EXHIBIT 4
AIRNET SYSTEMS, INC.
------------------------------------------
LOAN AGREEMENT
dated as of August 1, 1998
------------------------------------------
The Lenders party hereto,
and
NBD BANK, as Agent
TABLE OF CONTENTS
Article Page
------- ----
I. DEFINITIONS ......................................................... 1
1.1 Certain Definitions........................................... 1
1.2 Other Definitions; Rules of
Construction................................................ 10
II. THE COMMITMENTS AND THE ADVANCES..................................... 11
2.1 Commitment of the Lenders..................................... 11
2.2 Termination and Reduction of
Commitments................................................. 11
2.3 Fees.......................................................... 11
2.4 Disbursement of Advances...................................... 12
2.5 Conditions for First Disbursement............................. 13
2.6 Further Conditions for Disbursement........................... 14
2.7 Subsequent Elections as to
Borrowings; Etc............................................. 15
2.8 Limitation of Requests and Elections.......................... 15
2.9 Minimum Amounts; Limitation on
Number of Loans............................................. 15
2.10 Extension of Termination Dates................................ 15
III. PAYMENTS AND PREPAYMENTS OF ADVANCES................................. 16
3.1 Principal Payments and Prepayments............................ 16
3.2 Interest Payments............................................. 17
3.3 Letter of Credit Reimbursement
Payments.................................................... 17
3.4 Payment Method................................................ 19
3.5 No Setoff or Deduction........................................ 19
3.6 Payment on Non-Business Day;
Payment Computations........................................ 19
3.7 Additional Costs.............................................. 19
3.8 Illegality and Impossibility.................................. 20
3.9 Indemnification............................................... 21
3.10 Substitution of Lender........................................ 21
3.11 Applicable Lending Installation............................... 22
-i-
Article Page
------- ----
IV. REPRESENTATIONS AND WARRANTIES....................................... 22
4.1 Corporate Existence and Power................................. 22
4.2 Corporate Authority........................................... 22
4.3 Binding Effect................................................ 22
4.4 Subsidiaries.................................................. 22
4.5 Litigation.................................................... 23
4.6 Financial Condition........................................... 23
4.7 Use of Advances............................................... 23
4.8 Consents, Etc................................................. 23
4.9 Taxes......................................................... 23
4.10 Title to Properties; Acquisition.............................. 23
4.11 ERISA......................................................... 24
4.12 Environmental Matters......................................... 24
4.13 No Defaults................................................... 24
4.14 No Burdensome Restriction..................................... 24
4.15 FAA Certifications............................................ 24
4.16 Airworthiness Certificates.................................... 24
V. COVENANTS ........................................................... 25
5.1 Affirmative Covenants......................................... 25
(a) Preservation of Corporate
Existence, Etc......................................... 25
(b) Compliance with Laws, Etc................................ 25
(c) Maintenance of Properties;
Insurance.............................................. 25
(d) Reporting Requirements................................... 25
(e) Accounting; Access to
Records, Books, Etc.................................... 27
(f) Further Assurances....................................... 27
5.2 Negative Covenants........................................... 27
(a) Net Worth................................................ 27
(b) Funded Debt to Ratio .................................... 27
(c) Cash Flow Coverage Ratio................................. 27
(d) Liens.................................................... 28
(e) Merger; Etc.............................................. 28
(f) Disposition of Assets, Etc............................... 29
(g) Dividends and Other Restricted
Payments............................................... 29
(h) Investment Loans and Advances............................ 29
(i) Indebtedness............................................. 29
-ii-
Article Page
------- ----
(j) Nature of Business....................................... 30
(k) Transactions with Affiliates............................. 30
(l) Additional Covenants..................................... 30
VI. DEFAULT.............................................................. 30
6.1 Events of Default............................................. 30
6.2 Remedies...................................................... 32
VII THE AGENT AND THE LENDERS............................................ 33
7.1 Appointment and Authorization................................. 33
7.2 Agent and Affiliates.......................................... 33
7.3 Scope of Agent's Duties....................................... 34
7.4 Reliance by Agent............................................. 34
7.5 Default....................................................... 34
7.6 Liability of Agent............................................ 34
7.7 Nonreliance on Agent and
Other Lenders............................................... 34
7.8 Indemnification............................................... 35
7.9 Successor Agent............................................... 35
7.10 Sharing of Payments........................................... 36
7.11 Withholding Tax Exemption..................................... 36
VIII. MISCELLANEOUS ................................................... 37
8.1 Amendments, Etc............................................... 37
8.2 Notices....................................................... 37
8.3 No Waiver By conduct; Remedies
Cumulative.................................................. 38
8.4 Reliance on and Survival of
Various Provisions.......................................... 38
8.5 Expenses; Indemnification..................................... 38
8.6 Successors and Assigns........................................ 40
8.7 Counterparts.................................................. 42
8.8 Governing Law................................................. 42
8.9 Table of Contents and Headings................................ 42
8.10 Construction of Certain Provisions............................ 42
8.11 Integration and Severability.................................. 42
8.12 Independence of Covenants..................................... 43
8.13 Interest Rate Limitation...................................... 43
8.14 Judgment and Payment.......................................... 43
-iii-
Article Page
------- ----
8.15 Unification of Certain Currencies............................. 43
8.16 Acknowledgments............................................... 44
8.17 Year 2000 Problem............................................. 44
8.18 Waiver of Jury Trial.......................................... 44
EXHIBITS
Exhibit A................................... Note
Exhibit B................................... Request for Advance
Exhibit C................................... Request for Conversion
Exhibit D................................... Assignment and Acceptance
SCHEDULES
Schedule 2.10............................... Extension Request
Schedule 4.4................................ Subsidiaries
Schedule 4.5................................ Litigation
Schedule 4.6................................ Contingent Liabilities
Schedule 4.12............................... Environmental Matters
Schedule 5.2(d)............................. Liens
Schedule 5.2(i)............................. Indebtedness
-iv-
THIS LOAN AGREEMENT, dated as of August 1, 1998 (this "Agreement"),
is among AIRNET SYSTEMS, INC., an Ohio corporation (the "Company"), the lenders
party hereto from time to time (collectively, the "Lenders" and individually, a
"Lender") and NBD BANK, a Michigan banking corporation, as agent for the Lenders
(in such capacity, the "Agent").
INTRODUCTION
The Company desires to obtain a revolving credit facility, including
letters of credit, in the aggregate principal amount of $65,000,000, reducing to
$50,000,000, for working capital and general corporate purposes, to pay off
certain outstanding debt, make acquisitions, and purchase aircraft and
equipment, and the Lenders are willing to establish such credit facilities in
favor of the Company on the terms and conditions herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall
have the following respective meanings:
"Advance" shall mean any Loan and any Letter of Credit Advance.
"Affiliate", when used with respect to any Person shall mean any
other Person which, directly or indirectly, controls or is controlled by or is
under common control with such Person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Applicable Lending Installation" shall mean, with respect to any
Advance made by any Lender or with respect to such Lender's Commitment, the
office or branch of such Lender or of any Affiliate of such Lender located at
the address specified as the applicable lending installation for such Lender set
forth next to the name of such Lender in the signature pages hereof or any other
office or branch or Affiliate of such Lender or of any Affiliate of such Lender
hereafter selected and notified to the Company and the Agent by such Lender.
"Applicable Margin" shall mean the following margin based upon the
Funded Debt Ratio as adjusted on the first day of each fiscal quarter of the
Company based upon the Funded Debt Ratio as of the last day of the fiscal
quarter preceding the fiscal quarter most recently ended, provided, that, the
Eurodollar Rate and the Eurocurrency Rate shall not be adjusted pursuant to any
change in the Applicable Margin for any outstanding Fixed Rate Loan until after
the end of the Interest Period for such Fixed Rate Loan.
1
==================================================================================================================
Funded Debt Ratio Applicable Margin for Eurodollar Applicable Margin for Applicable Margin for
Eurodollar Rate Loans Facility Fees Under Letter of Credit Fees
and Eurocurrency Rate Loans Section 2.3(a) Under Section 2.3(b)
------------------------------------------------------------------------------------------------------------------
less than 1.0 0.65% 0.200% 0.65%
------------------------------------------------------------------------------------------------------------------
greater than or equal to
1.0 but less than 2.0 0.80% 0.225% 0.80%
------------------------------------------------------------------------------------------------------------------
greater than 2.0 0.90% 0.250% 0.90%
==================================================================================================================
"Borrowing" shall mean the aggregation of Advances, including each
Letter of Credit issuance, of the Lenders to be made to the Company, or
continuations and conversions of any Loans, made pursuant to Article II on a
single date and, in the case of any Eurodollar Rate Loans and Eurocurrency Rate
Loans, for a single Interest Period, which Borrowings may be classified for
purposes of this Agreement by reference to the type of Loans or the type of
Advance comprising the related Borrowing, e.g., a "Eurodollar Rate Borrowing" is
a Borrowing comprised of Eurodollar Rate Loans and a "Letter of Credit
Borrowing" is an Advance comprised of a single Letter of Credit.
"Business Day" shall mean (a) when such term is used in respect of a
day on which a Loan denominated in an Eligible Currency is to be made, a payment
is to be made in respect of such Loan or any other dealing in such Eligible
Currency is to be carried out pursuant to this Agreement, such term shall mean a
Eurodollar Business Day which is also a day on which banks are open for general
banking business in the city which is the principal financial center of the
country of issuance of such Eligible Currency; (b) when such term is used to
describe a day on which a borrowing, payment or interest rate determination is
to be made in respect of a Eurodollar Loan, such day shall be a Eurodollar
Business Day; and (c) when such term is used in any context in this Agreement
(including as described in the foregoing clauses (a) and (b)), such term shall
mean a day which, in addition to complying with any applicable requirements set
forth in the foregoing clauses (a) and (b), is a day other than a Saturday,
Sunday or other day on which commercial banks in Detroit or New York are
authorized or required by law to close.
"Capital Lease" of any Person shall mean any lease which, in
accordance with generally accepted accounting principles, is or should be
capitalized on the books of such Person.
"Cash Flow Coverage Ratio" shall mean, as of the last day of any
fiscal quarter of the Company and determined for the Company and its
Subsidiaries on a Consolidated basis, the ratio of (a) EBITDA plus the amount of
rent paid under operating leases, and minus the amount of capital expenditures
which are not financed by long term debt, in each case for the four consecutive
fiscal quarter period then ending, to (b) Interest Expense, plus the amount of
rent paid under operating leases, in each case as calculated for the four fiscal
quarters then ending, and plus the current portion of Funded Debt as of the last
day of such fiscal quarter.
"Change in Control" shall mean the occurrence of either of the
following (a) the acquisition by any Person, or two or more Persons acting in
concert, of beneficial ownership (within the meaning of
2
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock
of the Company or (b) during any period of not greater than twelve consecutive
months beginning after the Effective Date, individuals who at the beginning of
such period constituted the Board of Directors of the Company (together with any
new directors whose election by such board of directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of the directors of the Company then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
board of directors of the Company then in office.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations thereunder.
"Commitment" shall mean, with respect to each Lender, the commitment
of each such Lender to make Loans and to participate in Letter of Credit
Advances made through the Agent pursuant to Section 2.1, in amounts not
exceeding in aggregate principal amount outstanding at any time the respective
commitment amounts for each such Lender set forth next to the name of each such
Lender in the signature pages hereof, as such amounts may be reduced from time
to time pursuant to Section 2.2.
"Commitment Reduction Date" shall mean the earlier to occur of
November __, 1998 or the date on which the Company incurs indebtedness in excess
of $40,000,000 in principal amount pursuant to Section 5.2(i)(vi).
"Consolidated" shall mean, when used with reference to any financial
term in this Agreement, the aggregate for two or more Persons of the amounts
signified by such term for all such Persons determined on a consolidated basis
in accordance with generally accepted accounting principles.
"Contingent Liabilities" of any Person shall mean, as of any date,
all obligations of such Person or of others for which such Person is
contingently liable, as obligor, guarantor, surety, accommodation party, partner
or in any other capacity, or in respect of which obligations such Person assures
a creditor against loss or agrees to take any action to prevent any such loss
(other than endorsements of negotiable instruments for collection in the
ordinary course of business), including without limitation all reimbursement
obligations of such Person in respect of any letters of credit, surety bonds or
similar obligations (including, without limitation, bankers acceptances) and all
obligations of such Person to advance funds to, or to purchase assets, property
or services from, any other Person for no purpose other than to maintain the
financial condition of such other Person.
"Contractual Obligation" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default" shall mean any event or condition which might become an
Event of Default with notice or lapse of time or both.
"Defaulting Lender" shall mean any Lender that fails to make
available to the Agent such Lender's Loans required to be made hereunder or
shall have not made a payment required to be made to
3
the Agent hereunder. Once a Lender becomes a Defaulting Lender, such Lender
shall continue as a Defaulting Lender until such time as such Defaulting Lender
makes available to the Agent the amount of such Defaulting Lender's Loans and
all other amounts required to be paid to the Agent pursuant to this Agreement.
"Dollar Equivalent" shall mean as of any date, with respect to any
amount in a currency other than Dollars, the sum in Dollars resulting from the
conversion of such amount from such currency into Dollars at the most favorable
spot exchange rate determined by the Agent to be available to it for the
purchase of such currency with Dollars at approximately 11:00 a.m. local time of
the Applicable Lending Installation of the Agent on such date as a determination
of the Dollar Equivalent is made.
"Dollars" and "$" shall mean the lawful money of the United States
of America.
"EBITDA" shall mean, for any period, Net Income for such period plus
all amounts deducted in determining such Net Income on account of (a) Interest
Expense, (b) income taxes, and (c) depreciation and amortization expense.
"Effective Date" shall mean the effective date specified in the
final paragraph of this Agreement.
"Eligible Currency" shall mean such currency (other than Dollars)
which are approved and designated as an Eligible Currency by the Lenders,
provided that any such currency is and remains readily available, freely traded,
in which deposits are customarily offered to banks in the London interbank
market, convertible into Dollars in the international interbank market and as to
which the Dollar Equivalent may be readily calculated. If, after the designation
of any currency as an Eligible Currency, currency control or other exchange
regulations are imposed in the country in which such currency is issued with the
result that different types of such currency are introduced, or such country's
currency is, in the determination of the Agent, no longer readily available or
freely traded or as to which, in the determination of the Agent, a Dollar
Equivalent is not readily calculable, then the Agent shall promptly notify the
Company and such country's currency shall no longer be an Eligible Currency
until such time as the Lenders agree to reinstate such country's currency as an
Eligible Currency and promptly, but in any event within five (5) Business Days
of receipt of such notice from the Agent, the Company with respect to such
currency shall repay all Loans in such affected currency or convert such Loans
into Loans in Dollars or an Eligible Currency, as applicable, subject to the
other terms contained in this Agreement.
"Environmental Laws" at any date shall mean all provisions of law,
statute, ordinances, rules, regulations, judgments, writs, injunctions, decrees,
orders, awards and standards promulgated by the government of the United States
of America or any foreign government or by any state, province, municipality or
other political subdivision thereof or therein, or by any court, agency,
instrumentality, regulatory authority or commission of any of the foregoing
concerning the protection of, or regulating the discharge of substances into,
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations thereunder.
4
"ERISA Affiliate" shall mean, with respect to any Person, any trade
or business (whether or not incorporated) which, together with such Person or
any Subsidiary of such Person, would be treated as a single employer under
Section 414 of the Code and the regulations promulgated thereunder.
"Eurocurrency Rate" shall mean, with respect to any Eurocurrency
Rate Loan and the related Interest Period, the per annum rate that is equal to
the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum
interest rates at which deposits in the relevant Eligible Currency are offered
to the Applicable Lending Installation of the Agent by other prime banks in the
London interbank market in an amount comparable to such Eurocurrency Rate Loan
and for a period equal to such Interest Period at approximately 11:00 a.m.
London time two (2) Business Days prior to the first day of such Interest
Period, divided by (ii) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
and other fees, charges and other requirements similar thereto or the functional
equivalent thereof which the Agent determines to be market practice to take into
account in determining the Eurocurrency Rate that are specified on the first day
of such Interest Period by the Board of Governors of the Federal Reserve System
(or any successor agency thereto) for determining the maximum reserve
requirement with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such Board) maintained by a member
bank of such System or by any other governmental entity, foreign or domestic,
all as conclusively determined by the Agent (absent manifest error), such sum to
be rounded up, if necessary, to the nearest whole multiple of one sixteenth of
one percent (1/16 of 1%); provided that with respect to any Eurocurrency Rate
Loans, an alternative formula shall apply if (i) the Company and the Agent shall
have agreed to such alternative formula, and (ii) the Agent shall have
determined that such alternative formula more accurately compensates the Lenders
for the cost of maintaining reserves and similar requirements in respect of such
Eurocurrency Rate Loans.
"Eurocurrency Rate Loan" shall mean a Loan which bears interest at
the Eurocurrency Rate.
"Eurodollar Business Day" shall mean, with respect to any Eurodollar
Rate Loan, a day which is both a Business Day and a day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Rate
Loan and the related Interest Period, the per annum rate that is equal to the
sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum rate
of interest at which deposits in Dollars for such Interest Period and in an
aggregate amount comparable to the amount of such Eurodollar Rate Loan to be
made by the Agent in its capacity as a Lender hereunder are offered to the Agent
by other prime banks in the London interbank market at approximately 11:00 a.m.
London time on the second Eurodollar Business Day prior to the first day of such
Interest Period by (ii) an amount equal to one
5
minus the stated maximum rate (expressed as a decimal) of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) that are specified on the first day of
such Interest Period by the Board of Governors of the Federal Reserve System (or
any successor agency thereto) for determining the maximum reserve requirement
with respect to eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) maintained by a member bank of such
System;
all as conclusively determined by the Agent, absent manifest error, such sum to
be rounded up, if necessary, to the nearest whole multiple of one one-hundredth
of one percent (1/100 of 1%).
"Eurodollar Rate Loan" shall mean any Loan which bears interest at
the Eurodollar Rate.
"Event of Default" shall mean any of the events or conditions
described in Section 6.1.
"FAA" shall mean, collectively, the United States Department of
Transportation and/or United States Federal Aviation Administration and/or the
Administrator of the United States Federal Aviation Administration and/or the
Secretary of Transportation or any Person, governmental department, bureau,
commission or agency succeeding to the functions of any of the foregoing.
"Federal Funds Rate" shall mean the per annum rate that is equal to
the average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published by
the Federal Reserve Bank of New York for such day, or, if such rate is not so
published for any day, the average of the quotations for such rates received by
the Agent from three federal funds brokers of recognized standing selected by
the Agent in its discretion;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%), which Federal Funds Rate shall change simultaneously with any
change in such published or quoted rates or, when used in connection with any
Advance in any Eligible Currency, "Federal Funds Rate" shall mean, for any day,
an interest rate per annum equal to the local cost of funds rate for obligations
in such currency as determined by the Agent.
"Fixed Rate Loan" shall mean any Eurodollar Rate Loan, Eurocurrency
Rate Loan or Negotiated Rate Loan.
"Floating Rate" shall mean the per annum rate equal to the sum of
(a) the Applicable Floating Rate Margin plus (b) the greater of (i) the Prime
Rate in effect from time to time, and (ii) the sum of one-half percent (1/2%)
per annum plus the Federal Funds Rate in effect from time to time; which
Floating Rate shall change simultaneously with any change in such Prime Rate or
Federal Funds Rate, as the case may be.
"Floating Rate Loan" shall mean any Loan which bears interest at the
Floating Rate.
"Funded Debt" as of any date, shall mean: (a) all debt for borrowed
money and similar monetary obligations evidenced by bonds, notes, debentures,
Capital Lease obligations or otherwise, including without limitation obligations
in respect of the deferred purchase price of properties or assets, in each case
whether direct or indirect; (b) all liabilities secured by any Lien existing on
property owned or acquired subject thereto, whether or not the liability secured
thereby shall have been assumed; (c) all
6
reimbursements obligations under outstanding letters of credit in respect of
drafts which (i) may be presented or (ii) have been presented and have not yet
been paid, and (d) all Contingent Liabilities relating to any of the obligations
of others similar in character to those described in the foregoing clauses (a)
through (c), all as determined for the Company and its Subsidiaries on a
Consolidated basis.
"Funded Debt Ratio" shall mean, as of any date, the ratio of (a)
Funded Debt as of such date to (b) EBITDA, as calculated for the four
consecutive fiscal quarters of the Company most recently ended.
"Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles applied on a basis consistent with that reflected
in the financial statements referred to in Section 4.6.
"Guaranties" shall mean each guaranty executed by any Guarantor, as
amended or modified from time to time, which Guaranties shall be in form and
substance acceptable to the Agent.
"Guarantors" shall mean each present and future Subsidiary of the
Company.
"Hazardous Materials" includes, without limitation, any flammable
explosives, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances or related materials defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Sections 1801, et seq.), the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Sections 6901, et seq.) and in the
regulations adopted and publications promulgated pursuant thereto, or any other
federal, state or local government law, ordinance, rule or regulation.
"Indebtedness" of any Person shall mean, as of any date, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person as lessee under any Capital Lease, (c) all obligations which are secured
by any Lien existing on any asset or property of such Person whether or not the
obligation secured thereby shall have been assumed by such Person (to the extent
of such Lien if such obligation is not assumed), (d) all obligations of such
Person for the unpaid purchase price for goods, property or services acquired by
such Person, except for trade accounts payable arising in the ordinary course of
business that are not past due, (e) all obligations of such Person to purchase
goods, property or services where payment therefor is required regardless of
whether delivery of such goods or property or the performance of such services
is ever made or tendered (generally referred to as "take or pay contracts"), (f)
all liabilities of such Person in respect of Unfunded Benefit Liabilities under
any Plan of such Person or of any ERISA Affiliate, (g) all obligations of such
Person in respect of any interest rate or currency swap, rate cap or other
similar transaction (valued in an amount equal to the highest termination
payment, if any, that would be payable by such Person upon termination for any
reason on the date of determination), and (h) all Contingent Liabilities.
"Interest Expense" shall mean, for any period, total interest and
related expense (including, without limitation, that portion of any Capitalized
Lease obligation attributable to interest expense in conformity with Generally
Accepted Accounting Principles, amortization of debt discount, all capitalized
interest, the interest portion of any deferred payment obligations, all
commissions, discounts and other fees and charges owed with respect to letter of
credit and bankers acceptance financing, the net costs and net payments under
any interest rate hedging, cap or similar agreement or arrangement, prepayment
charges, agency fees, administrative fees, commitment fees and capitalized
transaction costs allocated to interest
7
expense) paid, payable or accrued during such period, without duplication for
any period, with respect to all outstanding Indebtedness of the Company or any
of its Subsidiaries, all as determined for the Company and its Subsidiaries on a
Consolidated basis.
"Interest Payment Date" shall mean (a) with respect to any Fixed
Rate Loan, the last day of each Interest Period with respect to such Fixed Rate
Loan and, in the case of any Interest Period exceeding three months, those days
that occur during such Interest Period at intervals of three months after the
first day of such Interest Period, and (b) in all other cases, the last Business
Day of each March, June, September and December occurring after the date hereof,
commencing with the first such Business Day occurring after the date of this
Agreement.
"Interest Period" shall mean, with respect to any Eurodollar Rate
Loan or Eurocurrency Rate Loan, the period commencing on the day such Loan is
made or converted to a Eurodollar Rate Loan or Eurocurrency Rate Loan and ending
on the day which is one, two, three or six months thereafter, as the Company may
elect under Section 2.4 or 2.7, and with respect to any Negotiated Rate Loan,
the period commencing on the day such Loan is made or converted to a Negotiated
Rate Loan and ending the date agreed upon between the Company and the Lenders at
the time such Negotiated Rate Loan is made, and, with respect to any Eurodollar
Rate Loan or Eurocurrency Rate Loan, and each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the day
which is one, two, three or six months thereafter, as the Company may elect
under Section 2.4 or 2.7, and, with respect to each Negotiated Rate Loan, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the date agreed upon between the Company and the
Lenders at the time such Negotiated Rate Loan is elected to be continued as a
Negotiated Rate Loan by the Company, provided, however, that (a) any Interest
Period which commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month, (b) each Interest Period which would otherwise end on
a day which is not a Business Day shall end on the next succeeding Business Day
or, if such next succeeding Business Day falls in the next succeeding calendar
month, on the next preceding Business Day, (c) no Interest Period which would
end after the Termination Date shall be permitted and (d) any Interest Period
pertaining to a Eurocurrency Rate Loan denominated in an Eligible Currency being
replaced by the currency of the European Monetary Union that would otherwise
extend beyond the date on which such replacement becomes effective shall end on
such date.
"Letter of Credit" shall mean a standby letter of credit having a
stated expiry date or a date upon which the draft must be reimbursed not later
than twelve months after the date of issuance and not later than the fifth
Business Day before the Termination Date issued by the Agent on behalf of the
Lenders for the account of the Company under an application and related
documentation acceptable to the Agent requiring, among other things, immediate
reimbursement by the Company to the Agent in respect of all drafts or other
demand for payment honored thereunder and all expenses paid or incurred by the
Agent relative thereto.
"Letter of Credit Advance" shall mean any issuance of a Letter of
Credit under Section 2.4 made pursuant to Section 2.1(b) in which each Lender
acquires a pro rata risk participation pursuant to Section 2.4(d).
"Letter of Credit Documents" shall have the meaning ascribed thereto
in Section 3.3(b).
8
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing,
lessor's or lessee's interest under any lease, subordination of any claim or
right, or any other type of lien, charge, encumbrance, preferential arrangement
or other claim or right.
"Loan" shall mean any borrowing under Section 2.4 evidenced by the
Notes and made pursuant to Section 2.1(a). Any such Loan or portion thereof may
also be denominated as a Floating Rate Loan, a Eurocurrency Rate Loan or a
Eurodollar Rate Loan and such Loans are referred to herein as "types" of Loans.
"Loan Documents" shall mean, collectively, this Agreement, the
Notes, the Guarantors, all agreements evidencing or relating to any swap
obligations owing by the Company to the Lender at any time and all other
agreements, instruments and documents executed pursuant thereto at any time, in
each case as amended or modified from time to time.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, operations, prospects or condition (financial or
otherwise) of the Company, or any Guarantor, (b) the ability of the Company to
perform its obligations under any Loan Document, or (c) the validity or
enforceability of any Loan Document or the rights or remedies of the Agent or
the Lenders under any Loan Document.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Negotiated Rate" shall mean, with respect to any Negotiated Rate
Loan, the rate per annum agreed upon between the Company and the Lenders at the
time such Negotiated Rate Loan is made.
"Negotiated Rate Loan" shall mean any Loan which bears interest at
the Negotiated Rate.
"Net Income" shall means for any period, the Consolidated net income
(or loss) of the Company and its Subsidiaries for such period taken as a single
accounting period, determined in accordance with Generally Accepted Accounting
Principles; provided that in determining Consolidated Net Income there shall be
excluded, without duplication: (a) the income of any Person in which any Person
other than the Company has a joint interest or partnership interest, except to
the extent of the amount of dividends or other distributions actually paid to
the Company by such Person during such period, (b) the proceeds of any insurance
policy, (c) gains from the sale, exchange, transfer or other disposition of
property or assets not in the ordinary course of business of the Company and its
Subsidiaries and related tax effects in accordance with Generally Accepted
Accounting Principles, and (d) any other extraordinary or non-recurring gains of
the Company or any of its Subsidiaries, and related tax effects in accordance
with Generally Accepted Accounting Principles.
"Net Worth" of any Person shall mean, as of any date, the amount of
any capital stock, paid in capital and similar equity accounts plus (or minus in
the case of a deficit) the capital surplus and retained earnings of such Person
and the amount of any foreign currency translation adjustment account shown as a
capital account of such Person.
9
"Note" shall mean any promissory note of the Company evidencing the
Loans, in substantially the form annexed hereto as Exhibit A, as amended or
modified from time to time and together with any promissory note or notes issued
in exchange or replacement therefor.
"Overdue Rate" shall mean (a) in respect of principal of Floating
Rate Loans, a rate per annum that is equal to the sum of three percent (3%) per
annum plus the Floating Rate, (b) in respect of principal of Fixed Rate Loans or
Eurocurrency Rate Loans, a rate per annum that is equal to the sum of three
percent (3%) per annum plus the per annum rate in effect thereon until the end
of the then current Fixed Interest Period for such Loan and, thereafter, a rate
per annum that is equal to the sum of three percent (3%) per annum plus the
Floating Rate, and (c) in respect of other amounts payable by the Company
hereunder (other than interest), a per annum rate that is equal to the sum of
three percent (3%) per annum plus the Floating Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Currency" shall mean Dollars or any Eligible Currency.
"Permitted Liens" shall mean Liens permitted by Section 5.2(e)
hereof.
"Person" shall include an individual, a corporation, an association,
a partnership, a trust or estate, a joint stock company, an unincorporated
organization, a joint venture, a trade or business (whether or not
incorporated), a government (foreign or domestic) and any agency or political
subdivision thereof, or any other entity.
"Plan" shall mean, with respect to any Person, any pension plan
(including a Multiemployer Plan) subject to Title IV of ERISA or to the minimum
funding standards of Section 412 of the Code which has been established or
maintained by such Person, any Subsidiary of such Person or any ERISA Affiliate,
or by any other Person if such Person, any Subsidiary of such Person or any
ERISA Affiliate could have liability with respect to such pension plan.
"Prime Rate" shall mean the per annum rate announced by the Agent
from time to time as its "prime rate" (it being acknowledged that such announced
rate may not necessarily be the lowest rate charged by the Agent to any of its
customers); which Prime Rate shall change simultaneously with any change in such
announced rate or, when used in connection with any Advance denominated in any
Eligible Currency, "Prime Rate" shall mean the correlative floating rate of
interest customarily applicable to similar extensions of credit to corporate
borrowers denominated in such currency in the country of issue, as determined by
the Agent, which Prime Rate shall change simultaneously with any change in such
announced or established rates.
"Prohibited Transaction" shall mean any transaction involving any
Plan which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Reportable Event" shall mean a reportable event as described in
Section 4043(b) of ERISA including those events as to which the thirty (30) day
notice period is waived under Part 2615 of the regulations promulgated by the
PBGC under ERISA.
10
"Required Lenders" shall mean Lenders holding not less than (i)
66-2/3% percent of the aggregate principal amount of the Advances then
outstanding or (ii) 66-2/3% percent of the Commitments if no Advances are then
outstanding.
"Requirement of Law" shall mean 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 property to which such Person or
any of its property is subject.
"Subsidiary" of any Person shall mean any other Person (whether now
existing or hereafter organized or acquired) in which (other than directors
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such Person or by one or more of the other Subsidiaries of such
Person or by any combination thereof. Unless otherwise specified, reference to
"Subsidiary" shall mean a Subsidiary of the Company.
"Termination Date" shall mean the earlier to occur of (a) the date
five years after the date of this Agreement or such later date as the
Termination Date may be extended pursuant to Section 2.10 and (b) the date on
which the Commitments shall be terminated pursuant to Section 2.2 or 6.2.
"Total Liabilities" of any Person shall mean, as of any date, all
obligations which, in accordance with Generally Accepted Accounting Principles,
are or should be classified as liabilities on a balance sheet of such Person and
all Contingent Liabilities of such Person.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan
as of any date, the amount of the unfunded benefit liabilities determined in
accordance with Section 4001(a)(18) of ERISA.
1.2 Other Definitions; Rules of Construction. As used herein, the
terms "Agent", "Lenders", "Company" and "this Agreement" shall have the
respective meanings ascribed thereto in the introductory paragraph of this
Agreement. Such terms, together with the other terms defined in Section 1.1,
shall include both the singular and the plural forms thereof and shall be
construed accordingly. All computations required hereunder and all financial
terms used herein shall be made or construed in accordance with Generally
Accepted Accounting Principles unless such principles are inconsistent with the
express requirements of this Agreement; provided that, if the Company notifies
the Agent that the Company wishes to amend any covenant in Article V to
eliminate the effect of any change in Generally Accepted Accounting Principles
in the operation of such covenant (or if the Agent notifies the Company that the
Required Lenders wish to amend Article V for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of Generally
Accepted Accounting Principles in effect immediately before the relevant change
in Generally Accepted Accounting Principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner satisfactory to the
Company and the Required Lenders. Use of the terms "herein", "hereof", and
"hereunder" shall be deemed references to this Agreement in its entirety and not
to the Section or clause in which such term appears. References to
11
"Sections" and "subsections" shall be to Sections and subsections, respectively,
of this Agreement unless otherwise specifically provided.
ARTICLE II.
THE COMMITMENTS AND THE ADVANCES
2.1 Commitment of the Lenders.
(a) Advances. Each Lender agrees, for itself only, subject to
the terms and conditions of this Agreement, to make Loans in any Permitted
Currency to the Company pursuant to Section 2.4 and to participate in Letters of
Credit from time to time from and including the Effective Date to but excluding
the Termination Date, not to exceed in aggregate principal amount at any time
outstanding the amount determined pursuant to Section 2.1(b).
(b) Limitation on Amount of Advances. Notwithstanding anything
in this Agreement to the contrary, (i) the Dollar Equivalent of the aggregate
principal amount of the Advances made or participated in by any Lender at any
time outstanding shall not exceed the amount of the Commitment of such Lender as
of such time, (ii) the Dollar Equivalent of the aggregate amount of all Advances
at any time outstanding shall not exceed the aggregate amount of the Commitments
as of such time and (iii) the aggregate principal amount of all Letter of Credit
Advances outstanding at any time shall not exceed $3,000,000.
2.2 Termination and Reduction of Commitments. (a) The Company shall
have the right to terminate or reduce the Commitments at any time and from time
to time at its option, provided that (i) the Company shall give notice of such
termination or reduction to the Agent (with sufficient executed copies for each
Lender) specifying the amount and effective date thereof, (ii) each partial
reduction of the Commitments shall be in a minimum amount of $2,000,000 and in
an integral multiple of $2,000,000 and shall reduce the Commitments of all of
the Lenders proportionately in accordance with the respective commitment amounts
for each such Lender set forth in the signature pages hereof next to name of
each such Lender, (iii) no such termination or reduction shall be permitted with
respect to any portion of the Commitments as to which a request for a Advance
pursuant to Section 2.4 is then pending and (iv) the Commitments may not be
terminated if any Advances are then outstanding and may not be reduced below the
principal amount of the Advances then outstanding. The Commitments or any
portion thereof terminated or reduced pursuant to this Section 2.2, whether
optional or mandatory, may not be reinstated.
(b) For purposes of this Agreement, a Letter of Credit Advance
(i) shall be deemed outstanding in an amount equal to the sum of the maximum
amount available to be drawn under the related Letter of Credit on or after the
date of determination and on or before the stated expiry date thereof plus the
amount of any draws under such Letter of Credit that have not been reimbursed as
provided in Section 3.3 and (ii) shall be deemed outstanding at all times on and
before such stated expiry date or such earlier date on which all amounts
available to be drawn under such Letter of Credit have been fully drawn, and
thereafter until all related reimbursement obligations have been paid pursuant
to Section 3.3. As provided in Section 3.3, upon each payment made by the Agent
in respect of any draft or other demand for payment under any Letter of Credit,
the amount of any Letter of Credit Advance outstanding immediately prior to such
payment
12
shall be automatically reduced by the amount of each Loan deemed advanced in
respect of the related reimbursement obligation of the Company.
2.3 Fees. (a) The Company agrees to pay to each Lender a facility
fee on the daily average amount of its Commitment for the period from the
Effective Date to but excluding the Termination Date at a rate equal to the
Applicable Margin. Accrued facility fees shall be payable quarterly in arrears
on the last Business Day of each March, June, September and December, commencing
on the first such Business Day occurring after the Effective Date, and on the
Termination Date.
(b) On or before the date of issuance of any Letter of Credit,
the Company agrees (i) to pay to the Lenders a fee computed at the rate of the
Applicable Margin of the maximum amount available to be drawn from time to time
under such Letter of Credit for the period from and including the date of
issuance of such Letter of Credit to and including the stated expiry date of
such Letter of Credit, and (ii) to pay an additional fee to the Agent for its
own account computed at the rate of 0.125% per annum of such maximum amount for
such period. Such fees are nonrefundable and the Company shall not be entitled
to any rebate of any portion thereof if such Letter of Credit does not remain
outstanding through its stated expiry date or for any other reason. The Company
further agrees to pay to the Agent, on demand, such other customary
administrative fees, charges and expenses of the Agent in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(c) The Company agrees to pay to the Agent such fees in such
amounts as may from time to time be agreed upon by the Company and the Agent and
to pay to the Lenders such fee as may be agreed upon by the Company and the
Agent.
2.4 Disbursement of Advances. (a) The Company shall give the Agent
notice of its request for each Advance in substantially the form of Exhibit B
hereto not later than 10:00 a.m. Detroit time (i) three Eurodollar Business Days
prior to the date such Advance is requested to be made if such Advance is to be
made as a Eurodollar Rate Loan or Eurocurrency Rate Loan, (ii) five Business
Days prior to the date any Letter of Credit Advance is requested to be made, and
(iii) one Business Day prior to the date such Advance is requested to be made in
all other cases, which notice shall specify whether a Eurodollar Rate Loan,
Eurocurrency Rate Loan, a Negotiated Rate Loan or Floating Rate Loan or a Letter
of Credit Advance is requested and, in the case of each requested Fixed Rate
Loan, the Interest Period to be initially applicable to such Loan and, in the
case of each Eurocurrency Rate Loan the Permitted Currency of such Loan and, in
the case of each Letter of Credit Advance, such information as may be necessary
for the issuance thereof by the Agent. The Agent, not later than the Business
Day next succeeding the day such notice is given, shall provide notice of such
requested Advance to each Lender. Subject to the terms and conditions of this
Agreement, the proceeds of each such requested Loan shall be made available to
the Company by depositing the proceeds thereof in immediately available funds,
in an account maintained and designated by the Company at the Applicable Lending
Installation of the Agent or as otherwise agreed to between the Agent and the
Company. Subject to the terms and conditions of this Agreement, the Agent shall,
on the date any Letter of Credit Advance is requested to be made, issue the
related Letter of Credit on behalf of the Lenders for the account of the
Company. Notwithstanding anything herein to the contrary, (a) the Agent may
decline to issue any requested Letter of Credit on the basis that the
beneficiary, the purpose of issuance or the terms or the conditions of drawing
are contrary to a policy of the Agent and (b) Loans denominated in any Permitted
Currency other than Dollars may only be made as Eurocurrency Rate Loans.
13
(b) Each Lender, on the date any Borrowing in the form of a
Loan is requested to be made, shall make its pro rata share of such Borrowing
available in immediately available, freely transferable, cleared funds for
disbursement to the Company pursuant to the terms and conditions of this
Agreement at the principal office of the Agent. Unless the Agent shall have
received notice from any Lender prior to the date such Borrowing is requested to
be made under this Section 2.4 that such Lender will not make available to the
Agent such Lender's pro rata portion of such Borrowing, the Agent may assume
that such Lender has made such portion available to the Agent on the date such
Borrowing is requested to be made in accordance with this Section 2.4. If and to
the extent such Lender shall not have so made such pro rata portion available to
the Agent, the Agent may (but shall not be obligated to) make such amount
available to the Company, and such Lender and the Company severally agree to pay
to the Agent forthwith on demand such amount together with interest thereon, for
each day from the date such amount is made available to the Company by the Agent
until the date such amount is repaid to the Agent, at the Federal Funds Rate in
the case of any Lender and at the interest rate applicable to such Advance in
the case of the Company. If such Lender shall pay such amount to the Agent
together with interest, such amount so paid shall constitute a Loan by such
Lender as a part of such the related Borrowing for purposes of this Agreement.
The failure of any Lender to make its pro rata portion of any such Borrowing
available to the Agent shall not relieve any other Lender of its obligations to
make available its pro rata portion of such Borrowing on the date such Borrowing
is requested to be made, but no Lender shall be responsible for failure of any
other Lender to make such pro rata portion available to the Agent on the date of
any such Borrowing.
(c) All Loans made under this Section 2.4 shall be evidenced
by the Notes, and all such Loans shall be due and payable and bear interest as
provided in Article III. Each Lender is hereby authorized by the Company to
record on the schedule attached to the Notes, or in its books and records, the
date, amount and type of each Loan and the duration of the related Interest
Period (if applicable), the amount of each payment or prepayment of principal
thereon, and the other information provided for on such schedule, which schedule
or books and records, as the case may be, shall constitute prima facie evidence
of the information so recorded, provided, however, that failure of any Lender to
record, or any error in recording, any such information shall not relieve the
Company of its obligation to repay the outstanding principal amount of the
Loans, all accrued interest thereon and other amounts payable with respect
thereto in accordance with the terms of the Notes and this Agreement. Subject to
the terms and conditions of this Agreement, the Company may borrow Loans under
this Section 2.4 and under Section 3.3, prepay Loans pursuant to Section 3.1 and
reborrow Loans under this Section 2.4 and under Section 3.3.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized that the
Agent has the sole obligation under this Agreement to issue Letters of Credit on
behalf of the Lenders, and the Commitment of each Lender with respect to Letter
of Credit Advances is expressly conditioned upon the Agent's performance of such
obligations. Upon such issuance by the Agent, each Lender shall automatically
acquire a pro rata risk participation interest in such Letter of Credit Advance
based on the amount of its respective Commitment. If the Agent shall honor a
draft or other demand for payment presented or made under any Letter of Credit,
the Agent shall provide notice thereof to each Lender on the date such draft or
demand is honored unless the Company shall have satisfied its reimbursement
obligation under Section 3.3 by payment to the Agent on such date. Each Lender,
on such date, shall make its pro rata share of the amount paid by the Agent
available in immediately available funds at the principal office of the Agent
for the account of the Agent. If
14
and to the extent such Lender shall not have made such pro rata portion
available to the Agent, such Lender and the Company severally agree to pay to
the Agent forthwith on demand such amount together with interest thereon, for
each day from the date such amount was paid by the Agent until such amount is so
made available to the Agent at a per annum rate equal to the Federal Funds Rate.
If such Lender shall pay such amount to the Agent together with such interest,
such amount so paid shall constitute a Loan by such Lender as part of the
Borrowing disbursed in respect of the reimbursement obligation of the Company
under Section 3.3 for purposes of this Agreement. The failure of any Lender to
make its pro rata portion of any such amount paid by the Agent available to the
Agent shall not relieve any other Lender of its obligation to make available its
pro rata portion of such amount, but no Lender shall be responsible for failure
of any other Lender to make such pro rata portion available to the Agent.
2.5 Conditions for First Disbursement. The obligation of the Lenders
to make the first Advance hereunder is subject to receipt by each Lender and the
Agent of the following documents and completion of the following matters, in
form and substance satisfactory to each Lender and the Agent:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of the Company's and each Guarantor's state of
incorporation (listing all charter documents on file in that office if such
listing is available) and certifying as to the good standing and corporate
existence of the Company and together with copies of such charter documents
certified as of a recent date by such authority or official;
(b) By-Laws and Corporate Authorizations. Copies of the
by-laws of the Company and each Guarantor and together with all authorizing
resolutions and evidence of other corporate action taken by the Company and each
Guarantor to authorize the execution, delivery and performance by the Company
Guarantor of the Loan Documents and the consummation by the Company Guarantor of
the transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of the Company and each Guarantor;
(c) Incumbency Certificate. Certificates of incumbency of the
Company and each Guarantor containing, and attesting to the genuineness of, the
signatures of those officers authorized to act on behalf of the Company and each
Guarantor in connection with the Loan Documents and the consummation by the
Company and each Guarantor of the transactions contemplated hereby, certified as
true and correct as of the Effective Date by a duly authorized officer of the
Company and each Guarantor;
(d) Notes. The Notes duly executed on behalf of the Company
for each Lender;
(e) Legal Opinions. The favorable written opinion of counsel
for the Company and the Guarantors in the form and substance acceptable to the
Agent;
(f) Fees. The fees required to be paid as of the Effective
Date under Section 2.3;
(g) Payment of Indebtedness. Simultaneously with the first
Advance hereunder, the Company shall have paid in full all indebtedness and
liabilities outstanding pursuant to the Loan Agreement between the Company, the
banks party thereto and NBD Bank, as agent, dated June 5,
15
1996, as amended, (the "Previous Loan Agreement"), and any other indebtedness
required by the Agent, and the Company hereby terminates any commitment to lend
under the Previous Loan Agreement;
(h) Guaranties. The Guaranties duly executed on behalf of each
Guarantor; and
(i) Appraisals. Appraisals requested by the Agent, in form and
substance and performed by an independent third party appraiser acceptable to
the Agent.
2.6 Further Conditions for Disbursement. The obligation of the
Lenders to make any Advance (including the first Advance), or any continuation
or conversion under Section 2.7 is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in Article IV
hereof shall be true and correct on and as of the date such Advance is made
(both before and after such Advance is made) as if such representations and
warranties were made on and as of such date;
(b) No Default or Event of Default shall exist or shall have
occurred and be continuing on the date such Advance is made (whether before or
after such Advance is made);
(c) In the case of any Letter of Credit Advance, the Company
shall have delivered to the Agent an application for the related Letter of
Credit and other related documentation requested by and acceptable to the Agent
appropriately completed and duly executed on behalf of the Company.
The Company shall be deemed to have made a representation and warranty to the
Lenders at the time of the making of, and the continuation or conversion of,
each Advance to the effects set forth in clauses (a) and (b) of this Section
2.6. For purposes of this Section 2.6 the representations and warranties
contained in Section 4.6 hereof shall be deemed made with respect to both the
financial statements referred to therein and the most recent financial
statements delivered pursuant to Section 5.1(d)(ii) and (iii).
2.7 Subsequent Elections as to Loans. The Company may elect (a) to
continue a Fixed Rate Loan, or a portion thereof, as a Fixed Rate Loan or (b) to
convert a Fixed Rate Loan, or a portion thereof, to a Loan of another type or
(c) to convert a Floating Rate Loan, or a portion thereof, to a Fixed Rate Loan
in each case by giving notice thereof to the Agent in substantially the form of
Exhibit C hereto not later than 10:00 a.m. Detroit time four Eurodollar Business
Days prior to the date any such continuation of or conversion to a Fixed Rate
Loan is to be effective and not later than 10:00 a.m. Detroit time one Business
Day prior to the date such continuation or conversion is to be effective in all
other cases, provided that an outstanding Fixed Rate Loan may only be converted
on the last day of the then current Interest Period with respect to such Loan,
and provided, further, if a continuation of a Loan as, or a conversion of a Loan
to, a Fixed Rate Loan is requested, such notice shall also specify the Interest
Period to be applicable thereto upon such continuation or conversion. The Agent,
not later than the Business Day next succeeding the day such notice is given,
shall provide notice of such election to the Lenders. If the Company shall not
timely deliver such a notice with respect to any outstanding Eurodollar Rate
Loan or Negotiated Rate Loan, the Company shall be deemed to have elected to
convert such Fixed Rate Loan to a Floating Rate Loan on the last day of the then
current Interest Period with respect to such Loan. If the Company shall not
timely deliver such
16
notice with respect to any outstanding Eurocurrency Rate Loan, the Company shall
be deemed to have elected to convert such Eurocurrency Rate Loan to a
Eurocurrency Rate Loan with an Interest Period of one month on the last day of
the then current Interest Period with respect to such Eurocurrency Rate Loan.
2.8 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
Eurodollar Rate Loan pursuant to Section 2.4, or a request for a continuation of
a Eurodollar Rate Loan as a Eurodollar Rate Loan of the then existing type, or a
request for a conversion of a Floating Rate Loan to a Eurodollar Rate Loan
pursuant to Section 2.7, (a) in the case of any Eurodollar Rate Loan, deposits
in Dollars for periods comparable to the Interest Period elected by the Company
are not available to any Lender in the London interbank market, or (b) the
Eurodollar Rate will not adequately and fairly reflect the cost to any Lender of
making, funding or maintaining the related Eurodollar Rate Loan, or (c) by
reason of national or international financial, political or economic conditions
or by reason of any applicable law, treaty or other international agreement,
rule or regulation (whether domestic or foreign) now or hereafter in effect, or
the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline, request or directive of such authority (whether or
not having the force of law), including without limitation exchange controls, it
is impracticable, unlawful or impossible for, or shall limit or impair the
ability of, (i) any Lender to make or fund the relevant Loan or to continue such
Loan as a Loan of the then existing type or to convert a Loan to such a Loan or
(ii) the Company to make or any Lender to receive any payment under this
Agreement at the place specified for payment hereunder or to freely convert any
amount paid into Dollars at market rates of exchange or to transfer any amount
paid or so converted to the address of its principal office specified in Section
8.2, then the Company shall not be entitled, so long as such circumstances
continue, to request a Loan of the affected type pursuant to Section 2.4 or a
continuation of or conversion to a Loan of the affected type pursuant to Section
2.7. In the event that such circumstances no longer exist, the Lenders shall
again consider requests for Loans of the affected type pursuant to Section 2.4,
and requests for continuations of and conversions to Loans of the affected type
pursuant to Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Loans; Etc. Except for
(a) Advances which exhaust the entire remaining amount of the Commitments, and
(b) payments required pursuant to Section 3.1(c) or Section 3.8, each Advance
and each continuation or conversion pursuant to Section 2.7 and each prepayment
thereof shall be in a minimum amount of $1,000,000 and in integral multiples of
$100,000 in case of each Fixed Rate Loan, in the minimum amount of $50,000 and
in integral multiples of $10,000 in the case of Floating Rate Loans and in the
minimum amount of $100,000 in the case of Letter of Credit Advances.
2.10 Extension of Termination Dates. The Termination Date may be
extended as set forth in this Section 2.10.
(a) Notwithstanding anything contained in this Agreement to
the contrary, not later than December 1 of each year, commencing March 1, 1997,
the Company may, by delivery of a duly completed extension request to the Agent
in the form of Schedule 2.10 hereto (an "Extension Request"), irrevocably
request that each Lender extend the Termination Date for a one year period.
(b) (i) The Agent shall, promptly after receipt of any such
Extension Request pursuant to subsection (a) above, notify each Lender by
providing them a copy of such Extension Request.
17
(ii) Each Lender shall, on or before the first January
15 following receipt of the Extension Request notify the Agent whether it
consents to the request of the Company set forth in such Extension Request, such
consent to be in the sole discretion of such Lender. If any Lender does not so
notify the Agent of its decision such Lender shall be deemed not to have
consented to such request of the Company.
(iii) The Agent shall promptly notify the Company which
Lenders have consented to such request (a "Consenting Lender"). If the Agent
does not so notify the Company on or before the first February 28 following such
Extension Request, the Agent shall be deemed to have notified the Company that
the Lenders have not consented to the Company's request.
(iv) Each Lender that elects not to extend the requested
Termination Date(s) or fails to so notify the Agent of such consent (a
"Non-Consenting Lender") hereby agrees that if any other Lender or financial
institution acceptable to the Company and the Agent offers to purchase such
Non-Consenting Lender's Commitment(s) for a purchase price equal to the sum of
all amounts then owing with respect to the Loans and all other amounts accrued
for the account of such Non-Consenting Lender and any amounts which may become
owing as a result of such purchase under Section 3.9, such Non-Consenting Lender
will, promptly or upon the existing Termination Date(s) for such Non-Consenting
Lender, as elected by the Company, assign, sell and transfer all of its right,
title and obligations with respect to the foregoing to such other Lender or
financial institution pursuant to and on the terms specified in the form of
Assignment and Acceptance attached hereto as Exhibit E.
(v) Notwithstanding anything herein to the contrary, the
Termination Date(s) will not be extended if the aggregate Commitments of each
Consenting Lender plus the additional Commitments of each Lender or other
financial institution replacing any Non-Consenting Lender pursuant to clause
(iv) above and agreeing to the Extension Request does not equal 100% of the then
existing aggregate Commitments. If the Termination Date(s) are extended
hereunder, it will not be extended for the Non-Consenting Lenders, and each
Non-Consenting Lender's Commitment(s) shall remain in effect and not be
terminated until the Termination Date(s) that is then in effect for it subject
to the purchase of such Non-Consenting Lender's Commitment pursuant to clause
(iv) above.
ARTICLE III.
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments and Prepayments.
(a) Unless earlier payment is required under this Agreement,
the Company shall pay to the Lenders on the Termination Date the entire
outstanding principal amount of the Advances.
(b) The Company may at any time and from time to time prepay
all or a portion of the Loans, without premium or penalty, provided that (i) the
Company may not prepay any portion of any Loan as to which an election for a
continuation of or a conversion to a Fixed Rate Loan is pending pursuant to
Section 2.4, and (ii) unless earlier payment is required under this Agreement,
any Fixed Rate Loan may only be prepaid on the last day of the then current
Interest Period with respect to such Loan.
18
Upon the giving of such notice, the aggregate principal amount of such Loan or
portion thereof so specified in such notice, together with such accrued interest
and other amounts, shall become due and payable on the specified prepayment
date.
(c) Anytime that the Dollar Equivalent of the aggregate
principal amount of the Advances exceeds the amount allowed by Section 2.1(b),
the Company shall prepay the Loans by an amount equal to such excess and, if a
deficiency still remains after all Loans have has been paid in full, the Company
will provide cash collateral in a manner and by written agreement satisfactory
to the Agent to secure the outstanding Letters of Credit in an amount equal to
the remaining deficiency.
3.2 Interest Payments. The Company shall pay interest to the Lenders
on the unpaid principal amount of each Loan, for the period commencing on the
date such Loan is made until such Loan is paid in full, on each Interest Payment
Date and at maturity (whether at stated maturity, by acceleration or otherwise),
and thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is a Floating Rate
Loan, the Floating Rate.
(b) During such periods that such Loan is a Eurodollar Rate
Loan, the Eurodollar Rate applicable to such Loan for each related Interest
Period.
(c) During such periods that such Loan is a Eurocurrency Rate
Loan, the Eurocurrency Rate applicable to such Loan for each related
Eurocurrency Interest Period.
(d) During such periods that such Loan is a Negotiated Rate
Loan, the Negotiated Rate applicable to such Loan for each related Interest
Period.
Notwithstanding the foregoing paragraphs (a), (b), (c) and (d), the Company
shall pay interest on demand by the Agent at the Overdue Rate on the outstanding
principal amount of any Loan and any other amount payable by the Company
hereunder (other than interest) at any time on or after an Event of Default if
required in writing by the Required Lenders.
3.3 Letter of Credit Reimbursement Payments. (a) (i) The Company
agrees to pay to the Lenders, on the day on which the Agent shall honor a draft
or other demand for payment presented or made under any Letter of Credit, an
amount equal to the amount paid by the Agent in respect of such draft or other
demand under such Letter of Credit and all expenses paid or incurred by the
Agent relative thereto. Unless the Company shall have made such payment to the
Lenders on such day, upon each such payment by the Agent, the Agent shall be
deemed to have disbursed to the Company, and the Company shall be deemed to have
elected to satisfy its reimbursement obligation by, a Loan bearing interest at
the Floating Rate for the account of the Lenders in an amount equal to the
amount so paid by the Agent in respect of such draft or other demand under such
Letter of Credit. Such Loan shall be disbursed notwithstanding any failure to
satisfy any conditions for disbursement of any Loan set forth in Article II
hereof and, to the extent of the Loan so disbursed, the reimbursement obligation
of the Company under this Section 3.3 shall be deemed satisfied; provided,
however, that nothing in this Section 3.3 shall be deemed to constitute a waiver
of any Default or Event of Default caused by the failure to the conditions for
disbursement or otherwise.
19
(ii) If, for any reason (including without limitation as
a result of the occurrence of an Event of Default with respect to the Company
pursuant to Section 6.1(h)), Floating Rate Loans may not be made by the Lenders
as described in Section 3.3(a)(i), then (A) the Company agrees that each
reimbursement amount not paid pursuant to the first sentence of Section
3.3(a)(i) shall bear interest, payable on demand by the Agent, at the interest
rate then applicable to Floating Rate Loans, and (B) effective on the date each
such Floating Rate Loan would otherwise have been made, each Lender severally
agrees that it shall unconditionally and irrevocably, without regard to the
occurrence of any Default or Event of Default, in lieu of deemed disbursement of
Loans, to the extent of such Lender's Commitment, purchase a participating
interest in each reimbursement amount. Each Lender will immediately transfer to
the Agent, in same day funds, the amount of its participation. Each Lender shall
share on a pro rata basis (calculated by reference to its Commitment) in any
interest which accrues thereon and in all repayments thereof. If and to the
extent that any Lender shall not have so made the amount of such participating
interest available to the Agent, such Lender and the Company severally agree to
pay to the Agent forthwith on demand such amount together with interest thereon,
for each day from the date of demand by the Agent until the date such amount is
paid to the Agent, at (x) in the case of the Company, the interest rate then
applicable to Floating Rate Loans and (y) in the case of such Lender, the
Federal Funds Rate.
(b) The reimbursement obligation of the Company under this
Section 3.3 shall be absolute, unconditional and irrevocable and shall remain in
full force and effect until all obligations of the Company to the Lenders
hereunder shall have been satisfied, and such obligations of the Company shall
not be affected, modified or impaired upon the happening of any event, including
without limitation, any of the following, whether or not with notice to, or the
consent of, the Company:
(i) Any lack of validity or enforceability of any Letter
of Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of Credit
Documents");
(ii) Any amendment, modification, waiver, consent, or
any substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff, defense or
other right which the Company may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any Persons or entities for whom any
such beneficiary or any such transferee may be acting), the Agent or any Lender
or any other Person or entity, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(iv) Any draft or other statement or document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(v) Payment by the Agent to the beneficiary under any
Letter of Credit against presentation of a documents which do not comply with
the terms of the Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit;
20
(vi) Any failure, omission, delay or lack on the part of
the Agent or any Lender or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred upon the Agent,
any Lender or any such party under this Agreement or any of the Letter of Credit
Documents, or any other acts or omissions on the part of the Agent, any Lender
or any such party;
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation of law
or otherwise of the Company from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the Company
against the Agent or any Lender. Nothing in this Section 3.3 shall limit the
liability, if any, of the Lenders to the Company pursuant to Section 8.5.
3.4 Payment Method. (a) All payments to be made by the Company
hereunder will be made to the Agent for the account of the Lenders in Dollars
and in immediately available, freely transferable, cleared funds not later than
1:00 p.m. at the principal office of the Agent specified in Section 8.2.
Payments received after 1:00 p.m. at the place for payment shall be deemed to be
payments made prior to 1:00 p.m. at the place for payment on the next succeeding
Business Day. The Company hereby authorizes the Agent to charge its account with
the Agent in order to cause timely payment of amounts due hereunder to be made
(subject to sufficient funds being available in such account for that purpose).
(b) At the time of making each such payment, the Company
shall, subject to the other terms and conditions of this Agreement, specify to
the Agent that Loan or other obligation of the Company hereunder to which such
payment is to be applied. In the event that the Company fails to so specify the
relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine in its sole
discretion.
(c) On the day such payments are deemed received, the Agent
shall remit to the Lenders their pro rata shares of such payments in immediately
available funds to the Lenders at their respective address in the United States
specified for notices pursuant to Section 8.2. In the case of payments of
principal and interest on any Borrowing, such pro rata shares shall be
determined with respect to each such Lender by the ratio which the outstanding
principal balance of its Loan included in such Borrowing bears to the
outstanding principal balance of the Loans of all of the Lenders included in
such Borrowing, and in the case of fees paid pursuant to Section 2.3 and other
amounts payable hereunder (other than the Agent's fees payable pursuant to
Section 2.3(d) and amounts payable to any Lender under Section 3.7), such pro
rata shares shall be determined with respect to each such Lender by the ratio
which the Commitment of such Lender bears to the Commitments of all the Lenders.
3.5 No Setoff or Deduction. All payments of principal of and
interest on the Loans and other amounts payable by the Company hereunder shall
be made by the Company without setoff or counterclaim, and, subject to the next
succeeding sentence, free and clear of, and without deduction or withholding
for, or on account of, any present or future taxes, levies, imposts, duties,
fees, assessments, or other charges of whatever nature, imposed by any
governmental authority, or by any department, agency or other political
subdivision or taxing authority. If any such taxes, levies, imposts, duties,
fees, assessments or
21
other charges are imposed, the Company will pay such additional amounts as may
be necessary so that payment of principal of and interest on the Loans and other
amounts payable hereunder, after withholding or deduction for or on account
thereof, will not be less than any amount provided to be paid hereunder and, in
any such case, the Company will furnish to the Lenders certified copies of all
tax receipts evidencing the payment of such amounts within 45 days after the
date any such payment is due pursuant to applicable law.
3.6 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period.
3.7 Additional Costs. (a) In the event that any applicable law,
treaty or other international agreement, rule or regulation (whether domestic or
foreign) now or hereafter in effect and whether or not presently applicable to
any Lender or the Agent, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Lender or the Agent with any guideline, request or
directive of any such authority (whether or not having the force of law), shall
(a) affect the basis of taxation of payments to any Lender or the Agent of any
amounts payable by the Company under this Agreement (other than taxes imposed on
the overall net income of any Lender or the Agent, by the jurisdiction, or by
any political subdivision or taxing authority of any such jurisdiction, in which
any Lender or the Agent, as the case may be, has its principal office), or (b)
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any Lender or the Agent, or (c) shall impose any other condition
with respect to this Agreement, or any of the Commitments, the Notes or the
Loans or any Letter of Credit, and the result of any of the foregoing is to
increase the cost to any Lender or the Agent, as the case may be, of making,
funding or maintaining any Fixed Rate Loan or any Letter of Credit or to reduce
the amount of any sum receivable by any Lender or the Agent, as the case may be,
thereon, then the Company shall pay to such Lender or the Agent, as the case may
be, from time to time, upon request by such Lender (with a copy of such request
to be provided to the Agent) or the Agent, additional amounts sufficient to
compensate such Lender or the Agent, as the case may be, for such increased cost
or reduced sum receivable to the extent, in the case of any Fixed Rate Loan,
such Lender or the Agent is not compensated therefor in the computation of the
interest rate applicable to such Fixed Rate Loan. A statement as to the amount
of such increased cost or reduced sum receivable, prepared in good faith and in
reasonable detail by such Lender or the Agent, as the case may be, and submitted
by such Lender or the Agent, as the case may be, to the Company, shall be
conclusive and binding for all purposes absent manifest error in computation.
(b) In the event that any applicable law, treaty or other
international agreement, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not presently applicable to any Lender or the
Agent, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Lender or the Agent with any guideline, request or directive
of any such authority (whether or not having the force of law), including any
risk-based capital guidelines, affects or would affect the amount of capital
22
required or expected to be maintained by such Lender or the Agent (or any
corporation controlling such Lender or the Agent) and such Lender or the Agent,
as the case may be, determines that the amount of such capital is increased by
or based upon the existence of such Lender's or the Agent's obligations
hereunder and such increase has the effect of reducing the rate of return on
such Lender's or the Agent's (or such controlling corporation's) capital as a
consequence of such obligations hereunder to a level below that which such
Lender or the Agent (or such controlling corporation) could have achieved but
for such circumstances (taking into consideration its policies with respect to
capital adequacy), then the Company shall pay to such Lender or the Agent, as
the case may be, from time to time, upon request by such Lender (with a copy of
such request to be provided to the Agent) or the Agent, additional amounts
sufficient to compensate such Lender or the Agent (or such controlling
corporation) for any increase in the amount of capital and reduced rate of
return which such Lender or the Agent reasonably determines to be allocable to
the existence of such Lender's or the Agent's obligations hereunder. A statement
as to the amount of such compensation, prepared in good faith and in reasonable
detail by such Lender or the Agent, as the case may be, and submitted by such
Lender or the Agent to the Company, shall be conclusive and binding for all
purposes absent manifest error in computation. Such Lender or the Agent may, at
its option, specify that such amounts be paid by way of an increase in the
commitment fees payable by the Company pursuant to Section 2.3(a).
3.8 Illegality and Impossibility. In the event that any applicable
law, treaty or other international agreement, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender, or any interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Lender with any guideline, request or directive of
such authority (whether or not having the force of law), including without
limitation exchange controls, shall make it unlawful or impossible for any
Lender to maintain any Loan under this Agreement, (b) shall make it
impracticable, unlawful or impossible for, or shall in any way limit or impair
ability of, the Company to make or any Lender to receive any payment under this
Agreement at the place specified for payment hereunder, the Company shall upon
receipt of notice thereof from such Lender, repay in full the then outstanding
principal amount of each Loan so affected, together with all accrued interest
thereon to the date of payment and all amounts owing to such Lender under
Section 3.8, (a) on the last day of the then current Interest Period applicable
to such Loan if such Lender may lawfully continue to maintain such Loan to such
day, or (b) immediately if such Lender may not continue to maintain such Loan to
such day.
3.9 Indemnification. If the Company makes any payment of principal
with respect to any Fixed Rate Loan on any other date than the last day of the
Interest Period applicable thereto (whether pursuant to Section 3.1(c), Section
3.7, Section 6.2 or otherwise), or if the Company fails to borrow any Fixed Rate
Loan after notice has been given to the Lenders in accordance with Section 2.4,
or if the Company fails to make any payment of principal or interest in respect
of a Fixed Rate Loan when due, the Company shall reimburse each Lender on demand
for any resulting loss or expense incurred by each such Lender, including
without limitation any loss incurred in obtaining, liquidating or employing
deposits from third parties, whether or not such Lender shall have funded or
committed to fund such Loan. A statement as to the amount of such loss or
expense, prepared in good faith and in reasonable detail by such Lender and
submitted by such Lender to the Company, shall be conclusive and binding for all
purposes absent manifest error in computation. Calculation of all amounts
payable to such Lender under this Section 3.9 shall be made as though such
Lender shall have actually funded or committed to fund the relevant Fixed Rate
Loan through the purchase of an underlying deposit in an amount equal to the
amount of such Loan in the relevant market and having a maturity comparable to
the related Interest Period; provided, however, that such Lender
23
may fund any Fixed Rate Loan in any manner it sees fit and the foregoing
assumption shall be utilized only for the purpose of calculation of amounts
payable under this Section 3.9.
3.10 Substitution of Lender. If (i) the obligation of any Lender to
make or maintain Fixed Rate Loans has been suspended pursuant to Section 3.8
when not all Lenders' obligations have been suspended (ii) any Lender has
demanded compensation under Section 3.7 when not all Lender's have or (iii) any
Lender is a Defaulting Lender, the Company shall have the right, if no Default
or Event of Default then exists, to replace such Lender (a "Replaced Lender")
with one or more other lenders (collectively, the "Replacement Lender")
acceptable to the Agent, provided that (x) at the time of any replacement
pursuant to this Section 3.10, the Replacement Lender shall enter into one or
more Assignment and Acceptances, pursuant to which the Replacement Lender shall
acquire the Commitments and outstanding Advances and other obligations of the
Replaced Lender and, in connection therewith, shall pay to the Replaced Lender
in respect thereof an amount equal to the sum of (A) the amount of principal of,
and all accrued interest on, all outstanding Loans of the Replaced Lender, (B)
the amount of all accrued, but theretofore unpaid, fees owing to the Replaced
Lender under Section 2.3 and (C) the amount which would be payable by the
Company to the Replaced Lender pursuant to Section 3.9 or 3.11 if the Borrowers
prepaid at the time of such replacement all of the Loans of such Replaced Lender
outstanding at such time and (y) all obligations of the Company then owing to
the Replaced Lender (other than those specifically described in clause (x) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Lender concurrently with
such replacement. Upon the execution of the respective Assignment and
Acceptances, the payment of amounts referred to in clauses (x) and (y) above
and, if so requested by the Replacement Lender, delivery to the Replacement
Lender of the appropriate Note or Notes executed by the Company, the Replacement
Lender shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder. The provisions of this Agreement (including
without limitation Sections 3.9 and 8.5) shall continue to govern the rights and
obligations of a Replaced Lender with respect to any Loans made or any other
actions taken by such lender while it was a Lender. Nothing herein shall release
any Defaulting Lender from any obligation it may have to the Company, the Agent
or any other Lender. Each Lender agrees to take such actions, at the Company's
expense, as may be reasonably necessary to effect the foregoing if it shall
become a Replaced Lender.
3.11 Applicable Lending Installation. Each Lender and the Agent may
make and books its Loans and, in the case of the Agent, issue Letters of Credit,
at any Applicable Lending Installation(s) selected by such Lender or the Agent,
as the case may be, and each Lender and the Agent may change its Applicable
Lending Installation(s) from time to time. Each Lender may, by written notice to
the Agent and the applicable Borrower, designate one or more Applicable Lending
Installations which are to make and book Loans and for whose account Loan
payments are to be made. The Agent may, by written notice to the applicable
Borrower, designate one or more Applicable Lending Installations which are to
issue and book Letters of Credit and for whose accounts Loan payments and Letter
of Credit reimbursements are to be made and through which its functions are to
be performed. All terms of this Agreement shall apply to any such Applicable
Lending Installation(s) and the Notes shall be deemed held by each Lender and
the Agent, as the case may be, for the benefit of such Applicable Lending
Installation.
ARTICLE IV.
24
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders and the Agent
that:
4.1 Corporate Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio, and is duly qualified to do business, and is in good standing, in all
additional jurisdictions where such qualification is necessary under applicable
law, except where the failure to be so qualified would not have a Material
Adverse Effect. The Company and each Guarantor has all requisite corporate power
to own or lease the properties used in its business and to carry on its business
as now being conducted and as proposed to be conducted, and to execute and
deliver the Loan Documents to which it is a party and to engage in the
transactions contemplated by the Loan Documents.
4.2 Corporate Authority. The execution, delivery and performance by
the Company and each Guarantor of the Loan Documents have been duly authorized
by all necessary corporate action and are not in contravention of any law, rule
or regulation, or any judgment, decree, writ, injunction order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's or
any Guarantor's charter or by-laws, or of any contract or undertaking to which
the Company or any Guarantor is a party or by which the Company or any Guarantor
or their respective property may be bound or affected or result in the
imposition of any Lien except for Permitted Liens.
4.3 Binding Effect. Each Loan Document to which it is a party is the
legal, valid and binding obligation of the Company and each Guarantor
enforceable against the Company and each Guarantor in accordance with their
respective terms.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the
corporate name, jurisdiction of incorporation and ownership of each Subsidiary
of the Company. Each such Subsidiary and each corporation becoming a Subsidiary
of the Company after the date hereof is and will be a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is and will be duly qualified to do business
in each additional jurisdiction where such qualification is or may be necessary
under applicable law, except where the failure to be so qualified would not have
a Material Adverse Effect. Each Subsidiary of the Company has and will have all
requisite corporate power to own or lease the properties used in its business
and to carry on its business as now being conducted and as proposed to be
conducted. All outstanding shares of capital stock of each class of each
Subsidiary of the Company have been and will be validly issued and are and will
be fully paid and nonassessable and, except as otherwise indicated in Schedule
4.4 hereto or disclosed in writing to the Lender from time to time, are and will
be owned, beneficially and of record, by the Company or another Subsidiary of
the Company free and clear of any Liens, except for Permitted Liens.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is
no action, suit or proceeding pending or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator, which
if adversely decided might result, either individually or collectively, in any
Material Adverse Effect and, to the best of the Company's knowledge, there is no
basis for any such action, suit or proceeding.
25
4.6 Financial Condition. The Consolidated balance sheet of the
Company and its Subsidiaries and the Consolidated statements of income, and cash
flow of the Company and its Subsidiaries for the fiscal year ended December 31,
1997 and reported on by Ernst & Young LLP, independent certified public
accountants, and the interim Consolidated balance sheet and interim Consolidated
statements of income, and cash flow of the Company and its Subsidiaries, as of
or for the three month period ended on March 31, 1998, copies of which have been
furnished to the Lenders, fairly present, and the financial statements of the
Company and its Subsidiaries delivered pursuant to Section 5.1(d) will fairly
present, the Consolidated financial position of the Company and its Subsidiaries
as at the respective dates thereof, and the Consolidated results of the
operations of the Company and its Subsidiaries for the respective periods
indicated, all in accordance with Generally Accepted Accounting Principles
consistently applied (subject, in the case of said interim statements, to
year-end audit adjustments and the absence of footnotes). There has been no
Material Adverse Effect since December 31, 1997. There is no material Contingent
Liability of the Company or any of its Subsidiaries that is not reflected in
such financial statements or in the notes thereto. All Contingent Liabilities of
the Company and its Subsidiaries as of the Effective Date are listed on Schedule
4.6 hereto.
4.7 Use of Loans. The Company will use the proceeds of the Loans to
pay off the indebtedness described in Section 2.5(g), to make acquisitions, to
purchase aircraft and other equipment and for working capital and other general
corporate purposes. Neither the Company nor any of its Subsidiaries extends or
maintains, in the ordinary course of business, credit for the purposes, whether
immediate, incidental, or ultimate, of buying or carrying margin stock (within
the meaning of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Loan will be used for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying any
such margin stock or maintaining or extending credit to others for such purpose.
After applying the proceeds of each Loan, such margin stock will not constitute
more than 25% of the value of the assets (either of the Company alone or of the
Company and its Subsidiaries on a Consolidated basis) that are subject to any
provisions of this Agreement that may cause the Advances to be deemed secured,
directly or indirectly, by margin stock.
4.8 Consents, Etc. No consent, approval or authorization of or
declaration, registration or filing with any governmental authority or any
nongovernmental Person or entity, including without limitation any creditor,
lessor or stockholder of the Company or any of its Subsidiaries, is required on
the part of the Company in connection with the execution, delivery and
performance of the Loan Documents or the transactions contemplated hereby or as
a condition to the legality, validity or enforceability of the Loan Documents.
4.9 Taxes. The Company and its Subsidiaries have filed all tax
returns (federal, state and local) required to be filed and have paid all taxes
shown thereto to be due, including interest and penalties, or have established
adequate financial reserves on their respective books and records for payment
thereof. Neither the Company nor any of its Subsidiaries knows of any actual or
proposed tax assessment or any basis therefor, and no extension of time for the
assessment of deficiencies in any federal or state tax has been granted by the
Company or any Subsidiary.
4.10 Title to Properties. Except as otherwise disclosed in the
latest year end balance sheet delivered pursuant to Section 4.6 or 5.1(d) of
this Agreement, the Company or one or more of its Subsidiaries have good and
marketable fee simple title to all of the real property, and a valid and
indefeasible ownership interest in all of the other properties and assets
reflected in said balance sheet or
26
subsequently acquired by the Company or any Subsidiary. All of such properties
and assets are free and clear of any Lien, except for Permitted Liens.
4.11 ERISA. The Company, its Subsidiaries, their ERISA affiliates
and their respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan. No Prohibited Transaction and no Reportable Event has occurred with
respect to any such Plan. None of the Company, any of its Subsidiaries or any of
their ERISA Affiliates is an employer with respect to any Multiemployer Plan.
The Company, its Subsidiaries and their ERISA Affiliates have met the minimum
funding requirements under ERISA and the Code with respect to each of their
respective Plans, if any, and have not incurred any liability to the PBGC of any
Plan. The execution, delivery and performance of this Agreement the Notes does
not constitute a Prohibited Transaction. There is no material unfunded benefit
liability, determined in accordance with Section 4001(a)(18) of ERISA, with
respect to any Plan of the Company, its Subsidiaries or their ERISA Affiliates.
4.12 Environmental and Safety Matters. The Company and each
Subsidiary is in substantial compliance with all material federal, state and
local laws, ordinances and regulations relating to safety and industrial hygiene
or to the environmental condition, including without limitation all
Environmental Laws in jurisdictions in which the Company or any Subsidiary owns
or operates, or has owned or operated, a facility or site, or arranges or has
arranged for disposal or treatment of hazardous substances, solid waste, or
other wastes, accepts or has accepted for transport any hazardous substances,
solid wastes or other wastes or holds or has held any interest in real property
or otherwise. Except as disclosed on Schedule 4.12, no demand, claim, notice,
suit, suit in equity, action, administrative action, investigation or inquiry
whether brought by any governmental authority, private Person or entity or
otherwise, arising under, relating to or in connection with any Environmental
laws is pending or threatened against the Company or any of its Subsidiaries,
any real property in which the Company or any such Subsidiary holds or has held
an interest or any past or present operation of the Company or any Subsidiary.
Neither the Company nor any of its Subsidiaries (a) is the subject of any
federal or state investigation evaluating whether any remedial action is needed
to respond to a release of any toxic substances, radioactive materials,
hazardous wastes or related materials into the environment, (b) has received any
notices of any toxic substances, radioactive materials, hazardous waste or
related materials in, or upon any of its properties in violation of any
Environmental Laws, or (c) knows of any basis for such investigation, notice or
violation, except as disclosed on Schedule 4.12 hereto, and as to such matters
disclosed on such Schedule, none will have a Material Adverse Effect. Except as
disclosed on Schedule 4.12, to the best of the knowledge of the Company after
due inquiry, no release, threatened release or disposal of hazardous waste,
solid waste or other wastes is occurring or has occurred on, under or to any
real property in which the Company or any of its Subsidiaries holds any interest
or performs any of its operations, in violation of any Environmental Law.
4.13 No Default. Neither the Company nor any Subsidiary is in
default or has received any written notice of default under or with respect to
any of its Contractual Obligations in any respect which could have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.14 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation applicable to the Company or any Subsidiary could have a
Material Adverse Effect on the financial condition or business of the Company
and its Subsidiaries.
27
4.15 FAA Certifications. The Company is, and at all times will be a
"Citizen of the United States" as defined in Section 40102(a)(15) of 490 U.S.C.,
an air carrier as to which the provisions of Section 1110 of the United States
Bankruptcy Code apply, and an air carrier certificated under Sections 41102(a)
and 44705 of 49 U.S.C.
4.16 Airworthiness Certificates. An airworthiness certificate has
been duly issued for each of the aircraft of the Company, all such airworthiness
certificates are in full force and effect, each aircraft is in such operating
condition, except for such repairs and maintenance in the ordinary course of
business, as may be required to permit each such aircraft to be utilized in
commercial charter operations and otherwise in material compliance with all
applicable laws and regulations.
ARTICLE V.
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that,
until the Termination Date and thereafter until payment in full of the principal
of and accrued interest on the Notes and the payment and performance of all
other obligations and liabilities of the Company under the Loan Documents,
unless the Required Lenders shall otherwise consent in writing, it shall, and
shall cause each of its Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and its qualification as a foreign corporation in
good standing in each jurisdiction in which such qualifications is necessary
under applicable law, except where the failure to be so qualified would not have
a Material Adverse Effect and the rights, licenses, permits (including those
required under Environmental Laws and those required by the FAA), franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
businesses; and defend all of the foregoing against all claims, actions,
demands, suits or proceedings at law or in equity or by or before any
governmental instrumentality or other agency or regulatory authority.
(b) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders of any governmental
authority, whether federal, state, local or foreign (including without
limitation ERISA, the Code, FAA regulations and Environmental Laws), in effect
from time to time, except where the failure to so comply would not have a
Material Adverse Effect; and pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income, revenues or property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, might give rise to Liens upon such properties or
any portion thereof, except to the extent that payment of any of the foregoing
is then being contested in good faith by appropriate legal proceedings and with
respect to which adequate financial reserves have been established on the books
and records of the Company or such Subsidiary.
(c) Maintenance of Properties; Insurance. Maintain, preserve
and protect all property that is material to the conduct of the business, as
such business exists from time to time, of the Company or any of its
Subsidiaries and keep such property in good repair, working order and condition
and from time to time make, or cause to be made all needful and proper repairs,
renewals, additions, improvements and replacements thereto necessary in order
that the business carried on in connection
28
therewith may be properly conducted at all times in accordance with customary
and prudent business practices for similar businesses; and maintain in full
force and effect insurance with responsible and reputable insurance companies or
associations in such amounts, on such terms and covering such risks, including
fire and other risks insured against by extended coverage, with such deductibles
and self insurance amounts as is usually carried by companies engaged in similar
businesses and of similar sizes and owning similar properties similarly situated
and maintain in full force and effect public liability insurance, insurance
against claims for Personal injury or death or property damage occurring in
connection with any of its activities or any of any properties owned, occupied
or controlled by it, in such amount as it shall reasonably deem necessary, and
maintain such other insurance as may be required by law or as may be reasonably
requested by the Required Lenders for purposes of assuring compliance with this
Section 5.1(c).
(d) Reporting Requirements. Furnish to the Lenders and the
Agent the following:
(i) Promptly and in any event within three calendar days
after becoming aware of the occurrence of (A) any Event of Default or any event
or condition which, with notice or lapse of time, or both, would constitute an
Event of Default, (B) the commencement of any material litigation against, by or
affecting the Company or any of its Subsidiaries, and any material developments
therein, (C) entering into any material contract or undertaking that is not
entered into in the ordinary course of business, (D) any formal investigation or
enforcement action by the FAA, or by (E) any development in the business or
affairs of the Company or any of its Subsidiaries which has resulted in or which
is likely in the reasonable judgment of the Company, to result in a Material
Adverse Effect, a statement of the chief financial officer or controller of the
Company setting forth details of such Event of Default or such event or
condition or such litigation and the action which the Company or such
Subsidiary, as the case may be, has taken and proposes to take with respect
thereto;
(ii) As soon as available and in any event within 45
days after the end of each of the first three fiscal quarters of each fiscal
year of the Company, the Consolidated and consolidating balance sheet of the
Company and its Subsidiaries as of the end of such quarter, and the related
Consolidated and consolidating statements of income for the period commencing at
the end of the previous fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding date or period of the preceding fiscal year, all in reasonable
detail and duly certified (subject to year-end audit adjustments) by the chief
financial officer or controller of the Company as having been prepared in
accordance with Generally Accepted Accounting Principles, together with a
certificate of the chief financial officer or controller of the Company stating
(A) that no Event of Default or Default has occurred and is continuing or, if an
Event of Default or Default has occurred and is continuing, a statement setting
forth the details thereof and the action which the Company has taken and
proposes to take with respect thereto, (B) that a computation (which computation
shall accompany such certificate and shall be in reasonable detail) showing
compliance with Section 5.2(a), (b) and (c) hereof is in conformity with the
terms of this Agreement, and (C) that there have been no substantive changes in
Schedule 4.12;
(iii) As soon as available and in any event within 90
days after the end of each fiscal year of the Company, a copy of the
Consolidated and consolidating balance sheet of the Company and its Subsidiaries
as of the end of such fiscal year and the related Consolidated and consolidating
statements of income and the Consolidated statement of cash flow of the Company
and its
29
Subsidiaries for such fiscal year, with a customary audit report of Ernst &
Young LLP, or other independent certified public accountants selected by the
Company and acceptable to the Required Lenders, without qualifications
unacceptable to the Required Lenders, together with a certificate of such
accountants stating that they have reviewed this Agreement and stating further
whether, in the course of their review of such financial statements, they have
become aware of any Event of Default or any Default, and together with a
computation by the Company (which computation shall accompany such certificate
and shall be in reasonable detail) showing compliance with Section 5.2 (a), (b)
and (c) hereof is in conformity with the terms of this Agreement;
(iv) Promptly after the sending or filing thereof,
copies of all reports, proxy statements and financial statements which the
Company or any of its Subsidiaries sends to or files with any of their
respective security holders or any securities exchange or the Securities and
Exchange Commission or any successor agency thereof;
(v) Promptly and in any event within 10 calendar days
after receiving or becoming aware thereof (A) a copy of any notice of intent to
terminate any Plan of the Company, its Subsidiaries or any ERISA Affiliate filed
with the PBGC, (B) a statement of the chief financial officer or controller of
the Company setting forth the details of the occurrence of any Reportable Event
with respect to any such Plan, (C) a copy of any notice that the Company, any of
its Subsidiaries or any ERISA Affiliate may receive from the PBGC relating to
the intention of the PBGC to terminate any such Plan or to appoint a trustee to
administer any such Plan, or (D) a copy of any notice of failure to make a
required installment or other payment within the meaning of Section 412(n) of
the Code or Section 302(f) of ERISA with respect to any such Plan;
(vi) Promptly and in any event within ten days after
receipt, a copy of any management letter or comparable analysis prepared by the
auditors for the Company or any of its Subsidiaries;
(vii) Promptly upon the request of the Agent, current
appraisals, in form satisfactory to the Agent and performed by an independent
third party appraiser acceptable to the Agent, of such aircraft of the Company
and its Subsidiaries as requested by the Agent; and
(viii) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of the
Company or any of it Subsidiaries as any Lender or the Agent may from time to
time reasonably request.
(e) Accounting; Access to Records, Books, Etc. Maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in accordance
with Generally Accepted Accounting Principles and to comply with the
requirements of this Agreement and, at any reasonable time and from time to
time, permit any Lender or the Agent or any agents or representatives thereof to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Company and its Subsidiaries, and to
discuss the affairs, finances and accounts of the Company and its Subsidiaries
with their respective directors, officers, employees and independent auditors,
and by this provision the Company does hereby authorize such Persons to discuss
such affairs, finances and accounts with any Lender or the Agent.
30
(f) Further Assurances. Will execute and deliver, or cause to
be executed and delivered within 30 days after request therefor by the Required
Lenders or the Agent, a Guaranty for each Subsidiary of the Company, whether now
existing or hereafter arising or formed, and all further instruments and
documents and take all further action that may be necessary or desirable, or
that the Agent may request, in order to give effect to, and to aid in the
exercise and enforcement of the rights and remedies of the Lenders and the Agent
under, the Loan Documents. In addition, the Company agrees to deliver to the
Agent and the Lenders from time to time upon the acquisition or creation of any
Subsidiary not listed in Schedule 4.4 hereto supplements to Schedule 4.4 such
that such Schedule, together with such supplements, shall at all times
accurately reflect the information provided for thereon.
5.2 Negative Covenants. Until the Termination Date and thereafter
until payment in full of the principal of and accrued interest on the Notes and
the payment and performance of all other obligations and liabilities of the
Company under the Loan Documents, the Company agrees that, unless the Required
Lenders shall otherwise consent in writing it shall not, and shall not permit
any of its Subsidiaries to:
(a) Net Worth. Permit or suffer the Consolidated Net Worth of
the Company and its Subsidiaries at any time to be less than the sum of (i)
$70,000,000, plus (ii) 50% of the Consolidated net income of the Company and its
Subsidiaries, commencing with the fiscal year ending December 31, 1998, provided
that, if such net income is negative in any fiscal year of the Company, the
amount added for such fiscal year shall be zero and such amount shall not reduce
the amount added pursuant to any other fiscal year.
(b) Funded Debt Ratio. Permit or suffer the Funded Debt Ratio
to exceed 2.50 to 1.00 at any time.
(c) Cash Flow Coverage Ratio. Permit or suffer the Cash Flow
Coverage Ratio to be less than 1.20 to 1.00 as of the end of any fiscal quarter
thereafter.
(d) Liens. Create, incur or suffer to exist any Lien on any of
the assets, rights, revenues or property, real, Personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which adequate
financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA)
created and maintained in the ordinary course of business which do not secure
obligations for borrowed money and are not material in the aggregate and which
would not have a Material Adverse Effect and which constitute (A) pledges or
deposits under worker's compensation laws, unemployment insurance laws or
similar legislation, (B) good faith deposits in connection with bids, tenders,
contracts or leases to which the Company or any of its Subsidiaries is a party
for a purpose other than borrowing money or obtaining credit, including rent
security deposits, (C) Liens imposed by law, such as those of carriers,
warehousemen and mechanics, if payment of the obligation secured thereby is not
yet due, (D) Liens securing taxes, assessments or other governmental charges or
levies not yet subject to penalties for nonpayment, except to the extent such
Liens
31
arise from nonpayment of any of such taxes or other assessments and governmental
charges if such payment is then being contested in good faith by appropriate
legal proceedings and with respect to which adequate financial reserves have
been established on the books and records of the Company, and (E) pledges or
deposits to secure public or statutory obligations of the Company or any of its
Subsidiaries, or surety, customs or appeal bonds to which the Company or any of
its Subsidiaries is a party;
(iii) Liens affecting real property which constitute
minor survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real property,
provided that all of the foregoing, in the aggregate, do not at any time
materially detract from the value of said properties or materially impair their
use in the operation of the businesses of the Company or any of its
Subsidiaries;
(iv) Each Lien existing on the Effective Date and
described in Schedule 5.2(d) hereof, but no extension or renewal thereof shall
be permitted; and
(v) Any Lien created to secure payment of a portion of
the purchase price of, or existing at the time of acquisition of, any tangible
fixed asset acquired by the Company or any of its Subsidiaries may be created or
suffered to exist upon such fixed asset if the outstanding principal amount of
the Indebtedness secured by such Lien does not at any time exceed the purchase
price paid by the Company or such Subsidiary for such fixed asset and the
aggregate principal amount of all Indebtedness secured by such Liens does not
exceed $250,000; provided that such Lien does not encumber any other asset at
any time owned by the Company or such Subsidiary, and provided, further, that
not more than one such Lien shall encumber such fixed asset at any one time.
(e) Acquisitions; Merger; Etc. Purchase or otherwise acquire,
whether in one or a series of transactions, all or a substantial portion of the
business, assets, rights, revenues or property, real, Personal, or mixed,
tangible or intangible, of any Person, or all or a substantial portion of the
capital stock of or other ownership interest in any other Person; nor merge or
consolidate or amalgamate with any other Person or take any other action having
a similar effect, nor enter into any joint venture or similar arrangement with
any other Person, provided, however, that this Section 5.2(e) shall not prohibit
any of the foregoing transactions described in this Section 5.2(e) if each of
the following conditions is satisfied: (i) the Company shall be the surviving or
continuing corporation thereof, (ii) immediately after such merger or
acquisition or other transaction, no Default or Event of Default shall exist or
shall have occurred and be continuing and, prior to the consummation of such
merger or acquisition or other transaction, the Company shall have provided to
the Lenders an opinion of counsel and a certificate of the chief financial
officer or controller of the Company (attaching computations to demonstrate
compliance with all financial covenants hereunder after giving effect to such
merger or acquisition and attaching such pro forma financial statements as may
be reasonably requested by the Agent), each stating that such merger or
acquisition or other transaction complies with this Section 5.2(e) and that any
other conditions under this Agreement relating to such transaction have been
satisfied, (iii) the board of directors of the corporation with which the
Company or its Subsidiaries is involved in such transaction has approved the
transaction, (iv) immediately after the consummation of such merger or
acquisition or other transaction, the Company shall be able to borrow, but has
not borrowed, at least $10,000,000 in Advances under Section 2.1(a), on a pro
forma basis acceptable to the Agent, and (v) if any such merger, acquisition or
other transaction involves aggregate consideration paid
32
or payable in excess of $10,000,000, the Required Lenders shall have approved in
writing such merger, acquisition or other transaction.
(f) Disposition of Assets; Etc. Sell, lease, license,
transfer, assign or otherwise dispose of any its business, assets, rights,
revenues or property, real, Personal or mixed, tangible or intangible, whether
in one or a series of transactions, other than inventory sold in the ordinary
course of business upon customary credit terms and sales of scrap or obsolete
material or equipment, provided, however that this Section 5.2(f) shall not
prohibit any such sale, lease, license, transfer, assignment or other
disposition if the aggregate book value (disregarding any write-downs of such
book value other than ordinary depreciation and amortization) of all of the
business, assets, rights, revenues and property disposed of after the date of
this Agreement shall be less than $2,500,000 in the aggregate for any calendar
year and if, immediately after such transaction, no Default or Event of Default
shall exist or shall have occurred and be continuing.
(g) Dividends and Other Restricted Payments. Make, pay,
declare or authorize any dividend, payment or other distribution in respect of
any class of its capital stock or any dividend, payment or distribution in
connection with the redemption, purchase, retirement or other acquisition,
directly or indirectly, of any shares of its capital stock other than such
dividends, payments or other distributions to the extent payable solely in
shares of the capital stock of the Company, if a Default or Event of Default
shall exist or shall have occurred and be continuing, or would be caused
thereby. For purposes of this Section 5.2(g), "capital stock" shall include
capital stock and any securities exchangeable for or convertible into capital
stock and any warrants, rights or other options to purchase or otherwise acquire
capital stock or such securities.
(h) Loans and Advances. Make any loan or advance of any of its
funds or property or make any other extension of credit to any Person other than
(i) advances by the Company to any of its Subsidiaries, (ii) advances by any
Subsidiary of the Company to the Company or to another Subsidiary of the
Company, and (iii) extensions of trade credit made in the ordinary course of
business on customary credit terms and commission, travel and similar advances
made to officers and employees in the ordinary course of business.
(i) Indebtedness. Create, incur, assume or in any manner
become liable in respect of, or suffer to exist, any Indebtedness other than:
(i) The Advances;
(ii) The Indebtedness described in Schedule 5.2(i)
hereto, but no increase in the amount thereof or extension thereof shall be
permitted;
(iii) Indebtedness in aggregate outstanding principal
amount not exceeding $250,000 which is secured by one or more liens permitted by
Section 5.2(d)(v) hereof;
(iv) Indebtedness of any Subsidiary of the Company owing
to the Company or to any other Subsidiary of the Company;
33
(v) Other Indebtedness of the Company or any of its
Subsidiaries owing to NBD Bank or its Affiliates; and
(vi) Other Indebtedness of the Company in aggregate
amount not to exceed $50,000,000 and subject to such covenants, defaults, and
other terms and conditions reasonably satisfactory to the Agent; provided that,
prior to incurring any such Indebtedness, the Company shall demonstrate to the
satisfaction of the Agent that it will be in compliance with all covenants and
other terms and conditions contained in this Agreement and that no Default or
Event of Default exists or would be caused thereby.
(j) Nature of Business. Make any substantial change in the
nature of its business from that engaged in on the date of this Agreement or
engage in any other businesses other than those in which it is engaged on the
date of this Agreement.
(k) Transactions with Affiliates. Enter into, become a party
to, or become liable in respect of, any contract or undertaking with any
Affiliate except in the ordinary course of business and on terms not less
favorable to the Company or such Subsidiary than those which could be obtained
if such contract or undertaking were an arms length transaction with a Person
other than an Affiliate.
(l) Additional Covenants. Additional Covenants. If at any time
the Company or any Subsidiary shall enter into or be a party to any instrument
or agreement, including all such instruments or agreements in existence as of
the date hereof and all such instruments or agreements entered into after the
date hereof, relating to or amending any terms or conditions applicable to any
of its Indebtedness which includes covenants, terms, conditions or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Company
shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent
shall request, upon notice to the Company, the Agent and the Lenders shall enter
into an amendment to this Agreement or an additional agreement (as the Agent may
request), providing for substantially the same covenants, terms, conditions and
defaults as those provided for in such instrument or agreement to the extent
required and as may be selected by the Agent.
ARTICLE VI.
DEFAULT
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived pursuant to Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due any
principal of the Advances or, within five days after becoming due, shall fail to
pay any interest on the Notes or any fees or any other amount payable hereunder;
or
(b) Misrepresentation. Any representation or warranty made by
the Company in Article IV hereof or in any other certificate, report, financial
statement or other document furnished by or on behalf of the Company in
connection with this Agreement, shall prove to have been incorrect in any
material respect when made or deemed made; or
34
(c) Certain Covenants. The Company shall fail to perform or
observe any term, covenant or agreement contained in Article V hereof, and any
such failure shall remain unremedied for 10 calendar days after notice thereof
shall have been given to the Company by the Agent; or
(d) Other Defaults. The Company or any Guarantor shall fail to
perform or observe any other term, covenant or agreement contained in any Loan
Document, and any such failure shall remain unremedied for 15 calendar days
after notice thereof shall have been given to the Company by the Agent; or
(e) Cross Default. The Company or any of its Subsidiaries
shall fail to pay any part of the principal of, the premium, if any, or the
interest on, or any other payment of money due under any of its Indebtedness
(other than Indebtedness hereunder), beyond any period of grace provided with
respect thereto, which individually or together with other such Indebtedness as
to which any such failure exists has an aggregate outstanding principal amount
in excess of $2,000,000; or if the Company or any of its Subsidiaries fails to
perform or observe any other term, covenant or agreement contained in any
agreement, document or instrument evidencing or securing any such Indebtedness
having such aggregate outstanding principal amount, or under which any such
Indebtedness was issued or created, beyond any period of grace, if any, provided
with respect thereto if the effect of such failure is to cause or permit the
holders of such Indebtedness (or trustee on behalf of such holders) to cause
payment in respect of such Indebtedness to become due prior to its due date; or
(f) Judgments. One or more Judgments or orders for the payment
of money in an aggregate amount of $2,000,000 shall be rendered against the
Company or any of its Subsidiaries, or any other judgment or order (whether or
not for the-payment of money) shall be rendered against or shall affect the
Company or any of its Subsidiaries which causes or could cause a Material
Adverse Effect, and either (i) such judgment or order shall have remained
unsatisfied and the Company or such Subsidiary shall not have taken action
necessary to stay enforcement thereof by reason of pending appeal or otherwise,
prior to the expiration of the applicable period of limitations for taking such
action or, if such action shall have been taken, a final order denying such stay
shall have been rendered, or (ii) enforcement proceedings shall have been
commenced by any creditor upon any such judgment or order; or
(g) ERISA. The occurrence of a Reportable Event that results
in or could result in liability of the Company, any Subsidiary of the Company or
their ERISA Affiliates to the PBGC or to any Plan and such Reportable Event is
not corrected within sixty (60) days after the occurrence thereof; or the
occurrence of any Reportable Event which could constitute grounds for
termination of any Plan of the Company, its Subsidiaries or their ERISA
Affiliates by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer any such Plan and such Reportable
Event is not corrected within sixty (60) days after the occurrence thereof; or
the filing by the Company, any Subsidiary of the Company or any of their ERISA
Affiliates of a notice of intent to terminate a Plan or the institution of other
proceedings to terminate a Plan; or the Company, any Subsidiary of the Company
or any of their ERISA Affiliates shall fail to pay when due any liability to the
PBGC or to a Plan; or the PBGC shall have instituted proceedings to terminate,
or to cause a trustee to be appointed to administer, any Plan of the Company,
its Subsidiaries or their ERISA Affiliates; or any Person engages in a
Prohibited Transaction with respect to any Plan which results in or could result
in liability of the Company, any Subsidiary of the Company, any of their ERISA
Affiliates, any Plan of the Company, its Subsidiaries or their ERISA
35
Affiliates or fiduciary of any such Plan; or failure by the Company, any
Subsidiary of the Company or any of their ERISA Affiliates to make a required
installment or other payment to any Plan within the meaning of Section 302(f) of
ERISA or Section 412(n) of the Code that results in or could result in liability
of the Company, any Subsidiary of the Company or any of their ERISA Affiliates
to the PBGC or any Plan; or the withdrawal of the Company, any of its
Subsidiaries or any of their ERISA Affiliates from a Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a) (2) of
ERISA; or the Company, any of its Subsidiaries or any of their ERISA Affiliates
becomes an employer with respect to any Multiemployer Plan without the prior
written consent of the Required Lenders; or
(h) Insolvency, Etc. The Company or any of its Subsidiaries
shall be dissolved or liquidated (or any judgment, order or decree therefor
shall be entered), or shall generally not pay its debts as they become due, or
shall admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors, or shall institute, or there
shall be instituted against the Company or any of its Subsidiaries, any
proceeding or case seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors or seeking the
entry of an order for relief, or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
assets, rights, revenues or property, and, if such proceeding is instituted
against the Company or such Subsidiary and is being contested by the Company or
such Subsidiary, as the case may be, in good faith by appropriate proceedings,
such proceeding shall remain undismissed or unstayed for a period of 60 days: or
the Company or such Subsidiary shall take any action (corporate or other) to
authorize or further any of the actions described above in this subsection;
(i) Change in Control. Any Change in Control shall occur; or
(j) Loan Documents. Any material provision of any Loan
Document shall at any time for any reason cease to be valid and binding and
enforceable against any obligor thereunder, or the validity, binding effect or
enforceability thereof shall be contested by any Person, or any obligor, shall
deny that it has any or further liability or obligation thereunder, or any Loan
Document shall be terminated invalidated or set aside, or be declared
ineffective or inoperative or in any way cease to give or provide to the Lenders
and the Agent the benefits purported to be created thereby; or
(k) Laws and Regulations. Any material violation of the 49
U.S.C. or any FAA regulation applicable to the Company or the Guarantor or to
any aircraft owned and/or operated by the Company or Guarantor or to any
aircraft owned and/or operated by the Company or the Guarantor is not cured
within 30 days; provided, however, that no Event of Default under this clause
(k) shall be deemed to exist if the Company and the Guarantors have commenced
and diligently pursued appropriate action to cure such violation and such
default may be and is cured within 30 days after such 30 day grace period;
provided, further, that among other material violations, any violation resulting
in a formal investigation or an enforcement action by the FAA shall be presumed
material.
6.2 Remedies.
(a) Upon the occurrence and during the continuance of any
Event of Default, the Agent may and, upon being directed to do so by the
Required Lenders, shall by notice to the Company
36
(i) terminate the Commitments or (ii) declare the outstanding principal of, and
accrued interest on, the Notes, all unpaid reimbursement obligations in respect
of drawings under Letters of Credit and all other amounts owing under this
Agreement to be immediately due and payable, or (iii) demand immediate delivery
of cash collateral, and the Company agrees to deliver such cash collateral upon
demand, in an amount equal to the maximum amount that may be available to be
drawn at any time prior to the stated expiry of all outstanding Letters of
Credit, or any one or more of the foregoing, whereupon the Commitments shall
terminate forthwith and all such amounts, including such cash collateral, shall
become immediately due and payable, provided that in the case of any event or
condition described in Section 6.1(h) with respect to the Company, the
Commitments shall automatically terminate forthwith and all such amounts,
including such cash collateral, shall automatically become immediately due and
payable without notice; in all cases without demand, presentment, protest,
diligence, notice of dishonor or other formality, all of which are hereby
expressly waived. Such cash collateral delivered in respect of outstanding
Letters of Credit shall be deposited in a special cash collateral account to be
held by the Agent as collateral security for the payment and performance of the
Company's obligations under this Agreement to the Lenders and the Agent.
(b) The Agent may and, upon being directed to do so by the
Required Lenders, shall, in addition to the remedies provided in Section 6.2(a),
exercise and enforce any and all other rights and remedies available to it,
whether arising under the Loan Documents or under applicable law, in any manner
deemed appropriate by the Agent, including suit in equity, action at law, or
other appropriate proceedings, whether for the specific performance (to the
extent permitted by law) of any covenant or agreement contained in any Loan
Document or in aid of the exercise of any power granted in any Loan Document.
(c) Upon the occurrence and during the continuance of any
Event of Default, each Lender may at any time and from time to time, without
notice to the Company (any requirement for such notice being expressly waived by
the Company set off and apply against any and all of the obligations of the
Company now or hereafter existing under this Agreement, Whether owing to such
Lender or any other Lender or the Agent, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Company and any property of the Company from time to time in
possession of such Lender, irrespective of whether or not such Lender shall have
made any demand hereunder and although such obligations may be contingent and
unmatured. The Company hereby grants to the Lenders and the Agent a lien on and
security interest in all such deposits, indebtedness and property as collateral
security for the payment and performance of the obligations of the Company under
the Loan Documents. The rights of such Lender under this Section 6.2(c) are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which such Lender may have.
(d) Notwithstanding anything herein to the contrary, no
payments of principal, interest or fees delivered to the Agent for the account
of any Defaulting Lender shall be delivered by the Agent to such Defaulting
Lender. Instead, such payments shall, for so long as such Defaulting Lender
shall be a Defaulting Lender, be held by the Agent, and the Agent is hereby
authorized and directed by all parties hereto to hold such funds in escrow and
apply such funds as follows:
(i) First, if applicable to any payments due from such
Defaulting Lender to the Agent, and
37
(ii) Second, to Loans required to be made by such
Defaulting Lender on any borrowing date to the extent such Defaulting Lender
fails to make such Loans.
Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Advances and other obligations owing
hereunder (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender.
ARTICLE VII.
THE AGENT AND THE LENDERS
7.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Agent
by the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto. The provisions of this Article VII are solely for the
benefit of the Agent and the Lenders, and the Company shall not have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Agent shall act solely as agent
of the Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for the Company.
7.2 Agent and Affiliates. NBD Bank in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise or refrain from exercising the same as though it were not the
Agent. NBD Bank and its affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with the Company,
or any of its respective Subsidiaries as if it were not acting as Agent
hereunder, and may accept fees and other consideration therefor without having
to account for the same to the Lenders.
7.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement, have a fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or shall otherwise exist against the Agent. As to any
matters not expressly provided for by the Loan Documents (including, without
limitation, collection and enforcement actioned under the Notes), the Agent
shall not be required to exercise any discretion or take any action, but the
Agent shall take such action or omit to take any action pursuant to the
reasonable written instructions of the Required Lenders and may request
instructions from the Required Lenders. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, pursuant to the written
instructions of the Required Lenders (or all of the Lenders, as the case may be,
in accordance with the requirements of this Agreement), which instructions and
any action or omission pursuant thereto shall be binding upon all of the
Lenders; provided, however, that the Agent shall not be required to act or omit
to act if, in the judgment of the Agent, such action or omission may expose the
Agent to Personal liability or is contrary to any Loan Document or applicable
law.
38
7.4 Reliance by Agent. The Agent shall be entitled to rely upon any
certificate, notice, document or other communication (including any cable,
telegram, telex, facsimile transmission or oral communication) believed by it to
be genuine and correct and to have been sent or given by or on behalf of a
proper Person. The Agent may treat the payee of any Note as the holder thereof
unless and until the Agent receives written notice of the assignment thereof
pursuant to the terms of this Agreement signed by such payee and the Agent
receives the written agreement of the assignee that such assignee is bound
hereby to the same extent as if it had been an original party hereto. The Agent
may employ agents (including without limitation collateral agents) and may
consult with legal counsel (who may be counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable to
the Lenders, except as to money or property received by it or its authorized
agents, for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
7.5 Default. The Agent shall not be deemed to have knowledge of the
occurrence of any Default or Event of Default, unless the Agent has received
written notice from a Lender or the Company specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Agent receives such a notice, the Agent shall give written notice thereto to
the Lenders.
7.6 Liability of Agent. Neither the Agent nor any of its directors,
officers, agents, or employees shall be liable to the Lenders for any action
taken or not taken by it or them in connection herewith with the consent or at
the request of the Required Lenders or in the absence of its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any recital, statement, warranty or
representation contained in any Loan Document, or in any certificate, report,
financial statement or other document furnished in connection with this
Agreement, (ii) the performance or observance of any of the covenants or
agreements of the Company, (iii) the satisfaction of any condition specified in
Article II hereof, or (iv) the validity, effectiveness, legal enforceability,
value or genuineness of any Loan Documents or any collateral subject thereto or
any other instrument or document furnished in connection herewith.
7.7 Nonreliance on Agent and Other Lenders. Each Lender acknowledges
and agrees that it has, independently and without reliance on the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and its Subsidiaries
decision to enter into this Agreement and that it will, independently and
without reliance upon the 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 analysis and decision in taking or not taking action under this Agreement.
The Agent shall not be required to keep itself informed as to the performance or
observance by the Company of the Loan Documents or any other documents referred
to or provided for herein or to inspect the properties or books of the Company
or any Subsidiary and, except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any information concerning the affairs, financial condition or
business of the Company, or any of its Subsidiaries which may come into the
possession of the Agent or any of its Affiliates.
7.8 Indemnification. The Lenders agree to indemnify the Agent (to
the extent not reimbursed by the Company, but without limiting any obligation of
the Company to make such
39
reimbursement), ratably according to the respective principal amounts of the
Advances then outstanding made by each of them (or if no Advances are at the
time outstanding, ratably according to the respective amounts of their
Commitments), from and against any and all claims, damages, losses, liabilities,
costs or expenses of any kind or nature whatsoever (including, without
limitation, fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or the transactions contemplated hereby or any action taken or omitted
by the Agent under this Agreement, provided, however, that no Lender shall be
liable for any portion of such claims, damages, losses, liabilities, costs or
expenses resulting from the Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any out-of-pocket expenses
(including without limitation fees and expenses of counsel) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Company but without limiting the obligation
of the Company to make such reimbursement. Each Lender agrees to reimburse the
Agent promptly upon demand for its ratable share of any amounts owing to the
Agent by the Lenders pursuant to this Section. If the indemnity furnished to the
Agent under this Section shall, in the judgment of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity from the Lenders
and cease, or not commence, to take any action until such additional indemnity
is furnished.
7.9 Successor Agent. The Agent may resign as such at any time upon
ten days' prior written notice to the Company and the Lenders. In the event of
any such resignation, the Required Lenders shall, by an instrument in writing
delivered to the Company and the Agent, appoint a successor, which shall be a
commercial Lender organized under the laws of the United States or any State
thereof and having a combined capital and surplus of at least $500,000,000. If a
successor is not so appointed or does not accept such appointment before the
Agent's resignation becomes effective, the retiring Agent may appoint a
temporary successor to act until such appointment by the Required Lenders is
made and accepted or if no such temporary successor is appointed as provided
above by the retiring Agent, the Required Lenders shall thereafter perform all
the duties of the Agent hereunder until such appointment by the Required Lenders
is made and accepted. Any successor to the Agent shall execute and deliver to
the Company and the Lenders an instrument accepting such appointment and
thereupon such successor Agent, without further act, deed, conveyance or
transfer shall become vested with all of the properties, rights, interests,
powers, authorities and obligations of its predecessor hereunder with like
effect as if originally named as Agent hereunder. Upon request of such successor
Agent, the Company and the retiring Agent shall execute and deliver such
instruments of conveyance, assignment and further assurance and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in such successor Agent all such properties, rights, interests,
powers, authorities and obligations. The provisions of this Article VII shall
thereafter remain effective for such retiring Agent with respect to any actions
taken or omitted to be taken by such Agent while acting as the Agent hereunder.
7.10 Sharing of Payments. The Lenders agree among themselves that,
in the event that any Lender shall obtain payment in respect of any Advance or
any other obligation owing to the Lenders under this Agreement through the
exercise of a right of set-off, Lender's lien, counterclaim or otherwise in
excess of its ratable share of payments received by all of the Lenders on
account of the Advances and other obligations (or if no Advances are
outstanding, ratably according to the respective amounts of the Commitments),
such Lender shall promptly purchase from the other Lenders participation in such
Advances
40
and other obligations in such amounts, and make such other adjustments from time
to time, as shall be equitable to the end that all of the Lenders share such
payment in accordance with such ratable shares. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of set-off, Lender's lien, counterclaim or otherwise 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
participation theretofore sold, return its share of that benefit to each Lender
whose payment shall have been rescinded or otherwise restored. The Company
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
Lender's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Advance or other obligation in the amount of
such participation. The Lenders further agree among themselves that, in the
event that amounts received by the Lenders and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Lender or the Agent shall fail to remit to the Agent or any
other Lender an amount payable by such Lender or the Agent to the Agent or such
other Lender pursuant to this 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 Agent or
such other Lender at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Lenders and the Agent that if the Agent shall
engage in any other transactions with the Company and shall have the benefit of
any collateral or security therefor which does not expressly secure the
obligations arising under this Agreement except by virtue of a so-called dragnet
clause or comparable provision, the Agent shall be entitled to apply any
proceeds of such collateral or security first in respect of the obligations
arising in connection with such other transaction before application to the
obligations arising under this Agreement.
7.11 Withholding Tax Exemption. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to each of
the Company and the Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes. Each Lender
which so delivers a Form 1001 or 4224 further undertakes to deliver to each of
the Company and the Agent two additional copies of such form (or a successor
form) on or before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Company or the Agent, in
each case certifying that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required 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 advises the Company and the Agent that
it is not capable of receiving payments without any deduction or withholding of
United States federal income tax. Each Lender will promptly execute such other
documents with respect to withholding or similar taxes in any jurisdiction other
than United States or any State thereof if required to do so to avoid any such
withholding tax or similar tax, provided that
41
such Lender is legally entitled to do so and such Lender would not be materially
prejudiced thereby. Each such Lender delivering such forms shall indemnify the
Company and the Agent, and hold harmless the Company and the Agent from, all
losses and damages suffered by the Company or the Agent for any inaccuracies in
any such forms.
ARTICLE VIII.
MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination or
waiver of any provision of any Loan Document nor any consent to any departure
therefrom shall be effective unless the same shall be in writing and signed by
the Company and Required Lenders and, to the extent any rights or duties of the
Agent may be affected thereby, the Agent, provided, however, that no such
amendment, modification, termination, waiver or consent shall, without the
consent of the Agent and all of the Lenders, (i) authorize or permit the
extension of time for, or any reduction of the amount of, any payment of the
principal of, or interest on, the Notes or any Letter of Credit reimbursement
obligation, or any fees or other amount payable hereunder, or (ii) amend, extend
or terminate the respective Commitments of any Lender set forth on the signature
pages hereof or the definition of Required Lenders.
42
(b) Any such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no
Defaulting Lender shall be entitled to vote (whether to consent or to withhold
its consent) with respect to any amendment, modification, termination or waiver
of any provision of this Agreement or any departure therefrom or any direction
from the Lenders to the Agent, and, for purposes of determining the Required
Lenders at any time when any Lender is in default under this Agreement, the
Commitments and Advances of such defaulting Lenders shall be disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Company at 0000 Xxxxxxxxxxxxx Xxxxxxx,
Xxxxxxxx, Xxxx 00000, Attention: Chief Financial Officer or Controller,
Facsimile No. (000) 000-0000, Telephone No. (000) 000-0000, and to the Agent and
the Lenders at the respective addresses for notices set forth on the signatures
pages hereof, or to such other address as may be designated by the Company, the
Agent or any Lender by notice to the other parties hereto. All notices and other
communications shall be deemed to have been given at the time of actual delivery
thereof to such address, or, unless sooner delivered, (i) if sent by certified
or registered mail, postage prepaid, to such address, on the third day after the
date of mailing, (ii) if sent by telex, upon receipt of the appropriate
answerback, or (iii) if sent by facsimile transmission, upon confirmation of
receipt by telephone at the number specified for confirmation, provided,
however, that notices to the Agent shall not be effective until received.
(b) Notices by the Company to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2, requests
for Advances pursuant to Section 2.4, requests for continuations or conversions
of Loans pursuant to Section 2.7 and notices of prepayment pursuant to Section
3.1 shall be irrevocable and binding on the Company.
(c) Any notice to be given by the Company to the Agent
pursuant to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or
any Lender hereunder, may be given by telephone, and all such notices given by
the Company must be immediately confirmed in writing in the manner provided in
Section 8.2(a). Any such notice given by telephone shall be deemed effective
upon receipt thereof by the party to whom such notice is to be given. The
Company shall indemnify and hold harmless the Lenders and the Agent from any and
all losses, damages, liabilities and claims arising from their good faith
reliance on any such telephone notice.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing
on the part of the Agent or any Lender, nor any delay or failure on the part of
the Agent or any Lender in exercising any right, power or privilege hereunder
shall operate as a waiver of such right, power or privilege or otherwise
prejudice the Agent's or such Lender's rights and remedies hereunder; nor shall
any single or partial exercise thereof preclude any further exercise thereof or
the exercise of any other right, power or privilege. No right or remedy
conferred upon or reserved to the Agent or any Lender under any Loan Document is
intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right or remedy
granted thereunder or now or hereafter existing under any applicable law. Every
right and remedy granted by any Loan Document or by applicable law to the Agent
or any Lender may be exercised from time to time and as often as may be deemed
expedient by the Agent or any Lender and, unless contrary to the express
provisions of any Loan Document, irrespective of the occurrence or continuance
of any Default or Event of Default.
50
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company made herein
or in any other Loan Document or in any certificate, report, financial statement
or other document furnished by or on behalf of the Company in connection with
this Agreement shall be deemed to be material and to have been relied upon by
the Lenders, notwithstanding any investigation heretofore or hereafter made by
any Lender or on such Lender's behalf, and those covenants and agreements of the
Company set forth in Section 3.7, 3.9 and 8.5 hereof shall survive the repayment
in full of the Advances and the termination of the Commitments.
8.5 Expenses; Indemnification. (a) The Company agrees to pay, or
reimburse the Agent for the payment of, on demand, (i) the reasonable fees and
expenses of counsel to the Agent, including without limitation the fees and
expenses of Xxxxxxxxx Xxxxxx PLLC, in connection with the preparation,
execution, delivery and administration of the Loan Documents and in connection
with advising the Agent as to its rights and responsibilities with respect
thereto, and in connection with any amendments, waivers or consents in
connection therewith, and (ii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of the Loan Documents (or the verification of filing, recording,
perfection or priority thereof) or the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees, and (iii) all
reasonable costs and expenses of the Agent and the Lenders (including reasonable
fees and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise)) in connection with any Default or Event of Default or
the enforcement of, or the exercise or preservation of any rights under, the
Loan Documents or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement and (iv) all reasonable costs
and expenses of the Agent and the Lenders (including reasonable fees and
expenses of counsel) in connection with any action or proceeding relating to a
court order, injunction or other process or decree restraining or seeking to
restrain the Agent from paying any amount under, or otherwise relating in any
way to, any Letter of Credit and any and all costs and expenses which any of
them may incur relative to any payment under any Letter of Credit.
(b) The Company hereby indemnifies and agrees to hold harmless
the Lenders and the Agent, and their respective officers, directors, employees
and agents, harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever which the
Lenders or the Agent or any such Person may incur or which may be claimed
against any of them by reason of or in connection with any Letter of Credit, and
neither any Lender nor the Agent or any of their respective officers, directors,
employees or agents shall be liable or responsible for: (i) the use which may be
made of any Letter of Credit or for any acts or omissions of any beneficiary in
connection therewith; (ii) the validity, sufficiency or genuineness of documents
or of any endorsement thereon, even if such documents should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the Agent to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; (iv) any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that the Company shall not be required to indemnify the
Lenders and the Agent and such other Persons, and the Lenders shall be liable to
the Company to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by the Company which were caused
by (A) the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit, or (B) the Agent's payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of the Letter of
51
Credit to the extent, but only to the extent, that such payment constitutes
gross negligence of wilful misconduct of the Agent. It is understood that in
making any payment under a Letter of Credit the Agent will rely on documents
presented to it under such Letter of Credit as to any and all matters set forth
therein without further investigation and regardless of any notice or
information to the contrary, and such reliance and payment against documents
presented under a Letter of Credit substantially complying with the terms
thereof shall not be deemed gross negligence or wilful misconduct of the Agent
in connection with such payment. It is further acknowledged and agreed that the
Company may have rights against the beneficiary or others in connection with any
Letter of Credit with respect to which the Lenders are alleged to be liable and
it shall be a precondition of the assertion of any liability of the Lenders
under this Section that the Company shall first have exhausted all remedies in
respect of the alleged loss against such beneficiary and any other parties
obligated or liable in connection with such Letter of Credit and any related
transactions.
(c) In consideration of the execution and delivery of this
Agreement by each Lender and the extension of the Commitments, the Company
hereby indemnifies, exonerates and holds the Agent, each Lender and each of
their respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred at any time by the Indemnified Parties or
any of them as a result of, or arising out of, or relating to:
(i) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of any Advance;
(ii) the entering into and performance of this Agreement
and any other agreement or instrument executed in connection herewith by any of
the Indemnified Parties (including any action brought by or on behalf of the
Company as the result of any determination by the Required Lenders not to fund
any Advance);
(iii) any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by the Company or any of its
Subsidiaries of any portion of the stock or assets of any Person, whether or not
the Agent or such Lender is party thereto;
(iv) any investigation, litigation or proceeding related
to any environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the release by the Company or any of its
Subsidiaries of any Hazardous Material; or
(v) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releasing from, any real
property owned or operated by the Company or any of its Subsidiaries of any
Hazardous Material (including any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under any Environmental Law), regardless
of whether caused by, or within the control of, the Company or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the activities of the Indemnified
Party on the property of the Company conducted subsequent to a foreclosure on
such property by the Lenders or by reason of the relevant Indemnified Party's
gross negligence or willful misconduct or breach of this Agreement, and if and
to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The Company shall be obligated to indemnify
the Indemnified Parties for all Indemnified Liabilities subject to and pursuant
to the
52
foregoing provisions, regardless of whether the Company or any of its
Subsidiaries had knowledge of the facts and circumstances giving rise to such
Indemnified Liability.
8.6 Successors and Assigns. (a) This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided that the Company may not, without the prior consent of the
Lenders, assign its rights or obligations under any Loan Document and the
Lenders shall not be obligated to make any Advance hereunder to any entity other
than the Company.
(b) Any Lender may sell to any financial institution or
institutions, and such financial institution or institutions may further sell, a
participation interest (undivided or divided) in, the Advances and such Lender's
rights and benefits under the Loan Documents, and to the extent of that
participation interest such participant or participants shall have the same
rights and benefits against the Company under Section 3.7, 3.9 and 6.2(c) as it
or they would have had if such participant or participants were the Lender
making the Advances to the Company hereunder, provided, however, that (i) such
Lender's obligations under this Agreement shall remain unmodified and fully
effective and enforceable against such Lender, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Company, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and (v) such Lender
shall not grant to its participant any rights to consent or withhold consent to
any action taken by such Lender or the Agent under this Agreement other than
action requiring the consent of all of the Lenders hereunder.
(c) The Agent from time to time in its sole discretion may
appoint agents for the purpose of servicing and administering this Agreement and
the transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under the Loan Documents or otherwise. In
furtherance of such agency, the Agent may from time to time direct that the
Company provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. The Company hereby consents to
the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself.
(d) Each Lender may, with the prior written consent of the
Company (which shall not be unreasonably withheld and shall not be required if
an Event of Default has occurred and is continuing or if such assignment is to
another Lender) and the Agent, assign to one or more Lenders or other entities
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations, (ii) except in the case of an assignment of all of a Lender's
rights and obligations under this Agreement, (A) the amount of the Commitment of
the assigning Lender being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000, and in integral multiples of
$1,000,000 thereafter, or such lesser amount as the Company and the Agent may
consent to and (B) after giving effect to each such assignment, the amount of
the Commitment of the assigning Lender shall in no event be less than
$5,000,000, (iii) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance in the form of Exhibit D hereto (an "Assignment and Acceptance"),
together with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,000, and (iv) any Lender may without the consent of the
Company or the Agent, and without paying any fee, assign to any Affiliate of
such Lender all of its rights and obligations under this Agreement. Upon such
execution, delivery, acceptance and recording, from and after the
53
effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(e) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company or the performance or observance by the Company of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.6 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement as are delegated to the Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender.
(f) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Company, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(g) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee, together with any Note or Notes subject
to such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Company shall execute and deliver to the Agent in exchange for the
surrendered Note or Notes a new Note to the order of such assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Commitment hereunder, a new Note to
the order of the assigning Lender in an amount equal to the Commitment retained
by it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall
54
be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit D hereto.
(h) The Company shall not be liable for any costs or expenses
of any Lender in effectuating any participation or assignment under this Section
8.6.
(i) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.6, disclose to the assignee or participant or proposed assignee or participant
any information relating to the Company.
(j) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in, or assign,
all or any portion of its rights under this Agreement (including, without
limitation, the Loans owing to it and the Note or Notes held by it) in favor of
any Federal Reserve Lender in accordance with Regulation A of the Board of
Governors of the Federal Reserve System; provided that such creation of a
security interest or assignment shall not release such Lender from its
obligations under this Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the law of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State. The
Company and the Lenders further agree that any legal or equitable action or
proceeding with respect to the Loan Documents or the transactions contemplated
hereby shall be brought in any court of the State of Michigan, or in any court
of the United States of America sitting in Michigan, and the Company and the
Lenders hereby submit to and accept generally and unconditionally the
jurisdiction of those courts with respect to its Person and property, and, in
the case of the Company irrevocably appoints its chief financial officer as its
agent for service of process and irrevocably consents to the service of process
in connection with any such action or proceeding by Personal delivery to such
agent or to the Company or by the mailing thereof by registered or certified
mail, postage prepaid to the Company or such Guarantor at its address for
notices pursuant to Section 8.2. Nothing in this paragraph shall affect the
right of the Lenders and the Agent to serve process in any other manner
permitted by law or limit the right of the Lenders or the Agent to bring any
such action or proceeding against the Company or property in the courts of any
other jurisdiction. The Company and the Lenders hereby irrevocably waives any
objection to the laying of venue of any such action or proceeding in the above
described courts.
8.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.
8.11 Integration and Severability. The Loan Documents embody the
entire agreement and understanding between the Company, the Guarantors, the
Agent and the Lenders, and supersede all
55
prior agreements and understandings, relating to the subject matter hereof. In
case any one or more of the obligations of the Company under the Loan Documents
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining obligations of the Company shall
not in any way be affected or impaired thereby, and such invalidity, illegality
or unenforceability in one jurisdiction shall not affect the validity, legality
or enforceability of the obligations of the Company under any Loan Document in
any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or such condition exists.
8.13 Interest Rate Limitation. Notwithstanding any provisions of any
Loan Document, in no event shall the amount of interest paid or agreed to be
paid by the Company exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of any Loan Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction may
deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall
be reduced to an amount computed at the highest rate of interest permissible
under applicable law, and if for any reason whatsoever any Lender shall ever
receive as interest an amount which would be deemed unlawful under such
applicable law such interest shall be automatically applied to the payment of
principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the Company
if such principal and all other obligations of the Company to the Lenders have
been paid in full.
8.14 Judgment and Payment.
(a) If, for the purpose of obtaining judgment in any court, it is
necessary to convert a sum owing hereunder by the Company in one currency into
another currency, the Company agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures in the relevant jurisdiction the Agent
could purchase the first currency with such other currency for the first
currency on the Business Day immediately preceding the day on which the final
judgment is given.
(b) The obligations of the Company in respect of any sum due in
Dollars to any party hereto or any holder of the obligations owing hereunder
(the "Applicable Creditor") shall, notwithstanding any payment obligation or
judgment in a currency (the "Payment Currency") other than Dollars, be
discharged only to the extent that, on the Business Day following receipt by the
Applicable Creditor of any sum adjudged to be so due in the Payment Currency,
the Applicable Creditor may in accordance with normal banking procedures in the
relevant jurisdiction purchase Dollars with the Payment Currency; if the amount
of Dollars so purchased is less than the sum originally due to the Applicable
Creditor in Dollars, the Company agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against
such loss. The obligations of the Company contained in this Section 8.14 shall
survive the termination of this Agreement and the payment of all other amounts
owing hereunder.
8.15 Unification of Certain Currencies. Notwithstanding the
commencement of the third stage of European Monetary Union ("EMU") (which as of
the date of this Agreement is scheduled to occur on January 1, 1999), all
Advances denominated in any Eligible Currency shall continue to be so
56
denominated, interest rates with respect to Eurocurrency Rate Loans denominated
in any Eligible Currency shall continue to be determined by reference to such
Permitted Currency in accordance with the procedures specified in the definition
of "Eurocurrency Rate", all calculations with respect to Advances outstanding in
any Eligible Currency shall continue to be made in units of such currency, and
the obligations of the Company with respect to payments of principal and
interest on Advances outstanding in any Eligible Currency shall continue to be
payable in such currency, all without regard to the conversion rates or rounding
rules referred to in European Council Regulation 96/0249 (CNS). Following the
commencement of the third stage of EMU and prior to the first issuance of
euro-bank notes by the European Central Bank pursuant to Article 105A(1) of the
Treaty Establishing the European Community, as amended, (which as of the date of
this Agreement is scheduled to occur on January 1, 2002) the Company and the
Lenders agree to negotiate in good faith an amendment to this Agreement,
satisfactory in form and substance to the Company and the Lenders to modify this
Agreement in light of EMU.
8.16 Acknowledgments. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) none of the Agent or any Lender has any fiduciary
relationship with or duty to such Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agent and the Lenders, on the one hand, and the Borrowers, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrowers and the Lenders.
8.17 Year 2000 Problem. The Company and its Subsidiaries have
reviewed the areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company and its Subsidiaries may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999). Based on such review and program, the
company reasonably believes that the "Year 2000 Problem" will not have a
Material Adverse Effect.
8.18 WAIVER OF JURY TRIAL. THE LENDERS, THE AGENT AND THE COMPANY,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER OF THEM MAY HAVE
TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN
DOCUMENTS OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER ANY LENDER, THE
AGENT, NOR THE COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE,
ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT
BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY
HERETO EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY.
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written, which
shall be the Effective Date of this Agreement.
AIRNET SYSTEMS, INC.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Its Vice President, Finance
-------------------------------------
58
Address for Notices: NBD BANK, as a Lender
and as Agent
000 Xxxxxxxx Xxxxxx By /s/ Xxxxxxxx X. Xxxxx
Xxxxxxx, Xxxxxxxx 00000 --------------------------------------
Its First Vice President
-------------------------------------
Attention: Michigan Banking Division
Facsimile No.: (000) 000-0000
Telephone No.:(000) 000-0000
Commitment amount for the period from and including the Effective Date
but excluding the commitment Reduction Date: $36,400,000
Commitment amount for the period from and including the Commitment
Reduction Date to and including the Termination Date: $28,000,000
Percentage of
Total Commitments: 56.00%
59
Address for Notices: BANK ONE, N.A.
000 Xxxx Xxxxx Xxxxxx By /s/ X. Xxxxx
Xxxxxxxx, Xxxx 00000 --------------------------------------
Its Vice President
-------------------------------------
Attention: Xxxxxxxxxxx X. Xxxx
Facsimile No.: (614) ___-____
Telephone No.:(000) 000-0000
Commitment amount for the period from and including the Effective Date
to but excluding the Commitment Reduction Date: $9,100,000
Commitment amount for the period from and including the Commitment
Reduction Date to and including the Termination Date: $7,000,000
Percentage of
Total Commitments: 14.00%
60
Address for Notices: KEYBANK NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
Xxxxxxxxx, Xxxx 00000 --------------------------------------
Its Assistant Vice President
-------------------------------------
Attention: Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
Telephone No.:(000) 000-0000
Commitment amount for the period from and including the Effective Date
to but excluding the Commitment Reduction Date: $19,500,000
Commitment amount for the period from and including the Commitment
Reduction Date to and including the Termination Date: $15,000,000
Percentage of
Total Commitments: 30.00%
61
List of Exhibits and Schedules to
Form of Loan Agreement dated as of August 1, 1998,
among AirNet Systems, Inc., the Lenders
Party Thereto and NBD Bank, as Agent
Exhibit
-------
A Note
B Request for Advance
C Request for Continuation or Conversion of Loan
D Assignment and Acceptance
Schedule
--------
2.10 Extension Request
4.4 Subsidiaries
4.5 Litigation
4.6 Contingent Liabilities
4.12 Environmental matters
5.2 (d) Liens
5.2 (i) Indebtedness
Note: these exhibits and schedules are not being filed herewith. AirNet Systems,
Inc. agrees to furnish a copy of any omitted Exhibit or Schedule to the
Securities and Exchange Commission upon request.
62
