1
EXHIBIT 10.1
CREDIT AGREEMENT
Dated as of April 30, 1998
among
AVTEAM, INC.,
as Borrower,
CERTAIN SUBSIDIARIES AND AFFILIATES IDENTIFIED HEREIN,
as Guarantors,
THE LENDERS IDENTIFIED HEREIN
AND
NATIONSBANK, N.A.,
as Administrative Agent
2
TABLE OF CONTENTS
SECTION 1 DEFINITIONS.............................................................................................1
1.1 DEFINITIONS..........................................................................................1
1.2 COMPUTATION OF TIME PERIODS.........................................................................25
1.3 ACCOUNTING TERMS....................................................................................25
SECTION 2 CREDIT FACILITIES......................................................................................26
2.1 REVOLVING LOAN COMMITMENTS..........................................................................26
2.2 LETTER OF CREDIT SUBFACILITY........................................................................28
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.........................................................34
3.1 DEFAULT RATE........................................................................................34
3.2 EXTENSION AND CONVERSION............................................................................34
3.3 PREPAYMENTS.........................................................................................35
3.4 TERMINATION AND REDUCTION OF COMMITMENTS............................................................35
3.5 FEES................................................................................................36
3.6 CAPITAL ADEQUACY....................................................................................37
3.7 INABILITY TO DETERMINE INTEREST RATE................................................................37
3.8 ILLEGALITY..........................................................................................38
3.9 REQUIREMENTS OF LAW.................................................................................38
3.10 TAXES..............................................................................................39
3.11 INDEMNITY..........................................................................................41
3.12 PRO RATA TREATMENT.................................................................................42
3.13 SHARING OF PAYMENTS................................................................................42
3.14 PAYMENTS, COMPUTATIONS, ETC........................................................................43
3.15 EVIDENCE OF DEBT...................................................................................45
SECTION 4 GUARANTY...............................................................................................45
4.1 THE GUARANTEE.......................................................................................45
4.2 OBLIGATIONS UNCONDITIONAL...........................................................................46
4.3 REINSTATEMENT.......................................................................................47
4.4 CERTAIN ADDITIONAL WAIVERS..........................................................................47
4.5 REMEDIES............................................................................................48
4.6 RIGHTS OF CONTRIBUTION..............................................................................48
4.7 CONTINUING GUARANTEE................................................................................49
SECTION 5 CONDITIONS.............................................................................................49
5.1 CONDITIONS TO CLOSING...............................................................................49
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT..............................................................50
SECTION 6 REPRESENTATIONS AND WARRANTIES.........................................................................51
6.1 FINANCIAL CONDITION.................................................................................51
6.2 NO CHANGES OR RESTRICTED PAYMENTS...................................................................52
6.3 ORGANIZATION; EXISTENCE; COMPLIANCE WITH LAW........................................................52
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.......................................................52
i
3
6.5 NO LEGAL BAR........................................................................................53
6.6 NO MATERIAL LITIGATION..............................................................................53
6.7 NO DEFAULT..........................................................................................53
6.8 OWNERSHIP OF PROPERTY; LIENS........................................................................53
6.9 INTELLECTUAL PROPERTY...............................................................................53
6.10 NO BURDENSOME RESTRICTIONS.........................................................................54
6.11 TAXES..............................................................................................54
6.12 ERISA..............................................................................................54
6.13 GOVERNMENTAL REGULATIONS, ETC......................................................................55
6.14 SUBSIDIARIES.......................................................................................55
6.15 PURPOSE OF EXTENSIONS OF CREDIT....................................................................55
6.16 ENVIRONMENTAL MATTERS..............................................................................56
6.17 LABOR MATTERS......................................................................................57
6.18 SOLVENCY...........................................................................................57
6.19 AIR CARRIER........................................................................................57
SECTION 7 AFFIRMATIVE COVENANTS..................................................................................57
7.1 FINANCIAL STATEMENTS................................................................................57
7.2 CERTIFICATES; OTHER INFORMATION.....................................................................59
7.3 NOTICES.............................................................................................60
7.4 PAYMENT OF OBLIGATIONS..............................................................................62
7.5 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE....................................................62
7.6 MAINTENANCE OF PROPERTY; INSURANCE..................................................................62
7.7 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS..............................................63
7.8 ENVIRONMENTAL LAWS..................................................................................63
7.9 FINANCIAL COVENANTS.................................................................................64
7.10 AGENCY FEES........................................................................................65
7.11 ADDITIONAL GUARANTIES AND STOCK PLEDGES............................................................65
7.12 OWNERSHIP OF SUBSIDIARIES..........................................................................65
7.13 USE OF PROCEEDS....................................................................................66
SECTION 8 NEGATIVE COVENANTS.....................................................................................66
8.1 INDEBTEDNESS........................................................................................66
8.2 LIENS...............................................................................................67
8.3 NATURE OF BUSINESS..................................................................................67
8.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC..............................................67
8.5 ADVANCES, INVESTMENTS AND LOANS.....................................................................68
8.6 TRANSACTIONS WITH AFFILIATES........................................................................68
8.7 OWNERSHIP OF EQUITY INTERESTS.......................................................................69
8.8 FISCAL YEAR.........................................................................................69
8.9 PREPAYMENTS OF INDEBTEDNESS, ETC....................................................................69
8.10 RESTRICTED PAYMENTS................................................................................69
8.11 SALE LEASEBACKS....................................................................................70
8.12 NO FURTHER NEGATIVE PLEDGES........................................................................70
SECTION 9 EVENTS OF DEFAULT......................................................................................71
9.1 EVENTS OF DEFAULT...................................................................................71
9.2 ACCELERATION; REMEDIES..............................................................................73
ii
4
SECTION 10 AGENCY PROVISIONS.....................................................................................74
10.1 APPOINTMENT........................................................................................74
10.2 DELEGATION OF DUTIES...............................................................................74
10.3 EXCULPATORY PROVISIONS.............................................................................74
10.4 RELIANCE ON COMMUNICATIONS.........................................................................75
10.5 NOTICE OF DEFAULT..................................................................................75
10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.............................................76
10.7 INDEMNIFICATION....................................................................................76
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY....................................................77
10.9 SUCCESSOR ADMINISTRATIVE AGENT.....................................................................77
SECTION 11 MISCELLANEOUS.........................................................................................78
11.1 NOTICES............................................................................................78
11.2 RIGHT OF SET-OFF...................................................................................79
11.3 BENEFIT OF AGREEMENT...............................................................................79
11.4 NO WAIVER; REMEDIES CUMULATIVE.....................................................................81
11.5 PAYMENT OF EXPENSES, ETC...........................................................................82
11.6 AMENDMENTS, WAIVERS AND CONSENTS...................................................................82
11.7 COUNTERPARTS.......................................................................................84
11.8 HEADINGS...........................................................................................84
11.9 SURVIVAL...........................................................................................84
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE..................................................86
11.11 SEVERABILITY......................................................................................84
11.12 ENTIRETY..........................................................................................84
11.13 BINDING EFFECT; TERMINATION.......................................................................85
11.14 CONFIDENTIALITY...................................................................................85
11.15 SOURCE OF FUNDS...................................................................................85
11.16 CONFLICT..........................................................................................86
iii
5
SCHEDULES
Schedule 2.1(a) Lenders and Commitments
Schedule 2.1(c)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(b)-1 Existing Letters of Credit
Schedule 2.2(b)-2 Form of Notice of Request for Letter of Credit
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(c)(v) Form of Officer's Certificate
Schedule 6.4 Required Consents, Authorizations, Notices and Filings
Schedule 6.8 Existing Liens
Schedule 6.14 Subsidiaries
Schedule 6.17 Employment Agreements
Schedule 7.1(c)-1 Form of Borrowing Base Certificate
Schedule 7.1(c)-2 Accounts Receivable
Schedule 7.2(b) Form of Officer's Compliance Certificate
Schedule 7.11 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 8.5 Existing Investments
Schedule 8.10 Shareholders
Schedule 11.1 Lenders and Addresses
Schedule 11.3(b) Form of Assignment and Acceptance
iv
6
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of April 30, 1998 (as amended and
modified, the "AGREEMENT") is by and among AVTEAM, INC., a Florida corporation
(the "BORROWER"), the subsidiaries and affiliates identified herein as
Guarantors and such other subsidiaries and affiliates as may hereafter join as
Guarantors in accordance with the provisions hereof (the "GUARANTORS"), the
lenders identified herein (the "LENDERS") and NATIONSBANK, N.A., as
Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $70
million credit facility for the purposes hereinafter set forth;
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall
have the meanings specified below unless the context otherwise requires:
"ACQUISITION REVOLVING COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make Acquisition Revolving
Loans in an aggregate principal amount at any time outstanding of up to
such Lender's Acquisition Revolving Commitment Percentage of the
Aggregate Acquisition Revolving Committed Amount as specified in
SCHEDULE 2.1(a), as such amount may be reduced from time to time in
accordance with the provisions hereof.
"ACQUISITION REVOLVING COMMITMENT PERCENTAGE" means, for each
Lender, a fraction (expressed as a decimal) the numerator of which is
the Acquisition Revolving Commitment of such Lender at such time and
the denominator of which is the Aggregate Acquisition Revolving
Committed Amount at such time. The initial Acquisition Revolving
Commitment Percentages are set out on SCHEDULE 2.1(a).
1
7
"ACQUISITION REVOLVING COMMITTED AMOUNT" means, collectively,
the aggregate amount of all of the Acquisition Revolving Commitments
and, individually, the amount of each Lender's Acquisition Revolving
Commitment as specified in SCHEDULE 2.1(b).
"ACQUISITION REVOLVING LOANS" shall have the meaning assigned
to such term in Section 2.1(b).
"ACQUISITION REVOLVING OBLIGATIONS" means the Acquisition
Revolving Loans.
"ADDITIONAL CREDIT PARTY" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such
term in the heading hereof, together with any successors or assigns.
"ADMINISTRATIVE AGENT'S FEE LETTER" means that certain letter
agreement, dated as of January 12, 1998, between the Administrative
Agent and the Borrower, as amended, modified, supplemented or replaced
from time to time.
"AFFILIATE" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding five percent (5%) or more of the equity
interest in such Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing. For purposes hereof, Affiliate shall not include any
investment company registered under the Investment Company Act of 1940,
as amended.
"AGENCY SERVICES ADDRESS" means NationsBank, N.A.,
NC1-001-15-04, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attn: Agency Services, or such other address as may be identified by
written notice from the Administrative Agent to the Borrower.
"AGENT'S FEES" shall have the meaning assigned to such term in
Section 3.5(d).
"AGGREGATE ACQUISITION REVOLVING COMMITTED AMOUNT" means the
aggregate amount of Acquisition Revolving Commitments in effect from
time to time, being initially TWENTY-FIVE MILLION DOLLARS
($25,000,000).
"AGGREGATE REVOLVING COMMITTED AMOUNT" means, with respect to
the Lenders collectively, the Aggregate Working Capital Revolving
Committed Amount and/or the Aggregate Acquisition Revolving Committed
Amount, as appropriate, and, with respect to each Lender individually,
the aggregate amount of such Lender's Working Capital
2
8
Revolving Committed Amount and/or such Lender's Acquisition Revolving
Committed Amount, as appropriate.
"AGGREGATE WORKING CAPITAL REVOLVING COMMITTED AMOUNT" means
the aggregate amount of Working Capital Revolving Commitments in effect
from time to time, being initially FORTY-FIVE MILLION DOLLARS
($45,000,000).
"AIRCRAFT SECURITY AGREEMENT" means the Aircraft Security
Agreement dated as of the Closing Date given by the Borrower to
NationsBank, N.A., as Administrative Agent, to secure the obligations
hereunder, as amended and modified.
"APPLICABLE PERCENTAGE" means for any day, the rate per annum
set forth below opposite the applicable Consolidated Senior Leverage
Ratio then in effect, it being understood that the Applicable
Percentage for (i) Base Rate Loans shall be the percentage set forth
under the column "Base Rate Margin", (ii) Eurodollar Loans shall be the
percentage set forth under the column "Eurodollar Margin and Letter of
Credit Fee", (iii) the Letter of Credit Fee shall be the percentage set
forth under the column "Eurodollar Margin and Letter of Credit Fee" and
(iv) the Commitment Fee shall be the percentage set forth under the
column "Commitment Fee":
Eurodollar
Margin
Consolidated and
Pricing Senior Leverage Base Rate Letter of Commitment
Level Ratio Margin Credit Fee Fee
----- ------------------------------------------------ ------- ---------- ---
I (greater than) 3.0 but (less than or equal to) 3.5 1.00% 2.50% 0.500%
II (greater than) 2.5 but (less than or equal to) 3.0 0.75% 2.25% 0.500%
III (greater than) 2.0 but (less than or equal to) 2.5 0.50% 2.00% 0.375%
IV (greater than) 1.5 but (less than or equal to) 2.0 0.25% 1.75% 0.375%
V (greater than) 1.0 but (less than or equal to) 1.5 0.00% 1.50% 0.300%
VI (less than or equal to) 1.0 0.00% 1.25% 0.250%
The Applicable Percentage shall be determined and adjusted quarterly on
the date (each a "RATE DETERMINATION DATE") five (5) Business Days
after the date by which the annual and quarterly compliance
certificates and related financial statements and information are
required in accordance with the provisions of Sections 7.1(a) and (b)
and Section 7.2(b), as appropriate; PROVIDED that:
(i) the initial Applicable Percentages shall be based
on Pricing Level V (or Pricing Levels I through IV, as
appropriate, based on the Consolidated Leverage Ratio as of
the end of the fiscal quarter immediately preceding the
Closing Date) and shall remain in effect at such Pricing Level
until the first Rate Determination Date to occur after the
date six (6) months from the Closing Date, and
3
9
(ii) in the event an annual or quarterly compliance
certificate and related financial statements and information
are not delivered timely to the Agency Services Address by the
date required by Sections 7.1(a) and (b) and Section 7.2(b),
as appropriate, the Applicable Percentages shall be based on
Pricing Level I until such time as an appropriate compliance
certificate and related financial statements and information
are delivered, whereupon the applicable Pricing Level shall be
adjusted based on the information contained in such compliance
certificate and related financial statements and information.
Each Applicable Percentage shall be effective from a Rate Determination
Date until the next such Rate Determination Date. The Administrative
Agent shall determine the appropriate Applicable Percentages in the
pricing matrix promptly upon receipt of the quarterly or annual
compliance certificate and related financial information and shall
promptly notify the Borrower and the Lenders of any change thereof.
Such determinations by the Administrative Agent shall be conclusive
absent manifest error. Adjustments in the Applicable Percentages shall
be effective as to existing Extensions of Credit as well as new
Extensions of Credit made thereafter.
"ASSET DISPOSITION" means (i) the sale, lease or other
disposition of any property or asset by any member of the Consolidated
Group, other than any such sale permitted by Sections 8.4(c)(i) and
8.4(c)(ii) and other than to the extent permitted by Section 8.5, and
(ii) receipt by any member of the Consolidated Group of any cash
insurance proceeds or condemnation award payable by reason of theft,
loss, physical destruction or damage, taking or similar event with
respect to any of their property or assets.
"BANKRUPTCY CODE" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"BANKRUPTCY EVENT" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee,
4
10
sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"BASE RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day PLUS 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms hereof,
the Base Rate shall be determined without regard to clause (a) of the
first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
"BASE RATE LOAN" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"BORROWER" means AVTEAM, Inc., a Florida corporation, as
referenced in the opening paragraph, its successors and permitted
assigns.
"BORROWING BASE" means, as of any day, an amount equal to the
sum of (a) eighty percent (80%) of Eligible Receivables and (b) fifty
percent (50%) of Eligible Inventory, in each case as set forth in the
most recent Borrowing Base Certificate delivered to the Administrative
Agent and the Lenders in accordance with the terms of Section 7.1(c).
"BORROWING BASE CERTIFICATE" means such term as defined in
Section 7.1(c).
"BUSINESS DAY" means a day other than a Saturday, Sunday, or
other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close, EXCEPT THAT,
when used in connection with a Eurodollar Loan, such day shall also be
a day on which dealings between banks are carried on in U.S. dollar
deposits in London, England.
"CAPITAL LEASE" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"CAPITAL LEASE OBLIGATION" means the capital lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"CASH EQUIVALENTS" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
5
11
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, or (ii) any domestic commercial bank of
recognized standing (y) having capital and surplus in excess of
$500,000,000 and (z) whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Xxxxx'x is at least
P-1 or the equivalent thereof (any such bank being an "APPROVED BANK"),
in each case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing
within six months of the date of acquisition, (d) repurchase agreements
entered into by a Person with a bank or trust company (including any of
the Lenders) or recognized securities dealer having capital and surplus
in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which such Person shall
have a perfected first priority security interest (subject to no other
Liens) and having, on the date of purchase thereof, a fair market value
of at least 100% of the amount of the repurchase obligations, (e)
obligations of any State of the United States or any political
subdivision thereof, the interest with respect to which is exempt from
federal income taxation under Section 103 of the Code, having a long
term rating of at least AA- or Aa-3 by S&P or Moody's, respectively,
and maturing within three years from the date of acquisition thereof,
(f) Investments in municipal auction preferred stock (i) rated AAA (or
the equivalent thereof) or better by S&P or Aaa (or the equivalent
thereof) or better by Moody's and (ii) with dividends that reset at
least once every 365 days and (g) Investments, classified in accordance
with GAAP as current assets, in money market investment programs
registered under the Investment Borrower Act of 1940, as amended, which
are administered by reputable financial institutions having capital of
at least $100,000,000 and the portfolios of which are limited to
Investments of the character described in the foregoing subdivisions
(a) through (f).
"CHANGE OF CONTROL" means the occurrence of any of the
following events:
(i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of or control
over, Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing 50% or more of the combined voting
power of all Voting Stock of the Borrower, or
(ii) during any period of up to 24 consecutive
months, commencing after the Closing Date, individuals who at the
beginning of such 24 month period were directors of the Borrower
(together with any new director whose election by the Borrower's Board
of Directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously
6
12
so approved) cease for any reason to constitute a majority of the
directors of the Borrower then in office; or
(iii) either Xxxxxx Xxxx or Xxxxx Xxxx shall fail to
be an officer active in the day-to-day management of the Consolidated
Group.
As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
"CLOSING DATE" means the date hereof.
"CODE" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"COMMITMENT" means the Working Capital Revolving Commitment
and/or the Acquisition Revolving Commitment, as appropriate.
"COMMITMENT FEE" shall have the meaning given such term in
Section 3.5(a).
"COMMITMENT PERCENTAGE" means the Working Capital Revolving
Commitment Percentage and/or the Acquisition Revolving Commitment
Percentage, as appropriate.
"COMMITMENT PERIOD" means the period from and including the
Closing Date to but not including the earlier of (i) the Termination
Date, or (ii) the date on which the Commitments terminate in accordance
with the provisions of this Credit Agreement.
"CONSOLIDATED ADJUSTED EBITDA" means for any period for the
Consolidated Group, the sum of Consolidated EBITDA PLUS lease and rent
expense MINUS the portion of capital expenditures not financed by third
parties (that is, the portion not financed as provided pursuant to
Section 8.1(c) hereof) MINUS cash taxes paid, in each case on a
consolidated basis determined in accordance with GAAP applied on an
consistent basis. Except as otherwise expressly provided, the
applicable period shall be for the four consecutive fiscal quarters
ending as of the date of determination.
"CONSOLIDATED EBITDA" means for any period for the
Consolidated Group, the sum of Consolidated Net Income PLUS
Consolidated Interest Expense PLUS all provisions for any Federal,
state or other domestic and foreign income taxes PLUS depreciation and
amortization, in each case on a consolidated basis determined in
accordance with GAAP applied on a consistent basis, but excluding for
purposes hereof extraordinary gains and losses and related tax effects
thereon. Except as otherwise expressly provided, the applicable period
shall be for the four consecutive fiscal quarters ending as of the date
of determination.
7
13
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means for any
period, the ratio of Consolidated Adjusted EBITDA to Consolidated Fixed
Charges.
"CONSOLIDATED FIXED CHARGES" means for any period for the
Consolidated Group, without duplication, the sum of Consolidated
Interest Expense PLUS lease and rental expense PLUS scheduled
maturities of Funded Debt paid (and mandatory commitment reductions,
sinking fund payments and the like relating thereto) PLUS earn-out or
like payments made in respect of acquisitions PLUS payments made in
connection with the Borrower's repurchase of equity from the
shareholders listed on SCHEDULE 8.10, in each case on a consolidated
basis determined in accordance with GAAP applied on an consistent
basis. Except as otherwise expressly provided, the applicable period
shall be for the four consecutive fiscal quarters ending as of the date
of determination.
"CONSOLIDATED FUNDED DEBT" means Funded Debt of the
Consolidated Group determined on a consolidated basis in accordance
with GAAP applied on a consistent basis, but excluding for purposes of
calculating the Consolidated Leverage Ratio any subordinated
indebtedness relating to the Borrower's repurchase of equity from the
shareholders listed on SCHEDULE 8.10, provided the terms and conditions
of such equity repurchase transaction are acceptable to the Lenders.
"CONSOLIDATED GROUP" means the Borrower and its consolidated
subsidiaries, as determined in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means for any period for the
Consolidated Group, all interest expense, including the amortization of
debt discount and premium and the interest component under Capital
Leases, in each case on a consolidated basis determined in accordance
with GAAP applied on a consolidated basis. Except as expressly provided
otherwise, the applicable period shall be for the four consecutive
quarters ending as of the date of determination.
"CONSOLIDATED LEVERAGE RATIO" means, as of the last day of any
fiscal quarter, the ratio of Consolidated Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending as of such day.
"CONSOLIDATED NET INCOME" means for any period for the
Consolidated Group, net income on a consolidated basis determined in
accordance with GAAP applied on a consistent basis, but excluding for
purposes of determining the Consolidated Leverage Ratio, the
Consolidated Senior Leverage Ratio and Consolidated Fixed Charge
Coverage Ratio, any extraordinary gains or losses and related tax
effects thereon. Except as expressly provided otherwise, the applicable
period shall be for the four consecutive quarters ending as of the date
of determination.
"CONSOLIDATED NET WORTH" means, as for any date for the
Consolidated Group, shareholders' equity or net worth as determined in
accordance with GAAP.
8
14
"CONSOLIDATED SENIOR FUNDED DEBT" means Funded Debt of the
Consolidated Group which is not Subordinated Debt determined on a
consolidated basis in accordance with GAAP applied on a consistent
basis.
"CONSOLIDATED SENIOR LEVERAGE RATIO" means, as of the last day
of any fiscal quarter, the ratio of Consolidated Senior Funded Debt on
such day to Consolidated EBITDA for the period of four consecutive
fiscal quarters ending as of such day.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any material
agreement, instrument or undertaking to which such Person is a party or
by which it or any of its property is bound.
"COST OF ACQUISITION" means the sum of cash paid, indebtedness
assumed (including seller financing provided) and the fair value of
property exchanged.
"CREDIT DOCUMENTS" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, the Security Agreement, the
Aircraft Security Agreement, the Pledge Agreement, each Joinder
Agreement, the Administrative Agent's Fee Letter, and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto.
"CREDIT PARTY" means any of the Borrower and the Guarantors.
"DEBT TRANSACTION" means, with respect to any member of the
Consolidated Group, any sale, issuance or placement of Funded Debt
(other than Funded Debt permitted under Section 8.1), whether or not
evidenced by promissory note or other written evidence of indebtedness.
"DEFAULT" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" means, at any time, any Lender that, at
such time, (i) has failed to make an Extension of Credit required
pursuant to the terms of this Credit Agreement, (ii) has failed to pay
to the Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of the Credit Agreement or any other of the
Credit Documents, or (iii) has been deemed insolvent or has become
subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar proceeding.
"DOLLARS" and "$" means dollars in lawful currency of the
United States of America.
"DOMESTIC CREDIT PARTY" means any Credit Party which is
incorporated or organized under the laws of any State of the United
States or the District of Columbia.
"DOMESTIC SUBSIDIARY" means any Subsidiary which is
incorporated or organized under the laws of any State of the United
States or the District of Columbia.
9
15
"ELIGIBLE INVENTORY" means, as of any date of determination
and without duplication, the lower of the aggregate book value or fair
market value of all raw materials, revenue producing equipment and
finished goods inventory held for sale or lease owned by the Borrower
less appropriate reserves determined, as to any inventory held for sale
only, in accordance with GAAP but excluding in any event (i) inventory
which is (a) not subject to a perfected, first priority Lien in favor
for the Administrative Agent to secure the Obligations or (b) subject
to any other Lien that is not a Permitted Lien, (ii) inventory located
outside of the United States, (iii) inventory which does not constitute
a component of commercial passenger and cargo jet-powered aircraft
(excluding regional aircraft) with the capacity for a minimum of one
hundred (100) passengers (or the equivalent if retrofitted for cargo);
(iv) airframe materials to the extent such constitute in excess of
sixty percent (60%) of the Borrower's inventory in the Borrowing Base
(i.e., engines and engine components must constitute at least forty
percent (40%) of Borrower's inventory in the Borrowing Base) and (v)
inventory held or stored on premises not owned or leased by a Credit
Party, unless the owner or tenant of such premises shall have given
written acknowledgment of the security interest in favor of the Lenders
in form and substance satisfactory to the Administrative Agent (subject
to normal statutory mechanics and laborers liens), except for such
inventory held under existing arrangements (in which case the Credit
Parties shall use reasonable efforts to secure acceptable
acknowledgments), provided that where existing arrangements are
formally modified or extended, acceptable acknowledgments are obtained.
"ELIGIBLE RECEIVABLES" means, as of any date of determination
and without duplication, the aggregate book value of all accounts
receivable, receivables, and obligations for payment created or arising
from the sale of inventory or the rendering of services in the ordinary
course of business (collectively, the "RECEIVABLES"), owned by or owing
to the Borrower, net of allowances and reserves for doubtful or
uncollectible accounts and sales adjustments consistent with such
Person's internal policies and in any event in accordance with GAAP,
but excluding in any event (i) any Receivable which is (a) not subject
to a perfected, first priority Lien in favor of the Administrative
Agent to secure the Obligations or (b) subject to any other Lien that
is not a Permitted Lien, (ii) Receivables which are more than 120 days
from the invoice date (net of reserves for bad debts in connection with
any such Receivables); provided, however, that with respect to those
accounts identified on SCHEDULE 7.1(c), 120 days shall be amended to
read 150 days, (iii) Receivables owing by an account debtor to the
extent there are any accounts payable due to the account debtor, (iv)
Receivables owing by an account debtor located outside of the United
States (unless payment for the goods shipped is secured by an
irrevocable letter of credit in a form and from an institution
acceptable to the Administrative Agent), (v) Receivables owing by an
account debtor which is not solvent or is subject to any bankruptcy or
insolvency proceeding of any kind and (vi) Receivables for which any
related or affiliated entity of the Borrower is the account debtor. For
the purposes of subsection (vi) of this definition, a "related or
affiliated entity of the Borrower" includes, without limitation, any
Person which, either directly or indirectly,
10
16
owns or controls any ownership interest in the Borrower, or in which
the Borrower, either directly or indirectly, owns or controls an
ownership interest.
"ENVIRONMENTAL LAWS" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"EQUITY TRANSACTION" means, with respect to any member of the
Consolidated Group, any issuance of shares of its capital stock or
other equity interest, other than an issuance (i) to a member of the
Consolidated Group, (ii) in connection with a conversion of (A) debt
securities to equity or (B) voting common stock to nonvoting common
stock or vice versa, or (iii) in connection with exercise by a present
or former employee, officer or director under a stock incentive plan,
stock option plan or other equity-based compensation plan or
arrangement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA AFFILIATE" means such term as defined under ERISA.
"EURODOLLAR LOAN" means any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"EURODOLLAR RATE" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"EURODOLLAR RESERVE PERCENTAGE" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the
11
17
interest rate of Eurodollar Loans is determined), whether or not Lender
has any Eurocurrency liabilities subject to such reserve requirement at
that time. Eurodollar Loans shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve requirements
without benefits of credits for proration, exceptions or offsets that
may be available from time to time to a Lender. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any
change in the Eurodollar Reserve Percentage.
"EVENT OF DEFAULT" means such term as defined in Section 9.1.
"EXISTING LETTERS OF CREDIT" means those Letters of Credit
outstanding on the Closing Date and identified on SCHEDULE 2.2(b)-1.
"EXTENSION OF CREDIT" means, as to any Lender, the making of,
or participation in, a Loan by such Lender or the issuance or extension
of, or participation in, a Letter of Credit.
"FEES" means all fees payable pursuant to Section 3.5.
"FEDERAL FUNDS RATE" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding
such day, PROVIDED that (A) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day and (B) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Administrative
Agent on such day on such transactions as determined by the
Administrative Agent.
"FOREIGN CREDIT PARTY" means a Credit Party which is not a
Domestic Credit Party.
"FOREIGN SUBSIDIARY" means a Subsidiary which is not a
Domestic Subsidiary.
"FUNDED DEBT" means, with respect to any Person, without
duplication, (i) all Indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, or upon which interest payments are
customarily made, (iii) all purchase money Indebtedness (including for
purposes hereof, indebtedness and obligations described in clauses
(iii) and (iv) of the definition of "Indebtedness") of such Person,
including without limitation the principal portion of all obligations
of such Person under Capital Leases, (iv) all Support Obligations of
such Person with respect to Funded Indebtedness of another Person, (v)
the maximum available amount of all standby letters of credit or
acceptances issued or created for the account of such Person, (vi) all
Funded Debt of another Person secured by a Lien on any Property of such
Person, whether or not such Funded Indebtedness has been assumed,
12
18
PROVIDED that for purposes hereof the amount of such Funded Debt shall
be limited to the greater of (A) the amount of such Funded Debt as to
which there is recourse to such Person and (B) the fair market value of
the property which is subject to the Lien, (vii) the outstanding
attributed principal amount under any securitization transaction, and
(viii) the principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an operating lease in accordance with
GAAP. The Funded Debt of any Person shall include the Funded Debt of
any partnership or joint venture in which such Person is a general
partner or joint venturer, but only to the extent to which there is
recourse to such Person for the payment of such Funded Debt.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3 hereof.
"GOVERNMENTAL AUTHORITY" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"GUARANTOR" means the Borrower and each of those other Persons
identified as a "Guarantor" on the signature pages hereto, and each
other Person which may hereafter become a Guarantor by execution of a
Joinder Agreement, together with their successors and permitted
assigns.
"GUARANTEED OBLIGATIONS" means, as to each Guarantor, without
duplication, (i) all obligations of the Borrower (including interest
accruing after a Bankruptcy Event, regardless of whether such interest
is allowed as a claim under the Bankruptcy Code) to the Lenders and the
Administrative Agent, whenever arising, under this Credit Agreement,
the Notes or the Credit Documents, and (ii) all liabilities and
obligations, whenever arising, owing from the Borrower to any Lender,
or any Affiliate of a Lender, arising under any Hedging Agreement
relating to Obligations hereunder.
"HEDGING AGREEMENTS" means any interest rate protection
agreement or foreign currency exchange agreement between the Borrower
and any Lender, or any Affiliate of a Lender relating to the
obligations hereunder.
"INDEBTEDNESS" of any Person means (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (iii) all obligations of
such Person under conditional sale or other title retention agreements
relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (iv) all obligations
of such Person issued or assumed as the deferred purchase price of
Property or services purchased by such Person (other than trade debt
incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a
balance sheet of such Person, (v) all obligations of such Person under
take-
13
19
or-pay or similar arrangements or under commodities agreements, (vi)
all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, PROVIDED that for
purposes hereof the amount of such Indebtedness shall be limited to the
greater of (A) the amount of such Indebtedness as to which there is
recourse to such Person and (B) the fair market value of the property
which is subject to the Lien, (vii) all Support Obligations of such
Person, (viii) the principal portion of all obligations of such Person
under Capital Leases, (ix) all obligations of such Person in respect of
interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest
or exchange rate or commodity price hedging agreements (including, but
not limited to, the Hedging Agreements), (x) the maximum amount of all
standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (xi) all
preferred stock issued by such Person and required by the terms thereof
to be redeemed, or for which mandatory sinking fund payments are due,
by a fixed date, (xii) the outstanding attributed principal amount
under any securitization transaction and (xiii) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product
to which such Person is a party, where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP. The Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer, but only to
the extent to which there is recourse to such Person for payment of
such Indebtedness.
"INTERBANK OFFERED RATE" means, for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
(rounded upwards, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the rate of interest, determined by the Administrative
Agent on the basis of the offered rates for deposits in dollars for a
period of time corresponding to such Interest Period (and commencing on
the first day of such Interest Period), appearing on Telerate Page 3750
(or, if, for any reason, Telerate Page 3750 is not available, the
Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London time)
two (2) Business Days before the first day of such Interest Period. As
used herein, "Telerate Page 3750" means the display designated as page
3750 by Dow Xxxxx Markets, Inc. (or such other page as may replace such
page on that service for the purpose of displaying the British Bankers
Association London interbank offered rates) and "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank
offered rates of major banks).
"INTEREST PAYMENT DATE" means (i) as to any Base Rate Loan,
the last day of each March, June, September and December, the date of
repayment of principal of such Loan and the Termination Date and (ii)
as to any Eurodollar Loan and Swingline Loan, the last
14
20
day of each Interest Period for such Loan, the date of repayment of
principal of such Loan and on the Termination Date, and in addition
where the applicable Interest Period is more than three months, then
also on the date three months from the beginning of the Interest
Period, and each three months thereafter. If an Interest Payment Date
falls on a date which is not a Business Day, such Interest Payment Date
shall be deemed to be the next succeeding Business Day.
"INTEREST PERIOD" means (i) as to any Eurodollar Loan, a
period of one, two or three month's duration, as the Borrower may
elect, commencing in each case, on the date of the borrowing (including
conversions, extensions and renewals) and (ii) as to any Swingline
Loan, a period of such duration, not to exceed 30 days, as the Borrower
may request and the Swingline Lender may agree in accordance with the
provisions of Section 2.3(b)(i), commencing in each case, on the date
of borrowing; PROVIDED, HOWEVER, (A) if any Interest Period would end
on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that in the case
of Eurodollar Loans where the next succeeding Business Day falls in the
next succeeding calendar month, then on the next preceding Business
Day), (B) no Interest Period shall extend beyond the Termination Date,
and (C) in the case of Eurodollar Loans, where an Interest Period
begins on a day for which there is no numerically corresponding day in
the calendar month in which the Interest Period is to end, such
Interest Period shall end on the last day of such calendar month.
"INVESTMENT", in any Person, means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of, or
equity interest in, such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any Support Obligation incurred for the benefit of such
Person.
"ISSUING LENDER" means NationsBank.
"ISSUING LENDER FEES" shall have the meaning assigned to such
term in Section 3.5(b)(ii).
"JOINDER AGREEMENT" means a Joinder Agreement substantially in
the form of SCHEDULE 7.11 hereto, executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
7.11.
"LENDERS" means each of the Persons identified as a "Lender"
on the signature pages hereto, and their successors and assigns.
"LETTER OF CREDIT" means the Existing Letters of Credit and
any standby letter of credit issued by the Issuing Lender for the
account of the Borrower in accordance with the terms of Section 2.2.
"LETTER OF CREDIT FEE" shall have the meaning given such term
in Section 3.5(b)(i).
15
21
"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"LOAN" or "LOANS" means the Revolving Loans and/or Swingline
Loans, as appropriate.
"LOC COMMITMENT" means the commitment of the Issuing Lender to
issue, and to honor payment obligations under, Letters of Credit
hereunder and with respect to each Lender, the commitment of each
Lender to purchase participation interests in the Letters of Credit up
to such Lender's LOC Committed Amount as specified in SCHEDULE 2.1(a),
as such amount may be reduced from time to time in accordance with the
provisions hereof.
"LOC COMMITTED AMOUNT" means, collectively, the aggregate
amount of all of the LOC Commitments of the Lenders to issue and
participate in Letters of Credit as referenced in Section 2.2(a) and,
individually, the amount of each Lender's LOC Commitment as specified
in SCHEDULE 2.1(a).
"LOC DOCUMENTS" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC OBLIGATIONS" means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit PLUS (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition, operations, business, assets or
liabilities of the Consolidated Group taken as a whole, (ii) the
ability of the Credit Parties taken as a whole to perform any material
obligation under the Credit Documents to which it is a party, (iii) the
rights and remedies of the Lenders under the Credit Documents or (iv)
the collateral pledged to secure the Obligations hereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic
16
22
substances, materials or wastes, defined or regulated as such in or
under any Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"MULTI-EMPLOYER PLAN" means such term as defined under ERISA.
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" means a Plan which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate and at least one
employer other than the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate are contributing sponsors.
"NATIONSBANK" means NationsBank, N.A. and its successors.
"NET PROCEEDS" means gross cash proceeds (including any cash
received by way of deferred payment pursuant to a promissory note,
receivable or otherwise, but only as and when received) received in
connection with an Asset Disposition, Equity Transaction or Debt
Transaction, net of (i) reasonable transaction costs, including in the
case of an Equity Transaction or a Debt Transaction, underwriting
discounts and commissions and professional fees and expenses, and in
the case of an Asset Disposition occurring in connection with a claim
under an insurance policy, costs incurred in connection with adjustment
and settlement of the claim, (ii) estimated taxes payable in connection
therewith, and (iii) in the case of an Asset Disposition or Debt
Transaction, any amounts payable in respect of Funded Debt, including
without limitation principal, interest, premiums and penalties, which
is secured by, or otherwise related to, any property or asset which is
the subject thereof to the extent that such Funded Debt and any
payments in respect thereof are paid with a portion of the proceeds
therefrom.
"NON-EXCLUDED TAXES" means such term as is defined in Section
3.10.
"NOTE" or "NOTES" means any Revolving Note.
"NOTICE OF BORROWING" means a written notice of borrowing in
substantially the form of SCHEDULE 2.1(c)(i), as required by Section
2.1(c)(i).
"NOTICE OF EXTENSION/CONVERSION" means the written notice of
extension or conversion in substantially the form of SCHEDULE 3.2, as
required by Section 3.2.
"OBLIGATIONS" means, collectively, the Working Capital
Revolving Obligations and the Acquisition Revolving Obligations.
17
23
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"PARTICIPATION INTEREST" means the purchase by a Lender of a
participation in LOC Obligations as provided in Section 2.2(c), in
Swingline Loans as provided in Section 2.3(b)(iii) and in Loans as
provided in Section 3.13.
"PARTS AGREEMENT" means such term as defined in Section
7.3(f).
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"PENSION PLAN" means such term as defined under ERISA.
"PERMITTED INVESTMENTS" means Investments which are either (i)
cash and Cash Equivalents; (ii) accounts receivable created, acquired
or made in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms; (iii) Investments consisting
of stock, obligations, securities or other property received in
settlement of accounts receivable (created in the ordinary course of
business) from bankrupt obligors; (iv) Investments existing as of the
Closing Date and set forth in SCHEDULE 8.5, (v) Support Obligations
permitted by Section 8.1; (vi) acquisitions permitted by Section
8.4(c); (vii) transactions permitted by Section 8.6, (viii) advances or
loans to employees, directors, officers or agents not to exceed
$100,000 in the aggregate at any time outstanding; (ix) advances or
loans to customers or suppliers (excluding deposits made for purchases
in the ordinary course of business) that do not exceed $50,000 in the
aggregate at any one time outstanding, (x) Investments by members of
the Consolidated Group in their Subsidiaries and Affiliates existing on
the Closing Date, (xi) Investments by one Credit Party in and to
another Credit Party and (xii) other loans, advances and investments of
a nature not contemplated in the foregoing subsections in an amount not
to exceed $100,000 in the aggregate at any time outstanding.
"PERMITTED LIENS" means:
(i) Liens in favor of the Administrative
Agent on behalf of the Lenders;
(ii) Liens (other than Liens created or
imposed under ERISA) for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on
account thereof);
18
24
(iii) statutory Liens of landlords and Liens
of carriers, warehousemen, mechanics, materialmen and
suppliers and other Liens imposed by law or pursuant to
customary reservations or retentions of title arising in the
ordinary course of business, PROVIDED that such Liens secure
only amounts not yet due and payable or, if due and payable,
are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or
imposed under ERISA) incurred or deposits made by the Borrower
and its Subsidiaries in the ordinary course of business in
connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the
performance of tenders, statutory obligations, bids, leases,
government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for
the payment of borrowed money);
(v) Liens in connection with attachments or
judgments (including judgment or appeal bonds) PROVIDED that
the judgments secured shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 30 days
after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or
irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use
of the encumbered Property for its intended purposes;
(vii) Liens securing purchase money and
sale/leaseback Indebtedness (including Capital Leases) to the
extent permitted under Section 8.1(c), PROVIDED that any such
Lien attaches only to the Property financed or leased and such
Lien attaches thereto concurrently with or within 90 days
after the acquisition thereof in connection with the purchase
money transactions and within 30 days after the closing of any
sale/leaseback transaction;
(viii) leases or subleases granted to others
not interfering in any material respect with the business of
any member of the Consolidated Group;
(ix) any interest of title of a lessor
under, and Liens arising from UCC financing statements (or
equivalent filings, registrations or agreements in foreign
jurisdictions) relating to, leases permitted by this Credit
Agreement;
19
25
(x) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(xi) Liens deemed to exist in connection
with Investments in repurchase agreements permitted under
Section 8.5;
(xii) normal and customary rights of setoff
upon deposits of cash in favor of banks or other depository
institutions; and
(xiii) Liens existing as of the Closing Date
and set forth on SCHEDULE 6.8; PROVIDED that (a) no such Lien
shall at any time be extended to or cover any Property other
than the Property subject thereto on the Closing Date and (b)
the principal amount of the Indebtedness secured by such Liens
shall not be extended, renewed, refunded or refinanced.
"PERSON" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"PLAN" means a pension plan or a welfare plan under ERISA.
"PLEDGE AGREEMENT" means the Pledge Agreement dated as of the
Closing Date given by the Borrower and the other pledgors identified
therein to NationsBank, N.A., as Administrative Agent, to secure the
obligations hereunder, as amended and modified.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by NationsBank as its prime rate in effect
at its principal office in Charlotte, North Carolina, with each change
in the Prime Rate being effective on the date such change is publicly
announced as effective (it being understood and agreed that the Prime
Rate is a reference rate used by NationsBank in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit by NationsBank to any
debtor).
"PRO FORMA BASIS" means, with respect to any Transaction, that
such Transaction shall be deemed to have occurred as of the first day
of the four fiscal-quarter period ending as of the most recent fiscal
quarter end preceding the date of such Transaction with respect to
which the Administrative Agent and the Lenders have received the
officer's certificate in accordance with the provisions of Section
7.2(b). As used herein, "Transaction" means (i), any corporate merger
or consolidation as referred to in Section 8.4(b) and 8.4(d)), (ii) any
sale or other disposition of assets as referred to in Section 8.4(c),
(iii) any acquisition of capital stock or securities or any purchase,
lease or other acquisition of property as referred to in Section 8.4(d)
or (iv) the making of any Restricted Payment as referred to in Section
8.10.
20
26
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"REGISTER" shall have the meaning given such term in Section
11.3(c).
"REGULATION T, U OR X" means Regulation T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"REPORTABLE EVENT" means such term as defined under ERISA.
"REPORTABLE EVENT" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"REQUIRED LENDERS" means, at any time, Lenders having more
than fifty percent (50%) of the Commitments, or if the Commitments have
been terminated, Lenders having more than fifty percent (50%) of the
aggregate principal amount of the Obligations outstanding (taking into
account in each case Participation Interests or obligation to
participate therein); PROVIDED that the Commitments of, and outstanding
principal amount of Obligations (taking into account Participation
Interests therein) owing to, a Defaulting Lender shall be excluded for
purposes hereof in making a determination of Required Lenders.
"REQUIREMENT OF LAW" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its material property is subject.
"RESPONSIBLE OFFICER" means the Chief Executive Officer, Chief
Financial Officer, Controller, President, Executive Vice President and
any Vice President.
"RESTRICTED PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock now or hereafter outstanding, except (A) a dividend payable
solely in shares of that class to the holders of that class and (B)
dividends and other distributions payable to a Credit Party, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any
class of stock now or hereafter outstanding, and (iii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock now or
hereafter outstanding.
21
27
"REVOLVING COMMITMENT PERCENTAGE" means the Working Capital
Revolving Commitment Percentage and/or the Acquisition Revolving
Commitment Percentage, as appropriate.
"REVOLVING COMMITMENTS" means the Working Capital Revolving
Commitment and/or the Acquisition Revolving Commitment, as appropriate.
"REVOLVING LOANS" means the Working Capital Revolving Loans
and the Acquisition Revolving Loans.
"REVOLVING NOTE" or "REVOLVING NOTES" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans and Swingline Loans in substantially the form attached
as SCHEDULE 2.1(e), individually or collectively, as appropriate, as
such promissory notes may be amended, modified, supplemented, extended,
renewed or replaced from time to time.
"REVOLVING OBLIGATIONS" means Working Capital Revolving
Obligations and Acquisition Revolving Obligations.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"SECURITY AGREEMENT" means the Security Agreement dated as of
the Closing Date given by the Borrower and the other grantors
identified therein to NationsBank, N.A., as Administrative Agent, to
secure the obligations hereunder, as amended and modified.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"SOLVENT" or "SOLVENCY" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature in their
ordinary course, (iii) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's Property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which such Person is engaged or is to engage, (iv) the
fair value of the Property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (v) the present fair saleable value of
the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as
they become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended
22
28
that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"SUBORDINATED DEBT" means any Indebtedness of a member of the
Consolidated Group which by its terms is expressly subordinated in
right of payment to the prior payment of the obligations under the
Credit Agreement and the other Credit Documents on terms and conditions
satisfactory to the Required Lenders.
"SUBSIDIARY" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than 50% of
the voting interests at any time. Unless otherwise identified,
"Subsidiary" or "Subsidiaries" shall mean Subsidiaries of the Borrower.
"SUPPORT OBLIGATIONS" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Support Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Support Obligation is made.
"SWINGLINE COMMITMENT" means the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any
time outstanding up to the Swingline Committed Amount and the
commitment of the Lenders to purchase participation interests in the
Swingline Loans up to their respective Revolving Commitment Percentage
as provided in Section 2.3(b)(iii), as such amounts may be reduced from
time to time in accordance with the provisions hereof.
"SWINGLINE COMMITTED AMOUNT" means the amount of the Swingline
Lender's Commitment as specified in Section 2.3(a).
23
29
"SWINGLINE LENDER" means NationsBank and its successors.
"SWINGLINE LOAN" means a swingline revolving loan made by the
Swingline Lender pursuant to the provisions of Section 2.3.
"TERMINATION DATE" means (i) with respect to Working Capital
Revolving Loans, April 30, 2001, or if extended with the written
consent of each of the Lenders, such later date as to which the
Termination Date may be extended, and (ii) with respect to Acquisition
Revolving Loans, April 30, 2001.
"VOTING STOCK" means, with respect to any Person, capital
stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
"WELFARE PLAN" means such term as defined under ERISA.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary
100% of whose Voting Stock or other equity interests is at the time
owned by such Person directly or indirectly through other Wholly Owned
Subsidiaries.
"WORKING CAPITAL REVOLVING COMMITMENT" means, with respect to
each Lender, the commitment of such Lender to make Working Capital
Revolving Loans in an aggregate principal amount at any time
outstanding of up to such Lender's Working Capital Revolving Commitment
Percentage of the Aggregate Working Capital Revolving Committed Amount
as specified in SCHEDULE 2.1(a), as such amount may be reduced from
time to time in accordance with the provisions hereof.
"WORKING CAPITAL REVOLVING COMMITMENT PERCENTAGE" means, for
each Lender, a fraction (expressed as a decimal) the numerator of which
is the Working Capital Revolving Commitment of such Lender at such time
and the denominator of which is the Aggregate Working Capital Revolving
Committed Amount at such time. The initial Working Capital Revolving
Commitment Percentages are set out on SCHEDULE 2.1(a).
"WORKING CAPITAL REVOLVING COMMITTED AMOUNT" means,
collectively, the aggregate amount of all of the Working Capital
Revolving Commitments and, individually, the amount of each Lender's
Working Capital Revolving Commitment as specified in SCHEDULE 2.1(a).
"WORKING CAPITAL REVOLVING LOANS" shall have the meaning
assigned to such term in Section 2.1(a).
"WORKING CAPITAL REVOLVING OBLIGATIONS" means the Working
Capital Revolving Loans, the LOC Obligations and the Swingline Loans.
24
30
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the
word "from" means "from and including" and the words "to" and "until" each mean
"to but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall be prepared, in accordance with GAAP applied on a
consistent basis. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 hereof (or, prior to the delivery of the first financial
statements pursuant to Section 7.1 hereof, consistent with the annual audited
financial statements referenced in Section 6.1(i) hereof); PROVIDED, HOWEVER, if
(a) the Borrower shall object to determining such compliance on such basis at
the time of delivery of such financial statements due to any change in GAAP or
the rules promulgated with respect thereto or (b) the Administrative Agent or
the Required Lenders shall so object in writing within 30 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.
It is further acknowledged and agreed that, except as expressly
provided otherwise, for purposes of determining the Applicable Percentage and
compliance with the financial covenants in Section 7.11 (and compliance
therewith on a Pro Forma Basis), in the case of acquisitions and dispositions
which have occurred during the applicable period to the extent permitted
hereunder, adjustments shall be made to take into account historical performance
relating thereto during such applicable period prior to the date of such
acquisition or disposition, and the effect of any Indebtedness paid with
proceeds from a disposition, PROVIDED that coverage items (relating to interest
and rental expense and other such items, under Consolidated EBITDA, Consolidated
Fixed Charges or the like) shall be determined by annualization from the date of
acquisition of disposition rather than by reference to historical performance
relating prior the date of acquisition or disposition. Adjustments giving pro
forma effect to such acquisitions or dispositions will be limited to addbacks or
adjustments permitted by the Securities and Exchange Commission (or otherwise
agreed by the Administrative Agent and the Required Lenders).
25
31
SECTION 2
CREDIT FACILITIES
-----------------
2.1 REVOLVING LOAN COMMITMENTS.
(a) WORKING CAPITAL REVOLVING LOAN COMMITMENT. During the Commitment
Period, subject to the terms and conditions hereof, each Lender severally agrees
to make revolving credit loans (the "WORKING CAPITAL REVOLVING LOANS") to the
Borrower from time to time in the amount of such Lender's Working Capital
Revolving Commitment Percentage of such Working Capital Revolving Loans for the
purposes hereinafter set forth; PROVIDED
(i) with regard to the Lenders collectively, (A) the aggregate
principal amount of the Working Capital Revolving Obligations shall not
exceed the Aggregate Working Capital Revolving Committed Amount and (B)
the aggregate principal amount of Working Capital Revolving Obligations
shall not exceed the Borrowing Base, and
(ii) with regard to each Lender individually, (A) such
Lender's Working Capital Revolving Commitment Percentage of the Working
Capital Revolving Obligations shall not exceed such Lender's Working
Capital Revolving Committed Amount and (B) the sum of such Lender's
portion of Working Capital Revolving Obligations shall not exceed the
lesser of such Lender's Working Capital Revolving Committed Amount or
such Lender's Commitment Percentage of the Borrowing Base.
Working Capital Revolving Loans may consist of Base Rate Loans or Eurodollar
Loans, or a combination thereof, as the Borrower may request, and may be repaid
and reborrowed in accordance with the provisions hereof.
(b) ACQUISITION REVOLVING LOAN COMMITMENT. During the Commitment
Period, subject to the terms and conditions hereof, each Lender severally agrees
to make revolving credit loans (the "ACQUISITION REVOLVING Loans") to the
Borrower from time to time in the amount of such Lender's Acquisition Revolving
Commitment Percentage of such Acquisition Revolving Loans for the purposes
hereinafter set forth; PROVIDED
(i) with regard to the Lenders collectively, the aggregate
principal amount of Acquisition Revolving Obligations shall not exceed
the Aggregate Acquisition Revolving Committed Amount;
(ii) with regard to each Lender individually, such Lender's
Acquisition Revolving Commitment Percentage of the Acquisition
Revolving Obligations shall not exceed such Lender's Acquisition
Revolving Committed Amount; and
(iii) with the Notice of Borrowing, the Borrower shall deliver
to the Administrative Agent a certificate of a Responsible Officer
which (i) demonstrates compliance with the financial covenants set
forth in Section 7.9 on a Pro Forma Basis after giving effect to the
acquisition, (ii) demonstrates a Consolidated Senior Leverage Ratio of
less than 2.5:1.0 on a Pro Forma Basis after giving effect to the
acquisition and (iii) states that, to the best of such Responsible
Officer's knowledge and belief, no Default or Event of Default is then
existing or would exist after giving effect to the acquisition on a Pro
Forma Basis.
26
32
Acquisition Revolving Loans may consist of Base Rate Loans or Eurodollar Loans,
or a combination thereof, as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof.
(c) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephone notice
promptly confirmed in writing) to the Administrative Agent not later
than 11:00 A.M. (Eastern Standard Time) on the Business Day prior to
the date of the requested borrowing in the case of Base Rate Loans, and
on the third Business Day prior to the date of the requested borrowing
in the case of Eurodollar Loans. Each such request for borrowing shall
be irrevocable and shall specify (A) the type of Revolving Loan
requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed, and
(D) whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. A form of Notice of
Borrowing is attached as SCHEDULE 2.1(c)(i). If the Borrower shall fail
to specify in any such Notice of Borrowing (I) an applicable Interest
Period in the case of a Eurodollar Loan, then such notice shall be
deemed to be a request for an Interest Period of one month, or (II) the
type of Revolving Loan requested, then such notice shall be deemed to
be a request for a Base Rate Loan hereunder. The Administrative Agent
shall give notice to each Lender promptly upon receipt of each Notice
of Borrowing pursuant to this Section 2.1(c)(i), the contents thereof
and each such Lender's share of any borrowing to be made pursuant
thereto.
(ii) MINIMUM AMOUNTS. Each Revolving Loan shall be in a
minimum aggregate principal amount of $5,000,000, in the case of
Eurodollar Loans, or $1,000,000 (or the remaining Revolving Committed
Amount, if less), in the case of Base Rate Loans, and integral
multiples of $1,000,000 in excess thereof.
(iii) ADVANCES. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of the Borrower, or in such other
manner as the Administrative Agent may specify in writing, by 1:00 P.M.
(Eastern Standard Time) on the date specified in the applicable Notice
of Borrowing in Dollars and in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent by crediting the account of the
Borrower with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by
the Administrative Agent.
(d) REPAYMENT. The principal amount of all Revolving Loans shall be due
and payable in full on their respective Termination Date.
(e) INTEREST. Subject to the provisions of Section 3.1,
27
33
(i) BASE RATE LOANS. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the Base
Rate PLUS the Applicable Percentage;
(ii) EURODOLLAR LOANS. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to the
Eurodollar Rate PLUS the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(f) REVOLVING NOTES. The Revolving Loans shall be evidenced by the
Revolving Notes.
(g) MAXIMUM NUMBER OF EURODOLLAR LOANS. The Borrower will be limited to
a maximum number of eight (8) Eurodollar Loans outstanding at any time. For
purposes hereof, Eurodollar Loans with separate or different Interest Periods
will be considered as separate Eurodollar Loans even if their Interest Periods
expire on the same date.
2.2 LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE. During the Commitment Period, subject to the terms and
conditions hereof and of the LOC Documents, if any, and such other terms and
conditions which the Issuing Lender may reasonably require, the Issuing Lender
shall issue, and the Lenders shall participate in on a pro rata basis as
described below, such Letters of Credit as the Borrower may request for its own
account or for the account of another Credit Party as provided herein, in a form
acceptable to the Issuing Lender, for the purposes hereinafter set forth;
PROVIDED that (i) the aggregate amount of LOC Obligations shall not exceed FIVE
MILLION DOLLARS ($5,000,000) at any time (the "LOC COMMITTED AMOUNT"), (ii) with
regard to the Lenders collectively, the aggregate principal amount of the
Working Capital Revolving Obligations shall not exceed the lesser of the
Aggregate Working Capital Revolving Committed Amount or the Borrowing Base, and
(iii) with regard to each Lender individually, such Lender's Working Capital
Revolving Commitment Percentage of the Working Capital Obligations shall not
exceed the lesser of such Lender's Working Capital Revolving Committed Amount or
such Lender's Commitment Percentage of the Borrowing Base. Except as otherwise
expressly agreed upon by the Required Lenders, (A) no standby Letter of Credit
shall have an original expiry date more than one year from the date of issuance;
PROVIDED that the expiry dates of standby Letters of Credit may be extended on
request, subject to the conditions to Extensions of Credit hereunder, annually
on each anniversary date of the date of issuance for an additional one year
period, and (B) no expiry date shall extend beyond the Termination Date unless,
and only to the extent that, cash collateral is provided to the Issuing Lender
in an amount equal to the maximum amount available to be drawn under such Letter
of Credit. Each Letter of Credit shall comply with the related LOC Documents.
The issuance date of each Letter of Credit shall be a Business Day.
28
34
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least three
(3) Business Days prior to the requested date of issuance (or such shorter
period as may be agreed by the Issuing Lender). A form of Notice of Request for
Letter of Credit is attached as SCHEDULE 2.2(b)-2. The Issuing Lender will
provide to the Administrative Agent at least monthly, and more frequently upon
request, a detailed summary report on its Letters of Credit and the activity
thereon, in form and substance acceptable to the Administrative Agent. In
addition, the Issuing Lender will provide to the Administrative Agent for
dissemination to the Lenders at least quarterly, and more frequently upon
request, a detailed summary report on its Letters of Credit and the activity
thereon, including, among other things, the Credit Party for whose account the
Letter of Credit is issued, the beneficiary, the face amount, and the expiry
date. The Issuing Lender will provide copies of the Letters of Credit to the
Administrative Agent and the Lenders promptly upon request.
(c) PARTICIPATION. Each Lender, with respect to the Existing Letters of
Credit, hereby purchases a participation interest in such Existing Letters of
Credit, and with respect to Letters of Credit issued on or after the Closing
Date, upon issuance of a Letter of Credit, shall be deemed to have purchased
without recourse a risk participation from the applicable Issuing Lender in such
Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its pro rata share of the obligations under such Letter of
Credit (based on the respective Working Capital Revolving Commitment Percentages
of the Lenders) and shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and be obligated to pay to the Issuing Lender
therefor and discharge when due, its pro rata share of the obligations arising
under such Letter of Credit. Without limiting the scope and nature of each
Lender's participation in any Letter of Credit, to the extent that the Issuing
Lender has not been reimbursed as required hereunder or under any such Letter of
Credit, each such Lender shall pay to the Issuing Lender its pro rata share of
such unreimbursed drawing in same day funds on the day of notification by the
Issuing Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) hereof. The obligation of each Lender to so reimburse the Issuing
Lender shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or event.
Any such reimbursement shall not relieve or otherwise impair the obligation of
the Borrower to reimburse the Issuing Lender under any Letter of Credit,
together with interest as hereinafter provided.
(d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower intends
to otherwise reimburse the Issuing Lender for such drawing, the Borrower shall
be deemed to have requested that the Lenders make a Working Capital Revolving
Loan in the amount of the drawing as provided in subsection (e) hereof on the
related Letter of Credit, the proceeds of which will be used to satisfy the
related reimbursement obligations. The Borrower promises to reimburse the
Issuing Lender on the Business Day after the Borrower receives a notice of
drawing under any Letter of Credit (either with the proceeds of a Swingline Loan
obtained hereunder or otherwise) in same day funds. The unreimbursed amount of
such drawing shall bear interest from the date of drawing until (but not
including) the date of repayment at a per annum rate equal to the Base Rate for
a period of two Business Days following notice to the Borrower of such drawing
and thereafter at a per annum rate equal to the
29
35
Base Rate plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to payment the
Borrower may claim or have against the Issuing Lender, the Administrative Agent,
the Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Administrative Agent for the
account of the Issuing Lender in Dollars and in immediately available funds, the
amount of such Lender's pro rata share of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Lender from the
Issuing Lender if such notice is received at or before 2:00 P.M. (Eastern
Standard Time) otherwise such payment shall be made at or before 12:00 Noon
(Eastern Standard Time) on the Business Day next succeeding the day such notice
is received. If such Lender does not pay such amount to the Issuing Lender in
full upon such request, such Lender shall, on demand, pay to the Administrative
Agent for the account of the Issuing Lender interest on the unpaid amount during
the period from the date of such drawing until such Lender pays such amount to
the Issuing Lender in full at a rate per annum equal to, if paid within two (2)
Business Days of the date that such Lender is required to make payments of such
amount pursuant to the preceding sentence, the Federal Funds Rate and thereafter
at a rate equal to the Base Rate. Each Lender's obligation to make such payment
to the Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the obligations of the Borrower hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a Lender to the Issuing
Lender, such Lender shall, automatically and without any further action on the
part of the Issuing Lender or such Lender, acquire a participation in an amount
equal to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrower with respect thereto.
(e) REPAYMENT WITH WORKING CAPITAL REVOLVING LOANS. On any day on which
the Borrower shall have requested, or been deemed to have requested, a Swingline
Loan, or to the extent Swingline Loans are not available, a Working Capital
Revolving Loan advance to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Lenders that a Working Capital
Revolving Loan has been requested or deemed requested by the Borrower to be made
in connection with a drawing under a Letter of Credit, in which case a Working
Capital Revolving Loan advance comprised of Base Rate Loans (or Eurodollar Loans
to the extent the Borrower has complied with the procedures of Section 2.1(c)(i)
with respect thereto) shall be immediately made to the Borrower by all Lenders
(notwithstanding any termination of the Commitments pursuant to Section 9.2) PRO
RATA based on the respective Working Capital Revolving Commitment Percentages of
the Lenders (determined before giving effect to any termination of the
Commitments pursuant to Section 9.2) and the proceeds thereof shall be paid
directly to the Issuing Lender for application to the respective LOC
Obligations.
30
36
Each such Lender hereby irrevocably agrees to make its pro rata share of each
such Working Capital Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the preceding
sentence NOTWITHSTANDING (i) the amount of such borrowing may not comply with
the minimum amount for advances of Working Capital Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Working Capital Revolving
Loan to be made by the time otherwise required hereunder, (v) whether the date
of such borrowing is a date on which Working Capital Revolving Loans are
otherwise permitted to be made hereunder or (vi) any termination of the
Commitments relating thereto immediately prior to or contemporaneously with such
borrowing. In the event that any Working Capital Revolving Loan cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to the Borrower or any Credit Party), then each such Lender
hereby agrees that it shall forthwith purchase (as of the date such borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Issuing
Lender such participation in the outstanding LOC Obligations as shall be
necessary to cause each such Lender to share in such LOC Obligations ratably
(based upon the respective Commitment Percentages of the Lenders (determined
before giving effect to any termination of the Commitments pursuant to Section
9.2)), PROVIDED that in the event such payment is not made on the day of
drawing, such Lender shall pay in addition to the Issuing Lender interest on the
amount of its unfunded Participation Interest at a rate equal to, if paid within
two (2) Business Days of the date of drawing, the Federal Funds Effective Rate,
and thereafter at the Base Rate.
(f) DESIGNATION OF OTHER CREDIT PARTIES AS ACCOUNT PARTIES.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a) hereof, a Letter of Credit issued
hereunder may contain a statement to the effect that such Letter of Credit is
issued for the account of a Credit Party, provided that notwithstanding such
statement, the Borrower shall be the actual account party for all purposes of
this Credit Agreement for such Letter of Credit and such statement shall not
affect the Borrower's reimbursement obligations hereunder with respect to such
Letter of Credit.
(g) RENEWAL, EXTENSION. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(h) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
(i) RESPONSIBILITY OF ISSUING LENDER. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders are
only those expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set forth in
Section 5.2 have been satisfied unless it shall have acquired actual
31
37
knowledge that any such condition precedent has not been satisfied; PROVIDED,
HOWEVER, that nothing set forth in this Section 2.2 shall be deemed to prejudice
the right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section 2.2 in
the event that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit constituted gross negligence or
willful misconduct on the part of the Issuing Lender.
(j) CONFLICT WITH LOC DOCUMENTS. In the event of any conflict between
this Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
2.3 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENT. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans to the Borrower on request (the
"SWINGLINE LOANS") from time to time for the purposes hereinafter set forth;
PROVIDED that (i) the aggregate principal amount of Swingline Loans shall not
exceed FIVE MILLION DOLLARS ($5,000,000) (the "SWINGLINE COMMITTED AMOUNT"), and
(ii) the aggregate principal amount of the Working Capital Revolving Obligations
shall not exceed the lesser of the Aggregate Working Capital Revolving Committed
Amount or the Borrowing Base. Swingline Loans shall consist of Base Rate Loans
and may be repaid and reborrowed in accordance with the provisions hereof.
(b) SWINGLINE LOAN ADVANCES.
(i) NOTICES; DISBURSEMENT. Whenever the Borrower desires a
Swingline Loan advance hereunder it shall give written notice (or
telephonic notice promptly confirmed in writing) to the Swingline
Lender not later than 11:00 A.M. (Eastern Standard Time) on the
Business Day of the requested Swingline Loan advance. Each such notice
shall be irrevocable and shall specify (A) that a Swingline Loan
advance is requested, (B) the date of the requested Swingline Loan
advance (which shall be a Business Day) and (C) the principal amount of
and Interest Period for the Swingline Loan advance requested. Each
Swingline Loan shall have such maturity date as the Swingline Lender
and the Borrower shall agree upon receipt by the Swingline Lender of
any such notice from the Borrower. The Swingline Lender shall initiate
the transfer of funds representing the Swingline Loan advance to the
Borrower by 2:00 P.M. (Eastern Standard Time) on the Business Day of
the requested borrowing.
(ii) MINIMUM AMOUNTS. Each Swingline Loan advance shall be in
a minimum principal amount of $100,000 and in integral multiples of
$50,000 in excess thereof (or the remaining amount of the Swingline
Committed Amount, if less).
(iii) REPAYMENT OF SWINGLINE LOANS. The principal amount of
all Swingline Loans shall be due and payable on the earlier of (A) the
maturity date agreed to by the Swingline Lender and the Borrower with
respect to such Loan (which maturity date shall
32
38
not be a date more than thirty (30) Business Days from the date of
advance thereof) or (B) the Termination Date. The Swingline Lender may,
at any time, in its sole discretion, by written notice to the Borrower
and the Lenders, demand repayment of its Swingline Loans by way of a
Working Capital Revolving Loan advance, in which case the Borrower
shall be deemed to have requested a Working Capital Revolving Loan
advance comprised solely of Base Rate Loans in the amount of such
Swingline Loans; PROVIDED, HOWEVER, that any such demand shall be
deemed to have been given one Business Day prior to the Termination
Date and on the date of the occurrence of any Event of Default
described in Section 9.1 and upon acceleration of the indebtedness
hereunder and the exercise of remedies in accordance with the
provisions of Section 9.2. Each Lender hereby irrevocably agrees to
make its pro rata share of each such Working Capital Revolving Loan in
the amount, in the manner and on the date specified in the preceding
sentence NOTWITHSTANDING (I) the amount of such borrowing may not
comply with the minimum amount for advances of Working Capital
Revolving Loans otherwise required hereunder, (II) whether any
conditions specified in Section 5.2 are then satisfied, (III) whether a
Default or an Event of Default then exists, (IV) failure of any such
request or deemed request for Working Capital Revolving Loan to be made
by the time otherwise required hereunder, (V) whether the date of such
borrowing is a date on which Working Capital Revolving Loans are
otherwise permitted to be made hereunder or (VI) any termination of the
Commitments relating thereto immediately prior to or contemporaneously
with such borrowing. In the event that any Working Capital Revolving
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower or
any other Credit Party), then each Lender hereby agrees that it shall
forthwith purchase (as of the date such borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on
or after such date and prior to such purchase) from the Swingline
Lender such Participation Interests in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such
Swingline Loans ratably based upon its Commitment Percentage of the
Revolving Committed Amount (determined before giving effect to any
termination of the Commitments pursuant to Section 3.4), provided that
(A) all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the
respective Participation Interest is purchased and (B) at the time any
purchase of Participation Interests pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay to the
Swingline Lender, to the extent not paid to the Swingline Lender by the
Borrower in accordance with the terms of subsection (c)(ii) below,
interest on the principal amount of Participation Interests purchased
for each day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment for such
Participation Interests, at the rate equal to the Federal Funds
Effective Rate for a period of two Business Days, and thereafter at the
Base Rate.
(c) INTEREST ON SWINGLINE LOANS. Subject to the provisions of Section
3.1, Swingline Loans shall bear interest at a per annum rate equal to the Base
Rate plus the Applicable Percentage.
33
39
Interest on Swingline Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as specified herein or mutually
agreed upon between the Swingline Lender and the Borrower).
(d) SWINGLINE NOTE. The Swingline Loans shall be evidenced by the
Revolving Note.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
----------------------------------------------
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event
of Default, the principal of and, to the extent permitted by law, interest on
the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate 2% greater
than the rate which would otherwise be applicable (or if no rate is applicable,
whether in respect of interest, fees or other amounts, then 2% greater than the
Base Rate).
3.2 EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have
the option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another interest
rate type; PROVIDED, HOWEVER, that (i) except as provided in Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "INTEREST PERIOD" set forth in Section 1.1 and
shall be in such minimum amounts as provided in Section 2.1(b)(ii), and (iv)
any request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month. Each such extension or conversion shall be effected by the
Borrower by giving a Notice of Extension/Conversion (or telephone notice
promptly confirmed in writing) to the Administrative Agent prior to 11:00 A.M.
(Eastern Standard Time on the Business Day of, in the case of the conversion of
a Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the extension of a Eurodollar Loan as, or conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall be irrevocable
and shall constitute a representation and warranty by the Borrower of the
matters specified in subsections (a) through (e) of Section 5.2. In the event
the Borrower fails to request extension or conversion of any Eurodollar Loan in
accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then such Eurodollar
34
40
Loan shall be automatically converted into a Base Rate Loan at the end of the
Interest Period applicable thereto. The Administrative Agent shall give each
Lender notice as promptly as practicable of any such proposed extension or
conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. Revolving Loans may be repaid in
whole or in part without premium or penalty; PROVIDED that (i) Eurodollar Loans
may be prepaid only upon three (3) Business Days' prior written notice to the
Administrative Agent and must be accompanied by payment of any amounts owing
under Section 3.11, and (ii) partial prepayments shall be minimum principal
amounts of $5,000,000, in the case of Eurodollar Loans, and $1,000,000, in the
case of Base Rate Loans, and in integral multiples of $1,000,000 in excess
thereof.
(b) MANDATORY PREPAYMENTS. If at any time, (A) the aggregate
principal amount of Working Capital Revolving Obligations shall exceed the
lesser of the Aggregate Working Capital Revolving Committed Amount or the
Borrowing Base, (B) the aggregate amount of LOC Obligations shall exceed the LOC
Committed Amount, (C) the aggregate amount of Swingline Loans shall exceed the
Swingline Committed Amount or (D) the aggregate principal amount of Acquisition
Revolving Obligations shall exceed the Aggregate Acquisition Revolving Committed
Amount, then the Borrower shall immediately make payment on the Revolving Loans
and/or to a cash collateral account in respect of the LOC Obligations, in an
amount sufficient to eliminate the deficiency.
(c) APPLICATION. Unless otherwise specified by the Borrower,
prepayments made hereunder shall be applied first to Swingline Loans, then to
Revolving Loans which are Base Rate Loans, then to Revolving Loans which are
Eurodollar Loans in direct order of Interest Period maturities and then to a
cash collateral account to secure LOC Obligations. Amounts prepaid hereunder may
be reborrowed in accordance with the provisions hereof.
3.4 TERMINATION AND REDUCTION OF COMMITMENTS
(a) VOLUNTARY REDUCTIONS. The Working Capital Revolving
Commitment or the Acquisition Revolving Commitment may be terminated or
permanently reduced in whole or in part upon one (1) Business Day prior written
notice to the Administrative Agent, PROVIDED that (i) after giving effect to any
voluntary reduction (x) the aggregate amount of Working Capital Revolving
Obligations shall not exceed the lesser of the Aggregate Working Capital
Revolving Committed Amount, as reduced, and (y) the Acquisition Revolving
Obligations shall not exceed the Aggregate Acquisition Revolving Committed
Amount, as reduced, and (ii) partial reductions shall be minimum principal
amount of $5,000,000, and in integral multiples of $1,000,000 in excess thereof.
35
41
(b) MANDATORY REDUCTION.
(i) SCHEDULED REDUCTIONS IN THE ACQUISITION REVOLVING
COMMITMENTS. Beginning on the date twenty-one (21) months after the
Closing Date, the Aggregate Acquisition Revolving Commitments shall be
permanently reduced by $750,000, and each three months thereafter by a
like amount until the Termination Date for Acquisition Revolving Loans.
(ii) ASSET DISPOSITIONS. The Working Capital
Commitments shall be permanently reduced in an aggregate amount equal
to one hundred percent (100%) of the Net Proceeds received from Asset
Dispositions to the extent (A) such Net Proceeds are not reinvested in
similar property or assets within six months of the date of sale,
lease, disposition, casualty, theft or loss which gave rise to the
Asset Disposition, and (B) such Net Proceeds that are not reinvested
exceed $50,000 in the aggregate in any calendar year.
(iii) EQUITY TRANSACTIONS. The Working Capital
Commitments shall be permanently reduced in an aggregate amount equal
to seventy-five percent (75%) of the Net Proceeds received from any
Equity Transaction.
(iv) DEBT TRANSACTIONS. The Working Capital
Commitments shall be permanently reduced in an aggregate amount equal
to one hundred percent (100%) of the Net Proceeds received from any
Debt Transaction.
(c) TERMINATION. The Commitments shall terminate on
the Termination Date.
3.5 FEES.
(a) COMMITMENT FEE. In consideration of the Revolving
Commitments hereunder, the Borrower agrees to pay to the Administrative Agent
for the ratable benefit of the Lenders a commitment fee (the "COMMITMENT FEE")
equal to the Applicable Percentage per annum on the average daily unused amount
of the Revolving Commitments for the applicable period. The Commitment Fee shall
be payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the immediately preceding quarter (or portion thereof)
beginning with the first such date to occur after the Closing Date. For purposes
of computation of the Commitment Fee, Swingline Loans shall not be counted
toward or considered usage under the Working Capital Revolving Loan facility.
(b) LETTER OF CREDIT FEES.
(i) LETTER OF CREDIT FEE. In consideration of the LOC
Commitment hereunder, the Borrower agrees to pay to the Administrative
Agent for the ratable benefit of the Lenders a fee (the "LETTER OF
CREDIT FEE") equal to the Applicable Percentage per annum on the
average daily maximum amount available to be drawn under Letters of
Credit during the period outstanding. The Letter of Credit Fee shall be
payable quarterly in arrears on the 15th day following the last day of
each calendar quarter for the
36
42
immediately preceding quarter (or portion thereof) beginning with the
first such date to occur after the Closing Date.
(ii) ISSUING LENDER FEE. In addition to the Letter of
Credit Fee, the Borrower agrees to pay to the Issuing Lender for its
own account without sharing by the other Lenders (A) a fronting and
negotiation fee of one-eighth of one percent (0.125%) per annum on the
average daily maximum amount available to be drawn under Letters of
Credit issued by the Issuing Lender, or such other such fronting and
negotiation fees as may be mutually agreed upon by the Issuing Lender
and the Borrower from time to time (in the absence of other agreement,
such fees shall be payable quarterly in arrears on the payment dates
for the Letter of Credit fee) and (B) customary charges of the Issuing
Lender with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings under,
such Letters of Credit (collectively, the "ISSUING LENDER FEES").
(c) ADMINISTRATIVE FEES. The Borrower agrees to pay to the
Administrative Agent, for its own account, an annual administrative fee and such
other fees, if any, referred to in the Administrative Agent's Fee Letter
(collectively, the "ADMINISTRATIVE AGENT FEES").
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto.
3.7 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, the Administrative
Agent shall have determined (which determination shall be conclusive and binding
upon the Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. If such notice is given (a) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans and (b) any Loans that were to have been
37
43
converted on the first day of such Interest Period to or continued as Eurodollar
Loans shall be converted to or continued as Base Rate Loans. Until such notice
has been withdrawn by the Administrative Agent, no further Eurodollar Loans
shall be made or continued as such, nor shall the Borrower have the right to
convert Base Rate Loans to Eurodollar Loans.
3.8 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans shall forthwith be canceled and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.11.
3.9 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
any Lender, or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing Date (or, if later, the
date on which such Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof (except
for (i) Non-Excluded Taxes covered by Section 3.10 (including
Non-Excluded Taxes imposed solely by reason of any failure of such
Lender to comply with its obligations under Section 3.10(b)) and (ii)
changes in taxes measured by or imposed upon the overall net income, or
franchise tax (imposed in lieu of such net income tax), of such Lender
or its applicable lending office, branch, or any affiliate thereof));
(b) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
38
44
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Administrative Agent, in accordance herewith, the Borrower shall be
obligated to promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable, PROVIDED that, in any such case, the Borrower may elect to convert
the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving
the Administrative Agent at least one Business Day's notice of such election, in
which case the Borrower shall promptly pay to such Lender, upon demand, without
duplication, such amounts, if any, as may be required pursuant to Section 3.11.
If any Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall provide prompt notice thereof to the Borrower, through the
Administrative Agent, certifying (x) that one of the events described in this
paragraph (a) has occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount resulting from such
event and (z) as to the additional amount demanded by such Lender and a
reasonably detailed explanation of the calculation thereof. Such a certificate
as to any additional amounts payable pursuant to this subsection submitted by
such Lender, through the Administrative Agent, to the Borrower shall be
conclusive and binding on the parties hereto in the absence of manifest error.
This covenant shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.
3.10 TAXES.
(a) Except as provided below in this subsection, all payments made by
the Borrower under this Credit Agreement and any Notes shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any court, or governmental body, agency or other
official, excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or affiliate thereof,
and all franchise taxes, branch taxes, taxes on doing business or taxes on the
overall capital or net worth of any Lender or its applicable lending office, or
any branch or affiliate thereof, in each case imposed in lieu of net income
taxes, imposed: (i) by the jurisdiction under the laws of which such Lender,
applicable lending office, branch or affiliate is organized or is located, or in
which its principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii) by reason
of any connection between the jurisdiction imposing such tax and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder or under any
Notes, (A) the amounts
39
45
so payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Credit Agreement and
any Notes, PROVIDED, HOWEVER, that the Borrower shall be entitled to deduct and
withhold any Non-Excluded Taxes and shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws of the United
States of America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection whenever any Non-Excluded Taxes
are payable by the Borrower, and (B) as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this subsection shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(X)(i) on or before the date of any payment by the Borrower
under this Credit Agreement or Notes to such Lender, deliver to the
Borrower and the Administrative Agent (A) two (2) duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying that it is
entitled to receive payments under this Credit Agreement and any Notes
without deduction or withholding of any United States federal income
taxes and (B) an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is entitled to
an exemption from United States backup withholding tax;
(ii) deliver to the Borrower and the Administrative Agent two
(2) further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent; or
(Y) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (i)
represent to the Borrower (for the benefit of the Borrower and the
Administrative Agent) that it is not a bank within the meaning of
Section 881(c)(3)(A) of the Internal Revenue Code, (ii) agree to
furnish to the Borrower on or before the date of any payment by the
Borrower, with a copy to the Administrative Agent two (2) accurate and
complete original signed copies of Internal
40
46
Revenue Service Form W-8, or successor applicable form certifying to
such Lender's legal entitlement at the date of such certificate to an
exemption from U.S. withholding tax under the provisions of Section
881(c) of the Internal Revenue Code with respect to payments to be made
under this Credit Agreement and any Notes (and to deliver to the
Borrower and the Administrative Agent two (2) further copies of such
form on or before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Administrative Agent for
filing and completing such forms), and (iii) agree, to the extent
legally entitled to do so, upon reasonable request by the Borrower, to
provide to the Borrower (for the benefit of the Borrower and the
Administrative Agent) such other forms as may be reasonably required in
order to establish the legal entitlement of such Lender to an exemption
from withholding with respect to payments under this Credit Agreement
and any Notes;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Each Person that shall become a Lender or
a participant of a Lender pursuant to subsection 11.3 shall, upon the
effectiveness of the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection, PROVIDED
that in the case of a participant of a Lender the obligations of such
participant of a Lender pursuant to this subsection (b) shall be determined as
if the participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and statements to
the Lender from which the related participation shall have been purchased.
3.11 INDEMNITY.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto. With
respect to Eurodollar Loans, such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of the applicable Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Percentage included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period
41
47
with leading banks in the interbank Eurodollar market. The covenants of the
Borrower set forth in this Section 3.11 shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.12 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) LOANS. Each Loan, each payment or prepayment of principal of any
Loan (other than Swingline Loans) or reimbursement obligations arising from
drawings under Letters of Credit, each payment of interest on the Loans or
reimbursement obligations arising from drawings under Letters of Credit, each
payment of Commitment Fees, each payment of the Letter of Credit Fee, each
reduction of the Revolving Committed Amount and each conversion or extension of
any Loan (other than Swingline Loans), shall be allocated pro rata among the
Lenders in accordance with the respective principal amounts of their outstanding
Loans (taking into account any funded Participation Interests therein) and
Participation Interests.
(b) ADVANCES. No Lender shall be responsible for the failure or delay
by any other Lender in its obligation to make its ratable share of a borrowing
hereunder; PROVIDED, HOWEVER, that the failure of any Lender to fulfill its
obligations hereunder shall not relieve any other Lender of its obligations
hereunder. Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its ratable share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by such Lender within the time period specified therefor hereunder, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the Federal Funds Rate for a period of two
(2) Business Days, and thereafter at the Base Rate, for the period until such
Lender makes such amount immediately available to the Administrative Agent. If
such Lender does not pay such amounts to the Administrative Agent forthwith upon
demand, the Administrative Agent may notify the Borrower and request the
Borrower to immediately pay such amount to the Administrative Agent with
interest at the Base Rate. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
3.13 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender
42
48
shall promptly purchase from the other Lenders a participation in such Loans,
LOC Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrower
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Loan, LOC Obligations or other obligation in
the amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or the Administrative Agent shall fail to remit
to the Administrative Agent or any other Lender an amount payable by such Lender
or the Administrative Agent to the Administrative Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Administrative
Agent or such other Lender at a rate per annum equal to the Federal Funds Rate.
If under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.13 applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders under
this Section 3.13 to share in the benefits of any recovery on such secured
claim.
3.14 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Administrative Agent in dollars in immediately
available funds, without setoff, deduction, counterclaim or withholding of any
kind, at the Administrative Agent's office specified in Section 11.1 not later
than 2:00 P.M. (Eastern Standard Time) on the date when due. Payments received
after such time shall be deemed to have been received on the next succeeding
Business Day. The Administrative Agent may (but shall not be obligated to) debit
the amount of any such payment which is not made by such time to any ordinary
deposit account of the Borrower maintained with the Administrative Agent (with
notice to the Borrower). The Borrower shall, at the time it makes any payment
under this Credit Agreement, specify to the Administrative Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower hereunder
to which such payment is to be applied (and in the event that it fails so to
specify, or if such application would be inconsistent with the terms hereof, the
Administrative Agent shall distribute such payment to the Lenders in such manner
as the Administrative Agent may determine to be appropriate in respect of
obligations owing by the Borrower hereunder, subject to the terms of Section
3.12(a)). The Administrative Agent will distribute such payments to such
Lenders, if any such payment is received prior to 12:00 Noon (Eastern Standard
Time) on a Business Day in like funds as received prior to the end of such
Business Day and otherwise the Administrative Agent will distribute such payment
to such Lenders on the next succeeding Business Day. Whenever any
43
49
payment hereunder shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such payment shall
instead be made on the next preceding Business Day. Except as expressly provided
otherwise herein, all computations of interest and fees shall be made on the
basis of actual number of days elapsed over a year of 360 days, except with
respect to computation of interest on Base Rate Loans which (unless the Base
Rate is determined by reference to the Federal Funds Rate) shall be calculated
based on a year of 365 or 366 days, as appropriate. Interest shall accrue from
and include the date of borrowing, but exclude the date of payment.
(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received by the Administrative Agent or any Lender on account of the Guaranteed
Obligations or any other amounts outstanding under any of the Credit Documents
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Administrative Agent in connection with enforcing the rights of
the Lenders under the Credit Documents;
SECOND, to payment of any fees owed hereunder to the
Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees)
of each of the Lenders in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Obligations owing
to such Lender;
FOURTH, to the payment of all accrued interest and fees on or
in respect of the Obligations;
FIFTH, to the payment of the outstanding principal amount of
the Guaranteed Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Obligations and other obligations which
shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
44
50
Obligations held by such Lender bears to the aggregate then outstanding
Obligations) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Administrative Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses "FIFTH" and
"SIXTH" above in the manner provided in this Section 3.14(b).
3.15 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c) hereof, and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Loan hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder from or for
the account of the Borrower and each Lender's share thereof. The Administrative
Agent will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.15 (and, if consistent
with the entries of the Administrative Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the Borrower
therein recorded; PROVIDED, HOWEVER, that the failure of any Lender or the
Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Borrower to repay the Loans made by such Lender in
accordance with the terms hereof.
SECTION 4
GUARANTY
--------
4.1 THE GUARANTEE.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, to each Affiliate of a Lender that enters into a Hedging Agreement and
to the Administrative Agent as hereinafter provided the prompt payment of the
Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof. The Guarantors hereby
further agree
45
51
that if any of the Guaranteed Obligations are not paid in full when due (whether
at stated maturity, as a mandatory prepayment, by acceleration, as mandatory
cash collateralization or otherwise), the Guarantors will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, as a mandatory prepayment, by acceleration or otherwise)
in accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of each Guarantor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 hereof are joint
and several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Guaranteed Obligations for amounts paid under this
Guaranty until such time as the Lenders (and any Affiliates of Lenders entering
into Hedging Agreements) have been paid in full, all Commitments under the
Credit Agreement have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from the
Lenders in connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
46
52
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Administrative
Agent or any Lender or Lenders as security for any of the Guaranteed
Obligations shall fail to attach or be perfected; or
(v) any of the Guaranteed Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement or any other agreement or instrument
referred to in the Credit Documents or Hedging Agreements, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Guaranteed Obligations, except through the exercise
of the rights of subrogation pursuant to Section 4.2.
47
53
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 hereof (and shall be deemed
to have become automatically due and payable in the circumstances provided in
said Section 9.2) for purposes of Section 4.1 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or preventing the
Guaranteed Obligations from becoming automatically due and payable) as against
any other Person and that, in the event of such declaration (or the Guaranteed
Obligations being deemed to have become automatically due and payable), the
Guaranteed Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of said
Section 4.1.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
hereof, (i) "EXCESS FUNDING GUARANTOR" shall mean, in respect of any obligations
arising under the other provisions of this Section 4 (hereafter, the "GUARANTIED
OBLIGATIONS"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guarantied Obligations; (ii) "EXCESS PAYMENT" shall mean, in
respect of any Guarantied Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guarantied Obligations; and
(iii) "PRO RATA SHARE", for the purposes of this Section 4.6, shall mean, for
any Guarantor, the ratio (expressed as a percentage) of (a) the amount by which
the aggregate present fair saleable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Guarantor hereunder) to (b) the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(if any Guarantor becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 4.6 such subsequent Guarantor shall be deemed
to have been a Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
a Guarantor shall be deemed true as of the Closing Date).
48
54
4.7 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Guaranteed Obligations whenever arising.
SECTION 5
CONDITIONS
----------
5.1 CONDITIONS TO CLOSING.
This Credit Agreement shall become effective, and the initial
Extensions of Credit may be made, upon the satisfaction of the following
conditions precedent:
(a) EXECUTION OF CREDIT AGREEMENT AND CREDIT DOCUMENTS.
Receipt of (i) multiple counterparts of this Credit Agreement, (ii) a Revolving
Note for each Lender, (iii) multiple counterparts of the Pledge Agreement, the
Aircraft Security Agreement and the Security Agreement and UCC financing
statements relating thereto, if any, in each case executed by a duly authorized
officer of each party thereto and in each case conforming to the requirements of
this Credit Agreement.
(b) LEGAL OPINIONS. Receipt of multiple counterparts of
opinions of counsel for the Credit Parties relating to the Credit Documents and
the transactions contemplated herein, in form and substance satisfactory to the
Administrative Agent and the Required Lenders.
(c) CORPORATE DOCUMENTS. Receipt of the following (or their
equivalent) for each of the Credit Parties:
(i) ARTICLES OF INCORPORATION. Copies of the articles
of incorporation or charter documents certified to be true and complete
as of a recent date by the appropriate governmental authority of the
state of its incorporation.
(ii) RESOLUTIONS. Copies of resolutions of the Board
of Directors approving and adopting the respective Credit Documents,
the transactions contemplated therein and authorizing execution and
delivery thereof, certified by a secretary or assistant secretary as of
the Closing Date to be true and correct and in force and effect as of
such date.
(iii) BYLAWS. Copies of the bylaws certified by a
secretary or assistant secretary as of the Closing Date to be true and
correct and in force and effect as of such date.
(iv) GOOD STANDING. Copies, where applicable, of
certificates of good standing, existence or its equivalent certified as
of a recent date by the appropriate governmental authorities of the
state of incorporation and each other state in which the
49
55
failure to so qualify and be in good standing would have a material
adverse effect on the business or operations in such state.
(v) OFFICER'S CERTIFICATE. An officer's certificate
for each of the Credit Parties dated as of the Closing Date
substantially in the form of SCHEDULE 5.1(i)(v) with appropriate
insertions and attachments.
(d) BORROWING BASE CERTIFICATE. Receipt by the Administrative
Agent of a Borrowing Base Certificate as of the end of the immediately preceding
month, certified by the chief financial officer of the Borrower to be true and
correct as of the date thereof and substantially satisfactory to the
Administrative Agent.
(e) ABSENCE OF LEGAL PROCEEDINGS. The absence of any action,
suit, investigation or proceeding pending in any court or before any arbitrator
or governmental instrumentality which could reasonably be expected to have a
Material Adverse Effect.
(f) EVIDENCE OF INSURANCE. Receipt of insurance policies or
certificates of insurance evidencing liability and casualty insurance meeting
the requirements set forth herein and in the other Credit Documents (and showing
the Administrative Agent as loss payee with respect to casualty insurance),
together with evidence of payment of premiums thereon.
(g) FEES. Receipt of all fees, if any, owing pursuant to the
Administrative Agent's Fee Letter, Section 3.5 or otherwise.
(h) SUBSECTION 5.2 CONDITIONS. The conditions specified in
Section 5.2 shall be satisfied.
(i) ADDITIONAL MATTERS. All other documents and legal matters
in connection with the transactions contemplated by this Credit Agreement shall
be reasonably satisfactory in form and substance to the Administrative Agent
and the Required Lenders.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Credit Parties herein or in any other Credit Documents or
which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects on and as
of the date of such Extension of Credit as if made on and as of such date
(except for those which expressly relate to an earlier date).
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the Extension of Credit to be
50
56
made on such date unless such Default or Event of Default shall have been waived
in accordance with this Credit Agreement.
(c) ADDITIONAL CONDITIONS TO REVOLVING LOANS. If a Revolving
Loan is made pursuant to Section 2.1, all conditions set forth therein shall
have been satisfied.
(d) ADDITIONAL CONDITIONS TO LETTERS OF CREDIT. If such
Extension of Credit is made pursuant to Section 2.2, all conditions set forth
therein shall have been satisfied.
(e) ADDITIONAL CONDITIONS TO SWINGLINE LOANS. If a Swingline
Loan is made pursuant to Section 2.3, all conditions set forth therein shall
have been satisfied.
Each request for Extension of Credit (including extensions and
conversions) and each acceptance by the Borrower of an Extension of Credit
(including extensions and conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) and (b), and in (c), (d)
or (e) of this subsection have been satisfied.
SECTION 6
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce the Lenders to enter into this Credit Agreement and to make
Extensions of Credit herein provided for, each of the members of the
Consolidated Group parties hereto hereby represents and warrants to the
Administrative Agent and to each Lender that:
6.1 FINANCIAL CONDITION.
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition and results from operations
of the entities and for the periods specified:
(i) an audited consolidated balance sheet of the Borrower and
its consolidated subsidiaries dated as of December 31, 1997, together
with related statements income and cash flows certified by Ernst &
Young LLP, certified public accountants.
To the best of the Credit Parties' knowledge, all factual information furnished
by the Credit Parties to the Administrative Agent and the Lenders in connection
with this Credit Agreement and the other Credit Documents is and will be
accurate and complete in all material respects on the date as of which such
information is so delivered and is not and will not be incomplete by the
omission of any material fact necessary to make such information not misleading.
All financial projections represent the Credit Parties' best estimate of future
financial performance and such assumptions are reasonable and believed to be
fair in light of current business conditions.
51
57
6.2 NO CHANGES OR RESTRICTED PAYMENTS.
Since the date of the audited financial statements referenced in
Section 6.1(i), (a) there has been no circumstance, development or event
relating to or affecting the members of the Consolidated Group which has had or
would be reasonably expected to have a Material Adverse Effect, and (b) except
as permitted herein, no Restricted Payments have been made or declared or are
contemplated by any members of the Consolidated Group.
6.3 ORGANIZATION; EXISTENCE; COMPLIANCE WITH LAW.
Each of the members of the Consolidated Group (a) is duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not, in the aggregate, have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law, except to
the extent that the failure to comply therewith would not, in the aggregate, be
reasonably expected to have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate or other
action to authorize the execution, delivery and performance by it of the Credit
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with acceptance of extensions of credit
or the making of the guaranties hereunder or with the execution, delivery or
performance of any Credit Documents by the Credit Parties (other than those
which have been obtained, such filings as are required by the Securities and
Exchange Commission and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party constitutes a legal, valid and
binding obligation of such Credit Party enforceable against such Credit Party in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
52
58
6.5 NO LEGAL BAR.
The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the
Consolidated Group (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. No member of the
Consolidated Group is in default under or with respect to any of its Contractual
Obligations in any respect which would reasonably be expected to have a Material
Adverse Effect.
6.6 NO MATERIAL LITIGATION.
No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties, threatened by or against, any members of the Consolidated Group
or against any of their respective properties or revenues which (a) relate to
the Credit Documents or any of the transactions contemplated hereby or thereby,
(b) if adversely determined, would reasonably be expected to have a Material
Adverse Effect.
6.7 NO DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.8 OWNERSHIP OF PROPERTY; LIENS.
Each of members of the Consolidated Group has good record and
marketable title in fee simple to, or a valid leasehold interest in, all its
material real property, and good title to, or a valid leasehold interest in, all
its other material property, and none of such property is subject to any Lien,
except for Permitted Liens.
6.9 INTELLECTUAL PROPERTY.
Each of the members of the Consolidated Group owns, or has the legal
right to use, all United States trademarks, tradenames, copyrights, technology,
know-how and processes, if any, necessary for each of them to conduct its
business as currently conducted (the "INTELLECTUAL PROPERTY") except for those
the failure to own or have such legal right to use would not be reasonably
expected to have a Material Adverse Effect. No claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Credit Party know of any such claim, and the use of such
Intellectual Property by the members of the Consolidated Group does not infringe
on the rights of any Person, except for such claims and infringements that in
the aggregate, would not be reasonably expected to have a Material Adverse
Effect.
53
59
6.10 NO BURDENSOME RESTRICTIONS.
No Requirement of Law or Contractual Obligation of the members of the
Consolidated Group would be reasonably expected to have a Material Adverse
Effect.
6.11 TAXES.
Each of the members of the Consolidated Group has filed or caused to be
filed all United States federal income tax returns and all other material tax
returns which, to the best knowledge of the Credit Parties, are required to be
filed and has paid (a) all taxes shown to be due and payable on said returns or
(b) all taxes shown to be due and payable on any assessments of which it has
received notice made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any (i) taxes, fees or other charges with respect to which
the failure to pay, in the aggregate, would not have a Material Adverse Effect
or (ii) taxes, fees or other charges the amount or validity of which are
currently being contested and with respect to which reserves in conformity with
GAAP have been provided on the books of such Person), and no tax Lien has been
filed, and, to the best knowledge of the Credit Parties, no claim is being
asserted, with respect to any such tax, fee or other charge.
6.12 ERISA
(a) Each Pension Plan and Welfare Plan complies with ERISA and all
other applicable statutes and governmental rules and regulations; no Reportable
Event has occurred and is continuing with respect to any Pension Plan; no member
of the Consolidated Group nor any ERISA Affiliate has withdrawn from any
Multi-Employer Plan in a "complete withdrawal" or a "partial withdrawal" as
defined in Sections 4203 or 4205 of ERISA, respectively; no member of the
Consolidated Group nor any ERISA Affiliate has entered into an agreement
pursuant to Section 4204 of ERISA; no member of the Consolidated Group nor any
ERISA Affiliate has in the past contributed to or currently contributes to a
Multi-Employer Plan; no member of the Consolidated Group nor any ERISA Affiliate
has any withdrawal liability with respect to a Multi-Employer Plan; no steps
have been instituted by any member of the Consolidated Group or any ERISA
Affiliate to terminate any Pension Plan; no condition exists or event or
transaction has occurred in connection with any Pension Plan, Multi-Employer
Plan or Welfare Plan which could result in the incurrence by a member of the
Consolidated Group or any ERISA Affiliate of any liability, fine or penalty; and
no member of the Consolidated Group nor any ERISA Affiliate is a "contributing
sponsor" as defined in Section 4001(a)(13) of ERISA of a single-employer plan as
defined in Section 4001(a)(15) of ERISA which has two (2) or more contributing
sponsors at least two (2) of whom are not under common control. No member of the
Consolidated Group nor any ERISA Affiliate has any liability with respect to any
Welfare Plan.
(b) The members of the Consolidated Group are in compliance with the
Multi-Employer Pension Plan Amendments Act of 1980, as amended ("MEPPAA"), and
no member of the Consolidated Group has any liability for pension contributions
pursuant to MEPPAA.
54
60
6.13 GOVERNMENTAL REGULATIONS, ETC.
(a) No part of the proceeds of the Extensions of Credit hereunder will
be used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any securities. If requested by any Lender
or the Administrative Agent, the Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in said Regulation U. No indebtedness
being reduced or retired out of the proceeds of the Extensions of Credit
hereunder was or will be incurred for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U or any "margin security" within
the meaning of Regulation T. "Margin stock" within the meanings of Regulation U
does not constitute more than 25% of the value of the consolidated assets of the
Borrower and its Subsidiaries. None of the transactions contemplated by this
Credit Agreement (including, without limitation, the direct or indirect use of
the proceeds of the Loans) will violate or result in a violation of the
Securities Exchange Act of 1934, as amended, or regulations issued pursuant
thereto, or Regulation T, U or X.
(b) None of the members of the Consolidated Group is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
none of the members of the Consolidated Group is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, and is not controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
6.14 SUBSIDIARIES.
Set forth on SCHEDULE 6.14 are all the Subsidiaries of the Borrower at
the Closing Date, the jurisdiction of their incorporation and the direct or
indirect ownership interest of the Borrower therein.
6.15 PURPOSE OF EXTENSIONS OF CREDIT.
Working Capital Revolving Loans, Swingline Loans and Letters of Credit
hereunder shall be used to finance working capital, capital expenditures and
other lawful corporate purposes (including in the case of Loans advanced
hereunder to finance acquisitions, the portion of such Loans which is supported
by Borrowing Base components acquired therewith). The Acquisition Revolving
Loans shall be used solely to finance acquisitions permitted under Sections
8.4(c) and 8.5 (excluding the portion of Loans advanced hereunder to finance
acquisitions which is supported by Borrowing Base components acquired therewith
(such excluded portion shall be advanced under the Working Capital Revolving
Loan facility as provided herein)).
55
61
6.16 ENVIRONMENTAL MATTERS.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) To the knowledge of any member of the Consolidated Group, (i) each
of the facilities and properties owned, leased or operated by the members of the
Consolidated Group (the "PROPERTIES") and all operations at the Properties are
in compliance with all applicable Environmental Laws, (ii) there is no violation
of any Environmental Law with respect to the Properties or the businesses
operated by the members of the Consolidated Group (the "BUSINESSES") and (iii)
there are no conditions relating to the Businesses or Properties that could give
rise to liability under any applicable Environmental Laws.
(b) None of the Properties contains or, to the knowledge of any member
of the Consolidated Group, has previously contained, any Materials of
Environmental Concern at, on or under the Properties in amounts or
concentrations that constitute or constituted a violation of, or could give rise
to liability under, Environmental Laws.
(c) None of the members of the Consolidated Group has received any
written notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Businesses, nor does any member of the
Consolidated Group have knowledge or reason to believe that any such notice will
be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties, or generated, treated, stored or disposed of
at, on or under any of the Properties or any other location, in each case by or
on behalf any members of the Consolidated Group in violation of, or in a manner
that would be reasonably likely to give rise to material liability under, any
applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of any Credit Party, threatened, under any
Environmental Law to which any member of the Consolidated Group is or will be
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
any member of the Consolidated Group, the Properties or the Businesses.
(f) There has been no release or known threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or related
to the operations (including, without limitation, disposal) of any member of the
Consolidated Group in connection with the Properties or otherwise in connection
with the Businesses, in violation of or in amounts or in a manner that could
give rise to material liability under Environmental Laws.
56
62
6.17 LABOR MATTERS.
(a) No member of the Consolidated Group is a party to any pending or,
to the knowledge of any member of the Consolidated Group, threatened labor
dispute. There are no pending or, to the knowledge of any member of the
Consolidated Group, threatened strikes or walkouts relating to any labor
contract to which any member of the Consolidated Group is subject. Hours worked
and payments made to the employees of the members of the Consolidated Group have
been in substantial compliance with the Fair Labor Standards Act or and/or other
applicable law dealing with such matters. All payments due from the members of
the Consolidated Group or for which any claim may be made against any of them,
in respect of wages, employee health and welfare insurance and/or other benefits
have been paid or accrued as a liability on their respective books. The
consummation of the transactions contemplated by the Credit Documents will not
give rise to a right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which any member of the
Consolidated Group is a party or by which any member of the Consolidated Group
is bound.
(b) Except for the employment agreements and the other agreements
described in SCHEDULE 6.17 attached hereto, true, complete and accurate copies
of which have been made available to Administrative Agent, there are no: (a)
employment agreements covering the management of any member of the Consolidated
Group; (b) collective bargaining agreements or other labor agreements covering
any employees of members of the Consolidated Group; or (c) agreements for
managerial, consulting or similar services to which any member of the
Consolidated Group is a party or by which any member of the Consolidated Group
is bound.
6.18 SOLVENCY.
The Consolidated Group, taken as a whole is and, after consummation of
the transactions contemplated by this Credit Agreement, will be Solvent.
6.19 AIR CARRIER.
No member of the Consolidated Group is, nor during the term of this
Agreement will be, an air carrier holding an air carrier certificate issued by
the Federal Aviation Administration.
SECTION 7
AFFIRMATIVE COVENANTS
---------------------
Each of the Credit Parties covenants and agrees that on the Closing
Date, and so long as this Credit Agreement is in effect and until the
Commitments have been terminated, no Obligations remain outstanding and all
amounts owing hereunder or in connection herewith have been paid in full, each
of the members of the Consolidated Group party hereto shall:
7.1 FINANCIAL STATEMENTS.
Furnish, or cause to be furnished, to the Lenders:
57
63
(a) AUDITED FINANCIAL STATEMENTS. As soon as available, but in
any event within 90 days after the end of each fiscal year, an audited
consolidated and consolidating balance sheet of the Borrower and its
subsidiaries as of the end of the fiscal year and the related
consolidated and consolidating statements of income, retained earnings,
shareholders' equity and cash flows for the year, audited by
independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Lenders, setting forth
in each case in comparative form the figures for the previous year,
reported without an impermissible qualification. As used herein,
"impermissible qualification" means relative to the opinion of any
independent public accountant as to any financial statement of members
of the Consolidated Group that said opinion contains no qualification
or exception to any such opinion or certification: (i) which is of a
"going concern" or similar nature; (ii) which relates to the limitation
on the scope of examination of matters relevant to such financial
statements; (iii) which relates to the treatment or classification of
any item in such financial statement in which, as a condition to its
removal would require an adjustment to such item, the effect of which
would be to cause a default of any of the financial covenants under any
of the Credit Documents; or (iv) which is otherwise unacceptable to the
Required Lenders in their sole discretion, acting reasonably.
(b) BORROWER-PREPARED FINANCIAL STATEMENTS. As soon as
available, but in any event
(i) within 45 days after the end of each fiscal
quarter, (A) a company-prepared consolidated balance sheet of
the Borrower and its subsidiaries as of the end of the quarter
and related company-prepared consolidated statements of
income, retained earnings, shareholders' equity and cash flows
for such quarterly period and for the fiscal year to date and
(B) a management discussion and analysis of the financial
condition and results of operation of the Consolidated Group,
in form and substance satisfactory to the Administrative Agent
and the Required Lenders;
(ii) within 45 days after the end of each fiscal
year, an annual business plan and budget for the members of
the Consolidated Group, containing, among other things, pro
forma financial statements for the next fiscal year and
subsequent revisions thereto;
in each case setting forth in comparative form the consolidated figures
for the corresponding period or periods of the preceding fiscal year or
the portion of the fiscal year ending with such period, as applicable,
in each case subject to normal recurring year-end audit adjustments.
(c) BORROWING BASE CERTIFICATE. Within 30 days after the end
of each calendar month, a statement of the Borrowing Base and its
components (the "Borrowing Base Certificate") as of the end of the
immediately preceding month (including, among other things, on a
monthly basis, accounts receivables aging and listing and inventory
aging
58
64
and listing (with location)), certified by the chief financial officer
of the Borrower to be true and correct as of the date thereof and in
form reasonably satisfactory to the Administrative Agent. A form of
Borrowing Base Certificate is attached as SCHEDULE 7.1(c); and
(d) NON-CONSOLIDATED SUBSIDIARY STATEMENTS AND TAX RETURNS. In
the case of Subsidiaries which are not consolidated with the Borrower,
(i) within 90 days after the end of the Borrower's fiscal year, updated
financial statements, and (ii) within 10 days following filing, a copy
of their annual federal income tax return (such tax returns to be filed
within time established by federal law, including provisions allowing
for extensions of time for filing);
All such financial statements shall be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments and the absence of footnotes) and shall be prepared
in reasonable detail and, in the case of the annual and quarterly financial
statements provided in accordance with subsections (a) and (b) above, in
accordance with GAAP applied consistently throughout the periods reflected
therein and further accompanied by a description of, and an estimation of the
effect on the financial statements on account of, a change in the application of
accounting principles as provided in Section 1.3.
7.2 CERTIFICATES; OTHER INFORMATION.
Furnish, or cause to be furnished, to the Administrative Agent for
distribution to the Lenders:
(a) ACCOUNTANT'S CERTIFICATE AND REPORTS. Concurrently with
the delivery of the financial statements referred to in subsection
7.1(a) above, a certificate of the independent certified public
accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such
certificate.
(b) OFFICER'S COMPLIANCE CERTIFICATE. Concurrently with the
delivery of the financial statements referred to in Sections 7.1(a) and
7.1(b) above, a certificate of a Responsible Officer stating that, to
the best of such Responsible Officer's knowledge and belief, (i) the
financial statements fairly present in all material respects the
financial condition of the parties covered by such financial
statements, (ii) during such period the members of the Consolidated
Group have observed or performed in all material respects the covenants
and other agreements hereunder and under the other Credit Documents
relating to them, and satisfied in all material respects the
conditions, contained in this Credit Agreement to be observed,
performed or satisfied by them, and (iii) such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate. Such certificate shall include the
calculations required to indicate compliance with Section 7.9. A form
of Officer's Certificate is attached as SCHEDULE 7.2(b).
59
65
(c) ACCOUNTANTS' REPORTS. Promptly upon receipt, a copy of any
final (as distinguished from a preliminary or discussion draft)
"management letter" or other similar report submitted by independent
accountants or financial consultants to the members of the Consolidated
Group in connection with any annual, interim or special audit.
(d) PUBLIC INFORMATION. Within thirty days after the same are
sent, copies of all reports (other than those otherwise provided
pursuant to subsection 7.1) and other financial information which any
member of the Consolidated Group sends to its public stockholders, and
within ten (10) days after the same are filed, notice of filing of all
financial statements and non-confidential reports which any member of
the Consolidated Group may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental
Authority.
(e) OTHER INFORMATION. Promptly, such additional financial and
other information as the Administrative Agent, at the request of any
Lender, may from time to time reasonably request.
7.3 NOTICES.
Give notice to the Administrative Agent (which shall promptly transmit
such notice to each Lender) of:
(a) DEFAULTS. Promptly (and in any event within two (2)
Business Days) after any Credit Party knows of the occurrence of any
Default or Event of Default.
(b) CONTRACTUAL OBLIGATIONS. Promptly, the occurrence of any
default or event of default under any Contractual Obligation of any
member of the Consolidated Group which would reasonably be expected to
have a Material Adverse Effect.
(c) LEGAL PROCEEDINGS. Promptly, after the filing or
notification of any litigation, investigation or other proceeding
(including without limitation, any environmental proceeding) against
any member of the Consolidated Group where (i) liability, damages or
other costs associated therewith would reasonably be expected to exceed
$100,000 in the aggregate or would otherwise reasonably be expected to
have a Material Adverse Effect, or (ii) enforcement, cleanup,
remediation, removal or other governmental or regulatory action is
sought, or claims made or threatened by any third party relating to
damages, contribution, cost recovery, compensation, loss or injury, in
respect of Materials of Environmental Concern, or
(d) INSURANCE. Promptly, any uninsured or partially uninsured
loss through fire, theft, liability or property damage in excess of
$100,000 in the aggregate.
60
66
(e) ERISA.
(i) As soon as available and in any event within
fifteen (15) days after a member of the Consolidated Group knows that
any Termination Event has occurred, a statement of a senior officer of
a Credit Party describing the Termination Event and the action which
the Credit Parties propose to take so that the Termination Event shall
not be continuing.
(ii) Promptly after receipt of request therefor by
the Administrative Agent, copies of each annual report filed by members
of the Consolidated Group pursuant to Section 104 of ERISA with respect
to each Plan (including to the extent required by Section 104 of ERISA,
the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information
referred to in said Section 103) and each annual report, if any,
required to be filed with respect to each Plan under Section 4065 of
ERISA;
(iii) Promptly and after receipt thereof by a member
of the Consolidated Group from the Pension Benefit Guaranty
Corporation, copies of each notice received by such party of the
Pension Benefit Guaranty Corporation's intent to terminate any Plan or
to have a Trustee appointed to administer any Plan: and
(iv) Promptly after such request, any other documents
and information relating to any Plan that the Administrative Agent may
reasonably request from time to time.
(f) PARTS AGREEMENT. Promptly, but in any event within ten
(10) days, after receipt by the Borrower of written notice of
cancellation, default or alleged breach of the Surplus Parts Supply
Agreement between the Borrower and United Technologies Corporation (the
"PARTS AGREEMENT").
(g) PURCHASE OF ENGINES AND PROPELLERS. Prior to the purchase
of any engine having at least 750 takeoff horsepower or equivalent or
any aircraft propeller capable of absorbing 750 or more rated takeoff
shaft horsepower, the Borrower shall give notice to the Administrative
Agent of the prospective purchase and (i) grant to the Administrative
Agent for the benefit of the Lenders a security interest therein,
including, without limitation, filing all applicable security filings
with the Federal Aviation Administration, (ii) provide to the
Administrative Agent a lien search satisfactory to the Administrative
Agent that such collateral is free and clear of any encumbrances, and
(iii) provide to the Administrative Agent a post-closing lien search
confirming the absence of liens other than those in favor of the
Administrative Agent.
(h) OTHER. Promptly, any other development or event which a
Responsible Officer of the Borrower determines could reasonably be
expected to have a Material Adverse Effect.
61
67
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the relevant Credit Parties propose
to take with respect thereto.
7.4 PAYMENT OF OBLIGATIONS.
(a) Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with prudent business
practice (subject, where applicable, to specified grace periods) all material
obligations of each member of the Consolidated Group of whatever nature and any
additional costs that are imposed as a result of any failure to so pay,
discharge or otherwise satisfy such obligations, except when the amount or
validity of such obligations and costs is currently being contested in good
faith by appropriate proceedings and reserves, if applicable, in conformity with
GAAP with respect thereto have been provided on the books of the Consolidated
Group, as the case may be.
(b) Pay all their respective material taxes, assessments, and other
obligations, including, but not limited to taxes, costs or other expenses
arising out of this transaction, as the same become due and payable, except to
the extent the same are being contested in good faith by appropriate proceedings
in a diligent manner.
7.5 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now
conducted by it on the date hereof and similar or related businesses (including,
without limitation, repair facilities) with, and preserve, renew and keep in
full force and effect its corporate existence and take all reasonable action to
maintain all rights, privileges, licenses and franchises necessary or desirable
in the normal conduct of its business; comply with all Contractual Obligations
and Requirements of Law applicable to it except to the extent that failure to
comply therewith would not, in the aggregate, have a Material Adverse Effect.
7.6 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Maintain all of their respective tangible property necessary for
the operation of their respective business in good condition and repair and make
all necessary replacements thereof, and preserve and maintain all licenses,
trademarks, privileges, permits, franchises, certificates and the like necessary
for the operation of their respective business.
(b) Maintain insurance with responsible insurance companies on such of
its properties, in such amounts and against such risks as is customarily
maintained by similar businesses operating in the same vicinity, specifically to
include fire and extended coverage insurance covering all assets, business
interruption insurance, workers compensation insurance and liability insurance,
all to be with such companies and in such amounts as are satisfactory to
Required Lenders and with respect to insurance on the Collateral, to contain a
mortgagee clause naming the Administrative Agent as a loss payee or an
additional insured (as applicable) as its interest may appear and providing for
at least 30 days prior notice to Administrative Agent of
62
68
any cancellation, nonrenewal or modification thereof. Satisfactory evidence of
such insurance will be supplied to Administrative Agent prior to extension of
credit hereunder and 30 days prior to each policy renewal. Co-insurance
provisions are not permitted in any insurance policy unless such provisions are
satisfactory to the Required Lenders. Further, each insurance policy provided to
the Administrative Agent shall be written by an insurer having not less than
"A-XII" Best's Rating according to the most current edition of Best's Key Rating
Guide. The address for notices to the Administrative Agent shall be the Agency
Services Address.
7.7 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Permit, upon reasonable notice and during normal business hours
(subject to reasonable procedures designed to prevent disruption of normal
business activities), representatives appointed by the Administrative Agent,
including, without limitation, independent accountants, agents, attorneys, and
appraisers to visit and inspect its properties, including its books and records
(other than materials protected by the attorney-client privilege and materials
which the members of the Consolidated Group may not disclose without violation
of a confidentiality obligation binding upon them), its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Administrative Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person. The foregoing shall include, without limitation,
the Administrative Agent performing a field audit of the assets and systems of
the members of the Consolidated Group. The Credit Parties agree that the
Administrative Agent, and its representatives, may conduct an annual audit of
the inventory and receivables, at the expense of the Borrower.
7.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and take reasonable actions
to ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in all
material respects with and maintain, and take reasonable actions to ensure that
all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so would not reasonably be expected to have a Material Adverse
Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the failure to do or the pendency of such
proceedings would not reasonably be expected to have a Material Adverse Effect;
and
(c) Defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers and directors,
from and against any and all
63
69
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of, noncompliance with
or liability under, any Environmental Law applicable to the operations of the
members of the Consolidated Group or the Properties, or any orders, requirements
or demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. The agreements
in this paragraph shall survive repayment of the Loans and all other amounts
payable hereunder, and termination of the Commitments.
(d) Permit the Administrative Agent to enter and inspect the places of
business or any other property of a member of the Consolidated Group at any
reasonable time (subject to reasonable procedures designed to prevent disruption
of normal business activities) upon three (3) days prior notice for the purpose
of conducting an environmental investigation or audit (including taking physical
samples) to ensure that such member of the Consolidated Group is in compliance
with this Section 7.8. The cost of the investigation referred to in the
preceding sentence shall be for the account of the Borrower and the Borrower
shall reimburse the Administrative Agent on demand for such costs.
7.9 FINANCIAL COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. As of the end of each fiscal quarter
to occur during the periods shown, the Consolidated Leverage Ratio shall not be
greater than:
Closing Date through the first Rate Determination
Date to occur after the date eighteen (18) months
from the Closing Date 4.5:1.0
Thereafter 4.0:1.0
(b) CONSOLIDATED SENIOR LEVERAGE RATIO. As of the end of each fiscal
quarter to occur during the periods shown, the Consolidated Senior Leverage
Ratio shall be not greater than:
Closing Date through the first Rate Determination
Date to occur after the date eighteen (18) months
from the Closing Date 3.5:1.0
Thereafter 3.0:1.0
(c) CONSOLIDATED NET WORTH. As of the end of each fiscal quarter, the
Consolidated Net Worth shall not be less than the sum of ninety percent (90%) of
the Consolidated Net Worth as of December 31, 1997 PLUS on the last day of each
fiscal quarter to occur thereafter, eighty-five percent (85%) of the
Consolidated Net Income for the fiscal quarter then ended (but not less
64
70
than zero), such increases to be cumulative, PLUS one hundred percent (100%) of
the Net Proceeds from Equity Transactions occurring thereafter.
(d) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. As of the end of each
fiscal quarter, the Consolidated Fixed Charge Coverage Ratio shall not be less
than 2.0:1.0.
(e) CAPITAL EXPENDITURES. Capital Expenditures for the Consolidated
Group shall not exceed $3,500,000 in any fiscal year.
7.10 AGENCY FEES.
Pay to the Administrative Agent the annual agency fee and comply with
the other agreements provided for in the Administrative Agent's Fee Letter.
7.11 ADDITIONAL GUARANTIES AND STOCK PLEDGES.
(a) DOMESTIC SUBSIDIARIES. At any time any Person becomes a
Domestic Subsidiary, the Borrower shall promptly notify the Administrative Agent
thereof and cause (i) such Domestic Subsidiary to become a Guarantor by
execution of a Joinder Agreement and join the Security Agreement pursuant to the
terms of the Joinder Agreement, (ii) delivery with the Joinder Agreement of
supporting resolutions, incumbency certificates, corporation formation and
organizational documentation and opinions of counsel as the Administrative Agent
may reasonably request, and (iii) delivery of stock certificates and related
pledge agreements or pledge joinder agreements evidencing the pledge of 100% of
the Voting Stock of such Domestic Subsidiary, and 100% of the Voting Stock of
each of its Domestic Subsidiaries and 65% of the Voting Stock of each of its
Foreign Subsidiaries, together in each case with undated stock transfer powers
executed in blank.
(b) FOREIGN SUBSIDIARIES. At any time any Person becomes a
Foreign Subsidiary, the Borrower shall promptly notify the Administrative Agent
thereof and cause (i) delivery of supporting resolutions, incumbency
certificates, corporation formation and organizational documentation and
opinions of counsel as the Administrative Agent may reasonably request, and (ii)
delivery of stock certificates (where required for perfection under applicable
law) and related pledge agreements or pledge joinder agreements evidencing the
pledge of 65% of the Voting Stock of such Foreign Subsidiary, and of 65% of the
Voting Stock of each of its Domestic Subsidiaries and 65% of the Voting Stock of
each of its Foreign Subsidiaries, together in each case with undated stock
transfer powers executed in blank.
7.12 OWNERSHIP OF SUBSIDIARIES.
Except to the extent otherwise permitted in Section 8.4(b) and Section
8.7 and to the extent as would not cause a Change of Control and except as set
forth on SCHEDULE 6.14, the Borrower shall, directly or indirectly, own at all
times 100% of the Voting Stock of each of its Subsidiaries.
65
71
7.13 USE OF PROCEEDS.
Extensions of Credit will be used solely for the purposes provided in
Section 6.15.
SECTION 8
NEGATIVE COVENANTS
Each of the Credit Parties covenants and agrees that on the Closing
Date, and so long as this Credit Agreement is in effect and until the
Commitments have been terminated, no Obligations remain outstanding and all
amounts owing hereunder or in connection herewith, have been paid in full, no
member of the Consolidated Group shall:
8.1 INDEBTEDNESS.
Contract, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness arising or existing under this Credit
Agreement and the other Credit Documents;
(b) Indebtedness set forth in SCHEDULE 8.1, and renewals,
refinancings and extensions thereof on terms and conditions consistent
with then prevailing market standards for such existing Indebtedness
[Describe on Schedule 8.1 the $2.9 million sale-leaseback with
NationsBanc Leasing];
(c) Capital Lease Obligations and Indebtedness incurred, in
each case, to provide all or a portion of the purchase price or costs
of construction of an asset or, in the case of a sale/leaseback
transaction as described in Section 8.11, to finance the value of such
asset owned by a member of the Consolidated Group, PROVIDED that (i)
such Indebtedness when incurred shall not exceed the purchase price or
cost of construction of such asset or, in the case of a sale/leaseback
transaction, the fair market value of such asset, (ii) no such
Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such
refinancing, and (iii) the total amount of all such Indebtedness shall
not exceed $3,000,000 at any time outstanding;
(d) Indebtedness and obligations owing under interest rate
protection agreements relating to the Obligations hereunder and under
interest rate, commodities and foreign currency exchange protection
agreements entered into in the ordinary course of business to manage
existing or anticipated risks and not for speculative purposes;
(e) unsecured intercompany Indebtedness owing by a member of
the Consolidated Group to another member of the Consolidated Group
(subject, however, to the limitations of Section 8.5 in the case of the
member of the Consolidated Group extending the intercompany loan,
advance or credit);
66
72
(f) seller financing and earn-out payment obligations,
PROVIDED that such obligations are Subordinated Debt.
(g) Subordinated Debt of the Borrower;
(h) other unsecured Indebtedness of the Borrower of up to
$500,000 in the aggregate at any time outstanding; and
(i) Support Obligations of Indebtedness permitted under this
Section 8.1.
8.2 LIENS.
Contract, create, incur, assume or permit to exist any Lien with
respect to any of their respective property or assets of any kind (whether real
or personal, tangible or intangible), whether now owned or hereafter acquired,
except for Permitted Liens.
8.3 NATURE OF BUSINESS.
Alter the character of their business in any material respect from that
conducted as of the Closing Date and similar or related businesses (including,
without limitation, repair facilities).
8.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
(a) Enter into a transaction of merger or consolidation,
EXCEPT
(i) a member of the Consolidated Group may be a party
to a transaction of merger or consolidation with another member of the
Consolidated Group, PROVIDED that (A) if the Borrower is a party
thereto, the Borrower shall be the surviving corporation, (B) if a
Guarantor is a party thereto and the Borrower is not a party thereto, a
Guarantor shall be the surviving corporation or the surviving
corporation shall be a Domestic Subsidiary and shall become a Guarantor
hereunder as an Additional Credit Party pursuant to Section 7.11
concurrently therewith, and (C) no Default or Event of Default shall
exist either immediately prior to or immediately after giving effect
thereto; and
(ii) a member of the Consolidated Group (other than
the Borrower) may be a party to a transaction of merger or
consolidation with any other Person, PROVIDED that (A) the provisions
of Section 7.11 regarding joinder of Domestic Subsidiaries as
Additional Credit Parties hereunder shall be complied with, (B) no
Default or Event of Default shall exist either immediately prior to or
immediately after giving effect thereto, and (C) the provisions of
subsection (c) of this Section shall be complied with.
(b) Sell, lease, transfer or otherwise dispose of assets,
property and/or operations (including any sale-leaseback transaction, but
excluding (i) the sale of inventory in the
67
73
ordinary course of business, (ii) the sale or disposition of plant, property and
equipment which is no longer useful in the business or as to which the proceeds
therefrom are reinvested in plant, property and equipment within six months
thereof and (iii) the sale or disposition of revenue-producing assets), other
than to another Credit Party, which in the aggregate in any calendar year shall
exceed $500,000.
(c) Acquire all or any portion of the capital stock or other
ownership interest in any Person which is not a Subsidiary or all or any
substantial portion of the assets, property and/or operations of a Person which
is not a Subsidiary, without the prior written consent of the Required Lenders
(which consent shall not be unreasonably withheld or delayed), UNLESS
(i) in the case of an acquisition of capital stock or
other ownership interest after giving effect thereto, such Person will
not be a Subsidiary, then such acquisition will not cause a violation
of Section 8.5;
(ii) in the case of an acquisition of capital stock
or other ownership interest after giving effect thereto, such Person
will be a Subsidiary, or in the case of an acquisition of assets,
property and/or operations then
(A) the Cost of Acquisition for all such
acquisitions shall not exceed $12,000,000 in the aggregate in
any calendar year;
(B) the Board of Directors of the Person
which is the subject of the acquisition shall have approved
the acquisition; and
(C) no Default or Event of Default would
exist after giving effect thereto on a Pro Forma Basis.
(d) In the case of the Borrower and any Subsidiary which is
not wholly-owned, liquidate, wind-up or dissolve, whether voluntarily or
involuntarily (or suffer to permit any such liquidation or dissolution).
(e) Alter the character of their business in any material
respect from that conducted as of the Closing Date and similar or related
businesses.
8.5 ADVANCES, INVESTMENTS AND LOANS.
Lend money or extend credit or make advances to any Person, or purchase
or acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, or otherwise make an Investment in, any Person
except for Permitted Investments.
8.6 TRANSACTIONS WITH AFFILIATES.
Enter into or permit to exist any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder or Affiliate other than (i)
68
74
transactions permitted by Section 8.1, Section 8.4(b), Section 8.5 or Section
8.10, (ii) customary fees and expenses paid to directors, (iii) the sale or
issuance of shares of capital stock or other equity or ownership interests in
any member of the Consolidated Group to a present or former employee, officer or
director under a stock incentive plan, stock option plan or other equity-based
compensation plan or arrangement, and (iv) where such transactions are on terms
and conditions substantially as favorable as would be obtainable in a comparable
arm's-length transaction with a Person other than an officer, director,
shareholder or Affiliate.
8.7 OWNERSHIP OF EQUITY INTERESTS.
Issue, sell, transfer, pledge or otherwise dispose of any partnership
interests, shares of capital stock or other equity or ownership interests
("EQUITY INTERESTS") in any member of the Consolidated Group, except (i)
issuance, sale or transfer of Equity Interests to a Credit Party by a Subsidiary
of such Credit Party, (ii) in connection with a transaction permitted by Section
8.4, (iii) as needed to qualify directors under applicable law, and (iv) the
sale or issuance of Equity Interests to a present or former employee, officer or
director under a stock incentive plan, stock option plan or other equity-based
compensation plan or arrangement.
8.8 FISCAL YEAR.
No member of the Consolidated Group will change its fiscal year without
the prior consent of the Required Lenders which consent shall not be
unreasonably withheld or delayed.
8.9 PREPAYMENTS OF INDEBTEDNESS, ETC.
(a) After the issuance thereof, amend or modify (or permit the
amendment or modification of), the terms of any other Indebtedness in a manner
adverse to the interests of the Lenders (including specifically shortening any
maturity or average life to maturity or requiring any payment sooner than
previously scheduled or increasing the interest rate or fees applicable
thereto);
(b) Make any prepayment, redemption, defeasance or acquisition for
value of (including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying when
due), or refund, refinance or exchange of any Funded Debt (other than
intercompany Indebtedness permitted hereunder) other than regularly scheduled
payments of principal and interest on such Funded Debt, except to the extent
permitted by Section 8.10.
8.10 RESTRICTED PAYMENTS.
Make or permit any Restricted Payments, PROVIDED HOWEVER that the
Borrower may repurchase equity from the shareholders listed on SCHEDULE 8.10 if
and to the extent that no Default or Event of Default shall exist immediately
prior or after giving effect thereto on a Pro Forma Basis.
69
75
8.11 SALE LEASEBACKS.
Except as permitted pursuant to Section 8.1(c) hereof, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real or personal or mixed), whether now owned or hereafter
acquired, (i) which such Person has sold or transferred or is to sell or
transfer to any other Person other than a Credit Party or (ii) which such Person
intends to use for substantially the same purpose as any other Property which
has been sold or is to be sold or transferred by such Person to any other Person
in connection with such lease.
8.12 NO FURTHER NEGATIVE PLEDGES.
Except with respect to prohibitions against other encumbrances on
specific Property encumbered to secure payment of particular Indebtedness (which
Indebtedness relates solely to such specific Property, and improvements and
accretions thereto, and is otherwise permitted hereby), no member of the
Consolidated Group will enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter acquired, or requiring
the grant of any security for such obligation if security is given for some
other obligation.
8.13 ERISA COMPLIANCE.
None of the members of the Consolidated Group will, nor will they cause
or permit any ERISA Affiliate to:
(a) permit any Pension to engage in any nonexempt "prohibited
transaction", as such term is defined in Section 4975 of the Code;
(b) permit any Pension Plan to incur any "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA. 29 U.S.C. Section
1082, whether or not waived;
(c) terminate any Pension Plan in a manner which could result
in the imposition of a Lien on any Property of any member of the Consolidated
Group or any ERISA Affiliate pursuant to Section 4068 of ERISA. 29 U.S.C.
Section l368; or
(d) take any action which would constitute a complete or
partial withdrawal from a Multi-Employer Plan within the meaning of Sections
4203 or 4205 of Title IV of ERISA.
70
76
SECTION 9
EVENTS OF DEFAULT
-----------------
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):
(a) PAYMENT. Any Credit Party shall
(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such defaults shall continue for five (5) or
more Business Days, in the payment when due of any interest on the Loans
or on any reimbursement obligations arising from drawings under Letters
of Credit, or of any Fees or other amounts owing hereunder, under any of
the other Credit Documents or in connection herewith or therewith; or
(b) REPRESENTATIONS. Any representation, warranty or statement made
herein, in any of the other Credit Documents, or in any certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue in any
material respect on the date as of which it was deemed to have been made; or
(c) COVENANTS.
(i) Default in the due performance or observance of any
covenant or agreement contained in Section 7.3(a), 7.9, 7.11, 7.13 or
8.1 through 8.13, inclusive, or
(ii) Default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in subsections
(a), (b) or (c)(i) of this Section 9.1) contained in this Credit
Agreement and such default shall continue unremedied for a period of at
least 30 days after the earlier of a responsible officer of a Credit
Party becoming aware of such default or notice thereof by the
Administrative Agent; or
(d) OTHER CREDIT DOCUMENTS. (i) Any Credit Party shall default in the
due performance or observance of any material covenant or agreement in any of
the other Credit Documents (subject to applicable grace or cure periods, if
any), or (ii) except as to any Credit Party which is dissolved, released or
merged or consolidated out of existence as the result of or in connection with a
dissolution, merger or disposition permitted by Section 8.4(a), Section 8.4(b)
or Section 8.4(c), any Credit Document shall fail to be in full force and effect
or to give the Administrative Agent and/or the Lenders any material part of the
Liens, rights, powers and privileges purported to be created thereby; or
71
77
(e) GUARANTIES. Except as to the Credit Party which is dissolved,
released or merged or consolidated out of existence as the result of or in
connection with a dissolution, merger or disposition permitted by Section
8.4(a), Section 8.4(b) or Section 8.4(c), the guaranty given by any Guarantor
hereunder or any material provision thereof shall cease to be in full force and
effect, or any Guarantor hereunder or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under such
guaranty, or any Guarantor shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any guaranty; or
(f) BANKRUPTCY, ETC. Any Bankruptcy Event shall occur with respect to
any member of the Consolidated Group; or
(g) DEFAULTS UNDER OTHER AGREEMENTS. With respect to any Indebtedness
(other than Indebtedness outstanding under this Credit Agreement) in excess of
$250,000 in the aggregate for the Consolidated Group taken as a whole, (A) (1)
any member of the Consolidated Group shall default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to any such
Indebtedness, or (2) the occurrence and continuance of a default in the
observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof; or
(h) JUDGMENTS. Any member of the Consolidated Group shall fail within
30 days of the date due and payable to pay, bond or otherwise discharge any
judgment, settlement or order for the payment of money which judgment,
settlement or order, when aggregated with all other such judgments, settlements
or orders due and unpaid at such time, exceeds $100,000, and which is not stayed
on appeal (or for which no motion for stay is pending) or is not otherwise being
executed; or
(i) ERISA. A Termination Event has occurred; or a trustee shall be
appointed to administer any Plan or Plans under Section 4042 of ERISA; or the
Pension Benefit Guaranty Corporation shall institute proceedings to terminate or
to have a trustee appointed to administer, any Plan or Plans and the proceeding
shall not be dismissed within thirty (30) days; or a voluntary notice of intent
to terminate is filed under Section 4041 of ERISA which would, in the opinion of
Bank, have a Material Adverse Effect; or, with respect to any Plan as to which
any member of the Consolidated Group may have any liability, there shall exist a
deficiency in the Plan assets available to satisfy the benefits guaranteeable
under ERISA with respect to the Plan which would have a Material Adverse Effect,
and (a) steps are undertaken to terminate the Plan, or (b) the Plan is
terminated, or (c) any Reportable Event which presents a material risk of
termination with respect to the Plan shall occur.
72
78
(j) CHANGE OF CONTROL. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter,
the Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(i) TERMINATION OF COMMITMENTS. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(ii) ACCELERATION. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by the Credit
Parties to the Administrative Agent and/or any of the Lenders hereunder
to be due whereupon the same shall be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each of the Credit Parties.
(iii) CASH COLLATERAL. Direct the Borrowers to pay (and each
Borrower agrees that upon receipt of such notice, or upon the occurrence
of an Event of Default under Section 9.1(f), it will immediately pay) to
the Administrative Agent additional cash, to be held by the
Administrative Agent, for the benefit of the Lenders, in a cash
collateral account as additional security for the LOC Obligations in
respect of subsequent drawings under all then outstanding Letters of
Credit in an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding.
(iv) ENFORCEMENT OF RIGHTS. Enforce any and all rights and
interests created and existing under the Credit Documents and all rights
of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Administrative Agent and/or any
of the Lenders hereunder automatically shall immediately become due and payable
without presentment, demand, protest or the giving of any notice or other action
by the Administrative Agent or the Lenders, all of which are hereby waived by
the Credit Parties.
73
79
SECTION 10
AGENCY PROVISIONS
-----------------
10.1 APPOINTMENT.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") of such
Lender to act as specified herein and the other Credit Documents, and each such
Lender hereby authorizes the Administrative Agent as the Administrative Agent
for such Lender, to take such action on its behalf under the provisions of this
Credit Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated by the terms hereof and of the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. Each Lenders further directs and authorizes the
Administrative Agent to execute waivers and releases (or similar agreements) to
give effect to the provisions of this Credit Agreement and the other Credit
Documents, including specifically without limitation the provisions of Section
8.4 hereof (subject in all cases to the provisions of Section 11.6).
Notwithstanding any provision to the contrary elsewhere herein and in the other
Credit Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Administrative Agent. The provisions of this Section are solely for
the benefit of the Administrative Agent and the Lenders and none of the Credit
Parties shall have any rights as a third party beneficiary of the provisions
hereof. In performing its functions and duties under this Credit Agreement and
the other Credit Documents, the Administrative Agent shall act solely as
Administrative Agent of the Lenders and does not assume and shall not be deemed
to have assumed any obligation or relationship of agency or trust with or for
any Credit Party or any of their respective Affiliates.
10.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties hereunder or
under the other Credit Documents by or through Administrative Agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any Administrative Agents or
attorneys-in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS.
The Administrative Agent and its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall not be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any certificate,
report, document, financial statement or other written or oral statement
referred to or
74
80
provided for in, or received by the Administrative Agent under or in connection
herewith or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure of
any Credit Party to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrower or any Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Credit Parties to the Administrative Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or the use of the Letters of Credit
or of the existence or possible existence of any Default or Event of Default or
to inspect the properties, books or records of the Credit Parties or any of
their respective Affiliates.
10.4 RELIANCE ON COMMUNICATIONS.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Administrative Agent with reasonable care). The
Administrative Agent may deem and treat the Lenders as the owners of their
respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 11.3(b) hereof. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit Documents
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder or under any of the other Credit Documents in accordance with
a request of the Required Lenders (or to the extent specifically provided in
Section 11.6, all the Lenders) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders (including their
successors and assigns).
10.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice
75
81
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders.
10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that each of the Administrative
Agent and its officers, directors, employees, Administrative Agents,
attorneys-in-fact or affiliates has not made any representations or warranties
to it and that no act by the Administrative Agent or any affiliate thereof
hereinafter taken, including any review of the affairs of any Credit Party or
any of their respective Affiliates, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower,
the other Credit Parties or their respective Affiliates and made its own
decision to make its Loans hereunder and enter into this Credit Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower, the other
Credit Parties and their respective Affiliates. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Borrower, the other Credit
Parties or any of their respective Affiliates which may come into the possession
of the Administrative Agent or any of its officers, directors, employees,
Administrative Agents, attorneys-in-fact or affiliates.
10.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
as such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitments (or if the Commitments have expired or been terminated, in
accordance with the respective principal amounts of outstanding Loans and
Participation Interests of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the final payment of all of
the obligations of the Borrower hereunder and under the other Credit Documents)
be imposed on, incurred by or asserted against the Administrative Agent in its
capacity as such in any way relating to or arising out of this Credit Agreement
or the other Credit Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; PROVIDED that no Lender shall be liable for the payment of
any portion of such
76
82
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent. If any indemnity furnished to the
Administrative Agent for any purpose shall, in the opinion of the Administrative
Agent, be insufficient or become impaired, the Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section shall survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower,
its Subsidiaries or their respective Affiliates as though the Administrative
Agent were not the Administrative Agent hereunder. With respect to the Loans
made by and all obligations of the Borrower hereunder and under the other Credit
Documents, the Administrative Agent shall have the same rights and powers under
this Credit Agreement as any Lender and may exercise the same as though it were
not the Administrative Agent, and the terms "Lender" and "Lenders" shall include
the Administrative Agent in its individual capacity.
10.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may, at any time, resign upon 30 days' written
notice to the Lenders and the Borrower, and may be removed, upon show of cause,
by the Required Lenders upon 30 days' written notice to the Administrative
Agent. Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the notice of
resignation or notice of removal, as appropriate, then the retiring
Administrative Agent shall select a successor Administrative Agent provided such
successor is a Lender hereunder or a commercial bank organized under the laws of
the United States of America or of any State thereof and has a combined capital
and surplus of at least $400,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations as
Administrative Agent, as appropriate, under this Credit Agreement and the other
Credit Documents and the provisions of this Section 10.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Credit Agreement.
77
83
SECTION 11
MISCELLANEOUS
-------------
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Borrower, Guarantors and the Administrative
Agent, set forth below, and, in the case of the Lenders, set forth on SCHEDULE
11.1, or at such other address as such party may specify by written notice to
the other parties hereto:
if to the Borrower or the Guarantors:
AVTEAM, Inc.
0000 Xxxxxxxxx Xxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Administrative Agent:
NationsBank, N.A.
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxxx Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (704) ________
Telecopy: (000) 000-0000
with a copy to:
NationsBank, N.A.
Xxx Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
78
84
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of any Credit Party against obligations and
liabilities of such Person to such Lender hereunder, under the Notes, the other
Credit Documents or otherwise, irrespective of whether such Lender shall have
made any demand hereunder and although such obligations, liabilities or claims,
or any of them, may be contingent or unmatured, or fully secured, and any such
set-off shall be deemed to have been made immediately upon the occurrence of an
Event of Default even though such charge is made or entered on the books of such
Lender subsequent thereto. Any Person purchasing a participation in the Loans
and Commitments hereunder pursuant to Section 3.13 or Section 11.3(d) may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.
11.3 BENEFIT OF AGREEMENT.
(a) GENERALLY. This Credit Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; PROVIDED that none of the Credit Parties may assign or
transfer any of its interests without prior written consent of the Lenders;
PROVIDED FURTHER that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited as
set forth in this Section 11.3, PROVIDED however that nothing herein shall
prevent or prohibit any Lender from (i) pledging its Loans hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank, or (ii) granting assignments or selling participations in
such Lender's Loans and/or Commitments hereunder to its parent company and/or to
any Affiliate or Subsidiary of such Lender.
(b) ASSIGNMENTS. Each Lender may assign all or a portion of its rights
and obligations hereunder, pursuant to an assignment agreement substantially in
the form of SCHEDULE 11.3(b), to (i) any Lender or any Affiliate or Subsidiary
of a Lender, or (ii) any other commercial bank, financial institution or
"accredited investor" (as defined in Regulation D of the Securities and Exchange
Commission) reasonably acceptable to the Administrative Agent and, so long as no
Default or Event of Default has occurred and is continuing, the Borrower;
PROVIDED that (i) any such assignment (other than any assignment to an existing
Lender) shall be in a minimum aggregate amount of $5,000,000 (or, if less, the
remaining amount of the Commitment being assigned by such Lender) of the
Commitments and in integral multiples of $1,000,000 above such amount and (ii)
each such assignment shall be of a constant, not varying, percentage of all such
Lender's rights and obligations under this Credit Agreement. Any assignment
hereunder shall be effective upon delivery to the Administrative Agent of
written notice of the assignment together with a transfer fee of $3,500 payable
to the Administrative Agent for its own account from and after the later of (i)
the effective date specified in the applicable assignment agreement and (ii) the
date of recording of
79
85
such assignment in the Register pursuant to the terms of subsection (c) below.
The assigning Lender will give prompt notice to the Administrative Agent and the
Borrower of any such assignment. Upon the effectiveness of any such assignment
(and after notice to, and (to the extent required pursuant to the terms hereof),
with the consent of, the Borrower as provided herein), the assignee shall become
a "Lender" for all purposes of this Credit Agreement and the other Credit
Documents and, to the extent of such assignment, the assigning Lender shall be
relieved of its obligations hereunder to the extent of the Loans and Commitment
components being assigned. Along such lines the Borrower agrees that upon notice
of any such assignment and surrender of the appropriate Note or Notes, it will
promptly provide to the assigning Lender and to the assignee separate promissory
notes in the amount of their respective interests substantially in the form of
the original Note (but with notation thereon that it is given in substitution
for and replacement of the original Note or any replacement notes thereof). By
executing and delivering an assignment agreement in accordance with this Section
11.3(b), the assigning Lender thereunder and the assignee thereunder shall be
deemed to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim; (ii) except as set forth in clause (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Credit
Agreement, any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto or the financial condition of any Credit
Party or any of their respective Affiliates or the performance or observance by
any Credit Party of any of its obligations under this Credit Agreement, any of
the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such assignment agreement; (iv) such
assignee confirms that it has received a copy of this Credit Agreement, the
other Credit Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without reliance
upon the Administrative Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Credit Agreement and the other Credit Documents; (vi) such assignee
appoints and authorizes the Administrative Agent to take such action on its
behalf and to exercise such powers under this Credit Agreement or any other
Credit Document as are delegated to the Administrative Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Credit Agreement and the other
Credit Documents are required to be performed by it as a Lender.
(c) MAINTENANCE OF REGISTER. The Administrative Agent shall maintain at
the Agency Services Address a copy of each Lender assignment agreement delivered
to it in accordance with the terms of subsection (b) above and a register for
the recordation of the identity of the principal amount, type and Interest
Period of each Loan outstanding hereunder, the names, addresses and the
Commitments of the Lenders pursuant to the terms hereof from time to time (the
"REGISTER"). The
80
86
Administrative Agent will make reasonable efforts to maintain the accuracy of
the Register and to promptly update the Register from time to time, as
necessary. The entries in the Register shall be conclusive in the absence of
manifest error and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Credit Agreement. The
Register shall be available for inspection by the Borrower and each Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) PARTICIPATIONS. Each Lender may sell, transfer, grant or assign
participations in all or any part of such Lender's interests, obligations or
interests and obligations hereunder (including all or a portion of its
Commitments or Loans); PROVIDED that (i) such selling Lender shall remain a
"Lender" for all purposes under this Credit Agreement (such selling Lender's
obligations under the Credit Documents remaining unchanged) and the participant
shall not constitute a Lender hereunder, (ii) no such participant shall have, or
be granted, rights to approve any amendment or waiver relating to this Credit
Agreement or the other Credit Documents except to the extent any such amendment
or waiver would (A) reduce the principal of or rate of interest on or Fees in
respect of any Loans in which the participant is participating, (B) postpone the
date fixed for any payment of principal (including extension of the Termination
Date or the date of any mandatory prepayment), interest or Fees in which the
participant is participating, (C) except as expressly provided in the Credit
Documents, release any Guarantor from its guaranty obligations hereunder or (D)
except as the result of or in connection with a disposition permitted under
Section 8.4, release all or substantially all of the collateral and (iii)
sub-participations by the participant (except to an affiliate, parent company or
affiliate of a parent company of the participant) shall be prohibited. In the
case of any such participation, the participant shall not have any rights under
this Credit Agreement or the other Credit Documents (the participant's rights
against the selling Lender in respect of such participation to be those set
forth in the participation agreement with such Lender creating such
participation) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation, PROVIDED, however,
that such participant shall be entitled to receive additional amounts under
Sections 3.6, 3.9, 3.10 and 3.11 on the same basis as if it were a Lender.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Administrative Agent or any
Lender and any of the Credit Parties shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle the Borrower or any other Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
81
87
11.5 PAYMENT OF EXPENSES, ETC.
The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and
expenses (A) of the Administrative Agent in connection with the negotiation,
preparation, execution and delivery and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses of
Xxxxx & Xxx Xxxxx, PLLC, special counsel to the Administrative Agent, but which
shall not include the fees and expenses of any other Lender) and any amendment,
waiver or consent relating hereto and thereto including, but not limited to, any
such amendments, waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the Credit Parties
under this Credit Agreement and (B) of the Administrative Agent and the Lenders
in connection with enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, in connection
with any such enforcement, the reasonable fees and disbursements of counsel for
the Administrative Agent and each of the Lenders); (ii) permit the
Administrative Agent to perform inventory and accounts receivable field audits
at the Borrower's expense (not to exceed $650 per day plus out-of-pocket
expenses) provided that unless a Default shall be in existence the Borrower's
obligation to reimburse the Administrative Agent for such field audits shall be
limited to one such field audit each fiscal year; (iii) pay and hold each of the
Lenders harmless from and against any and all present and future stamp and other
similar taxes with respect to the foregoing matters and save each of the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to such
Lender) to pay such taxes; and (iv) indemnify each Lender, its officers,
directors, employees, representatives and Administrative Agents from and hold
each of them harmless against any and all losses, liabilities, claims, damages
or expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of (A) any investigation, litigation or other
proceeding which a member of the Consolidated Group is a party thereto (whether
or not any Lender is a party thereto) related to the entering into and/or
performance of any Credit Document or the use of proceeds of any Loans
(including other extensions of credit) hereunder or the consummation of any
other transactions contemplated in any Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding or (B)
the presence or Release of any Materials of Environmental Concern at, under or
from any Property owned, operated or leased by the Borrower or any of its
Subsidiaries, or the failure by the Borrower or any of its Subsidiaries to
comply with any Environmental Law (but excluding, in the case of either of
clause (A) or (B) above, any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified).
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, PROVIDED, HOWEVER, that:
82
88
(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(i) extend the final maturity of any Loan or the time of
payment of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit, or
extend or waive any principal amortization payment of any
Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability
of any increase in interest rates after the occurrence of an
Event of Default or on account of a failure to deliver
financial statements on a timely basis) thereon or Fees
hereunder,
(iii) reduce or waive the principal amount of any Loan or
of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a
waiver of any Default or Event of Default or mandatory
reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender),
(v) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted
under Section 8.4, release the Borrower or substantially all
of the other Credit Parties from its or their obligations
under the Credit Documents,
(vi) except as the result of or in connection with a
disposition permitted under Section 8.4, release all or
substantially all of the collateral;
(vii) amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13,
3.14, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the
Borrower (or another Credit Party) of any of its rights and
obligations under (or in respect of) the Credit Documents
except as permitted thereby;
(b) without the consent of the Administrative Agent, no
provision of Section 10 may be amended;
83
89
(c) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.9, 3.11, 10.7 or 11.5 shall survive the execution and delivery
of this Credit Agreement, the making of the Loans, the issuance of the Letters
of Credit, the repayment of the Loans, LOC Obligations and other obligations
under the Credit Documents and the termination of the Commitments hereunder, and
all representations and warranties made by the Credit Parties herein shall
survive delivery of the Notes and the making of the Loans hereunder.
11.10 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.11 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
84
90
11.12 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by the Borrower, the
Guarantors and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors, the
Administrative Agent and each Lender and their respective successors and
assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding and until all of the Commitments
hereunder shall have expired or been terminated.
11.13 CONFIDENTIALITY.
The Administrative Agent and the Lenders agree to keep confidential
(and to cause their respective affiliates, officers, directors, employees,
Administrative Agents and representatives to keep confidential) all information,
materials and documents furnished to the Administrative Agent or any such Lender
by or on behalf of any Credit Party (whether before or after the Closing Date)
which relates to the Borrower or any of its Subsidiaries (the "INFORMATION").
Notwithstanding the foregoing, the Administrative Agent and each Lender shall be
permitted to disclose Information (i) to its affiliates, officers, directors,
employees, Administrative Agents and representatives in connection with its
participation in any of the transactions evidenced by this Credit Agreement or
any other Credit Documents or the administration of this Credit Agreement or any
other Credit Documents; (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by any
Governmental Authority; (iii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this Credit Agreement
or any agreement entered into pursuant to clause (iv) below, (B) becomes
available to the Administrative Agent or such Lender on a non-confidential basis
from a source other than a Credit Party or (C) was available to the
Administrative Agent or such Lender on a non-confidential basis prior to its
disclosure to the Administrative Agent or such Lender by a Credit Party; (iv) to
any assignee or participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or participant) first
specifically agrees in a writing furnished to and for the benefit of the Credit
Parties to be bound by the terms of this Section 11.14; or (v) to the extent
that the Borrower shall have consented in writing to such disclosure. Nothing
set forth in this Section 11.14 shall obligate the Administrative Agent or any
Lender to return any materials furnished by the Credit Parties.
11.14 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
85
91
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.15 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.16 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA.
Any legal action or proceeding with respect to this Credit Agreement or any
other Credit Document may be brought in the courts of the State of Florida in
Broward County, or of the United States for the Southern District of Florida,
and, by execution and delivery of this Credit Agreement, each of the Credit
Parties hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such courts.
Each of the Credit Parties further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section 11.1, such
service to become effective three (3) days after such mailing. Nothing herein
shall affect the right of the Administrative Agent to serve process in any other
manner permitted by law or to commence legal proceedings or to otherwise proceed
against any Credit Party in any other jurisdiction.
86
92
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT,
THE LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
[Signature Page to Follow]
87
93
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: AVTEAM, INC.,
-------- a Florida corporation
By: /s/
------------------------------
Name:
Title:
GUARANTORS: AVTEAM AVIATION FIELD SERVICES, INC.,
---------- a Florida corporation
By: /s/
------------------------------
Name:
Title:
94
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/
------------------------------
Name:
Title:
SOUTHTRUST BANK, NATIONAL ASSOCIATION
By:
------------------------------
Name:
Title:
NATIONAL CITY BANK OF KENTUCKY
By: /s/
------------------------------
Name:
Title:
NATIONAL BANK OF CANADA
By: /s/
------------------------------
Name:
Title:
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/
------------------------------
Name:
Title:
By: /s/
------------------------------
Name:
Title:
95
USTRUST
By: /s/
------------------------------
Name:
Title:
BANK LEUMI LE-ISRAEL B.M., MIAMI AGENCY
By: /s/
------------------------------
Name:
Title:
96
SCHEDULE 2.1(a)
Lenders and Commitments
97
SCHEDULE 2.1(c)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N.A. NationsBank, N.A.,
as Administrative Agent for the Lenders as Swingline Lender
000 X. Xxxxx Xxxxxx 000 X. Xxxxx Xxxxxx
Independence Center, 15th Floor Independence Center, 15th Floor
NC1-001-15-04 NC1-001-15-04
Charlotte, North Carolina 28255 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services Attention: Agency Services
RE: Credit Agreement dated as of April 30, 1998 (as amended and
modified, the "CREDIT AGREEMENT") among AVTEAM, Inc., the
Guarantors and Lenders identified therein and NationsBank,
N.A., as Administrative Agent. Terms used but not otherwise
defined herein shall have the meanings provided in the Credit
Agreement.
Ladies and Gentlemen:
The undersigned hereby gives notice of a request for Revolving Loan pursuant to
Section 2.1(b) of the Credit Agreement or of a request for Swingline Loan
pursuant to Section 2.3(b) of the Credit Agreement as follows:
Revolving Loan
----------------
Swingline Loan
----------------
(A) Date of Borrowing
(which is a Business Day) --------------------------------
(B) Principal Amount of
Borrowing --------------------------------
(C) Interest rate basis
--------------------------------
(D) Interest Period and the
last day thereof --------------------------------
In accordance with the requirements of Section 5.2 of the Credit Agreement, the
undersigned Borrower hereby certifies that:
(a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date of this request, and will be true and correct after
giving effect to the requested Extension of Credit (except for those which
expressly related to an earlier date).
(b) No Default or Event of Default exists, or will exist after giving
effect to the requested Extension of Credit.
98
(c) All conditions set forth in Section 2.1 as to the making of
Revolving Loans or in Section 2.3 as to the making of Swingline Loans, as
appropriate, have been satisfied.
Very truly yours,
AVTEAM, INC.
By:
--------------------------------
Name:
Title:
3
99
SCHEDULE 2.1(e)
FORM OF REVOLVING NOTE
April 30, 1998
FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to
the order of ______________________, and its successors and assigns, on or
before the Termination Date to the office of the Administrative Agent in
immediately available funds as provided in the Credit Agreement,
(i) in the case of Working Capital Revolving Loans, such
Lender's Working Capital Revolving Committed Amount or, if less, the
aggregate unpaid principal amount of all Working Capital Revolving
Loans made by such Lender to the undersigned; and
(ii) in the case of Acquisition Revolving Loans, such Lender's
Acquisition Revolving Committed Amount or, if less, the aggregate
unpaid principal amount of all Acquisition Revolving Loans made by such
Lender to the undersigned; and
(iii) in the case of Swingline Loans, if such lender is the
Swingline Lender, the aggregate Swingline Committed Amount or, if less,
the aggregate unpaid principal amount of all Swingline Loans made to
the undersigned;
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement dated as of April 30, 1998 (as amended and modified, the "CREDIT
AGREEMENT") among AVTEAM, Inc., a Florida corporation, the Guarantors and
Lenders identified therein and NationsBank, N.A., as Administrative Agent. Terms
used but not otherwise defined herein shall have the meanings provided in the
Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; PROVIDED that
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by
this Note may, or shall, become immediately due and payable as provided in the
Credit Agreement without presentment, demand, protest or notice of any kind, all
of which are waived by the undersigned Borrower. In the event payment of amounts
evidenced by this Note is not made at any stated or accelerated maturity, the
undersigned Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of Florida.
4
100
In WITNESS WHEREOF, the undersigned Borrower has caused this Note to be
duly executed as of the date first above written.
AVTEAM, INC.,
a Florida corporation
By:
--------------------------------
Name:
Title:
5
101
SCHEDULE 2.2(b)-1
Existing Letters of Credit
6
102
SCHEDULE 2.2(b)-2
Form of Notice of Request for Letter of Credit
[Date]
NationsBank, N.A. NationsBank, N.A.
as Issuing Agent under the as Administrative Agent under the
Credit Agreement referred to below Credit Agreement referred to below
000 X. Xxxxx Xxxxxx 000 X. Xxxxx Xxxxxx
Independence Center, 15th Floor Independence Center, 15th Floor
NC1-001-15-04 NC1-001-15-04
Charlotte, North Carolina 28255 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Re: Credit Agreement dated as of April 30, 1998 (as amended and
modified, the "CREDIT AGREEMENT") among AVTEAM, Inc., the
Guarantors and Lenders identified therein and NationsBank,
N.A., as Administrative Agent. Terms used but not otherwise
defined herein shall have the meanings provided in the Credit
Agreement.
Ladies and Gentlemen:
The undersigned, pursuant to Section 2.2(b) of the Credit Agreement,
hereby requests that the following Letters of Credit be made on [date] as
follows (the "PROPOSED EXTENSION"):
(1) Account Party:
(2) For use by:
(3) Beneficiary:
(4) Face Amount of Letter of Credit:
(5) Date of Issuance:
(6) Date of Expiry
Delivery of Letter of Credit should be made as follows:
In accordance with the requirements of Section 5.2 of the Credit
Agreement, the undersigned Borrower hereby certifies that:
(a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects as of the date of this request, and will be true and correct after
giving effect to the requested Extension of Credit (except for those which
expressly relate to an earlier date).
7
103
(b) No Default or Event of Default exists, or will exist after giving
effect to the requested Extension of Credit.
(c) All conditions set forth in Section 2.2 as to the issuance of a
Letter of Credit have been satisfied.
Very truly yours,
AVTEAM, INC.
By:
--------------------------------
Name:
Title:
8
104
SCHEDULE 3.2
Form of Notice of Extension/Conversion
NationsBank, N.A.,
as Administrative Agent for the Lenders
000 X. Xxxxx Xxxxxx
Independence Center, 15th Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Re: Credit Agreement dated as of April 30, 1998 (as amended and
modified, the "CREDIT AGREEMENT") among AVTEAM, Inc., the
Guarantors and Lenders identified therein and NationsBank,
N.A., as Administrative Agent. Terms used but not otherwise
defined herein shall have the meanings provided in the Credit
Agreement.
Ladies and Gentlemen:
The undersigned hereby gives notice pursuant to Section 3.2 of the
Credit Agreement that it requests an extension or conversion of a Revolving Loan
outstanding under the Credit Agreement, and in connection therewith sets forth
below the terms on which such extension or conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the
applicable Interest Period) -------------------------------
(B) Principal Amount of
Extension or Conversion -------------------------------
(C) Interest rate basis
-------------------------------
(D) Interest Period and the
last day thereof -------------------------------
In accordance with the requirements of Section 5.2 of the Credit
Agreement, the undersigned Borrower hereby certifies that:
(a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all
material respects as of the date of this request, and will be true and
correct after giving effect to the requested Extension of Credit
(except for those which expressly relate to an earlier date).
(b) No Default or Event of Default exists, or will exist after
giving effect to the requested Extension of Credit.
9
105
(c) All conditions set forth in Section 3.2 as to the
extension or conversion of such Revolving Loan have been satisfied.
Very truly yours,
AVTEAM, INC.
By:
----------------------------------
Name:
Title:
10
106
SCHEDULE 5.1(c)(v)
Secretary's Certificate
Pursuant to Section 5.1(i)(v) of the Credit Agreement (the "CREDIT
AGREEMENT"), dated as of April 30, 1998, among AVTEAM, Inc., a Florida
corporation, the Guarantors and Lenders identified therein and NationsBank,
N.A., as Administrative Agent, the undersigned ) ___________________________
Secretary of ____________________ (the "CORPORATION") hereby certifies as
follows:
1. Attached hereto as Annex I is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Corporation on
_______________________, 199_. The attached resolutions have not been rescinded
or modified and remain in full force and effect. The attached resolutions are
the only corporate proceedings of the Corporation now in force relating to or
affecting the matters referenced to therein.
2. Attached hereto as Annex II is a true and complete copy of the
By-laws of the Corporation as in effect on the date hereof.
3. Attached hereto as Annex III is a true and complete copy of the
Certificate of Incorporation of the Corporation and all amendments thereto as in
effect on the date hereof.
4. The following persons are now duly elected and qualified officers of
the Corporation, holding the offices indicated, and the signature appearing
opposite his name below is his true and genuine signature, and such officer is
duly authorized to execute and deliver on behalf of the Corporation, the Credit
Agreement, the Notes to be issued pursuant thereto and the other Credit
Documents to act as a Responsible Officer on behalf of the Corporation under the
Credit Agreement.
Name Office Signature
---- ------ ---------
------------------------
IN WITNESS WHEREOF, the undersigned has hereunto set his/her name and
affixed the corporate seal of the Corporation.
-----------------------------
Secretary
(CORPORATE SEAL)
Date: _______________________, 1998
I, _____________________, ________________ of ________________________,
hereby certify that _____________________, whose genuine signature appears
above, is, and has been at all times since ______________________, a duly
elected, qualified and acting ____________________ of
_______________________________________.
11
107
of
-------------------------------
----------------------------------
, 1998
----------------------------
12
108
SCHEDULE 6.4
Required Consents, Authorizations, Notices and Filings
13
109
SCHEDULE 6.8
Liens
14
110
SCHEDULE 6.14
Subsidiaries
15
111
SCHEDULE 6.17
Employment Agreements
16
112
SCHEDULE 7.1(C)-1
Form of Borrowing Base Certificate
Pursuant to Section 7.1(c) of the Credit Agreement (the "Credit
Agreement") dated as of April 30, 1998 among AVTEAM, Inc., a Florida corporation
(the "Borrower"), the Guarantors and Lenders identified therein and NationsBank,
N.A., as Administrative Agent (the "Administrative Agent"), the undersigned
hereby represent and warrant as follows (all of the defined terms in the Credit
Agreement are incorporated herein by reference):
Certificate Number __________ Status as of: (DATE)
-----------------------------------------------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE
-----------------------------------------------------------------------------------------------------------------------
1. Beginning Balance (Line 5 of the Last Report)
-----------------
2. Plus: Net Credit Sales as of (DATE)
-----------------
3. Less: Cash Remittances as of (DATE)
-----------------
4. Less: Other A/R Reductions as (DATE) contra's and unshipped sales
-----------------
5. ENDING BALANCE
-----------------
6. Less: Ineligible Accounts Receivable (Line 37 below)
-----------------
7. ELIGIBLE ACCOUNTS RECEIVABLE
-----------------
8. Times: Accounts Receivable Advance Rate 80%
----------------- ---------------
9. ACCOUNTS RECEIVABLE AVAILABILITY
-----------------------------------------------------------------------------------------------------------------------
INVENTORY
-----------------------------------------------------------------------------------------------------------------------
10. Beginning Balance (Line 14 of the Last Report)
-----------------
11. Plus: Purchases as of (DATE)
-----------------
12. Less: Cost of Sales as of (DATE)
-----------------
13. Plus / Minus: Adjustments as of (DATE)
-----------------
14. ENDING BALANCE
-----------------
15. Less: Ineligible Inventory (Line 43 below)
-----------------
16. ELIGIBLE INVENTORY
-----------------
17. Times: Inventory Advance Rate 50%
----------------- ---------------
18. INVENTORY AVAILABILITY
-----------------------------------------------------------------------------------------------------------------------
TOTAL BORROWING BASE AVAILABILITY
-----------------------------------------------------------------------------------------------------------------------
19. AVAILABILITY (Sum of Lines 9 and 18))
-----------------------------------------------------------------------------------------------------------------------
LOAN ACTIVITY
-----------------------------------------------------------------------------------------------------------------------
20. Beginning Balance (Line 25 of the Last Report)
-----------------
21. Less: Principal Payments as of (DATE)
-----------------
22. Plus: Principal Advances as of (DATE)
-----------------
23. Plus / Minus: Change in Outstanding Letters of Credit as of (DATE)
-----------------
24. Plus / Minus: Adjustments as of (Detail attached)
----------------- ---------------
25. ENDING BALANCE
-----------------------------------------------------------------------------------------------------------------------
AVAILABILITY
-----------------------------------------------------------------------------------------------------------------------
26. Calculated Availability (Line 19 above)
-----------------
27. Less: Ending Loan Balance (Line 25 above)
----------------- ---------------
28. NET AVAILABILITY
113
-----------------------------------------------------------------------------------------------------------------------
INELIGIBLE ACCOUNTS RECEIVABLE
-----------------------------------------------------------------------------------------------------------------------
29. Outstanding in Excess of 120 Days (All)
-----------------
30. Less: Preapproved Outstanding Between 120-150 Days
-----------------
31. Receivables with Offsetting Accounts Payable
-----------------
32. Foreign Accounts Receivable (Less than 120 Days)
-----------------
33. Less: Approved Foreign Accounts Receivable
-----------------
34. Receivables Owing by Insolvent Account Debtor
----------------- ---------------
35. Intercompany Receivables
----------------- ---------------
36. Other Ineligible Accounts Receivable
----------------- ---------------
37. TOTAL INELIGIBLE ACCOUNTS RECEIVABLE
-----------------------------------------------------------------------------------------------------------------------
INELIGIBLE INVENTORY
-----------------------------------------------------------------------------------------------------------------------
38. Engine Material Inventory of Aircraft with Capacity of Less than 100
-----------------
39. Airframe Material Inventory in Excess of 60% of Total Inventory
-----------------
40. Inventory Held Outside of Continental United States
-----------------
41. Inventory-Held on Premises Not Owned or Leased by Borrower
----------------- ---------------
42. Other Ineligible Inventory
----------------- ---------------
43. TOTAL INELIGIBLE INVENTORY
CERTIFICATION
This certificate is furnished to the Administrative Agent by the
Borrower pursuant to Section 7.1(c) of the Credit Agreement. The undersigned,
being a Responsible Officer of the Borrower, hereby certifies, in my official
capacity and not in my individual capacity, that (a) the computation of the
Borrowing Base set forth above complies with all the applicable provisions of
the Credit Agreement; (b) the data has been prepared from the books of account
and records of the Borrower in accordance with GAAP and represents fairly and
accurately the status of the Borrower's accounts as of the dates referenced
herein; (c) the inventory value is based on the fair market value of such
inventory or the actual cost, whichever is lower; (d) the Borrower holds title
to such inventory free and clear of any liens or other security interests except
that created by the aforesaid Credit Agreement; and (e) the goods are held for
sale or lease to others. The Borrower further reaffirms the representations,
warranties, and covenants contained in the Credit Agreement, and represents and
warrants that the information set forth above is true and complete.
BORROWER
AVTEAM, Inc.,
a Florida corporation
By:
-----------------------
Print Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
18
114
SCHEDULE 7.1(c)-2
Accounts Receivable
19
115
SCHEDULE 7.2(b)
Form of Officer's Compliance Certificate
This Certificate is delivered in accordance with the provisions of
Section 7.2(b) of that Credit Agreement dated as of April 30, 1998 (as amended,
modified and supplemented, the "CREDIT AGREEMENT") among AVTEAM, Inc., a Florida
corporation, the Guarantors and Lenders identified therein, and NationsBank,
N.A., as Administrative Agent. Terms used but not otherwise defined herein shall
have the same meanings provided in the Credit Agreement.
The undersigned, being a Responsible Officer of AVTEAM, Inc., a Florida
corporation, hereby certifies, in my official capacity and not in my individual
capacity, that to the best of my knowledge and belief:
(a) the financial statements accompanying this Certificate fairly
present the financial condition of the parties covered by such financial
statements in all material respects;
(b) during the period the Credit Parties have observed or performed all
of their covenants and other agreements in all material respects, and satisfied
in all material respects every material condition, contained in the Credit
Agreement to be observed, performed or satisfied by them;
(c) the undersigned has no actual knowledge of any Default or Event of
Default; and
(d) detailed calculations demonstrating compliance with the financial
covenants set out in Section 7.9 of the Credit Agreement accompany this
Certificate.
This the _______________ day of ________________________, 199_.
AVTEAM, INC.
By:
-----------------------------------
Name:
Title:
20
116
ATTACHMENT TO OFFICER'S CERTIFICATE
Computation of Financial Covenants
21
117
SCHEDULE 7.11
Form of Joinder Agreement
THIS JOINDER AGREEMENT (the "AGREEMENT"), dated as of ________________,
199_, is by and between _______________________, a __________________ (the
"APPLICANT GUARANTOR"), and NATIONSBANK, N.A., in its capacity as Administrative
Agent under that certain Credit Agreement dated as of April 30, 1998 (as amended
and modified, the "CREDIT AGREEMENT") by and among AVTEAM, Inc., a Florida
corporation, the Guarantors and Lenders identified therein and NationsBank,
N.A., as Administrative Agent. All of the defined terms in the Credit Agreement
are incorporated herein by reference.
The Applicant Guarantor has indicated its desire to become a Guarantor
or is required by the terms of Section 7.11 of the Credit Agreement to become, a
Guarantor under the Credit Agreement.
Accordingly, the Applicant Guarantor hereby agrees as follows with the
Administrative Agent, for the benefit of the Lenders:
1. The Applicant Guarantor hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Applicant Guarantor will be deemed
to be a party to the Credit Agreement and a "Guarantor" for all purposes of the
Credit Agreement and the other Credit Documents, and shall have all of the
obligations of a Guarantor thereunder as if it had executed the Credit Agreement
and the other Credit Documents. The Applicant Guarantor agrees to be bound by,
all of the terms, provisions and conditions contained in the Credit Documents,
including without limitation (i) all of the affirmative and negative covenants
set forth in Sections 7 and 8 of the Credit Agreement and (ii) all of the
undertakings and waivers set forth in Section 4 of the Credit Agreement. Without
limiting the generality of the foregoing terms of this paragraph 1, the
Applicant Guarantor hereby (A) jointly and severally together with the other
Guarantors, guarantees to each Lender, the Administrative Agent and the Issuing
Lender as provided in Section 4 of the Credit Agreement, the prompt payment and
performance of the Guaranteed Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof,
(B) agrees that if any of the Guaranteed Obligations are not paid or performed
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the Applicant
Guarantor will, jointly and severally together with the other Guarantors,
promptly pay and perform the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal, (C) grants to the Administrative Agent a security interest
in its Collateral as referred in, and pursuant to the terms of, the Security
Agreement, and (D) pledges and grants a security interest to the Administrative
Agent in the Pledged Stock identified in SCHEDULE A attached and the other
Collateral as referred in, and pursuant to the terms of, the Pledge Agreement.
2. The Applicant Guarantor acknowledges and confirms that it has
received a copy of the Credit Agreement and the Schedules and Exhibits thereto.
The information on the Schedules to the Credit Agreement, the Security Agreement
and the Pledge Agreement are amended to provide the information shown on the
attached SCHEDULE A.
22
118
3. The Applicant Guarantor hereby waives acceptance by the
Administrative Agent and the Lenders of the guaranty by the Applicant Guarantor
under Section 4 of the Credit Agreement upon the execution of this Joinder
Agreement by the Applicant Guarantor.
4. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the Applicant Guarantor has caused this Joinder
Agreement to be duly executed by its authorized officers, and the Administrative
Agent, for the benefit of the Lenders, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.
APPLICANT GUARANTOR
By:
--------------------------------
Name:
Title:
Address for Notices:
Attn:
Telephone:
Telecopy:
Acknowledged and accepted:
NATIONSBANK, N.A., as Administrative Agent
By:
--------------------------------
Name:
Title:
23
119
SCHEDULE A
to
Joinder Agreement
SCHEDULE A TO SECURITY AGREEMENT
Address for Chief Executive Locations of Record
Applicant Guarantor Notices Office Collateral Owner
------------------- ------- ------ ---------- -----
120
SCHEDULE 8.1
Indebtedness
25
121
SCHEDULE 8.5
Existing Investments
26
122
SCHEDULE 8.10
Shareholders
27
123
SCHEDULE 11.1
Lenders and Addresses
Lender Address For Notices
------ -------------------
NationsBank, N.A. NationsBank, N.A.
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxxx Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (704) ________
Telecopy: (000) 000-0000
with a copy to:
NationsBank, N.A.
Xxx Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SouthTrust Bank, National Association SouthTrust Bank, National Association
000 X. 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxx
Ph: 000-000-0000
Fx: 000-000-0000
National City Bank of Kentucky National City Bank of Kentucky
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx #X00
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Ph: 000-000-0000
Fx:
28
124
National Bank of Canada National Bank of Canada
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx D'Alto
Ph: 000-000-0000
Fx:
Creditanstalt AG Creditanstalt XX
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxx
Ph: 000-000-0000
Fx:
USTrust USTRUST
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxx Xxxxxx
Ph: 000-000-0000
Fx: 000-000-0000
Bank Leumi Le-Israel B.M., Miami Agency Bank Leumi Le-Israel B.M.,
Miami Agency
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx,
Vice President
Ph: 000-000-0000
Fx: 000-000-0000
29
125
SCHEDULE 11.3(b)
Form of Assignment and Acceptance
THIS ASSIGNMENT AND ACCEPTANCE dated as of , 199_ is entered into
between THE LENDER IDENTIFIED ON THE SIGNATURE PAGES AS THE "ASSIGNOR" (the
"ASSIGNOR") and THE PARTIES IDENTIFIED ON THE SIGNATURE PAGES AS "ASSIGNEES"
("ASSIGNEE").
Reference is made to that Credit Agreement dated as of April 30, 1998
(as amended and modified, the "CREDIT AGREEMENT") among AVTEAM, INC., a Florida
corporation (the "BORROWER"), the Guarantors and Lenders identified therein and
NationsBank, N.A., as Administrative Agent. Terms defined in the Credit
Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignees, and the Assignees hereby purchase and assume, without recourse, from
the Assignor, effective as of the Effective Date shown below, those rights and
interests of the Assignor under the Credit Agreement identified below (the
"ASSIGNED INTERESTS"), including the Obligations and Commitments relating
thereto, together with unpaid interest and fees relating thereto accruing from
the Effective Date. The Assignor represents and warrants that it owns interests
assigned hereby free and clear of liens, encumbrances or other claims. Each of
the Assignees represents that it is an Eligible Assignee within the meaning of
the term in the Credit Agreement. The Assignor and each of the Assignees hereby
makes and agrees to be bound by all the representations, warranties and
agreements set forth in Section 11.3 of the Credit Agreement, a copy of which
has been received by each such party. From and after the Effective Date (i) each
Assignee, if it is not already a Lender under the Credit Agreement, shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the interests assigned by this Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and (ii) each Assignor shall, to
the extent of the interests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement (other than the rights of indemnification referenced in Section 11.9
of the Credit Agreement). SCHEDULE 2.1(a) is deemed modified and amended to the
extent necessary to give effect to this Assignment.
2. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of Florida.
3. Terms of Assignment
(a) Date of Assignment: , 199__
------------------
(b) Legal Name of Assignor: SEE SIGNATURE PAGE
(c) Legal Name of Assignee: SEE SIGNATURE PAGE
(d) Effective Date of Assignment: , 199__
-------------------
See SCHEDULE I attached for a description of the Loans and Obligations and
Commitments (and the percentage interests therein and relating thereto) which
are the subject of this Assignment and Acceptance.
4. The fee payable to the Paying Agent in connection with this
Assignment is enclosed.
126
IN WITNESS WHEREOF, the parties hereto have caused the execution of
this instrument by their duly authorized officers as of the date first above
written.
ASSIGNOR: ASSIGNEE:
--------- ---------
By: By:
------------------------- --------------------------
Name: Name:
Title: Title:
Address For Notices:
--------------------
ACKNOWLEDGMENT AND CONSENT
--------------------------
NATIONSBANK, N.A. AVTEAM, INC.
as Administrative Agent
By: By:
------------------------- --------------------------
Name: Name:
Title: Title:
127
SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
AVTEAM, INC.
REVOLVING LOANS AND LETTERS OF CREDIT PRIOR TO ASSIGNMENT
Revolving Revolving Revolving LOC LOC
Committed Commitment Loans Committed Obligations
Amount Percentage Outstanding Amount Outstanding
------ ---------- ----------- ------ -----------
ASSIGNOR
--------
ASSIGNEES
---------
------------------ ------------------ -------------------- -------------------- --------------------
-- -- -- -- --
$ $ $ $
128
REVOLVING LOANS AND LETTERS OF CREDIT INTERESTS SUBJECT TO THIS ASSIGNMENT
Revolving Revolving Revolving LOC LOC
Committed Commitment Loans Committed Obligations
Amount Percentage Outstanding Amount Outstanding
------ ---------- ----------- ------ -----------
ASSIGNOR
--------
ASSIGNEES
---------
------------------ ------------------ -------------------- -------------------- --------------------
-- -- -- -- --
$ $ $ $
129
SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
AVTEAM, INC.
REVOLVING LOANS AND LETTERS OF CREDIT AFTER ASSIGNMENT
Revolving Revolving Revolving LOC LOC
Committed Commitment Loans Committed Obligations
Amount Percentage Outstanding Amount Outstanding
------ ---------- ----------- ------ -----------
ASSIGNOR
--------
ASSIGNEES
---------
------------------ ------------------ -------------------- -------------------- --------------------
-- -- -- -- --
$ $ $ $
