thereof, which in either case aggregate(s) more than $500,000, the
Borrower shall obtain from such lessor or holder a duly executed
intercreditor agreement in form and substance satisfactory to the Agent
prior to granting any such Lien;
(e) Intentionally omitted;
(f) federal tax Liens not resulting in an Event of Default
under SECTION 12.01(j)(ii); and
(g) extensions, renewals, refundings and replacements of Liens
referred to in CLAUSES (a), (b), and (e) of this SECTION 10.03;
PROVIDED THAT any such extension, renewal, refunding or replacement of
a Lien referred to in CLAUSE (b) or (e) shall be limited to the
Property covered by the Lien extended, renewed, refunded or replaced
and that the obligations secured by any such extension, renewal,
refunding or replacement Lien shall be in an amount not greater than
the amount of the obligations then secured by the Lien extended,
renewed, refunded or replaced.
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10.04. INVESTMENTS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly make or own any Investment except:
(a) Investments in Cash Equivalents;
(b) Permitted Existing Investments;
(c) Investments in the form of advances to employees in the
ordinary course of business for moving, relocation and travel expenses;
and other loans to employees for any lawful purpose, PROVIDED THAT (i)
each loan permitted under this CLAUSE (c) shall be evidenced by a
promissory note, (ii) the aggregate principal amount of all such
advances and loans at any time outstanding shall not exceed $500,000,
and (iii) no such advances or loans outstanding at any time to any one
Person shall exceed $100,000;
(d) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(e) Investments pursuant to joint venture agreements to which
the Borrower or any Subsidiary of the Borrower is a party in an
aggregate amount for all such Investments not to exceed $250,000 at any
time;
(f) Investments by the Borrower in the form of intercompany
loans to Leasing Affiliate; PROVIDED THAT the conditions set forth in
SECTION 6.04 are satisfied or waived in accordance with the provisions
of SECTION 15.07 and the promissory note evidencing the same is
endorsed and delivered to the Agent as part of the Collateral;
(g) Investments by the Borrower in Distribution;
(h) Intentionally omitted
(i) Investments by the Borrower in Foreign Subsidiaries formed
for the sole purpose of distribution of Inventory of the Borrower
outside of the United States and which Foreign Subsidiaries own no
Inventory and retain cash and cash equivalents only to the extent
required to pay expenses associated with maintenance of an office and
related personnel engaged to conduct its business in the jurisdiction
in which it is domiciled; and
(j) to the extent they constitute Investments, contributions
to and payments of benefits under any Plan in existence as of the
Effective Date as required
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by the benefit commitments in such Plan as of the Effective Date.
The Borrower shall not form any direct Subsidiary after the Effective Date or
permit any Subsidiary of the Borrower to form any Subsidiary except to the
extent Investments therein are permitted hereinabove. Neither the Borrower nor
any Subsidiary of the Borrower may make any Investment in Leasing Affiliate or
any Subsidiary of Leasing Affiliate, except to the extent permitted in CLAUSE
(f) above.
10.05. ACCOMMODATION OBLIGATIONS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly create or become or be
liable with respect to any Accommodation Obligation, except:
(a) recourse obligations resulting from endorse ment of
negotiable instruments for collection in the ordinary course of its
business;
(b) Permitted Existing Accommodation Obligations and any
extensions, renewals or replacements thereof, PROVIDED THAT the
aggregate Indebtedness under any such extension, renewal or replacement
is not greater than the Indebtedness under, and shall be on terms no
less favorable to the Borrower than the terms of, the Permitted
Existing Accommodation Obligation so extended, renewed or replaced;
(c) Accommodation Obligations (i) arising under the Loan
Documents or (ii) included in the Indebtedness permitted under SECTION
10.01(a);
(d) Accommodation Obligations of the Borrower with respect to
Indebtedness of Leasing Affiliate; PROVIDED THAT the conditions set
forth in SECTION 6.04 are satisfied or waived in accordance with the
provisions of SECTION 15.07;
(e) in addition to the Accommodation Obligations permitted by
CLAUSES (a) through (d) above, other unsecured Accommodation
Obligations in an aggregate amount not to exceed $1,000,000 at any time
outstanding.
Neither the Borrower nor any Subsidiary of the Borrower shall incur any
Accommodation Obligation with respect to Indebtedness of Leasing Affiliate or
any Subsidiary of Leasing Affiliate except to the extent specifically permitted
under CLAUSE (d) above.
10.06. RESTRICTED JUNIOR PAYMENTS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, declare or make any Restricted Junior
Payment, except:
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(a) interest payments in respect of the Finance Affiliate
Indebtedness;
(b) dividends and other distributions by Distribution to the
Borrower;
(c) payments in respect of loans made by the Borrower to
Distribution;
(d) Intentionally omitted; and
(e) fees and other remuneration paid to Parent, Finance
Affiliate, or any Subsidiary of the Borrower by the Borrower or any
Guarantor in the ordinary course of the Borrower's or such Guarantor's
business and otherwise permitted under this Agreement
PROVIDED, HOWEVER, the Restricted Junior Payments described in CLAUSES (a) and
(e) above shall not be permitted after the occurrence and during the continuance
of an Event of Default or a Potential Event of Default or if an Event of Default
or a Potential Event of Default would result therefrom.
10.07. CONDUCT OF BUSINESS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (a) the
businesses engaged in by the Borrower and Distribution on the date hereof, (b)
any business or activities which are substantially similar, related, incidental
or complimentary thereto, including, without limitation, the business of repair
of aircraft spare parts, and (c) the business of new parts distribution, parts
manufacturing, related engineering or inventory management services.
10.08. TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly enter into or
permit to exist any trans action (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Borrower, on terms that are less favorable to the Borrower
or such Subsidiary of the Borrower than those that might be obtained in an arm's
length transaction at the time from Persons who are not such an Affiliate.
Nothing contained in this SECTION 10.08 shall prohibit (a) any transaction
expressly permitted by SECTION 10.06; (b) increases in compensation and benefits
for officers and employees of the Borrower or its Subsidiaries which are
customary in the industry; PROVIDED THAT no Event of Default or Potential Event
of Default has occurred and is continuing; (c) payment of customary officers'
and directors' indemnities or (d) the sale or other transfer of Inventory of the
Borrower to Leasing Affiliate or a Subsidiary of Leasing Affiliate (i) at cost,
if such Inventory is purchased by the Borrower acting as purchasing agent for
Leasing Affiliate or a Subsidiary of Leasing Affiliate after the Effective Date,
or
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(ii) at the value attributed to such Inventory after application of the advance
rates applicable thereto on the then most recent Borrowing Base Certificate, if
such Inventory is Inventory of the Borrower on the Effective Date; PROVIDED THAT
the sale or other transfer of such Inventory is otherwise permissible under the
terms of SECTION 10.02(e).
10.09. RESTRICTION ON FUNDAMENTAL CHANGES. The Borrower shall not (a)
enter into any merger or consolidation except in connection with a Permitted
Acquisition, (b) permit any Foreign Subsidiary to enter into any merger or
consolidation, or (c) permit any of its other Subsidiaries to enter into any
merger or consolidation except in connection with (i) a Permitted Acquisition or
(ii) a merger or consolidation requiring no payment of cash or incurrence of
Indebtedness not otherwise permitted under SECTION 10.01. The Borrower shall not
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution), or
convey, lease, sell, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or substantially all of its business or Property,
whether now or hereafter acquired, except in connection with transactions
permitted under SECTION 10.02 or permit any of its Subsidiaries to (a)
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution) or (b)
convey, lease, sell, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or substantially all of their respective businesses
or Property, whether now or hereafter acquired, except in connection with
transactions permitted under SECTION 10.02.
10.10. SALES AND LEASEBACKS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, become liable, directly, by assumption or by
Accommodation Obligation, with respect to any lease, whether an Operating Lease
or a Capital Lease, of any Property (whether real or personal or mixed) which it
(a) sold or transferred or is to sell or transfer to any other Person, or (b)
intends to use for substantially the same purposes as any other Property which
has been or is to be sold or trans ferred by it to any other Person, in either
instance, in connection with such lease.
10.11. MARGIN REGULATIONS; SECURITIES LAWS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, use all or any portion of the
proceeds of any credit extended under this Agreement to purchase or carry Margin
Stock.
10.12. ERISA. The Borrower shall not:
(a) engage, or permit any of the Guarantors to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of
the Internal Revenue Code for which a statutory or class exemption is
not available or a private exemption has not been pre viously obtained
from the DOL;
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(b) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue Code),
with respect to any Benefit Plan, whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual install ments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan which would result in any liability of Borrower or any
ERISA Affiliate under Title IV of ERISA;
(e) fail to make any contribution or payment to any
Multiemployer Plan which Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law per taining thereto;
(f) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or other payment; or
(g) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan year
such that the Borrower or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal Revenue
Code;
if such event results, either singly or in the aggregate, after taking into
account all other such events and any liabilities associated therewith, in an
aggregate liability in excess of $500,000.
10.13. ISSUANCE OF EQUITY SECURITIES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, issue any equity Securities.
10.14. ORGANIZATIONAL DOCUMENTS; FINANCE AFFILIATE INDEBTEDNESS. The
Borrower shall not, and shall not permit any of its Subsidiaries to, amend,
modify or otherwise change any of the terms or provisions in any of (a) its
Organizational Documents as in effect on the Effective Date, except amendments
to effect a change of name of the Borrower or a Subsidiary of the Borrower,
written notice of which change of name the Borrower shall have provided the
Agent within sixty (60) days prior to the effective date of any such name change
or (b) the agreements and instruments evidencing the Finance Affiliate
Indebtedness as in
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effect on the Effective Date or (c) the agreements and instruments evidencing
loans and advances comprising part of the Leasing Affiliate Liabilities.
10.15. BANK ACCOUNTS. The Borrower shall not, and shall not permit any
of the Guarantors to, establish or maintain any deposit account into which
collections of Receivables and proceeds of other Collateral are deposited other
than those identified as existing on the Effective Date and disclosed on
SCHEDULE 10.15 attached hereto, unless the Borrower gives the Agent prior
written notice of such establishment and delivers to the Agent an executed
Collection Account Agreement concurrently with such deposit account being
established.
10.16. FISCAL YEAR. The Borrower shall not, and shall not permit any of
its Subsidiaries to, change its fiscal year from the Fiscal Year.
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ARTICLE XI
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as any Revolving Credit
Commitments are outstanding and thereafter until payment in full of all of the
Obligations (other than indemnities not yet due):
11.01. INTEREST COVERAGE RATIO. The Borrower shall maintain an Interest
Coverage Ratio, as determined as of the last day of each fiscal quarter of the
Borrower (a) commencing with the fiscal quarter ending June 30, 1997 and ending
with the fiscal quarter ending March 31, 2000, for the four-fiscal-quarter
period then ending, of at least 3.0 to 1.0 and (b) commencing with the fiscal
quarter ending June 30, 2000 and ending with the fiscal quarter ending June 30,
2002, for the four-fiscal-quarter period then ending, of at least 4.0 to 1.0.
11.02. FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain a Fixed
Charge Coverage Ratio, as determined as of the last day of each fiscal quarter
of the Borrower ending during the period set forth below, for the
four-fiscal-quarter period then ending, of at least the level set forth below
opposite such period.
PERIOD MINIMUM RATIO
------ -------------
June 30, 1997 - September 30, 1998 1.35 to 1.00
December 31, 1998 - September 30, 1999 1.50 to 1.00
December 31, 1999 - June 30, 2002 1.60 to 1.00
11.03. WORKING CAPITAL. Working Capital shall be maintained, at all
times during the term of this Agreement, at a minimum amount of $100,000,000.
11.04. CAPITAL EXPENDITURES. The Borrower shall not (a) make Capital
Expenditures during:
(i) the period commencing on the Effective Date and ending on December
31, 1997 aggregating more than $3,000,000,
(ii) the period commencing on January 1, 1998 and ending on December
31, 1998 aggregating more that $2,000,000, or
(iii) any Fiscal Year ending after 1998 in excess of $1,000,000 in the
aggregate;
(in each instance, the "Maximum Amount"); PROVIDED, HOWEVER, to the extent the
Borrower and its Subsidiaries have not made
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Capital Expenditures in the amount permitted above for any given period set
forth above, Capital Expenditures in an amount equal to 100% of the Maximum
Amount of such Capital Expenditures permitted but not made in such period may be
made in the immediately next succeeding Fiscal Year in addition to any amounts
permitted above for such Fiscal Year; PROVIDED THAT to the extent amounts
carried forward from one period to the next succeeding Fiscal Year are not
expended in such Fiscal Year, such surplus may not be carried forward to any
other succeeding year.
11.05. EXCESS BORROWING AVAILABILITY. The Borrower shall, at all times
during the term of this Agreement, maintain Revolving Credit Availability which
exceeds the Revolving Credit Obligations by at least $2,000,000.
11.06. LEVERAGE RATIO. The Borrower shall maintain a ratio of Funded
Debt of the Borrower to EBITDA of the Borrower, determined as of the end of each
fiscal quarter of the Borrower for the four-fiscal-quarter period then ended, of
not more than 4.0 to 1.0.
11.07. MINIMUM TANGIBLE NET WORTH. The Borrower shall maintain a
Tangible Net Worth of at least the amount set forth below for each fiscal
quarter of the Borrower ending during the period set forth below opposite such
amount.
PERIOD MINIMUM TANGIBLE NET WORTH
------ --------------------------
June 30, 1997 -
September 30, 1998 $70,000,000
December 31, 1998 -
September 30, 1999 $80,000,000
December 31, 1999 -
September 30, 2000 $90,000,000
December 31, 2000 -
September 30, 2001 $110,000,000
December 31, 2001 -
June 30, 2002 $125,000,000
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ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.01. EVENTS OF DEFAULT. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall fail to pay
(i) when due any principal on any Loan or any Reimbursement Obligation or (ii)
any interest on any Loan, fees due under the terms of this Agreement or the Fee
Letter or other Obligations outstanding within two (2) Business Days after the
same become due in accordance with the terms of this Agreement or the Fee
Letter.
(b) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under SECTIONS 9.01 - 9.07, 9.10, 9.11, 9.13, and 9.14, ARTICLE
X or ARTICLE XI. Leasing Affiliate shall fail to duly and punctually perform or
observe any agreement, covenant or obligation binding on Leasing Affiliate under
SECTIONS 22(a)-(e) and (h)-(s) of the Leasing Affiliate Guaranty.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any repre sentation or
warranty made or deemed made by the Borrower or any Guarantor to the Agent, any
Lender or any Issuing Bank herein or by any Person in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be false or mislead ing in
any material respect on the date as of which made (or deemed made).
(d) OTHER DEFAULTS. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as identified
in CLAUSES (a), (b) or (c) of this SECTION 12.01) or any default or event of
default shall occur under any of the other Loan Documents (other than as
identified in CLAUSES (b) or (c) of this SECTION 12.01), and such default or
event of default shall continue for thirty (30) days after the occurrence
thereof; or Leasing Affiliate shall default in the performance of or compliance
with any term contained in the Leasing Affiliate Guaranty (other than as
identified in CLAUSE (b) of this SECTION 12.01) and such default shall continue
for thirty (30) days after the occurrence thereof.
(e) DEFAULT AS TO OTHER INDEBTEDNESS; OPERATING LEASES. (i) The
Borrower or any Guarantor shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) with
respect to any Indebtedness (other than an Obligation) of such Persons,
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singly or in the aggregate equal to or exceeding $250,000; or any breach,
default or event of default shall occur, or any other condition shall exist
under any instrument, agreement or indenture pertaining to any such
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption or other required repurchase of such Indebtedness, or permit the
holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by the obligor thereon (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; or any breach, default or
event of default on the part of the Borrower or any Guarantor shall occur under
any Operating Lease to which the Borrower or such Guarantor is a party which
breach, default or event of default shall materially adversely affect the rights
of the Borrower or such Guarantor with respect to the Property subject to any
Operating Lease on which the remaining payments exceed $1,000,000.
(ii) Any three (3) Special Purpose Subsidiaries shall have failed to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) with respect to any Indebtedness of such
Persons; or any breach, default or event of default shall occur, or any other
condition shall exist under any instrument, agreement or indenture pertaining to
any such Indebtedness, if the effect thereof is to cause an acceleration,
mandatory redemption or other required repurchase of such Indebtedness, or
permit the holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) by the obligors thereon (other than by a regularly
scheduled required prepayment) prior to the stated maturity thereof.
(iii) Any Special Purpose Subsidiary/ies in which, either singly or in
the aggregate, Leasing Affiliate has made Investments aggregating at least
$5,000,000 shall have failed to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness of such Person(s); or any breach, default or event of
default shall occur, or any other condition shall exist under any instrument,
agreement or indenture pertaining to any such Indebtedness, if the effect
thereof is to cause an acceleration, mandatory redemption or other required
repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness to
accelerate the maturity of any such Indebtedness or require a redemption or
other repurchase of such Indebtedness; or any such Indebtedness shall be
otherwise declared to be due and payable (by acceleration or otherwise) by the
obligor(s)
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thereon (other than by a regularly scheduled required prepayment) prior to the
stated maturity thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against the Borrower or any
Guarantor and the petition shall not be dismissed, stayed, bonded or discharged
within thirty (30) days after commencement of the case; or a court having
jurisdiction in the premises shall enter a decree or order for relief in respect
of the Borrower or any Guarantor in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal, state, local
or foreign law;
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee, custodian
or other officer having similar powers over the Borrower or any Guarantor or
over all or a substantial part of the Property shall be entered; or an interim
receiver, trustee or other custodian of the Borrower or any Guarantor or of all
or a substantial part of the Property shall be appointed or a warrant of
attachment, execution or similar process against any substantial part of the
Property shall be issued and any such event shall not be stayed, dismissed,
bonded or discharged within thirty (30) days after entry, appointment or
issuance.
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower or
any Guarantor shall have an order for relief entered with respect to it or
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its Property; or the Borrower or any Guarantor
shall make any assignment for the benefit of creditors or shall be unable or
fail, or admit in writing its inability, to pay its debts as such debts become
due; or the shareholders or board of directors (or equivalent) of the Borrower
or any Guarantor (or any committee thereof) adopts any resolution or otherwise
authorizes any action to approve any of the foregoing.
(h) DISSOLUTION. Any order, judgment or decree shall be entered against
the Borrower or any Guarantor decreeing its involuntary dissolution or split up
and such order shall remain undischarged and unstayed for a period in excess of
thirty (30) days; or the Borrower or any Guarantor shall otherwise dissolve,
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be dissolved, or cease to exist except as specifically permitted by this
Agreement.
(i) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason,
(i) any Loan Document ceases to be in full force and effect (other than any
Hedge Agreement not required to be maintained by the terms of this Agreement) or
the Borrower or any Guarantor seeks to repudiate its obligations thereunder and
the Liens intended to be created thereby against Property having an aggregate
Fair Market Value in excess of $100,000 are, or the Borrower or any Guarantor
seeks to render such Liens, invalid or unperfected, or (ii) Liens in favor of
the Agent for the benefit of the Holders contemplated by the Loan Documents
against Property having an aggregate Fair Market Value in excess of $100,000
shall, at any time, for any reason, be invalidated or otherwise cease to be in
full force and effect, or such Liens shall be subordinated or shall not have the
priority contemplated by this Agreement or the Loan Documents.
(j) JUDGMENTS AND ATTACHMENTS. (i) Any money judgment (other than a
money judgment covered by insurance as to which the insurance company has
acknowledged coverage), writ or warrant of attachment, or similar process
against the Borrower or any Guarantor or any of their respective assets
involving in any case an amount in excess of $250,000 is entered and shall
remain undischarged, unvacated, unbonded or unstayed for a period of thirty (30)
days or in any event later than five (5) days prior to the date of any proposed
sale thereunder; PROVIDED, HOWEVER, if any such judgment, writ or warrant of
attachment or similar process is in excess of $5,000,000, the entry thereof
shall immediately constitute an Event of Default hereunder unless fully bonded
in a manner satisfactory to the Agent.
(ii) A federal tax Lien is filed against the Borrower or any Guarantor
or any of the Property which is not discharged of record, bonded over or
otherwise secured to the satisfaction of the Agent within forty-five (45) days
after the filing thereof or the date upon which the Agent receives actual
knowledge of the filing thereof for an amount which equals or exceeds
$1,000,000.
(iii) An Environmental Lien is filed against any of the Property with
respect to Claims in an amount which equals or exceeds $500,000.
(k) TERMINATION EVENT. Any Termination Event occurs which could
reasonably be expected to subject either the Borrower or any ERISA Affiliate to
liability in excess of $500,000.
(l) WAIVER APPLICATION. The plan administrator of any Benefit Plan
applies under Section 412(d) of the Code for a waiver of the minimum funding
standards of Section 412(a) of the Internal Revenue Code and the Agent believes
that the substantial business hardship upon which the application for the waiver
is
125
based could subject either the Borrower or any ERISA Affiliate to liability in
excess of $1,000,000.
(m) CHANGE IN CONTROL. A Change of Control shall occur.
(n) MATERIAL ADVERSE EFFECT. An event shall occur which results in a
Material Adverse Effect.
(o) CERTAIN EVENTS PERTAINING TO THE PARENT. (i) The Parent shall fail
to (A) maintain its existence as a corporation duly organized and existing and
qualified and in good standing as a corporation authorized to do business in the
states of Delaware and Florida and in each other jurisdiction in which failure
to be so qualified and in good standing will result, or is reasonably likely to
result, in a Material Adverse Effect, (B) comply in all material respects with
all Requirements of Law applicable to it, (C) file all tax returns and reports
required to be filed by it with any Governmental Authority as and when required
to be filed or to pay taxes, assessments, fees or other governmental charges
upon it or its Property, assets, income or franchises which are shown in such
returns or reports to be due and payable as and when due and payable, except for
taxes, assessments, fees and other governmental charges (I) that are being
contested by it in good faith by an appropriate proceeding diligently pursued,
(II) for which adequate reserves have been made on its books and records, and
(III) the amounts the non-payment of which would not individually, or in the
aggregate, result in a Material Adverse Effect, or (D) within three (3) days
after its receipt of any distribution, dividend or payment from any Subsidiary
of Parent, make a capital contribution in the amount thereof (net of taxes
allocable to transfers under Requirements of Law) to Borrower.
(ii) The Parent shall (A) merge or liquidate with or into any other
Person and, as a result thereof and after giving effect thereto, the Parent is
not the surviving Person, (B) repurchase or redeem any of its Capital Stock
other than as required with respect to the Permitted Equity Securities Options
or expressly consented to in writing by the Requisite Lenders, (C) engage in any
business other than that of acting as a holding company for the Borrower,
Leasing Affiliate, Finance Affiliate, and any Person acquired or formed in
connection with a Permitted Parent Acquisition, (D) make or maintain any
Investments other than (1) its Investments in Leasing Affiliate existing as of
the Effective Date or from the proceeds of issuance of (a) Indebtedness by
Parent which is unsecured and subordinated to the Parent's obligations as a
Guarantor pursuant to agreements in form and substance satifactory to the Agent
or (b) equity Securities of Parent, (2) Investments in the Borrower and Finance
Affiliate, (3) Investments in connection with Permitted Parent Acquisitions from
the proceeds of issuance of (a) Indebtedness by Parent which is unsecured and
subordinated to the Parent's obligations as a Guarantor pursuant to agreements
in form and
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substance satisfactory to the Agent or (b) equity Securities of Parent, or (4)
Investments in Cash Equivalents, or (E) incur any Indebtedness other than that
identified on SCHEDULE 1.01.3 or described in CLAUSES (D)(1)(a) or (D)(3)(a)
above; (F) grant or suffer to exist any Lien against any property or asset of
the Parent other than Liens securing the Obligations; (G) fail to maintain a
Fixed Charge Coverage Ratio, as determined as of the last day of each fiscal
quarter of the Parent commencing with the fiscal quarter ending June 30, 1997
and ending with the fiscal quarter ending September 30, 2000, for the
four-fiscal-quarter period then ending, of at least 1.10 to 1.00; (H) fail to
maintain a Fixed Charge Coverage Ratio, as determined as of the last day of each
fiscal quarter of the Parent commencing with the fiscal quarter ending December
31, 2000 and ending with the fiscal quarter ending September 30, 2001, for the
four-fiscal-quarter period then ending, of at least 1.15 to 1.00; (I) fail to
maintain a Fixed Charge Coverage Ratio, as determined as of the last day of each
fiscal quarter of the Parent commencing with the fiscal quarter ending December
31, 2001 and ending with the fiscal quarter ending June 30, 2002, for the
four-fiscal-quarter period then ending, of at least 1.20 to 1.00; (J) fail to
maintain a ratio of Funded Debt of the Parent to EBITDA of the Parent,
determined as of the end of each fiscal quarter of the Parent, for the
four-fiscal-quarter period then ended, of not more than 6.00 to 1.00; or (K)
fail to limit the Capital Expenditures made by the Parent and its Subsidiaries
during (1) the period commencing on the Effective Date and ending on December
31, 1997 to no more than $3,000,000, (2) the period commencing on January 1,
1998 and ending on December 31, 1998 to no more than $2,000,000 or (3) any
Fiscal Year ending after 1998 to no more than $1,000,000, PROVIDED, HOWEVER, to
the extent the Parent and its Subsidiaries have not made Capital Expenditures in
the amount permitted in CLAUSES (1), (2), or (3) above for a given period,
Capital Expenditures in an amount equal to 100% of the amount specified for any
such respective period but not made in such period may be made in the
immediately next succeeding Fiscal Year; PROVIDED THAT to the extent amounts
carried forward from one period to the next succeeding Fiscal Year are not
expended in such Fiscal Year, such surplus may not be carried forward to any
other succeeding year.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with SECTION 15.07.
12.02. RIGHTS AND REMEDIES.
(a) ACCELERATION AND TERMINATION. Upon the occurrence of any Event of
Default described in SECTIONS 12.01(f) or 12.01(g) or 12.01(h), the Revolving
Lenders' respective obligations to make Revolving Loans under the Revolving
Credit Commitments shall automatically and immediately terminate and the unpaid
principal amount of, and any and all accrued interest on, the Obligations and
all accrued fees shall automatically become
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immediately due and payable, without presentment, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by the Borrower;
and upon the occurrence and during the continuance of any other Event of
Default, the Agent shall at the request, or may with the consent, of the
Requisite Lenders, by written notice to the Borrower, (i) declare that the
Revolving Lenders' respective obligations to make Revolving Loans under the
Revolving Credit Commitments are terminated, whereupon such obligation of each
Revolving Lender to make any Revolving Loan hereunder and of each Revolving
Lender or Issuing Bank to issue or participate in any Letter of Credit not then
issued shall immediately terminate, and/or (ii) declare the unpaid principal
amount of and any and all accrued and unpaid interest on the Obligations to be,
and the same shall thereupon be, immediately due and payable, without
presentment, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and of acceleration), all of which are hereby
expressly waived by the Borrower.
(b) DEPOSIT FOR LETTERS OF CREDIT. In addition, after the occurrence
and during the continuance of an Event of Default, the Borrower shall, promptly
upon demand by the Agent, deliver to the Agent, Cash Collateral in such form as
requested by the Agent for deposit in the Cash Collateral Account, together with
such endorsements, and execution and delivery of such documents and instruments
as the Agent may request in order to perfect or protect the Agent's Lien with
respect thereto, in an aggregate principal amount equal to the then outstanding
Letter of Credit Obligations.
(c) RESCISSION. If at any time after termination of the Revolving
Lenders' obligations to make Revolving Loans under the Revolving Credit
Commitments and/or acceleration of the maturity of the Loans, the Borrower shall
pay all arrears of interest and all payments on account of principal of the
Loans and Reimbursement Obligations which shall have become due other wise than
by acceleration (with interest on principal and, to the extent permitted by law,
on overdue interest, at the rates speci fied in this Agreement) and all Events
of Default and Potential Events of Default (other than nonpayment of principal
of and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to SECTION 15.07, then upon
the written consent of the Requisite Lenders and Requisite Revolving Lenders and
written notice to the Borrower, the termination of Revolving Lenders' respective
obligations to make Revolving Loans under the Revolving Credit Commitments and
the respective Revolving Lenders' and Issuing Banks' obligations to participate
in or issue Letters of Credit and/or the aforesaid acceleration and its
consequences may be rescinded and annulled;
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but such action shall not affect any subsequent Event of Default or Potential
Event of Default or impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to bind the Revolving
Lenders and the Issuing Banks to a decision which may be made at the election of
the Requisite Lenders and Requisite Revolving Lenders; they are not intended to
benefit the Borrower and do not give the Borrower the right to require the
Revolving Lenders to rescind or annul any termination of the aforesaid
obligations of the Revolving Lenders or Issuing Banks or any acceleration
hereunder, even if the conditions set forth herein are met.
(d) ENFORCEMENT. The Borrower acknowledges that in the event the
Borrower or any Guarantor fails to perform, observe or discharge any of their
respective obligations or liabilities under this Agreement or any other Loan
Document, any remedy of law may prove to be inadequate relief to the Agent, the
Issuing Banks and the Lenders; therefore, the Borrower agrees that the Agent,
the Issuing Banks and the Lenders shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
12.03. POST-DEFAULT WITHDRAWALS FROM THE CONCENTRATION ACCOUNT AND CASH
COLLATERAL ACCOUNT. Notwithstanding any other provision of this Agreement, from
and after acceleration of the Obligations as described in SECTION 12.02(a),
neither the Borrower nor any Person or entity claiming on behalf of or through
the Borrower shall have any right to withdraw any of the funds held in the
Concentration Account until the Obligations have been paid in full in cash. The
Agent may, at any such time, sell or cause to be sold any Cash Equivalents being
held by the Agent in the Concentration Account or as Cash Collateral at any
broker's board or at public or private sale, in one or more sales or lots, at
such price as the Agent may deem best, without assumption of any credit risk,
and the purchaser of any or all such Cash Equivalents so sold shall thereafter
own the same, absolutely free from any claim, encumbrance or right of any kind
whatsoever. The Agent or any Holder may, in its own name or in the name of a
designee or nominee, buy such Cash Equivalents at any public sale and, if
permitted by applicable law, buy such Cash Equivalents at any private sale. The
Agent shall apply the proceeds of any such sale, net of any reasonable expenses
incurred in connection therewith, and any other funds deposited in the
Concentration Account or Cash Collateral Account to the payment of the
Obligations in accordance with SECTION 4.02(b)(ii), other than amounts which are
being held as Cash Collateral for Reimbursement Obligations, which shall be
applied to such Reimbursement Obligations without regard to SECTION 4.02(b)(ii).
The Borrower agrees that any sale of Cash Equivalents conducted in conformity
with reasonable commercial practices of banks, commercial finance companies,
insurance companies or other financial institutions disposing of property
similar to such Cash Equivalents shall be deemed to be
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commercially reasonable and any requirements of reasonable notice shall be met
if such notice is given by the Agent within a commercially reasonable time prior
to such disposition, the time of delivery of which notice the parties hereto
agree shall in no event be required to be greater than five (5) Business Days
before the date of the intended sale or disposition. Any other requirement of
notice, demand or advertisement for sale is waived to the extent permitted by
law. The Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
ARTICLE XIII
THE AGENT
13.01. APPOINTMENT. (a) Each Lender and each Issuing Bank hereby
designates and appoints Citicorp as the Agent of such Lender or such Issuing
Bank under this Agreement, and each Lender and each Issuing Bank hereby
irrevocably authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and the Loan Documents and to exercise such powers
as are set forth herein or therein together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such on the express
conditions contained in this ARTICLE XIII.
(b) The provisions of this ARTICLE XIII are solely for the benefit of
the Agent, the Lenders and Issuing Banks, and neither the Borrower nor any of
its Affiliates shall have any right to rely on or enforce any of the provisions
hereof (other than as expressly set forth in SECTION 13.07). In performing its
functions and duties under this Agreement, the Agent shall act solely as agent
of the Lenders and the Issuing Banks and does not assume and shall not be deemed
to have assumed any obligation or relationship of agency, trustee or fiduciary
with or for the Borrower or any Affiliate of the Borrower and the agency, trust
and fiduciary relationship of the Agent hereunder with the Lenders and Issuing
Banks shall be strictly limited in scope to the specific provisions of this
Agreement. The Agent may perform any of its duties hereunder, or under the other
Loan Documents, by or through its agents or employees.
13.02. NATURE OF DUTIES. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall not have by reason of this Agreement a fiduciary
relation ship in respect of any Holder. Nothing in this Agreement or any of the
other Loan Documents, expressed or implied, is intended to or shall be construed
to impose upon the Agent any obligations in respect of this Agreement or any of
the Loan Documents except as
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expressly set forth herein or therein. Each Lender and each Issuing Bank shall
make its own independent investigation of the financial condition and affairs of
the Borrower and its Affiliates in connection with the making and the
continuance of the Loans hereunder and with the issuance of the Letters of
Credit and shall make its own appraisal of the creditworthiness of the Borrower,
any Guarantor and any of their Affiliates initially and on a continuing basis,
and the Agent shall not have any duty or responsibility, either initially or on
a continuing basis, to provide any Holder with any credit or other information
with respect thereto (except for reports required to be delivered by the Agent
under the terms of this Agreement). If the Agent seeks the consent or approval
of the Lenders to the taking or refraining from taking of any action hereunder,
the Agent shall send notice thereof to each Lender. The Agent shall promptly
notify each Lender at any time that the Lenders so required hereunder have
instructed the Agent to act or refrain from acting pursuant hereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes or any amount payable under
any provision of ARTICLE IV or ARTICLE V when due) or the other Loan Documents,
the Agent shall not be required to exercise any discretion or take any action.
Notwithstanding the foregoing, the Agent shall be required to act or refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Requisite Lenders (unless the instructions
or consent of certain affected or all of the Lenders or the Requisite Revolving
Lenders is required hereunder or thereunder) and such instructions shall be
binding upon all Lenders, Issuing Banks and Holders of Notes; PROVIDED, HOWEVER,
the Agent shall not be required to take any action which (i) the Agent
reasonably believes will expose it to personal liability unless the Agent
receives an indemnification satisfactory to it from the Lenders with respect to
such action or (ii) is contrary to this Agreement, the other Loan Documents or
applicable law.
13.03. RIGHTS, EXCULPATION, ETC. (a) LIABILITIES; RESPONSIBILITIES.
None of the Agent, any Affiliate of the Agent, or any of their respective
officers, directors, employees or agents shall be liable to any Holder for any
action taken or omitted by them hereunder or under any of the Loan Documents, or
in connection therewith, except that no Person shall be relieved of any
liability imposed by law for gross negligence or willful misconduct. The Agent
shall not be liable for any apportionment or distribution of payments made by it
in good faith pursuant to SECTION 4.02(b), and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Holder to whom payment was due, but not made, shall be to
recover from other Holders any payment in excess of the amount to which they are
determined to have been entitled. The Agent shall not be responsible to any
Holder for any recitals, statements, representations or warranties herein or for
the execution, effectiveness, genuineness, validity, legality,
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enforceability, collectibility, or sufficiency of this Agreement or any of the
other Loan Documents or the transactions contemplated thereby, or for the
financial condition of the Borrower or any of its Affiliates. The Agent shall
not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any of the Loan Documents, the agreements and instruments executed and delivered
in connection with the Finance Affiliate Indebtedness or the Leasing Affiliate
Liabilities, or the financial condition of the Borrower or any of its
Affiliates, or the existence or possible existence of any Potential Event of
Default or Event of Default.
(b) RIGHT TO REQUEST INSTRUCTIONS. The Agent may at any time request
instructions from the Lenders with respect to any actions or approvals which by
the terms of any of the Loan Documents the Agent is permitted or required to
take or to grant, and the Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from any action or withholding
any approval under any of the Loan Documents until it shall have received such
instructions from those Lenders from whom the Agent is required to obtain such
instructions for the pertinent matter in accordance with the Loan Documents.
Without limiting the generality of the foregoing, no Holder shall have any right
of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting under the Loan Documents in accordance with the
instructions of the Requisite Lenders or, where required by the express terms of
this Agree ment, a different or greater proportion of the Lenders.
13.04. RELIANCE. The Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it.
13.05. INDEMNIFICATION. To the extent that the Agent is required to be
reimbursed and indemnified by the Borrower but is not reimbursed and indemnified
by the Borrower and the Borrower is not otherwise relieved or excused from such
obligation, the Lenders will reimburse and indemnify the Agent for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against it in any
way relating to or arising out of the Loan Documents or any action taken or
omitted by the Agent under the Loan Documents, in proportion to each Lender's
Pro Rata Share. The obligations of
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the Lenders under this SECTION 13.05 shall survive the payment in full of the
Loans, the Reimbursement Obligations and all other Obligations and the
termination of this Agreement.
13.06. AGENT INDIVIDUALLY. With respect to its Pro Rata Share of the
Revolving Credit Commitments hereunder, if any, and the Loans made by it, if
any, the Agent shall have and may exercise the same rights and powers hereunder
and is subject to the same obligations and liabilities as and to the extent set
forth herein for any other Lender. The terms "Lenders", "Requisite Lenders",
"Requisite Revolving Lenders" or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity, if
applicable, as a Lender or one of the Requisite Lenders or Requisite Revolving
Lenders. The Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Borrower or any of its Affiliates as if it were not acting as the Agent pursuant
hereto.
13.07. SUCCESSOR AGENTS. (a) RESIGNATION. The Agent may resign from the
performance of all its functions and duties hereunder at any time by giving at
least thirty (30) Business Days' prior written notice to the Borrower and the
Lenders. Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to this SECTION 13.07.
(b) APPOINTMENT BY AGENT. Upon any such notice of resignation, the
Agent shall have the right to appoint a successor Agent selected from among the
Lenders, which appointment shall be subject to (i) the prior written approval of
the Borrower (which may not be unreasonably withheld or delayed, and shall not
be required upon the occurrence and during the continuance of an Event of
Default) and the Requisite Lenders and (ii) the concurrence of the Lender
proposed for such appointment.
(c) RIGHTS OF THE SUCCESSOR AND RETIRING AGENTS. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of this ARTICLE XIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Agreement.
13.08. RELATIONS AMONG LENDERS. Each Lender and each Issuing Bank
agrees (except as provided in SECTION 15.05) that it will not take any legal
action, nor institute any actions or proceedings, against the Borrower or any
other obligor hereunder or with respect to any Collateral, without the prior
written consent of the Requisite Lenders. Without limiting the
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generality of the foregoing, no Lender may accelerate or otherwise enforce its
portion of the Obligations, or unilaterally terminate its Revolving Credit
Commitments, except in accordance with SECTION 12.02(a).
13.09. CONCERNING THE COLLATERAL AND THE LOAN DOCUMENTS. (a) PROTECTIVE
ADVANCES. The Agent may from time to time, (i) before or after the occurrence of
an Event of Default, make such disbursements and advances pursuant to the Loan
Documents which the Agent, in its sole discretion, deems necessary or desirable
to preserve or protect the Collateral or any portion thereof and (ii) after the
occurrence of an Event of Default which is continuing unwaived, to enhance the
likelihood or maximize the amount of repayment of the Loans and other
Obligations ("Protective Advances"); PROVIDED, HOWEVER, that Agent shall obtain
the prior written consent of the Requisite Revolving Lenders with respect to the
making of any Protective Advance which, when combined with other Protective
Advances not then reimbursed by the Borrower, would exceed $3,000,000. The Agent
shall notify the Borrower and each Revolving Lender in writing of each such
Protective Advance, which notice shall include a description of the purpose of
such Protective Advance. The Borrower agrees to pay the Agent, upon demand, the
principal amount of all outstanding Protective Advances, together with interest
thereon at the rate from time to time applicable to Base Rate Loans pursuant to
SECTION 5.01 from the date of such Protective Advance until the outstanding
principal balance thereof is paid in full. If the Borrower fails to make payment
in respect of any Protective Advance within one (1) Business Day after the date
the Borrower receives written demand therefor from the Agent, the Agent shall
promptly notify each Revolving Lender and each Revolving Lender agrees that it
shall thereupon make available to the Agent, in Dollars in immediately available
funds, the amount equal to such Revolving Lender's Revolving Loan Pro Rata Share
of such Protective Advance; PROVIDED, HOWEVER, that no Revolving Lender shall be
required to make any such payment in excess of its then unfunded Revolving
Credit Commitment. If such funds are not made available to the Agent by any
Revolving Lender within one (1) Business Day after the Agent's demand therefor,
the Agent will be entitled to recover any such amount from such Revolving Lender
together with interest thereon at the Federal Funds Rate for each day during the
period commencing on the date of such demand and ending on the date such amount
is received. The failure of any Revolving Lender to make available to the Agent
its Revolving Loan Pro Rata Share of any such Protective Advance shall neither
relieve any other Revolving Lender of its obligation hereunder to make available
to the Agent such other Revolving Lender's Pro Rata Share of such Protective
Advance on the date such payment is to be made nor increase the obligation of
any other Revolving Lender to make such payment to the Agent. All outstanding
principal of, and interest on, Protective Advances shall constitute Obligations
secured by the Collateral until paid in full by the Borrower.
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(b) AUTHORITY. Each Lender and each Issuing Bank authorizes and directs
the Agent to enter into the Loan Documents relating to the Collateral for the
benefit of the Lenders and the Issuing Banks. Each Lender and each Issuing Bank
agrees that any action taken by the Agent or the Requisite Lenders (or, where
required by the express terms of this Agreement, a different or greater
proportion of the Lenders) in accordance with the provisions of this Agreement
or the other Loan Documents, and the exercise by the Agent or the Requisite
Lenders (or, where so required, such greater or different proportion of the
Lenders) of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of the Lenders and Issuing Banks. Without limiting the generality of
the foregoing, the Agent shall have the sole and exclusive right and authority
to (i) act as the disbursing and collecting agent for the Lenders and the
Issuing Banks with respect to all payments and collections arising in connection
with this Agreement and the Loan Documents relating to the Collateral; (ii)
execute and deliver each Loan Document relating to the Collateral and accept
delivery of each such agreement delivered by the Borrower or any Guarantor a
party thereto; (iii) act as collateral agent for the Lenders and the Issuing
Banks for purposes of the perfection of all security interests and Liens created
by such agreements and all other purposes stated therein; PROVIDED, HOWEVER, the
Agent hereby appoints, authorizes and directs the Lenders and the Issuing Banks
to act as collateral sub-agent for the Agent, the Lenders and the Issuing Banks
for purposes of the perfection of all security interests and Liens with respect
to the Property at any time in the possession of such Lender or such Issuing
Bank, including, without limitation, deposit accounts maintained with, and cash
and Cash Equivalents held by, such Lender or such Issuing Bank; (iv) manage,
supervise and otherwise deal with the Collateral; (v) take such action as is
necessary or desirable to maintain the perfection and priority of the security
interests and liens created or purported to be created by the Loan Documents;
and (vi) except as may be otherwise specifically restricted by the terms of this
Agreement or any other Loan Document, exercise all remedies given to the Agent,
the Lenders or the Issuing Banks with respect to the Collateral under the Loan
Documents relating thereto, applicable law or otherwise.
(c) RELEASE OF COLLATERAL. (i) Each Lender and each Issuing Bank hereby
directs, in accordance with the terms of this Agreement, the Agent to release
any Lien held by the Agent for the benefit of the Holders:
(A) against all of the Collateral, upon final and
indefeasible payment in full of the Obligations and
termination of this Agreement;
(B) against any part of the Collateral sold or
disposed of by the Borrower or any of its Subsidiaries,
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if such sale or disposition is permitted by SECTION 10.02, as certified
to the Agent by the Borrower in an Officer's Certificate, or is
otherwise consented to by the Requisite Lenders; and/or
(C) against any part of the Collateral consisting of a
promissory note, upon final and indefeasible payment in full of the
Indebtedness evidenced thereby.
(ii) Each Lender and each Issuing Bank hereby directs the Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this SECTION 13.09(c) promptly upon the effectiveness of any such release.
ARTICLE XIV
YIELD PROTECTION
14.01. TAXES. (a) PAYMENT OF TAXES. Any and all payments by the
Borrower hereunder or under any Note or other document evidencing any
Obligations shall be made, in accordance with SECTION 4.02, free and clear of
and without reduction for any and all present or future taxes, levies, imposts,
deductions, charges, withholdings, and all stamp or documentary taxes, excise
taxes, ad valorem taxes and other taxes imposed on the value of the Property,
charges or levies which arise from the execution, delivery or registration, or
from payment or performance under, or otherwise with respect to, any of the Loan
Documents or the Revolving Credit Commitments and all other liabilities with
respect thereto excluding, in the case of each Lender, each Issuing Bank and the
Agent, taxes imposed on or measured by net income or overall gross receipts and
capital and franchise taxes imposed on it by (i) the United States, (ii) the
Governmental Authority of the jurisdiction in which such Lender's Domestic
Lending Office is located or any political subdivision thereof or (iii) the
Governmental Authority in which such Person is organ ized, managed and
controlled or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges and withholdings being hereinafter referred
to as "Taxes"). If the Borrower shall be required by law to withhold or deduct
any Taxes from or in respect of any sum payable hereunder or under any such Note
or document to any Lender, any Issuing Bank or the Agent, (x) the sum payable to
such Lender, Issuing Bank, or the Agent shall be increased as may be necessary
so that after making all required withholding or deductions (including
withholding or deductions applicable to additional sums payable under this
SECTION 14.01) such Lender, such Issuing Bank or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
withholding or
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deductions been made, (y) the Borrower shall make such withholding or
deductions, and (z) the Borrower shall pay the full amount withheld or deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) INDEMNIFICATION. The Borrower will indemnify each Lender, each
Issuing Bank and the Agent against, and reimburse each on demand for, the full
amount of all Taxes (including, without limitation, any Taxes imposed by any
Governmental Authority on amounts payable under this SECTION 14.01 and any
additional income or franchise taxes resulting therefrom) incurred or paid by
such Lender, such Issuing Bank or the Agent (as the case may be) or any of their
respective Affiliates and any liability (including penalties, interest, and
out-of-pocket expenses paid to third parties) arising therefrom or with respect
thereto, whether or not such Taxes were lawfully payable. A certificate as to
any additional amount payable to any Person under this SECTION 14.01 submitted
by it to the Borrower shall, absent manifest error, be final, conclusive and
binding upon all parties hereto. Each Lender and each Issuing Bank agrees,
within a reasonable time after receiving a written request from the Borrower, to
provide the Borrower and the Agent with such certificates as are reasonably
required, and take such other actions as are reasonably necessary to claim such
exemptions as such Lender or such Issuing Bank may be entitled to claim in
respect of all or a portion of any Taxes which are otherwise required to be paid
or deducted or withheld pursuant to this SECTION 14.01 in respect of any
payments under this Agreement or under the Notes.
(c) RECEIPTS. Within thirty (30) days after the date of any payment of
Taxes by the Borrower, it will furnish to the Agent, at its address referred to
in SECTION 15.08, the original or a certified copy of a receipt evidencing
payment thereof.
(d) FOREIGN BANK CERTIFICATIONS. (i) Each Lender that is not created or
organized under the laws of the United States or a political subdivision thereof
shall deliver to the Borrower and the Agent on the Effective Date or the date on
which such Lender becomes a Lender pursuant to SECTION 15.01 hereof a true and
accurate certificate executed in duplicate by a duly authorized officer of such
Lender to the effect that such Lender is eligible to receive payments hereunder
and under the Notes without deduction or withholding of United States federal
income tax (I) under the provisions of an applicable tax treaty concluded by the
United States (in which case the certificate shall be accompanied by two duly
completed copies of IRS Form 1001 (or any successor or substitute form or
forms)), (II) under Sections 1442(c)(1) and 1442(a) of the Internal Revenue Code
(in which case the certificate shall be accompanied by two duly completed copies
of IRS Form 4224 (or any successor or substitute form or forms)), or (III) due
to such Lender's not being a "bank" as such term is used in Section 881(c)(3)(A)
of the Internal
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Revenue Code (in which case, the certificate shall be accompanied by two
accurate and complete original signed copies of IRS Form W-8 (or any successor
or substitute form or forms)).
(ii) Each Lender further agrees to deliver to the Bor rower and the
Agent from time to time, a true and accurate certificate executed in duplicate
by a duly authorized officer of such Lender before or promptly upon the
occurrence of any event requiring a change in the most recent certificate
previously delivered by it to the Borrower and the Agent pursuant to this
SECTION 14.01(d). Each certificate required to be delivered pursuant to this
SECTION 4.01(d)(ii) shall certify as to one of the following:
(A) that such Lender can continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax;
(B) that such Lender cannot continue to receive
payments hereunder and under the Notes without deduction or withholding
of United States federal income tax as specified therein but does not
require additional payments pursuant to SECTION 14.01(a) because it is
entitled to recover the full amount of any such deduction or
withholding from a source other than the Borrower; or
(C) that such Lender is no longer capable of receiving
payments hereunder and under the Notes without deduction or withholding
of United States federal income tax as specified therein and that it is
not capable of recovering the full amount of the same from a source
other than the Borrower.
Each Lender agrees to deliver to the Borrower and the Agent further duly
completed copies of the above-mentioned IRS forms on or before the earlier of
(x) the date that any such form expires or becomes obsolete or otherwise is
required to be resubmitted as a condition to obtaining an exemption from
withholding from United States federal income tax and (y) fifteen (15) days
after the occurrence of any event requiring a change in the most recent form
previously delivered by such Lender to the Borrower and Agent, unless any change
in treaty, law, regulation, or official interpretation thereof which would
render such form inapplicable or which would prevent the Lender from duly
completing and delivering such form has occurred prior to the date on which any
such delivery would otherwise be required and the Lender promptly advises the
Borrower that it is not capable of receiving payments hereunder and under the
Notes without any deduction or withholding of United States federal income tax.
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14.02. INCREASED CAPITAL. If after the date hereof any Lender or
Issuing Bank determines that (i) the adoption or implementation of or any change
in or in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or banks or financial institutions generally (whether or
not having the force of law), compliance with which affects or would affect the
amount of capital required or expected to be maintained by such Lender or
Issuing Bank or any corporation controlling such Lender or Issuing Bank and (ii)
the amount of such capital is increased by or based upon (A) the making or
maintenance by any Lender of its participation in or obligation to participate
in Letters of Credit or (B) the issuance or maintenance by any Issuing Bank of,
or the existence of any Issuing Bank's obligation to issue, Letters of Credit,
then, in any such case, upon written demand by such Lender or Issuing Bank (with
a copy of such demand to the Agent), the Borrower shall immediately pay to the
Agent for the account of such Lender or Issuing Bank, from time to time as
specified by such Lender or Issuing Bank, additional amounts sufficient to
compensate such Lender or Issuing Bank or such corporation therefor. Such demand
shall be accompanied by a statement as to the amount of such compensation and
include a brief summary of the basis for such demand. Such statement shall be
conclusive and binding for all purposes, absent manifest error.
14.03. CHANGES; LEGAL RESTRICTIONS. If after the date hereof any Lender
or Issuing Bank determines that the adoption or implementation of or any change
in or in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or over banks or financial institutions generally (whether
or not having the force of law), compliance with which:
(a) does or will subject a Lender or an Issuing Bank to
charges (other than taxes) of any kind which such Lender or Issuing
Bank reasonably determines to be applicable to the Revolving Credit
Commitments of the Lenders and/or the Issuing Banks to issue and/or
participate in Letters of Credit or change the basis of taxation of
payments to that Lender or Issuing Bank of fees, interest, or any other
amount payable hereunder with respect to Letters of Credit; or
(b) does or will impose, modify, or hold appli cable, in the
determination of a Lender or an Issuing Bank, any reserve, special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities (including
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those pertaining to Letters of Credit) in or for the account of,
advances or loans by, commitments made, or other credit extended by, or
any other acquisition of funds by, a Lender or an Issuing Bank;
and the result of any of the foregoing is to increase the cost to that Lender or
Issuing Bank of making, renewing or maintaining its Revolving Credit Commitments
with respect to, or issuing or participating in, the Letters of Credit or to
reduce any amount receivable thereunder; then, in any such case, upon written
demand by such Lender or Issuing Bank (with a copy of such demand to the Agent),
the Borrower shall immediately pay to the Agent for the account of such Lender
or Issuing Bank, from time to time as specified by such Lender or Issuing Bank,
such amount or amounts as may be necessary to compensate such Lender or Issuing
Bank for any such additional cost incurred or reduced amount received. Such
demand shall be accompanied by a statement as to the amount of such compensation
and include a brief summary of the basis for such demand. Such statement shall
be conclusive and binding for all purposes, absent manifest error.
14.04. LIMITATION ON ADDITIONAL AMOUNTS PAYABLE BY THE BORROWER.
Notwithstanding the provisions of SECTION 14.01(a), the Borrower shall not be
required to pay any additional amounts thereunder to a Lender if (a) the
obligation to pay such additional amounts would not have arisen but for a
failure by the Lender to comply with the requirements described in SECTION 14.01
or (b) the Lender shall not have furnished the Borrower with such forms or shall
not have taken such other action as reasonably may be available to it under
applicable tax laws and any applicable tax treaty to obtain an exemption from,
or reduction (to the lowest applicable rate) of withholding of such United
States federal income tax; PROVIDED, HOWEVER, the Borrower's obligation to pay
such additional amounts shall be reinstated upon receipt of such forms or
evidence that action with respect to obtaining such exemption or reduction has
been taken.
14.05. CHANGE IN LENDING OFFICE. Any Lender claiming any additional
amounts payable pursuant to SECTION 14.01 shall use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the Domestic Lending Office designated by it for purposes of this
Agreement to a Domestic Lending Office in another jurisdiction, if the making of
such a change would avoid the need for, or reduce the amount of, any such
additional amounts which may thereafter accrue and would not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender.
14.06. ILLEGALITY. (a) If at any time any Lender determines (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties) that the making or continuation of any Eurodollar Rate Loan
has become unlawful or impermissible by compliance by that Lender with any
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law, governmental rule, regulation or order of any Governmental Authority
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful or would result in costs or penalties), then, and in
any such event, such Lender may give notice of that determination, in writing,
to the Borrower and the Agent, and the Agent shall promptly transmit the notice
to each other Lender.
(b) When notice is given by a Lender under SECTION 14.06(a), (i) the
Borrower's right to request from such Lender and such Lender's obligation, if
any, to make Eurodollar Rate Loans shall be immediately suspended, and such
Lender shall make a Base Rate Loan as part of any requested Borrowing of
Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loan or Loans are
then outstanding, the Borrower shall immediately, or if permitted by applicable
law, no later than the date permitted thereby, upon at least one (1) Business
Day's prior written notice to the Agent and the affected Lender, convert each
such Loan into a Base Rate Loan.
(c) If at any time after a Lender gives notice under SECTION 14.06(a)
such Lender determines that it may lawfully make Eurodollar Rate Loans, such
Lender shall promptly give notice of that determination, in writing, to the
Borrower and the Agent, and the Agent shall promptly transmit the notice to each
other Lender. The Borrower's right to request, and such Lender's obligation, if
any, to make, Eurodollar Rate Loans shall thereupon be restored.
14.07. COMPENSATION. In addition to all amounts required to be paid by
the Borrower pursuant to SECTION 5.01, the Borrower shall compensate each
Lender, upon demand, for all losses, expenses and liabilities (including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurodollar Rate Loans to the Borrower but excluding any
loss of the then applicable Eurodollar Rate Margin on the relevant Loans) which
that Lender may sustain (a) if for any reason a Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion/Continuation given
by the Borrower or in a telephonic request by it for borrowing or
conversion/continuation or a successive Eurodollar Interest Period does not
commence after notice therefor is given pursuant to SECTION 5.01(e), including,
without limitation, pursuant to SECTION 5.03(d), (b) if for any reason any
Eurodollar Rate Loan is prepaid or converted (including, without limitation,
mandatorily pursuant to SECTION 4.01 or SECTION 14.06(b)) on a date which is not
the last day of the applicable Eurodollar Interest Period, (c) as a consequence
of a required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a
result of any of the events indicated in SECTION 5.03(d) or SECTION 14.06(b), or
(d) as a consequence of any
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failure by the Borrower to repay Eurodollar Rate Loans when required by the
terms of this Agreement. The Lender making demand for such compensation shall
deliver to the Borrower concurrently with such demand a written statement in
reasonable detail as to such losses, expenses and liabilities, and this
statement shall be conclusive as to the amount of compensation due to that
Lender, absent manifest error.
ARTICLE XV
MISCELLANEOUS
15.01. ASSIGNMENTS AND PARTICIPATIONS. (a) ASSIGN MENTS. No assignments
or participations of any Lender's rights or obligations under this Agreement
shall be made except in accordance with this SECTION 15.01. Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all of its rights and obligations
with respect to the Term Loans, the Revolving Loans, and the Letters of Credit)
in accordance with the provisions of this SECTION 15.01.
(b) LIMITATIONS ON ASSIGNMENTS. Each assignment shall be subject to the
following conditions: (i) each such assignment may be on a non-pro-rata basis,
but shall be of a constant, and not a varying, ratable percentage of all of the
assigning Lender's rights and obligations under this Agreement which are subject
to such assignment and, in the case of (A) a partial assignment, shall be in a
minimum principal amount of $5,000,000 or (B) an assignment of a Lender's
Revolving Credit Commitment or outstanding Term Loans, shall be in a minimum
principal amount of the lesser of $5,000,000 or such Lender's Revolving Credit
Commitment or outstanding balance of such Lender's Term Loans being assigned,
(ii) each such assignment shall be to an Eligible Assignee, and (iii) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance. Upon
such execution, delivery, acceptance and recording in the Register, from and
after the effective date specified in each Assignment and Acceptance and agreed
to by the Agent, (A) the assignee thereunder shall, in addition to any rights
and obligations hereunder held by it immediately prior to such effective date,
if any, have the rights and obligations hereunder that have been assigned to it
pursuant to such Assignment and Acceptance and shall, to the fullest extent
permitted by law, have the same rights and benefits hereunder as if it were an
original Lender hereunder, (B) the assigning Lender shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or
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the remaining portion of such assigning Lender's rights and obligations under
this Agreement, the assigning Lender shall cease to be a party hereto), and (C)
the Borrower shall execute and deliver to the assignee thereunder one or more
Notes, as applicable, evidencing its obligations to such assignee and the
adjusted obligations to such assignor with respect to the Loans in substitution
for the Note(s) previously held by the assignor.
(c) THE REGISTER. The Agent shall maintain at its address referred to
in SECTION 15.08 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitment under each Loan of, and prin
cipal amount of the Loans under each facility owing to, each Lender from time to
time and whether such Lender is an original Lender or the assignee of another
Lender pursuant to an Assignment and Acceptance. The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower and each of its Subsidiaries, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) FEE. Upon its receipt of an Assignment and Accep tance executed by
the assigning Lender and an Eligible Assignee and a processing and recordation
fee of $2,500 (payable by the assigning Lender or the assignee, as shall be
agreed between them), the Agent shall, if such Assignment and Acceptance has
been completed and is in compliance with this Agreement and in substantially the
form of EXHIBIT A, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower and the other Lenders.
(e) PARTICIPATIONS. Each Lender may sell partici pations to one or more
other financial institutions in or to all or a portion of its rights and
obligations under and in respect of any and all facilities under this Agreement
(including, with out limitation, all or a portion of any or all of its Revolving
Credit Commitments hereunder and the Loans owing to it and its undivided
interest in the Letters of Credit); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Revolving
Credit Commitments hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (iv) such participant's
rights to agree or to restrict such Lender's ability to agree to the
modification, waiver or release of any of the terms of the
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Loan Documents or to the release of any Collateral covered by the Loan
Documents, to consent to any action or failure to act by any party to any of the
Loan Documents or any of their respective Affiliates, or to exercise or refrain
from exercising any powers or rights which any Lender may have under or in
respect of the Loan Documents or any Collateral, shall be limited to the right
to consent to (A) increase in the Commitment of the Lender from whom such
participant purchased a participation, (B) reduction of the principal of, or
rate or amount of interest on the Loans(s) subject to such participation (other
than by the payment or prepayment thereof), (C) postponement of any date fixed
for any payment of principal of, or interest on, the Loan(s) subject to such
participation and (D) release of any Guarantor or all or a substantial portion
of the Collateral except as provided in SECTION 13.09(c).
(f) INFORMATION REGARDING THE BORROWER. Any Lender may, in connection
with any assignment or participation or pro posed assignment or participation
pursuant to this SECTION 15.01, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the Borrower or
its Subsidiaries furnished to such Lender by the Agent or by or on behalf of the
Borrower; PROVIDED that, prior to any such disclosure, such assignee or
participant, or proposed assignee or participant, shall agree to preserve in
accordance with SECTION 15.20 the confidentiality of any confidential
information described therein.
(g) PAYMENT TO PARTICIPANTS. Anything in this Agree ment to the
contrary notwithstanding, in the case of any participation, all amounts payable
by the Borrower under the Loan Documents shall be calculated and made in the
manner and to the parties required hereby as if no such participation had been
sold.
(h) LENDERS' CREATION OF SECURITY INTERESTS. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, Obligations owing to it and any Notes held by
it) in favor of any Federal Reserve bank in accordance with Regulation A of the
Federal Reserve Board.
(i) ASSIGNMENTS BY AGENT. If Agent ceases to be a Lender under this
Agreement by virtue of any assignment made pursuant to this SECTION 15.01, then,
as of the effective date of such cessation, Citibank's obligations to issue
Letters of Credit pursuant to SECTION 3.01 shall terminate and Citibank shall be
an Issuing Bank hereunder only with respect to outstanding Letters of Credit
issued prior to such date.
15.02. EXPENSES.
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(a) GENERALLY. The Borrower agrees upon demand to pay, or reimburse the
Agent for, all of the Agent's reasonable internal and external audit, legal,
appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other out-of-pocket costs and expenses of
every type and nature (including, without limitation, the reasonable fees,
expenses and disbursements of Sidley & Austin, local legal counsel, auditors,
accountants, appraisers, printers, insurance and environmental advisers, and
other consultants and agents) incurred by the Agent in connection with (i) the
Agent's review and investigation of the Borrower and its Affiliates and the
Collateral in connection with the preparation, negotiation, and execution of the
Loan Documents and the Agent's periodic reviews and audits of the Borrower; (ii)
the preparation, negotiation, execution and interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any of the conditions set forth in ARTICLE VI) and the other Loan Documents and
the making of the Loans hereunder; (iii) the cre ation, perfection or protection
of the Liens under the Loan Documents (including, without limitation, any
reasonable fees and expenses for local counsel in various jurisdictions); (iv)
the ongoing administration of this Agreement, the other Loan Documents and the
Loans, including consultation with attorneys in connection therewith and with
respect to the Agent's rights and responsibilities under this Agreement and the
other Loan Documents; (v) the protection, collection or enforcement of any of
the Obligations or the enforcement of any of the Loan Documents; (vi) the
commencement, defense or intervention in any court proceeding relating in any
way to the Obligations, the Property, the Borrower, any Guarantor, any of
Borrower's Subsidiaries, this Agreement or any of the other Loan Documents;
(vii) the response to, and preparation for, any subpoena or request for document
production with which the Agent is served or deposition or other proceeding in
which the Agent is called to testify, in each case, relating in any way to the
Obligations, the Property, the Borrower, any Guarantor, any of Borrower's
Subsidiaries, this Agreement or any of the other Loan Documents; and (viii) any
amendments, consents, waivers, assignments, restatements, or supplements to any
of the Loan Documents and the preparation, negotiation, and execution of the
same.
(b) AFTER DEFAULT. The Borrower further agrees to pay or reimburse the
Agent, the Issuing Banks and the Lenders upon demand for all out-of-pocket costs
and expenses, including, without limitation, reasonable attorneys' fees
(including allocated costs of internal counsel and costs of settlement) incurred
by the Agent, any Issuing Bank or any Lender after the occurrence of an Event of
Default (i) in enforcing any Loan Document or Obligation or any security
therefor or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or in any insolvency or
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bankruptcy proceeding; (iii) in commencing, defending or inter vening in any
litigation or in filing a petition, complaint, answer, motion or other pleadings
in any legal proceeding relat ing to the Obligations, the Property, the
Borrower, any Guarantor, or any of Borrower's Subsidiaries and related to or
arising out of the transactions contemplated hereby or by any of the other Loan
Documents; and (iv) in taking any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) described in CLAUSES (i) through (iii)
above.
15.03. INDEMNITY. The Borrower further agrees (a) to indemnify and hold
harmless the Agent and each and all of the Lenders and Issuing Banks and each of
their respective officers, directors, employees, attorneys and agents
(including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
ARTICLE VI) (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses (other than loss of profits), damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature what soever (excluding any taxes (other than specifically
provided for in ARTICLE XIV) and including, without limitation, the fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of
(i) this Agreement or the other Loan Documents, or any act, event or transaction
related or attendant thereto or to the Leasing Transfer or Finance Affiliate
Indebtedness, the making of the Loans and the issuance of and participation in
Letters of Credit hereunder, the management of such Loans or Letters of Credit,
the use or intended use of the proceeds of the Loans or Letters of Credit
hereunder, or any of the other transactions contemplated by any of the Loan
Documents, or (ii) any Liabilities and Costs relating to any violation by the
Borrower or any Guarantor, or their respective predecessors-in-interest, of any
Environmental, Health or Safety Requirements of Law, the past, present or future
operations of the Borrower or any Guarantor, or any of their respective
predecessors-in-interest, or, the past, present or future environmental, health
or safety condition of any respective past, present or future Property, the
presence of asbestos-containing materials at any respective past, present or
future Property, or the Release or threatened Release of any Contaminant into
the environment by the Borrower or any Guarantor, or their respective
predecessors-in-interest, or the Release or threatened Release of any
Contaminant into the environment from or at any facility to which the Borrower
or any Guarantor, or their respective predecessors-in-interest, sent or directly
arranged the transport of any Contaminant (collectively, the "Indemnified
Matters"); PROVIDED, HOWEVER, the Borrower shall have no obligation to an
Indemnitee hereunder with respect to Indemnified Matters caused by or resulting
from the willful
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misconduct or gross negligence of such Indemnitee, as determined by a final,
non-appealable order of a court of competent jurisdiction and (b) not to assert
any claim against any of the Indemnified Parties on any theory of liability for
special, indirect, consequential or punitive damages arising out of, or in any
way in connection with, the Revolving Credit Commitments, the Obligations or any
other matters governed by this Agreement and/or the other Loan Documents. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees. The Agent,
Lenders and the Issuing Banks agree to notify the Borrower of the institution or
assertion of any Indemnified Matter, but the parties hereto hereby agree that
the failure to so notify the Borrower shall not release the Borrower from its
obligations hereunder, except to the extent of any material increase in the
liabilities of the Borrower under this SECTION 15.03 directly resulting from
such failure to receive notice from such Indemnitees.
15.04. CHANGE IN ACCOUNTING PRINCIPLES. If any change in the accounting
principles used in the preparation of the most recent Financial Statements
referred to in SECTION 8.01 are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the Borrower with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the covenants,
standards or terms found in ARTICLE IX, ARTICLE X, ARTICLE XI and SECTION
12.01(o)(ii), the parties hereto agree to enter into negotiations in order to
amend such provisions so as to equitably reflect such changes with the desired
result that the criteria for evaluating compliance with such covenants,
standards and terms by the Bor rower shall be the same after such changes as if
such changes had not been made; PROVIDED, HOWEVER, no change in GAAP that would
affect the method of calculation of any of the covenants, standards or terms
shall be given effect in such calculations until such provisions are amended, in
a manner satisfactory to the Requisite Lenders and the Borrower, to so reflect
such change in accounting principles.
15.05. SETOFF. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each Lender, each
Issuing Bank and any Lender Affiliate is hereby authorized by the Borrower at
any time or from time to time, without notice to any Person (any such notice
being hereby expressly waived) to set off and to
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appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured (but not including trust accounts)) and any other
Indebtedness at any time held or owing by such Lender, Issuing Bank or any
Lender Affiliate to or for the credit or the account of the Borrower against and
on account of the Obligations of the Borrower to such Lender, Issuing Bank or
any Lender Affiliate, including, but not limited to, all Loans and Letters of
Credit and all claims of any nature or description arising out of or in
connection with this Agreement, irrespective of whether or not (i) such Lender
or Issuing Bank shall have made any demand hereunder or (ii) the Agent, at the
request or with the consent of the Requisite Lenders, shall have declared the
principal of and interest on the Loans and other amounts due hereunder to be due
and payable as permitted by ARTICLE XII and even though such Obligations may be
contingent or unmatured. Each Lender and each Issuing Bank agrees that it shall
not, without the express consent of the Requisite Lenders, and that it shall, to
the extent it is lawfully entitled to do so, upon the request of the Requisite
Lenders, exercise its setoff rights hereunder against any accounts of the
Borrower or any Guarantor now or hereafter maintained with such Lender, Issuing
Bank or any Lender Affiliate of either of them. Any Lender whose Lender
Affiliate has exercised any such right of set-off agrees to provide the Agent
and Borrower with written notice thereof promptly after the occurrence thereof.
15.06. RATABLE SHARING. The Lenders agree among them selves that (i)
with respect to all amounts received by them which are applicable to the payment
of the Obligations (excluding the fees described in SECTIONS 3.01(g), 5.02 and
ARTICLE XIV), equitable adjustment will be made so that, in effect, all such
amounts will be shared among them ratably in accordance with their Pro Rata
Shares, whether received by voluntary payment, by the exercise of the right of
setoff or banker's lien, by counterclaim or cross-action or by the enforcement
of any or all of the Obligations (excluding the fees described in SECTIONS
3.01(g), 5.02 and ARTICLE XIV) or the Collateral, (ii) if any of them shall by
voluntary payment or by the exercise of any right of counterclaim, setoff,
banker's lien or otherwise, receive payment of a proportion of the aggregate
amount of the Obliga tions held by it, which is greater than the amount which
such Lender is entitled to receive hereunder, the Lender receiving such excess
payment shall purchase, without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in such Obligations owed to the others so that all such
recoveries with respect to such Obligations shall be applied ratably in
accordance with their Pro Rata Shares; PROVIDED, HOWEVER, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases shall be rescinded and the purchase prices paid for
such participations
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shall be returned to such party to the extent necessary to adjust for such
recovery, but without interest except to the extent the purchasing party is
required to pay interest in connection with such recovery. The Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this SECTION 15.06 may, to the fullest extent permitted by law, exercise all its
rights of payment (including, subject to SECTION 15.05, the right of setoff)
with respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
15.07. AMENDMENTS AND WAIVERS. (a) GENERAL PROVISIONS. Unless otherwise
provided for or required in this Agreement, no amendment or modification of any
provision of this Agreement or any of the other Loan Documents shall be
effective without the written agreement of the Requisite Lenders (which the
Requisite Lenders shall have the right to grant or withhold in their sole
discretion) and the Borrower or Guarantor parties thereto, as applicable. No
termination or waiver of any provision of this Agreement or any of the other
Loan Documents, or consent to any departure by the Borrower or any Guarantor
therefrom, shall be effective without the written concurrence of the Requisite
Lenders, which the Requisite Lenders shall have the right to grant or withhold
in their sole discretion. All amendments, modifications, waivers and consents
not specifically reserved to Lenders, Issuing Banks, and the Agent in SECTION
15.07(b), SECTION 15.07(c) and in other provisions of this Agreement or the
other Loan Documents shall require only the approval of the Requisite Lenders.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances.
(b) AMENDMENTS, CONSENTS AND WAIVERS BY AFFECTED LENDERS. Any
amendment, modification, termination, waiver or consent with respect to any of
the following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender or Issuing Bank affected thereby as described
below:
(i) waiver of any of the conditions specified in SECTIONS 6.01 and 6.02
(except with respect to a condition based upon another provision of
this Agreement, the waiver of which requires only the concurrence of
the Requisite Lenders),
(ii) increase in the amount of any of the Revolving Credit
Commitment of such Lender,
(iii) reduction of the principal of, rate or amount of interest on the
Loans, the Reimbursement Obligations, or any fees or other amounts
payable to such Lender (other than by the payment or prepayment
thereof),
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(iv) postponement of the Revolving Credit Termination Date, the Term
Loan Termination Date, the Acquisition Subfacility Termination Date, or
any date fixed for any payment of principal of, or interest on, the
Loans, the Reimbursement Obligations or any fees or other amounts
payable to such Lender,
(v) the orders of priority set forth in SECTION 4.01, in
SECTION 4.02(b)(i), or in CLAUSES (d) through (i) of SECTION
4.02(b)(ii), and
(vi) change in the definitions of Revolving Credit Commitments,
Requisite Revolving Lenders, Acquisition Subfacility, or any of
Performance Levels 1 through 6.
(c) AMENDMENTS, CONSENTS AND WAIVERS BY ALL LENDERS. Any amendment,
modification, termination, waiver or consent with respect to any of the
following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender:
(i) release of any Guarantor or all or a substantial
portion of the Collateral (except as provided in SECTION
13.09(c)),
(ii) change in the definitions of Borrowing Base, Borrowing Base
Certificate, or Requisite Lenders, or change in any component of the
Borrowing Base or Borrowing Base Certificate, including, without
limitation, the definitions of any terms used in the Borrowing Base
Certificate or the definition of Borrowing Base (other than by
inclusion of Eligibility Reserves established by the Agent or Requisite
Revolving Lenders),
(iii) amendment of SECTION 15.01 or this SECTION 15.07,
(iv) assignment of any right or interest in or under this
Agreement or any of the other Loan Documents by the
Borrower,
(v) waiver of any Event of Default described in SECTIONS
12.01(a), (f), (g), (h), and (m), and
(vi) change in any term of this Agreement restricting the Leasing
Affiliate Liabilities to $20,000,000.
(d) AGENT AUTHORITY. The Agent may, but shall have no obligation to,
with the written concurrence of any Lender, exe cute amendments, modifications,
waivers or consents on behalf of that Lender. Notwithstanding anything to the
contrary contained in this SECTION 15.07, no amendment, modification, waiver or
consent shall affect the rights or duties of the Agent under this Agreement or
the other Loan Documents, unless made in writing and
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signed by the Agent in addition to the Lenders required above to take such
action; and the order of priority set forth in CLAUSES (A) through (C) of
SECTION 4.02(b)(ii) may be changed only with the prior written consent of the
Agent. Notwithstanding anything herein to the contrary, in the event that the
Borrower shall have requested, in a writing delivered to the Agent and the
Lenders, that any Lender agree to an amendment, modification, waiver or consent
with respect to any particular provision or provisions of this Agreement or the
other Loan Documents, and such Lender shall have failed to state, in writing,
that it either agrees or disagrees (in full or in part) with all such requests
(in the case of its statement of agreement, subject to satisfactory
documentation and such other conditions it may specify) within thirty (30) days
after such request, then such Lender hereby irrevocably authorizes the Agent to
agree or disagree, in full or in part, and in the Agent's sole discretion, to
such requests on behalf of such Lender as such Lender's attorney-in-fact and to
execute and deliver any writing approved by the Agent which evidences such
agreement as such Lender's duly authorized agent for such purposes.
15.08. NOTICES. Unless otherwise specifically pro vided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, sent by facsimile transmission or
courier service or United States certified mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a
facsimile transmission, or four (4) Business Days after deposit in the United
States mail with postage prepaid and properly addressed. Notices to the Agent
pursuant to ARTICLES II, IV or XIII shall not be effective until received by the
Agent. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this SECTION 15.08) shall
be as set forth below each party's name on the signature pages hereof or the
signature page of any applicable Assignment and Acceptance, or, as to each
party, at such other address as may be designated by such party in a written
notice to all of the other parties to this Agreement.
15.09. SURVIVAL OF WARRANTIES AND AGREEMENTS. All representations and
warranties made herein and all obligations of the Borrower in respect of taxes,
indemnification and expense reimbursement shall survive the execution and
delivery of this Agreement and the other Loan Documents, the making and
repayment of the Loans, the issuance and discharge of Letters of Credit
hereunder and the termination of this Agreement and shall not be limited in any
way by the passage of time or occurrence of any event and shall expressly cover
time periods when the Agent, any of the Issuing Banks or any of the Lenders may
have come into possession or control of any of the Property.
15.10. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of the Agent, any
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Lender or any Issuing Bank in the exercise of any power, right or privilege
under any of the Loan Documents shall impair such power, right or privilege or
be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privi lege.
All rights and remedies existing under the Loan Documents are cumulative with
and not exclusive of any rights or remedies otherwise available.
15.11. MARSHALLING; PAYMENTS SET ASIDE. None of the Agent, any Lender
or any Issuing Bank shall be under any obliga tion to xxxxxxxx any assets in
favor of the Borrower or any other Person or against or in payment of any or all
of the Obligations. To the extent that the Borrower makes a payment or payments
to the Agent, the Lenders or the Issuing Banks or any of such Persons receives
payment from the proceeds of the Collateral or exercises its rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
15.12. SEVERABILITY. In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
15.13. HEADINGS. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement or be given any substantive effect.
15.14. GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
15.15. LIMITATION OF LIABILITY. No claim may be made by the Borrower,
any Lender, any Issuing Bank, the Agent or any other Person against the Agent,
any other Issuing Bank or any other Lender or the Affiliates, directors,
officers, employees, attorneys or agents of any of them for any special,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and
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the Borrower, each Lender, each Issuing Bank and the Agent hereby waives,
releases and agrees not to xxx upon any such claim for any such damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
15.16. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Lenders and the Issuing Banks. The
rights hereunder of the Borrower, or any interest therein, may not be assigned
without the written consent of all Lenders as provided in SECTION 15.07(c)(iv).
15.17. CERTAIN CONSENTS AND WAIVERS OF THE BORROWER.
(a) PERSONAL JURISDICTION. (i) EACH OF THE AGENT, THE LENDERS, THE
ISSUING BANKS AND THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE
COURT OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING
JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR
PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE BORROWER IRREVOCABLY
DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, INC., 0000 XXXXXXXX, XXX XXXX,
XXX XXXX 00000 AS ITS AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO
BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH OF THE AGENT, THE
LENDERS, THE ISSUING BANKS AND THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
THE BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) THE BORROWER AGREES THAT THE AGENT SHALL HAVE THE RIGHT TO PROCEED
AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE THE
AGENT, THE ISSUING BANKS AND THE LENDERS TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF THE AGENT, ANY ISSUING BANK OR ANY LENDER. THE
BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY THE AGENT, ANY LENDER OR ANY ISSUING BANK TO REALIZE ON
THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER
153
COURT ORDER IN FAVOR OF THE AGENT, ANY LENDER OR ANY ISSUING BANK. THE BORROWER
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE
AGENT, ANY ISSUING BANK OR ANY LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN
THIS SECTION.
(b) SERVICE OF PROCESS. THE BORROWER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR THE BORROWER'S NOTICE ADDRESS SPECIFIED
BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE
BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
THE AGENT TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
(C) WAIVER OF JURY TRIAL. EACH OF THE AGENT, THE LENDERS, THE ISSUING
BANKS AND THE BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. ANY OF THE
BORROWER, THE AGENT, LENDERS, OR ISSUING BANKS MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
15.18. COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES. This Agreement and
any amendments, waivers, consents, or supple ments hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. Subject to the provisions of SECTION 6.01, this Agreement shall
become effective against the Borrower, each Lender, each Issuing Bank and the
Agent on the Effective Date. This Agreement and each of the other Loan Documents
shall be construed to the extent reasonable to be consistent one with the other,
but to the extent that the terms and conditions of this Agreement are actually
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
15.19. LIMITATION ON AGREEMENTS. All agreements between the Borrower,
the Agent, each Lender and each Issuing Bank in the Loan Documents are hereby
expressly limited so that in no event shall any of the Loans or other amounts
payable by the Borrower under any of the Loan Documents be directly or
indirectly secured (within the meaning of Regulation U) by Margin Stock.
154
15.20. CONFIDENTIALITY. Subject to SECTION 15.01(f), the Agent, the
Lenders and the Issuing Banks shall hold all nonpublic information obtained
pursuant to the requirements of this Agreement in accordance with the Agent's,
such Lender's or such Issuing Bank's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure (a) reasonably required
by a bona fide offeree, transferee or participant in connection with the
contemplated transfer or participation and shall require any such offeree,
transferee or participant to agree (and require any of its offerees, transferees
or participants to agree) in writing to comply with this SECTION 15.20 or (b) as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process and, unless prohibited by any Requirement of Law, use
its best efforts to inform the Borrower of such request or legal process prior
to its compliance therewith. In no event shall the Agent, any Lender or any
Issuing Bank be obligated or required to return any materials furnished by the
Borrower; PROVIDED, HOWEVER, each offeree shall be required to agree that if it
does not become a transferee or participant it shall return all materials
furnished to it by the Borrower in connection with this Agreement. Any and all
confidentiality agreements entered into between the Agent, any Lender or any
Issuing Bank and the Borrower shall survive the execution of this Agreement.
15.21. ENTIRE AGREEMENT. This Agreement, taken together with all of the
other Loan Documents, embodies the entire agreement and understanding among the
parties hereto and supersedes all prior agreements and understandings, written
and oral, relating to the subject matter hereof.
15.22. ADVICE OF COUNSEL. The Borrower and each Lender and Issuing Bank
understand that the Agent's counsel represents only the Agent's and its
Affiliates' interests and that the Borrower, other Lenders and other Issuing
Banks are advised to obtain their own counsel. The Borrower represents and
warrants to the Agent and the other Holders that it has discussed this Agreement
with its counsel.
15.23. AMENDMENT AND RESTATEMENT OF 1996 CREDIT AGREEMENT; NO NOVATION.
Upon this Agreement becoming effective, the terms and provisions of the 1996
Credit Agreement shall be and hereby are amended, superseded and restated in
their entirety by the terms and provisions of this Agreement. This Agreement
shall not constitute a novation.
155
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.
BORROWER: AVIATION SALES OPERATING COMPANY
By /s/ XXXX X. XXXXX
----------------------------------
Xxxx X. Xxxxx
President
PARENT: AVIATION SALES COMPANY
By /s/ XXXX X. XXXXX
----------------------------------
Xxxx X. Xxxxx
President
Notice Address (Borrower & Parent):
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attn: Chief Financial Officer
Telecopier No. (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: J. Xxxxxxx Xxxxx
Telecopier No. (000) 000-0000
156
AGENT: CITICORP USA, INC., as Agent
By /s/ SHAPLEIGH X. XXXXX
----------------------------------
Shapleigh X. Xxxxx
Attorney-in-Fact
Notice Address:
Citicorp USA, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Shapleigh X. Xxxxx
Telecopier No. (000) 000-0000
with a copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: XxXxxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
ISSUING BANK: CITIBANK, N.A.
By /s/ SHAPLEIGH X. XXXXX
----------------------------------
Name: Shapleigh X. Xxxxx
Title: Attorney-in-Fact
Notice Address:
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Shapleigh X. Xxxxx
Telecopier No. (000) 000-0000
157
LENDER: CITICORP USA, INC.
By /s/ SHAPLEIGH X. XXXXX
----------------------------------
Shapleigh X. Xxxxx
Attorney-in-Fact
Notice Address, Domestic Lending
Office and Eurodollar Lending
Office or Eurodollar Affiliate:
Citicorp USA, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Shapleigh X. Xxxxx
Telecopier No. (000) 000-0000
Pro Rata Share: 20%
Term Loan: $3,714,285.71
Term Loan
Pro Rata Share: 20%
Revolving Credit
Commitment: $21,285,714.29
Revolving Loan Pro
Rata Share: 20%
158
XXXXXX FINANCIAL, INC.
By /s/ XXXX XXXXXXX
----------------------------------
Xxxx Xxxxxxx
Assistant Vice President
Notice Address:
Xxxxxx Financial, Inc.
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx
Telecopier No. (000) 000-0000
Domestic Lending Office, Eurodollar
Lending Office or Eurodollar Affiliate:
Xxxxxx Financial, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxx
Telecopier No. (000) 000-0000
Pro Rata Share: 20%
Term Loan: $3,714,285.72
Term Loan
Pro Rata Share: 20%
Revolving Credit
Commitment: $21,285,714.28
Revolving Loan Pro
Rata Share: 20%
159
CONGRESS FINANCIAL CORPORATION
By /s/ XXXXXXXX X. XXXXX
----------------------------------
Xxxxxxxx X. Xxxxx
First Vice President
Notice Address, Domestic Lending Office
Eurodollar Lending Office and
Eurodollar Affiliate:
Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxx
Telecopier No. (000) 000-0000
Pro Rata Share: 16%
Term Loan: $2,971,428.58
Term Loan
Pro Rata Share: 16%
Revolving Credit
Commitment: $17,028,571.42
Revolving Loan Pro
Rata Share: 16%
160
THE SUMITOMO BANK, LIMITED
By /s/ XXXXX X. XXXXX
----------------------------------
Xxxxx X. Xxxxx
Senior Vice President
By /s/ XXXXXXX X. XXXXX
----------------------------------
Xxxxxxx X. Xxxxx
Vice President
Notice Address:
The Sumitomo Bank, Limited
One Biscayne Tower, Suite 3300
0 Xxxxx Xxxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attn: Xxx X. Xxxxxx
Telecopier No. (000) 000-0000
Domestic Lending Office
Eurodollar Lending Office and
Eurodollar Affiliate:
The Sumitomo Bank, Limited
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
Telecopier No. (000) 000-0000
Pro Rata Share: 8%
Term Loan: $1,485,714.29
Term Loan
Pro Rata Share: 8%
Revolving Credit $8,514,285.71
Commitment:
Revolving Loan Pro 8%
Rata Share:
161
NATIONAL CITY COMMERCIAL FINANCE, INC.
By /s/ XXXX X. XXXX
----------------------------------
Xxxx X. Xxxx
Vice President
Notice Address, Domestic Lending
Office, Eurodollar Lending Office
and Eurodollar Affiliate:
National City Commercial Finance, Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxx
Fax: (000) 000-0000
Pro Rata Share: 16%
Term Loan: $2,971,428.58
Term Loan
Pro Rata Share: 16%
Revolving Credit
Commitment: $17,028,571.42
Revolving Loan Pro
Rata Share: 16%
162
FIRST UNION COMMERCIAL CORPORATION
By /s/ XXXX XXXXXX
----------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
Notice Address:
First Union Commercial Corporation
000 Xxxxx Xxxxxxx Xxxxxx-XX0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxx Xxxx
Fax: (000) 000-0000
Domestic Lending Office, Eurodollar
Lending Office:
First Union Commercial Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000
Pro Rata Share: 20%
Term Loan: $3,714,285.72
Term Loan
Pro Rata Share: 20%
Revolving Credit
Commitment: $21,285,714.28
Revolving Loan Pro
Rata Share: 20%
163
