EXHIBIT 10(b)(i)
$40,000,000
________________________________________________________________________________
LOAN AGREEMENT
DATED AS OF JUNE ___, 1998
BETWEEN
AERO INTERNATIONAL, L.L.C.
AND
AMERICAN AERO CRANES, L.L.C.
(THE BORROWERS)
AND
NATIONAL CANADA FINANCE CORP.
(THE AGENT)
AND
THE LENDERS
________________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I DEFINITIONS......................................................... 1
1.1 Definitions........................................................... 1
1.1.1 "Account Debtor"....................................... 1
1.1.2 "Acquire or Acquisition"............................... 1
1.1.3 "Acquisition Consideration"............................ 1
1.1.4 "Acquisition Debt"..................................... 1
1.1.5 "Additional Borrower".................................. 1
1.1.6 "Additional Borrower Certificate....................... 1
1.1.7 "Advance".............................................. 2
1.1.8 "Aero"................................................. 2
1.1.9 "Agent"................................................ 2
1.1.10 "Agent's Office"....................................... 2
1.1.11 "Affiliate"............................................ 2
1.1.12 "Agreement"............................................ 2
1.1.13 "Agreement Date"....................................... 2
1.1.14 "American Aero"........................................ 2
1.1.15 "Applicable Margin".................................... 2
1.1.16 "ASI Accounts"......................................... 3
1.1.17 "Benefit Plan"......................................... 3
1.1.18 "Borrower"............................................. 3
1.1.19 "Borrowing Base"....................................... 3
1.1.20 "Borrowing Base Certificate"........................... 3
1.1.21 "Borrowing Date"....................................... 3
1.1.22 "Business Day"......................................... 3
1.1.23 "Business Unit"........................................ 3
1.1.24 "CAPEX Borrowing Base"................................. 3
1.1.25 "CAPEX Credit Availability"............................ 3
1.1.26 "CAPEX Credit Advances"................................ 4
1.1.27 "CAPEX Hard Cost"...................................... 4
1.1.28 "Capital Expenditures"................................. 4
1.1.29 "Capitalized Lease".................................... 4
1.1.30 "Capitalized Lease Obligation"......................... 4
1.1.31 "Code"................................................. 4
1.1.32 "Collateral"........................................... 4
1.1.33 "Commitment"........................................... 4
1.1.34 "Consolidated.......................................... 5
1.1.35 "Consolidated Net Worth of Aero"....................... 5
1.1.36 "Consolidated Subsidiaries"............................ 5
1.1.37 "Controlled Disbursement Account"...................... 5
1.1.38 "Debt"................................................. 5
1.1.39 "Deed of Trust"........................................ 5
1.1.40 "Defaulting Lender".................................... 5
1.1.41 "Default Margin"....................................... 5
1.1.42 "Deposit Accounts"..................................... 5
1.1.43 "Dollar"............................................... 6
1.1.44 "Drawing".............................................. 6
1.1.45 "EBITDA"............................................... 6
1.1.46 "ERISA"................................................ 6
1.1.47 "Effective Date"....................................... 6
1.1.48 "Effective Interest Rate".............................. 6
1.1.49 "Eligible Equipment"................................... 6
1.1.50 "Eligible Inventory"................................... 6
1.1.51 "Eligible Receivable".................................. 7
1.1.52 "Eligible Real Estate"................................. 7
1.1.53 "Environmental Laws"................................... 8
1.1.54 ''Equipment"........................................... 8
1.1.55 "Equipment Appraisal".................................. 8
1.1.56 "Event of Default"..................................... 8
1.1.57 "Excluded Collateral".................................. 8
1.1.58 "Facilities"........................................... 8
1.1.59 "Financing Statements"................................. 8
1.1.60 "Fixed Asset Availability"............................. 8
1.1.61 "Fixed Asset Advances"................................. 9
1.1.62 "Fixed Asset Borrowing Base"........................... 9
1.1.63 "GAAP"................................................. 9
1.1.64 "General Intangibles".................................. 9
1.1.65 "Governmental Approvals"............................... 9
1.1.66 "Governmental Authority"............................... 10
1.1.67 "Guaranteed Obligations"............................... 10
1.1.68 "Guaranty", "Guaranteed" or to "Guarantee,"............ 10
1.1.69 "Indebtedness"......................................... 10
1.1.70 "Initial Advances"..................................... 10
1.1.71 "Intellectual Property"................................ 10
1.1.72 "Interest Expense"..................................... 11
1.1.73 "Interest Rate Agreements"............................. 11
1.1.74 "Inventory"............................................ 11
1.1.75 "Investment"........................................... 11
1.1.76 "ITS".................................................. 11
1.1.77 "Lender"............................................... 11
1.1.78 "Lender Default"shall mean (i)......................... 11
1.1.79 "Letter of Credit Bank"................................ 11
1.1.80 "Letter of Credit Fee"................................. 11
1.1.81 "Letter of Credit Request"............................. 11
1.1.82 "Letters of Credit".................................... 11
1.1.83 "Letter of Credit Limit"............................... 12
1.1.84 "Letter of Credit Obligations"......................... 12
1.1.85 "LIBOR"................................................ 12
1.1.86 "LIBOR Applicable Margin".............................. 12
1.1.87 "LIBOR Interest Period"................................ 12
1.1.88 "LIBOR Interest Rate".................................. 12
1.1.89 "LIBOR Term"........................................... 12
1.1.90 "Liabilities".......................................... 13
1.1.91 "Lien"................................................. 13
1.1.92 "Loan Documents"....................................... 13
1.1.93 "Majority Lenders"..................................... 13
1.1.94 "Materially Adverse Effect"............................ 13
1.1.95 "Merger"............................................... 13
1.1.96 "Merger Letter Agreement".............................. 13
1.1.97 "Mortgage"............................................. 14
1.1.98 "Multiemployer Plan"................................... 14
1.1.99 "Net Income" or "Net Loss"............................. 14
1.1.100 "Net Worth"............................................ 14
1.1.101 "Non-Defaulting Lender"................................ 14
1.1.102 "Note"................................................. 14
1.1.103 "Notice of Borrowing".................................. 14
1.1.104 "Operating Lease"...................................... 14
1.1.105 "Overadvance Availability"............................. 14
1.1.106 "Overadvance Facility"................................. 15
1.1.107 "Overadvance Advances"................................. 15
1.1.108 "Participant".......................................... 15
1.1.109 "PBGC"................................................. 15
1.1.110 "Percentage"........................................... 15
1.1.111 "Permitted Investments................................. 15
1.1.112 "Permitted Liens"...................................... 15
1.1.113 "Permitted Purchase Money Debt"........................ 16
1.1.114 "Person"............................................... 16
1.1.115 "Pledge Agreement"..................................... 16
1.1.116 "Potential Borrower"................................... 16
1.1.117 "Prime Rate"........................................... 16
1.1.118 "Purchase Money Debt".................................. 16
1.1.119 "Purchase Money Lien".................................. 16
1.1.120 "Real Estate".......................................... 16
1.1.121 "Real Estate Appraisal"................................ 17
1.1.122 "Receivables".......................................... 17
1.1.123 "Reference Bank"....................................... 17
1.1.124 "Reimbursement Obligations"............................ 17
1.1.125 "Related Company....................................... 17
1.1.126 "Required Lenders"..................................... 17
1.1.127 "Restricted Distribution".............................. 17
1.1.128 "Restricted Payment"................................... 18
1.1.129 "Revolving Credit Availability''....................... 18
1.1.130 "Revolving Credit Advances"............................ 18
1.1.131 "Revolving Facility"................................... 18
1.1.132 "Revolving Loans"...................................... 14
1.1.133 "Schedule of Equipment"................................ 18
1.1.134 "Schedule of Inventory"................................ 18
1.1.135 "Schedule of Receivables".............................. 19
1.1.136 "Secured Obligations".................................. 19
1.1.137 "Security Agreement"................................... 19
1.1.138 "Security Documents"................................... 19
1.1.139 "Security Interest".................................... 19
1.1.140 "Senior Secured Debt".................................. 19
1.1.141 "Subordinated Debt".................................... 19
1.1.142 "Subsidiary"........................................... 19
1.1.143 "Taxes"................................................ 20
1.1.144 "Termination Date"..................................... 20
1.1.145 "Termination Event".................................... 20
1.1.146 "Title Company"................................................ 20
1.1.147 "Title Policy"................................................. 20
1.1.148 "Total Credit Facility"........................................ 20
1.1.149 "UCC".......................................................... 20
1.1.150 "Unfunded Vested Accrued Benefits"............................. 20
1.1.151 "Wholly-Owned Subsidiary"...................................... 20
1.1.152 "WIP".......................................................... 21
1.2 Other Referential Provisions............................................. 21
1.3 Exhibits and Schedules................................................... 22
ARTICLE II FACILITIES................................................................. 22
2.1 CREDIT FACILITY NOTE........................................................... 22
2.2 REVOLVING FACILITY....................................................... 22
2.2.1 Revolving Credit Advances........................................ 22
2.2.2 Fixed Asset Advances............................................. 22
2.2.3 CAPEX Credit Advances............................................ 23
2.2.4 Revolving Loan Commitments....................................... 23
2.2.5 Manner of Borrowing Revolving Loans.............................. 23
2.2.5.1 Requests for Borrowing................................. 23
2.2.5.2 Disbursement of Revolving Loans........................ 24
2.2.6 Repayment of Revolving Loans..................................... 24
2.2.7 Reductions and Increases in Availability......................... 25
2.2.7.1 Increase and Reduction of Fixed Asset Availability..... 25
2.2.7.2 Reduction of CAPEX Facility............................ 25
2.2.8 Maximum Availability of the Revolving Facility................... 25
2.3 Overadvance Facility..................................................... 25
2.3.1 Overadvance Advances............................................. 25
2.3.2 Manner of Borrowing Overadvance Advances......................... 26
2.3.2.1 Requests for Borrowing................................. 26
2.3.2.2 Disbursement of Advances............................... 26
2.3.3 Repayment of Overadvance Credit Advances......................... 26
2.3.4 Reduction Facility............................................... 27
2.4 LETTER OF CREDIT FACILITY.................................................... 27
2.4.1 Amounts, Terms and Issuance of Letters of Credit...................... 27
2.4.2 Reimbursement Obligations............................................. 27
2.4.3 Increased Cost........................................................ 28
2.4.4 Legal Restrictions on Letters of Credit............................... 29
2.4.5 Indemnification....................................................... 29
2.4.6 Letter of Credit Participants......................................... 30
2.5 Extension of Facilities...................................................... 31
GENERAL LOAN PROVISIONS.................................................................. 32
3.1 Interest..................................................................... 32
3.2 Fees......................................................................... 34
3.2.1 Unused Line Fee...................................................... 34
3.2.2 Facility Fee......................................................... 34
3.2.3 Quarterly Audit Fee.................................................. 34
3.2.4 Letter of Credit Fee................................................. 34
3.2.5 General.............................................................. 34
3.3 Manner of Payment............................................................ 34
3.4 Statements of Account........................................................ 35
3.5 Reduction of Revolving Facility and Termination of Agreement................. 35
3.5.1 Reduction of Revolving Facility....................................... 35
3.5.2 Termination of Agreement.............................................. 35
3.6 Prepayments of Advances with the LIBOR Interest Rate......................... 36
3.7 Funding Losses............................................................... 36
3.8 Increased Costs and Reduced Returns.......................................... 36
3.9 Unconditional and Absolute Guaranty.......................................... 37
3.9.1 Guaranty............................................................... 37
3.9.2 No Release............................................................. 37
3.9.3 Guarantee Absolute..................................................... 37
3.9.4 Waivers................................................................ 38
3.9.5 Survival............................................................... 38
3.10 Authorized Borrowed Representative........................................... 39
3.11 Pro-Rata Borrowings.......................................................... 39
ARTICLE IV CONDITIONS PRECEDENT......................................................... 39
4.1 Conditions Precedent to Initial Advances..................................... 39
4.1.1 Closing Documents..................................................... 39
4.1.2 Acquisitions.......................................................... 41
4.1.3 Preferred Interests................................................... 41
4.1.4 Appraisals............................................................ 41
4.1.5 Environmental Report.................................................. 41
4.1.6 Title Policies........................................................ 41
4.1.7 Survey................................................................ 41
4.1.8 Insurance............................................................. 41
4.1.9 Audit................................................................. 41
4.1.10 No Injunctions, Etc................................................... 41
4.1.11 Material Adverse Change............................................... 41
4.1.12 Solvency.............................................................. 42
4.2 All Advances................................................................. 42
4.3 Additional Borrower.......................................................... 42
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BORROWER. ................................ 43
5.1 Representations and Warranties............................................... 43
5.1.1 Organization; Power; Qualification.................................... 43
5.1.2 Subsidiaries; Ownership of the Borrower; Shareholder Agreements....... 43
5.1.3 Authorization of Agreement, Notes, Loan Documents and Borrowing....... 44
5.1.4 Compliance of Agreement, Notes, Loan Documents and Borrowing with
Laws, Etc............................................................ 44
5.1.5 Business.............................................................. 44
5.1.6 Compliance with Law; Governmental Approvals........................... 44
5.1.7 Titles to Properties.................................................. 45
5.1.8 Liens................................................................. 45
5.1.9 Indebtedness and Guaranties........................................... 45
5.1.10 Litigation............................................................ 45
5.1.11 Tax Returns and Payments.............................................. 45
5.1.12 Burdensome Provisions................................................. 46
5.1.13 Financial Statements.................................................. 46
5.1.14 Adverse Change........................................................ 46
5.1.15 ERISA................................................................. 46
5.1.16 Absence of Defaults................................................... 46
5.1.17 Accuracy and Completeness of Information.............................. 47
5.1.18 Solvency.............................................................. 47
5.1.19 Status of Receivables................................................. 47
5.1.20 Chief Executive Office................................................ 47
5.1.21 Equipment............................................................. 47
5.1.22 Real Property......................................................... 47
5.1.23 Corporate and Fictitious Names: Trade Names........................... 47
5.1.24 Federal Regulations................................................... 47
5.1.25 Investment Company Act................................................ 48
5.1.26 Employee Relations.................................................... 48
5.1.27 Intellectual Property................................................. 48
5.1.28 Bank Accounts, Lockboxes, Etc......................................... 48
5.2 Survival of Representations and Warranties, Etc.............................. 48
ARTICLE VI COLLATERAL COVENANTS......................................................... 48
6.1 Verification and Notification................................................ 48
6.2 Disputes, Returns and Adjustments............................................ 49
6.3 Invoices..................................................................... 49
6.4 Delivery of Instruments...................................................... 49
6.5 Ownership and Defense of Title............................................... 49
6.6 Insurance.................................................................... 50
6.7 Location of Offices and Collateral........................................... 50
6.8 Records Relating to Collateral............................................... 50
6.9 Inspection................................................................... 50
6.10 Maintenance of Equipment..................................................... 50
6.11 Information and Reports...................................................... 51
6.11.1 Schedule of Receivables............................................. 51
6.11.2 Schedule of Inventory............................................... 51
6.11.3 Schedule of Equipment............................................... 51
6.11.4 Borrowing Base Certificate.......................................... 51
6.11.5 Notice of Diminution of Value....................................... 51
6.11.6 Certification....................................................... 51
6.11.7 Other Information................................................... 51
6.12 Power of Attorney............................................................ 52
ARTICLE VII AFFIRMATIVE COVENANTS........................................................ 52
7.1 Preservation of Entity Existence and Similar Matters......................... 52
7.2 Compliance with Applicable Law............................................... 52
7.3 Conduct of Business.......................................................... 52
7.4 Payment of Taxes and Claims.................................................. 52
7.5 Accounting Methods and Financial Records..................................... 52
7.6 Use of Proceeds. N.......................................................... 52
7.7 Subordinated Debt............................................................ 53
7.8 Accuracy of Information...................................................... 53
ARTICLE VIII INFORMATION................................................................. 53
8.1 Financial Statements......................................................... 53
8.1.1 Audited Year-End Statements......................................... 53
8.1.2 Monthly Financial Statements........................................ 53
8.1.3 Annual Budget....................................................... 54
8.1.4 Acquisitions........................................................ 54
8.2 Accountants' Certificate..................................................... 54
8.3 Officer's Certificate........................................................ 54
8.4 Copies of Other Reports...................................................... 54
8.5 Notice of Litigation and Other Matters....................................... 55
8.6 ERISA........................................................................ 56
ARTICLE IX NEGATIVE COVENANTS........................................................... 56
9.1 Financial Ratios............................................................. 56
9.1.1 Minimum Interest Charge Coverage.................................... 56
9.1.2 Minimum Capital..................................................... 56
9.1.3 Quarterly Net Loss.................................................. 56
9.2 Debt......................................................................... 57
9.3 Guaranties................................................................... 57
9.4 Investments.................................................................. 57
9.5 Acquisitions................................................................. 57
9.6 Restricted Distributions and Payments........................................ 57
9.7 Merger, Consolidation and Sale of Assets..................................... 57
9.8 Transactions with Affiliates................................................. 57
9.9 Liens........................................................................ 57
9.10 Operating Leases............................................................. 57
9.11 Benefit Plans................................................................ 57
9.12 Sales and Leasebacks......................................................... 57
9.13 Amendments of Other Agreements............................................... 57
ARTICLE X DEFAULT...................................................................... 58
10.1 Events of Default............................................................ 58
10.1.1 Default in Payment of Advances....................................... 58
10.1.2 Other Payment Default................................................ 58
10.1.3 Misrepresentation.................................................... 58
10.1.4 Defaulting Performance............................................... 58
10.1.5 Debt Cross-Default................................................... 58
10.1.6 Other Cross-Defaults................................................. 58
10.1.7 Voluntary Bankruptcy Proceeding...................................... 58
10.1.8 Involuntary Bankruptcy Proceeding.................................... 59
10.1.9 Loan Documents....................................................... 59
10.1.10 Failure of Agreements................................................ 59
10.1.11 Judgment............................................................. 59
10.1.12 Attachment........................................................... 60
10.1.13 ERISA................................................................ 60
10.1.14 Qualified Audits..................................................... 60
10.1.15 Material Adverse Effect.............................................. 60
10.1.16 Change of Control.................................................... 60
10.1.17 Change of Management................................................. 60
10.2 Remedies..................................................................... 61
10.2.1 Automatic Acceleration and Termination of Facilities................. 61
10.2.2 Other Remedies....................................................... 61
10.3 Application of Proceeds...................................................... 63
10.3.1 First: .............................................................. 63
10.3.2 Second: ............................................................. 63
10.3.3 Third: ............................................................. 63
10.4 Power of Attorney............................................................ 63
10.5 Miscellaneous Provisions Concerning Remedies................................. 63
10.5.1 Rights Cumulative.................................................... 63
10.5.2 Waiver of Marshaling................................................. 63
10.5.3 Limitation of Liability.............................................. 63
10.5.4 Appointment of Receiver.............................................. 64
10.6 Dividends; Redemption........................................................ 64
10.7 Performance in Lenders....................................................... 64
10.8 Trademark License............................................................ 64
ARTICLE XI MERGER WITH INTERNATIONAL TOOL & SUPPLY, PLC................................. 64
11.1 Merger with ITS.............................................................. 64
11.1.1 Formation of Aero International, Inc................................. 64
11.1.2 ITS Subsidiaries..................................................... 65
11.1.3 Definitive Agreement................................................. 65
11.1.4 Updated Borrowing Base Certificate................................... 65
11.2 Obligations.................................................................. 65
11.2.1 Obligations of Borrowers............................................. 65
11.2.2 Obligations of Lenders............................................... 66
11.3 Termination of Certain Availability.......................................... 66
11.4 Debt and Equity Offerings.................................................... 66
ARTICLE XII AGENT........................................................................ 66
12.1 Appointment.................................................................. 66
12.2 Consultation with Counsel.................................................... 66
12.3 Delegation of Duties......................................................... 67
12.4 Exculpatory Provisions....................................................... 67
12.5 Reliance by Agent............................................................ 67
12.6 Notice of Default............................................................ 67
12.7 Non-Reliance on Agent, and other Lenders.............................. 68
12.8 Indemnification....................................................... 68
12.9 Agent in its Individual Capacity...................................... 68
12.10 Resignation of the Agent; Successor Agent............................. 69
12.11 Certain Action Requiring Consent of Majority Banks.................... 69
12.12 Benefit of Article XII................................................ 69
MISCELLANEOUS..................................................................... 69
13.1 Notices............................................................... 69
13.1.1 Method of Communication....................................... 69
13.1.2 Addresses for Notices......................................... 69
13.1.3 Agent's Office................................................ 70
13.2 Expenses.............................................................. 70
13.3 Stamp and Other Taxes................................................. 71
13.4 Setoff................................................................ 71
13.5 Litigation............................................................ 72
13.6 Waiver of Rights...................................................... 72
13.7 Reversal of Payments.................................................. 73
13.8 Injunctive Relief..................................................... 73
13.9 Accounting Matters.................................................... 73
13.10 Assignment; Participation............................................. 73
13.11 Amendments............................................................ 73
13.12 Performance of Borrowers' Duties...................................... 74
13.13 Indemnification....................................................... 74
13.14 All Powers Coupled with Interest...................................... 74
13.15 Survival.............................................................. 74
13.16 Severability of Provisions............................................ 74
13.17 Governing Law......................................................... 74
13.18 Counterparts.......................................................... 75
13.19 Reproduction of Documents............................................. 75
ARTICLE XIV NAME CHANGE........................................................... 75
LOAN AGREEMENT
Dated as of June ___, 1998
THIS LOAN AGREEMENT is entered into by and among AERO INTERNATIONAL,
L.L.C., a Louisiana limited liability company, AMERICAN AERO CRANES, L.L.C., a
Louisiana limited liability company, and the financial institutions listed on
the signature pages of this Agreement under the heading "Lenders", and NATIONAL
CANADA FINANCE CORP., a Delaware corporation, as Agent for the Lenders, to the
extent and in the manner provided in ARTICLE XII below.
PRELIMINARY STATEMENT:
Aero International, L.L.C. has requested the Lenders (as hereinafter
defined) provide financing to it and certain of its subsidiaries and the Lenders
(as hereinafter defined) have agreed to provide such financing on the terms and
conditions hereinafter set forth. Aero International, L.L.C. and the other
"Borrowers" now or hereafter party hereto acknowledge that the Borrowers have
sought such financing based on a credit of the consolidated group, the
businesses of which are interrelated, and that each member of such consolidated
group will derive substantial benefit from such extension of credit.
ARTICLE I
DEFINITIONS
1.1 Definitions. For the purpose of this Agreement:
1.1.1 "Account Debtor" means a Person who is obligated on a Receivable.
1.1.2 "Acquire or Acquisition" as applied to any Business Unit or
Investment means the acquisition of such Business Unit or Investment by
purchase, exchange, issuance of securities, or by merger, reorganization or any
other method.
1.1.3 "Acquisition Consideration" means, with respect to any Acquisition by
Aero of any Business Unit, the sum of the total amount of cash paid to or for
the account of the seller of such Business Unit, PLUS the principal amount of
Indebtedness issued to such seller, PLUS the principal amount of any
Indebtedness and other Liabilities of such seller assumed by Aero, PLUS the fair
value of any shares of capital stock or other non-cash consideration transferred
to such seller in payment of any part of the purchase price of such Business
Unit.
1.1.4 "Acquisition Debt" means Acquisition Consideration consisting of
unsecured Indebtedness for Money Borrowed (other than Loans hereunder) incurred
or assumed by Aero in connection with any Acquisition permitted pursuant to this
Agreement.
1.1.5 "Additional Borrower" means a Person that becomes a party to this
Agreement as a "Borrower" pursuant to SECTION 4.3.
Loan Agreement
Final Execution Copy
Page 1
1.1.6 "Additional Borrower Certificate" means a certificate of a Potential
Borrower and the Borrowers in the form of EXHIBIT 1.1.6.
1.1.7 "Advance" means the disbursement by Lenders of a sum or sums loaned
to a Borrower, including any of the Revolving Credit Advances, the Fixed Asset
Advances, the Overadvance Advances and the CAPEX Advances, as well as all such
advances collectively, together with the Letter of Credit Obligations.
1.1.8 "Aero" means Aero International, L.L.C., a Louisiana limited
liability company and its successors and assigns. Upon completion of the merger
contemplated by ARTICLE XI, Aero shall thereafter mean Aero International, Inc.,
a Delaware corporation.
1.1.9 "Agent" shall mean National Canada Finance Corp., as Agent, and any
successor to the Agent pursuant to SECTION 12.2.9.
1.1.10 "Agent's Office" shall mean the office of Agent specified or
determined in accordance with the provisions of SECTION 13.1.3.
1.1.11 "Affiliate" means, with respect to a Person, (a) any officer,
director, member, employee or managing agent of such Person, (b) any spouse,
parents, brothers, sisters, children and grandchildren of such Person, (c) any
association, partnership, trust, entity or enterprise in which such Person is a
director, officer, member or general partner, (d) any other Person that, (i)
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such given Person, (ii) directly
or indirectly beneficially owns or holds 10% or more of any class of voting
stock or partnership or other interest of such Person or any Subsidiary of such
Person, or (iii) 10% or more of the voting stock or partnership or other
interest of which is directly or indirectly beneficially owned or held by such
Person or a Subsidiary of such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities or partnership or other interests, by contract or otherwise.
1.1.12 "Agreement" means this Loan Agreement, including the Exhibits and
Schedules hereto, and all amendments, modifications and supplements hereto and
thereto and restatements hereof and thereof.
1.1.13 "Agreement Date" means the date as of which this Agreement is dated.
1.1.14 "American Aero" means American Aero Cranes, L.L.C., a Louisiana
limited liability company.
1.1.15 "Applicable Margin" prior to the consummation of the Merger, the
Applicable Margin is in accordance with the table below:
Loan Agreement
Final Execution Copy
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Margin is in accordance with the table below:
Senior Secured Debt/EBITDA Applicable Margin
-------------------------- -----------------
greater than 3.0 0.75%
3.0 or less 0.05%
Upon the consummation of the Merger, the applicable margin shall be in
accordance with the table below:
Senior Secured Debt/EBITDA Applicable Margin
-------------------------- -----------------
greater than 3.00 0.25%
3.00 or less 0.00%
1.1.16 "ASI Accounts" means Receivables due to a Borrower with respect to
which the Account Debtor has agreed in writing that such Borrower will invoice
goods giving rise to such Receivable upon completion and hold such goods
rendering receipt of shipping instructions, such agreement to be substantially
in the form attached as EXHIBIT 1.1.16 and a copy thereof delivered to Agent
prior to being considered an ASI Account.
1.1.17 "Benefit Plan" means an employee benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which a Person or
any Related Company is, or within the immediately preceding 6 years was, an
"employer" as defined in Section 3(5) of ERISA, including such plans as may be
established after the Agreement Date.
1.1.18 "Borrower" means Aero and American Aero, and any Additional
Borrower, and "Borrowers" means all of the foregoing.
1.1.19 "Borrowing Base" means at any time an amount equal to the sum of (a)
85% (or such lesser percentage as the Required Lenders may in their sole and
absolute discretion determine from time to time) of the face value of Eligible
Receivables due and owing at such time, (b) 50% (or such lesser percentage as
the Required Lenders may in their sole and absolute discretion determine from
time to time) of the value of Eligible Inventory, (c) except as provided in the
following CLAUSE (D) 25% (or such lesser percentage as the Required Lenders may
in its sole and absolute discretion determine from time to time) of non parts
WIP, (d) 85% (or such lesser percentage as Required Lenders may in their sole
and absolute discretion determine from time to time) of WIP subject to a United
States government guaranty, in a form and amount acceptable to Required Lenders
in their sole and absolute discretion, or (e) such other matters acceptable to
Lenders in their sole and absolute discretion.
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1.1.20 "Borrowing Base Certificate" means a certificate in the form of
EXHIBIT 1.1.20 attached hereto, showing the Borrowing Base, the Fixed Asset
Borrowing Base and the CAPEX Borrowing Base or such other form as may be
acceptable to the Lender in its discretion.
1.1.21 "Borrowing Date" shall have the meaning set forth in SECTION
2.2.4.1.
1.1.22 "Business Day" means any day other than a Saturday, Sunday or other
day on which banks in the city in which the Agent's Office is located are
authorized to close.
1.1.23 "Business Unit" means the assets constituting the business, or a
division or operating unit thereof, of any Person.
1.1.24 "CAPEX Borrowing Base" means at any time a sum equal to 90% (or such
lesser percentage as Required Lenders may in their sole and absolute discretion
determine) of the CAPEX Hard Costs.
1.1.25 "CAPEX Credit Availability" means as of the date of determination,
the aggregate principal amount of the CAPEX Credit Advances available to be
borrowed by the Borrowers hereunder at the time of determination in accordance
with SECTION 2.2.3, which shall be equal to the remainder derived by subtracting
the aggregate principal amount of the CAPEX Credit Advances outstanding on such
date from an amount equal to the lesser of: (i) the Total Credit Facility,
MINUS, the total principal amount outstanding, at the date of determination,
under the Revolving Credit Advances, the Fixed Asset Advances, the Overadvance
Advances and the Letter of Credit Obligations; or (ii) the CAPEX Borrowing Base.
1.1.26 "CAPEX Credit Advances" means advances made to the Borrowers
pursuant to SECTION 2.2.3. Each advance made pursuant to a request under SECTION
2.2.5 shall be a "CAPEX Credit Advance" and all such advances shall be the
"CAPEX Credit Advances".
1.1.27 "CAPEX Hard Cost" means, as to each Capital Expenditure, mean the
total actual cost as shown on the depreciation schedule attached to the
Borrowing Base Certificate, MINUS, any administrative, overhead and any other
soft costs contained the depreciation schedule.
1.1.28 "Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets (other
than assets which constitute a Business Unit) which are not, in accordance with
GAAP, treated as expense items for such Person in the year made or incurred or
as a prepaid expense applicable to a future year or years.
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1.1.29 "Capitalized Lease" means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
1.1.30 "Capitalized Lease Obligation" means Indebtedness represented by
obligations under a Capitalized Lease, and the amount of such Indebtedness shall
be the capitalized amount of such obligations determined in accordance with
GAAP.
1.1.31 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.1.32 "Collateral" means and includes all of the Borrowers' right, title
and interest in and to all its property; whether incorporeal, corporeal,
tangible or intangible, movable or immovable, real or personal whenever located
and whether now or hereinafter existing or now owned or hereinafter acquired,
including without limitation, Receivables, Equipment, Inventory, Deposit
Accounts, General Intangibles and Real Estate other than Equipment and Inventory
located outside of the U.S. or Receivables not included in the Borrowing Base;
provided, however, that Inventory, Equipment and Receivables located or deemed
to be located outside of the United States may be included as "Collateral" if
Borrowers provide a legal opinion in a form reasonably acceptable to Agent, by
counsel, reasonably acceptable to Agent, qualified to practice law in the
jurisdiction where such "Collateral" is located or deemed to be located.
1.1.33 "Commitment" shall mean with respect to a Lender, the amount set
forth by such Lender's name in SCHEDULE 1 directly below the column entitled
"Commitment" as the same may be reduced from time to time pursuant to SECTION
3.5.5.1.
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1.1.34 "Consolidated" means, when used with reference to any financial
account, the sum of such accounts of Aero and its Consolidated Subsidiaries, as
consolidated after elimination of intercompany items and, if used with reference
to Net Income or Net Worth, after appropriate deductions for any minority
interests in any Subsidiaries, all in accordance with GAAP.
1.1.35 "Consolidated Net Worth of Aero" means the Net Worth of Aero and its
Consolidated Subsidiaries after appropriate reductions for any minority
interests in any Subsidiaries in accordance with GAAP, adjusted on a quarterly
basis.
1.1.36 "Consolidated Subsidiaries" means, as to Aero, American Aero and any
other Subsidiary of Aero whose accounts are, at the time in question,
consolidated in accordance with GAAP with those of Aero, PROVIDED, THAT, as to
any Subsidiary other than American Aero, such consolidation shall be subject to
the prior consent of the Required Lenders, which consent shall be conditioned
upon the execution and delivery of guaranties, security agreements, amendments
to this Agreement or such other agreements or documents as the Required Lenders
may specify.
1.1.37 "Controlled Disbursement Account" means the account maintained by
and in the name of the Borrowers with the Agent for the purpose of disbursing
Revolving Loan proceeds and amounts credited thereto pursuant to SECTIONS
2.2.4.2.
1.1.38 "Debt" means (a) Indebtedness for money borrowed, (b) Indebtedness,
whether or not in any such case the same was for money borrowed, (i) represented
by notes payable, drafts accepted and payment made on behalf of such Person
under letters of credit and similar instruments, that represent extensions of
credit, (ii) constituting obligations evidenced by bonds, debentures, notes or
similar instruments, or (iii) upon which interest charges are customarily paid
or that was issued or assumed as full or partial payment for property (other
than trade credit that is incurred in the ordinary course of business), (c)
Indebtedness that constitutes a Capitalized Lease Obligation, (d) Indebtedness
under Interest Rate Agreements, and (e) Indebtedness that is such by virtue of
CLAUSE (G) of the definition thereof, but only to the extent that the
obligations Guaranteed are obligations that would constitute Debt.
1.1.39 "Deed of Trust" means deeds of trust executed by a Borrower covering
Real Estate located in Texas securing the Secured Obligations in favor of Agent,
as Agent for the Lenders, acceptable to Lenders in their sole discretion
substantially in the form attached as EXHIBIT 1.1.39 with all blanks
appropriately filled.
1.1.40 "Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
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1.1.41 "Default Margin" means 3.0%.
1.1.42 "Deposit Accounts" means any demand, time passbook, money market or
like depository account, and all certificates of deposit, maintained with a
bank, savings and loan association, credit union or like organization other than
an account evidenced by a certificate of deposit that is an instrument under the
UCC.
1.1.43 "Dollar" and "$" means freely transferable United States dollars.
1.1.44 "Drawing" means with respect to any Letter of Credit, a drawing made
by the beneficiary of such Letter of Credit.
1.1.45 "EBITDA" means for any period (i) the income (or deficit) of Aero
and its Consolidated Subsidiaries before provision for Taxes for such period
(excluding to the extent not already deducted income attributable to minority
interests in Subsidiaries for such period), PLUS (ii) Interest Expense for such
period, PLUS (iii) all amounts in respect of depreciation and amortization for
such period.
1.1.46 "ERISA" means the Employee Retirement Income Security Act of 1974,
as in effect from time to time, and any successor statute.
1.1.47 "Effective Date" means the later of (a) the Agreement Date, and (b)
the first date on which all of the conditions set forth in SECTION 4.1 shall
have been fulfilled or waived by the Agent.
1.1.48 "Effective Interest Rate" means the rate of interest per annum on
the Advances in effect from time to time pursuant to the provisions of SECTION
3.1.1, 3.1.2, 3.1.3 AND 3.1.4.
1.1.49 "Eligible Equipment" means Equipment which meets the following
requirements: (a) it is in good and workable condition, ordinary wear and tear
excepted; (b) no portion of the purchase price thereof remains unpaid, as
established by documentation satisfactory to Agent; (c) it is not subject to any
Lien other than Permitted Liens, except Purchase Money Liens shall not be
permitted; (d) it complies with Borrowers' specifications and has been delivered
to and accepted by Borrowers; (e) there exists no dispute with respect thereto
between Borrowers and the manufacturers or supplier thereof, including but not
limited to warranty or other claims; (f) it is not Equipment which in any way
fails to meet or violates any warranty representation or covenant contained in
this Agreement or the other Loan Documents relating directly or indirectly to
Borrowers' Equipment; (g) Agent has not determined in its sole and absolute
discretion that it is not acceptable due to age, type, condition or quality; and
(h) it is included in an Equipment Appraisal. Equipment which at any time is
Eligible Equipment, but which subsequently fails to meet any of the foregoing
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requirements shall cease forthwith to be Eligible Equipment. Inclusion of any
Equipment that does not meet the requirements of (a) through (h) shall require
the consent of the Required Lenders.
1.1.50 "Eligible Inventory" means Inventory of a Borrower except: (a)
Inventory which is not owned by Borrower free and clear of all security
interests, liens, encumbrances and claims of third parties; (b) Inventory which
Agent, in its sole discretion deems obsolete, unsalable, damaged, defective, or
unfit for further processing; (c) WIP, components which are not finished goods,
spare parts, packaging and shipping materials, or supplies used and consumed in
Borrowers' business; (d) Inventory not insured pursuant to the terms hereof or
the Security Documents; (d) Inventory which was not produced in accordance with
the Fair Labor Standards Act of 1938, as amended; (f) Inventory purchased or
held on consignment with a value in excess of $250,000 in the aggregate; and (g)
any Inventory located outside the United States of America unless otherwise
approved in writing by the Required Lenders. No inventory in the possession of
any Borrower which constitutes an ASI Account shall be deemed Eligible
Inventory, regardless of whether title to such Inventory has passed.
1.1.51 "Eligible Receivable" means a Receivable of a Borrower that consists
of the unpaid portion of the obligation stated on the invoice issued to an
Account Debtor with respect to services performed for such Account Debtor in the
ordinary course of business, net of any credits or rebates owed by such Borrower
to the Account Debtor and that the Required Lenders, in their absolute
discretion, determines to be eligible for inclusion in the Borrowing Base.
Unless otherwise approved in writing by the Required Lenders, no Receivable
shall be deemed an Eligible Receivable unless it meets all of the following
requirements or is secured by a Letter of Credit in a form and amount acceptable
to Agent, in its sole absolute discretion: (a) such Receivable is owed by a
Borrower and represents a complete BONA FIDE transaction which requires no
further act under any circumstances on the part of such Borrower to make such
Receivable payable by the Account Debtor; (b) such Receivable is not unpaid more
than 120 days after the date of the original invoice; (c) such Receivable does
not arise out of any transaction with any Subsidiary, creditor, lessor or
supplier of such Borrower; (d) such Receivable is not owing by an Account Debtor
more than 25% of whose then-existing accounts owing to the Borrowers do not meet
the requirements set forth in clause (b) above; (e) the Account Debtor with
respect to such Receivable is not located in a state which imposes conditions on
the enforceability of Receivables with which such Borrower has not complied; (f)
such Receivable is not subject to the Assignment of Claims Act of 1940, as
amended from time to time, or any applicable law now or hereafter existing
similar in effect thereto, as determined in the sole discretion of the Agent, or
to any provision prohibiting its assignment or requiring notice of or consent to
such assignment; (g) the Account Debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceedings of any kind
or of any other proceeding or action, threatened or pending, which might, in the
Agent's sole judgment, have a Materially Adverse Effect on such Account Debtor;
(h) such Receivable is not owing by
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an Account Debtor or a group of affiliated Account Debtors whose then-existing
accounts owing to such Borrower exceed in face amount 40% of such Borrower's
total Eligible Receivables; (i) such Receivable is evidenced by an invoice or
other documentation in form acceptable to the Agent containing only terms
normally offered by such Borrower; (j) such Receivable is a valid, legally
enforceable obligation of the Account Debtor with respect thereto and is not
subject to any present, or contingent (and no facts exist which are the basis
for any future), offset, deduction or counterclaim, dispute or other defense on
the part of such Account Debtor; (k) such Receivable is not evidenced by chattel
paper or an instrument of any kind; (l) such Receivable does not arise out of
service charges by such Borrower or other fees for the time value of money; (m)
such Receivable is subject to the Security Interest, which is perfected as to
such Receivable, and is subject to no other Lien whatsoever other than a
Permitted Lien; (n) such Receivable does not arise out of a transaction with an
Affiliate; (o) the goods giving rise to such Receivable have not been delivered
or accepted by the Account Debtor or the Receivable does not represent a final
sale (other than the ASI Accounts); and (p) for receivables that are located or
deemed to be located outside the United States such Receivable is owed an
Account Debtor which is a publicly traded foreign oil company with a principal
business office in the United States or the Account Debtor is Xxxxxx Engineering
or Timro. Inclusion of any Receivable that does not meet the requirements of (a)
through (p) above shall require the consent of the Required Lenders.
1.1.52 "Eligible Real Estate" means Real Estate in which a Borrower has
good, indefeasible and merchantable fee title free and clear of all Liens
without any violation or potential violation of Environmental Laws, all in a
manner acceptable to Agent in its sole and absolute discretion and, for Real
Estate with a value in excess of $500,000, for which Borrowers have provided
Agent with a Real Estate Appraisal acceptable to Agent in its sole and absolute
discretion. PROVIDED, THAT, for any Real Estate meeting the foregoing
requirements, Agent shall have the right to include Real Estate as Eligible Real
Estate. Inclusion of any Real Estate that does not meet the foregoing
requirements shall require the consent of the Required Lenders.
1.1.53 "Environmental Laws" means all federal, state, local and foreign
laws now or hereafter in effect relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals or industrial, toxic
or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water or land) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes, and any and all
regulations, notices or demand letters issued, entered, promulgated or approved
thereunder.
1.1.54 "Equipment" means (i) all machinery, apparatus, equipment, motor
vehicles, tractors, trailers, rolling stock, fittings, fixtures and other
tangible personal property (other
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than inventory) of every kind and description, including, without limitation,
any and all poles, posts, cross-arms, conduits, ducts, lines (whether
underground or overhead or otherwise), wires, cables, exchanges, switches
(including, without limitation, host switches and remote switches), testboards
and paystations, (ii) all tangible personal property (other than inventory) and
fixtures used in the Borrowers' business operations or owned by the Borrowers or
in which the Borrowers have an interest, (iii) all parts, accessories and
special tools and all increases and accessions thereto and substitutions and
replacements therefor, and (iv) all other Equipment as defined in the UCC.
1.1.55 "Equipment Appraisal" shall mean an appraisal of the Equipment
obtained by the Agent, at Borrower's expense, indicating the orderly liquidation
value of the Equipment acceptable to the Agent, in its sole discretion.
1.1.56 "Event of Default" means any of the events specified in
SECTION 10.1.
1.1.57 "Excluded Collateral" means any Collateral located or deemed to be
located outside the United States of America.
1.1.58 "Facilities" means collectively and interchangeably, the Revolving
Facility, the Overadvance Facility and the Letter of Credit Facility.
1.1.59 "Financing Statements" means the Uniform Commercial Code financing
statements executed and delivered by each Borrower to the Agent, naming the
Agent as secured party and such Borrower as debtor, in connection with this
Agreement and the Security Documents.
1.1.60 "Fixed Asset Availability" means as the date of determination the
aggregate principal amount of the Fixed Asset Advances available to be borrowed
by the Borrowers hereunder at the time of determination in accordance with
SECTION 2.2.2, which shall be equal to the remainder derived by subtracting the
aggregate principal amount of the Fixed Asset Advances outstanding on such date
from an amount equal to the lesser of: (i) the Total Credit Facility, MINUS, the
total principal amount outstanding as of the date of determination under the
Revolving Credit Advances, the CAPEX Credit Advances, the Overadvance Advances,
and the Letter of Credit Obligations; or (ii) the Fixed Asset Borrowing Base.
1.1.61 "Fixed Asset Advances" means advances made to the Borrowers pursuant
to SECTION 2.2.2. Each advance made pursuant to request under SECTION 2.2.5
based on the Fixed Asset Borrowing Base shall be a "Fixed Asset Advance" and all
such advances shall be the "Fixed Asset Advances."
1.1.62 "Fixed Asset Borrowing Base" means at any time an amount equal to
80% (or such lesser percentage as the Required Lenders may in their sole and
absolute discretion
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determine from time to time) of the sum of (i) the appraised orderly liquidation
value of the Eligible Equipment according to the Equipment Appraisal, and (ii)
the appraised value of the Eligible Real Estate according to the Real Estate
Appraisals.
1.1.63 "GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the American Institute of Certified
Public Accountants acting through its Accounting Principles Board or by the
Financial Accounting Standards Board or through the appropriate committees
thereof and which are consistently applied for all periods after the date hereof
so as to properly reflect the financial condition, and the results of operations
and changes in financial position, of Aero and its Consolidated Subsidiaries,
except that any accounting principle or practice required to be changed by the
Accounting Principles Board or Financial Accounting Standards Board (or other
appropriate board or committee of such Boards) in order to continue as a
generally accepted accounting principle or practice may so be changed. In the
event of a change in GAAP, Lenders and Borrowers will thereafter negotiate in
good faith to revise the covenants of this Agreement affected thereby in order
to make such covenants consistent with GAAP then in effect.
1.1.64 "General Intangibles" all general intangibles, chooses in action and
causes of action and all other intangible personal property of every kind and
nature (other than Receivables), including, without limitation, Intellectual
Property, corporate or other business records, inventions, designs, blueprints,
plans, specifications, trade secrets, goodwill, computer software, customer
lists, registrations, licenses, permits, franchises, privileges, permissions and
grants (other than any such registrations, licenses, permits, franchises,
privileges, permissions or grants which would by their terms or pursuant to
applicable law become void or voidable if a security interest therein were
granted, or the granting of a security interest in which would constitute a
default under the terms thereof or in which a security interest cannot be
granted without the consent of other parties whose consent has not been
obtained), tax refund claims, reversions or any rights thereto and any other
amounts payable to such Person from any Benefit Plan, Multiemployer Plan or
other employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
property, casualty or any similar type of insurance and any proceeds thereof,
the beneficiary's interest in proceeds of insurance covering the lives of key
employees and any letter of credit, guarantee, claims, security interest or
other security for the payment by an Account Debtor of any of the Receivables.
1.1.65 "Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all governmental bodies, whether federal, state, local, foreign
national or provincial, and all agencies thereof.
1.1.66 "Governmental Authority" means any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.
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1.1.67 "Guaranteed Obligations" shall have the meaning set forth in
SECTION 3.9.1.
1.1.68 "Guaranty", "Guaranteed" or to "Guarantee," as applied to any
obligation of another Person, shall mean and include (a) a guaranty (other than
by endorsement of negotiable instruments for collection in the ordinary course
of business), directly or indirectly, in any manner, of any part or all of such
obligation of such other Person, and, (b) an agreement, direct or indirect,
contingent or otherwise, and whether or not constituting a guaranty, the
practical effect of which is to assure the payment or performance (or payment of
damages in the event of nonperformance) of any part or all of such obligation of
such other Person whether by (i) the purchase of securities or obligations, (ii)
the purchase, sale or lease (as lessee or lessor) of property or the purchase or
sale of services primarily for the purpose of enabling the obligor with respect
to such obligation to make any payment or performance (or payment of damages in
the event of nonperformance) of or on account of any part or all of such
obligation or to assure the owner of such obligation against loss, (iii) the
supplying of funds to, or in any other manner investing in, the obligor with
respect to such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit, or (v) the supplying of funds to or
investing in a Person on account of all or any part of such Person's obligation
under a guaranty of any obligation or indemnifying or holding harmless (outside
the ordinary course of business), in any way, such Person against any part or
all of such obligation.
1.1.69 "Indebtedness" of any Person means, without duplication, (a)
Liabilities, (b) all obligations for money borrowed or for the deferred purchase
price of property or services or in respect of drafts accepted or reimbursement
obligations under letters of credit, (c) all obligations represented by bonds,
debentures, notes and accepted drafts and similar instruments that represent
extensions of credit, (d) Capitalized Lease Obligations, (e) all obligations
(including, during the noncancellable term of any lease in the nature of a title
retention agreement, all future payment obligations under such lease discounted
to their present value in accordance with GAAP) secured by any Lien to which any
property or asset owned or held by such Person is subject, whether or not the
obligation secured thereby shall have been assumed by such Person, (f) all
obligations under Interest Rate Agreements, (g) all obligations of other Persons
which such Person has Guaranteed, including, but not limited to, all obligations
of such Person consisting of recourse liability with respect to accounts
receivable sold or otherwise disposed of by such Person (other than indemnities
granted in the ordinary course of business), and (h) in the case of the Borrower
(without duplication) the Loans.
1.1.70 "Initial Advances" means the Advances to the Borrowers on the
Effective Date pursuant to the letter referred to in SECTION 4.1.1.12.
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1.1.71 "Intellectual Property" means, as to any Person, all of such
Person's then owned existing and future acquired or arising patents, patent
rights, copyrights, works which are the subject of copyrights, trademarks,
service marks, trade names, trade styles, patent, trademark and service xxxx
applications, and all licenses and rights related to any of the foregoing and
all other rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations and continuations-in-part of any of the foregoing and
all rights to xxx for past, present and future infringements of any of the
foregoing.
1.1.72 "Interest Expense" means any interest in any Debt paid or accrued as
on financial statements provided under SECTIONS 5.1.13 AND 8.1 prepared in
accordance with GAAP.
1.1.73 "Interest Rate Agreements" means an interest rate swap, cap or
collar agreement or similar arrangement between any Person and a financial
institution providing for the transfer or mitigation of interest rate risks
either generally or under specific contingencies.
1.1.74 "Inventory" means all of Borrowers' raw materials, WIP, finished
goods, merchandise, parts and supplies, of every kind and description, and goods
held for sale or lease or furnished under contracts of service in which
Borrowers now has or hereafter acquires a right, whether held by Borrowers or
others, and all documents of title, merchandise receipts, bills of lading, and
all other documents of every type covering all or any part of the foregoing.
Inventory includes inventory temporarily out of Borrowers' custody or possession
and all returns on Receivables.
1.1.75 "Investment" means, with respect to any Person: (a) the direct or
indirect purchase or acquisition of any beneficial interest in, any share of
capital stock of, evidence of Indebtedness of or other security issued by any
other Person, (b) any loan, advance or extension of credit to, or contribution
to the capital of, any other Person, excluding advances to employees in the
ordinary course of business for business expenses, (c) any Guaranty of the
obligations of any other Person, (d) any other investment in any other Person,
or (e) any commitment or option to take any of the actions described in CLAUSES
(A) THROUGH (D) above.
1.1.76 "ITS" shall mean International Tool & Supply PLC, an English
company.
1.1.77 "Lender" means any one of National Canada Finance Corp. or the
Persons listed on the signature pages under the heading Lenders and listed on
SCHEDULE 1 hereto, and "Lenders" shall mean all such Persons.
1.1.78 "Lender Default"shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Loan or to fund its
portion of any unreimubursed payment under SECTION 2.4.6, or (ii) a Lender
having notified the Agent
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and/or the Borrowers that it does not intend to comply with its obligations to
fund its designated percentage of any Advance under SECTIONS 2.2.5.2 OR 2.4.6.3.
1.1.79 "Letter of Credit Bank" shall mean National Bank of Canada.
1.1.80 "Letter of Credit Fee" shall have the meaning set forth in
SECTION 3.2.5.
1.1.81 "Letter of Credit Request" shall have the meaning set forth in
SECTION 2.4.1.2.
1.1.82 "Letters of Credit" mean any and all standing or commercial letters
of credit issued by the Letter of Credit Bank for the account of Borrowers (or
any of them pursuant to SECTION 2.4.1 hereof, and any extension, renewals,
modifications or substitutions thereof or therefor which may be in effect from
time to time.
1.1.83 "Letter of Credit Limit" means as of the date of determination the
Total Credit Facility, MINUS the greater of (i) the principal amount outstanding
as of the date of determination under the Revolving Credit Advances, the Fixed
Asset Advances, the CAPEX Credit Advances and the Overadvance Advances or (ii)
the sum of the Borrowing Base, the Fixed Asset Borrowing Base and the CAPEX
Borrowing Base.
1.1.84 "Letter of Credit Obligations" means in respect to any Letter of
Credit and as of any date, the maximum amount then available to be drawn under
such Letter of Credit, PLUS the aggregate principal amount of all Reimbursement
Obligations then outstanding in respect thereof.
1.1.85 "LIBOR" means Reference Bank's established per annum rates based on
London Interbank Offered Rates as publically announced by Reference Bank in its
principal office for any given Business Day. This rate shall be decreased, as
the case may be, by an amount equal to any increase or decrease in LIBOR, with
such adjustments to be effective as of the opening of business on the next
Business day that any such change in LIBOR becomes effective. LIBOR in effect on
the Effective Date shall be LIBOR in effect as of the opening of business on the
Effective Date; PROVIDED, THAT, if the Effective Date is a date which is not a
Business Day, LIBOR in effect on the Effective Date shall be LIBOR as of the
opening of business on the last Business Day immediately preceding the Effective
Date. LIBOR is a reference used by the Reference Bank in determining interest
rates on certain loans and is not intended to be the lowest rate of interest
charges on any extension of credit to any debtor.
1.1.86 "LIBOR Applicable Margin" prior to the consummation of the Merger,
means a determination based on the following:
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------------------------------------------------------------------------------
Senior Secured Debt/EBITDA LIBOR Applicable Margin
------------------------------------------------------------------------------
greater than 3.00 2.50%
------------------------------------------------------------------------------
between 3.00 to 2.50 2.25%
------------------------------------------------------------------------------
between 2.50 to 1.50 2.00%
------------------------------------------------------------------------------
less than 1.50 1.75%
------------------------------------------------------------------------------
After the consummation of the Merger, LIBOR Applicable Margin means a
determination in accordance with the table below:
------------------------------------------------------------------------------
Senior Secured Debt/EBITDA LIBOR Applicable Margin
------------------------------------------------------------------------------
greater than 3.00 2.00%
------------------------------------------------------------------------------
between 3.00 to 2.50 1.75%
------------------------------------------------------------------------------
between 2.50 to 1.50 1.50%
------------------------------------------------------------------------------
less than 1.50 1.25%
------------------------------------------------------------------------------
1.1.87 "LIBOR Interest Period" means a period of time commencing on the
date specified in the Notice of Borrowing selecting the LIBOR Interest Rate
pursuant to SECTION 3.1.2 and ending on the opening of business at the
expiration of the LIBOR Term elected by Borrowers in the Notice of Borrowing
pursuant to SECTION 3.1.2.
1.1.88 "LIBOR Interest Rate" shall have the meaning set forth in
SECTION 3.1.1.
1.1.89 "LIBOR Term" means the term allowed by Reference Bank to be used in
for loans with LIBOR Interest Rates. Currently, Reference Bank allows one (1)
month, two (2) month, three (3) month, six (6) month, nine (9) month or twelve
(12) month LIBOR Terms.
1.1.90 "Liabilities" means all liabilities of a Person determined in
accordance with GAAP and includable on a balance sheet of such Person prepared
in accordance with GAAP.
1.1.91 "Lien" as applied to the property of any Person means: (a) any
mortgage, deed to secure debt, deed of trust, lien, pledge, charge, assignment,
collateral assignments, lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security interest,
security title or encumbrance of any kind in respect of
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any property of such Person or upon the income or profits therefrom, (b) any
arrangement, express or implied, under which any property of such Person is
transferred, sequestered or otherwise identified for the purpose of subjecting
the same to the payment of Indebtedness or performance of any other obligation
in priority to the payment of the general, unsecured creditors of such Person,
(c) any Indebtedness which is unpaid more than 30 days after the same shall have
become due and payable and which if unpaid might by law (including, but not
limited to, bankruptcy and insolvency laws) or otherwise be given any priority
whatsoever over general unsecured creditors of such Person, (d) the filing of,
or any agreement to give, any financing statement under the UCC or its
equivalent in any jurisdiction, and (e) in the case of Real Estate,
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances.
1.1.92 "Loan Documents" means, collectively, this Agreement, the Note, the
Security Documents and each other instrument, agreement and document executed
and delivered by a Borrower in connection with this Agreement and each other
instrument, agreement or document referred to herein or contemplated hereby.
1.1.93 "Majority Lenders" means Non-Defaulting Lenders whose Commitment (or
if the Total Credit Facility is terminated, outstanding Advances and the
percentage of the Overadvance Advances and the Letter of Credit Obligations
constitute greater than 80% of the Total Credit Facility (or if the Total Credit
Facility has terminated, the Total Outstanding Advances and the aggregate
Percentage of the Total Outstanding Overadvance Advances and the Letter of
Credit Obligations at such time).
1.1.94 "Materially Adverse Effect" means any act, omission, situation,
circumstance, event or undertaking which would, singly or in any combination
with one or more other acts, omissions, situations, circumstances, events or
undertakings, have, or reasonably be expected by the Lender to have, a
materially adverse effect upon (a) the business, assets, properties,
liabilities, condition (financial or otherwise), results of operations or
business prospects of a Borrower, (b) the value of the whole or any part of the
Collateral, the Security Interest or the priority of the Security Interest, (c)
the respective ability of a Borrower to perform any obligations under this
Agreement or any other Loan Document to which it is a party, or (d) the
legality, validity, binding effect, enforceability or admissibility into
evidence of any Loan Document or the ability of the Agent and Lenders to enforce
any rights or remedies under or in connection with any Loan Document.
1.1.95 "Merger" shall have the meaning set forth in SECTION 11.1.
1.1.96 "Merger Letter Agreement" shall mean that certain letter agreement
by and between Aero and ITS attached as EXHIBIT 1.1.96 as amended and revised as
shown in EXHIBIT 1.1.96.
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1.1.97 "Mortgage" means (i) as to Real Estate located in Louisiana a
mortgage granted under article 3298 of the Louisiana Civil Code covering all
Real Estate located in Louisiana in favor of Agent, as Agent for the Lenders,
securing the Secured Obligations, acceptable to Agent in its sole discretion
substantially in the form attached as EXHIBIT 1.1.97 with all blanks
appropriately filled, and (ii) as to Real Estate located in Alabama means a
mortgage or mortgages covering all Real Estate of Borrowers located in Alabama
in favor of Agent, as Agent for the Lenders securing the Secured Obligations,
acceptable to Agent in its sole discretion substantially in the form attached as
EXHIBIT 1.1.97 with all blanks appropriately filled.
1.1.98 "Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which any Borrower or a Related Company is
required to contribute or has contributed within the immediately preceding 6
years.
1.1.99 "Net Income" or "Net Loss" means, as applied to any Person for any
accounting period, the net income or net loss, as the case may be, of such
Person for the period in question after giving effect to deduction of or
provision for all operating expenses, all taxes and reserves (including reserves
for deferred taxes) and all other proper deductions, all determined in
accordance with GAAP.
1.1.100 "Net Worth" of any Person means the total shareholders' or members'
equity (including capital stock or membership interest, additional paid-in
capital and retained earnings, after deducting treasury stock) which would
appear as such on a balance sheet of such Person prepared in accordance with
GAAP.
1.1.101 "Non-Defaulting Lender" shall mean any Lender other than a
Defaulting Lender.
1.1.102 "Note" shall mean the promissory note executed pursuant to
SECTION 2.1 in the form attached as EXHIBIT 1.1.102.
1.1.103 "Notice of Borrowing" shall have the meaning set forth in
SECTION 2.2.4.1.
1.1.104 "Operating Lease" means any lease (other than a lease constituting
a Capitalized Lease Obligation) of real or personal property as defined under
GAAP.
1.1.105 "Overadvance Advances" means loans or advances made to the
Borrowers pursuant to SECTION 2.3. Each advance made pursuant to a request under
SECTION 2.3 shall be an "Overadvance Advance" and all such advances shall be the
"Overadvance Advances."
1.1.106 "Overadvance Availability" shall mean as of the date of
determination, the
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aggregate principal amount of the Overadvance Advances available to be borrowed
by the Borrowers hereunder at the time of determination in accordance with
SECTION 2.3 which shall be equal to the remainder derived by subtracting the
aggregate principal amount of the Overadvance Advances outstanding on such date
from an amount equal to the lesser of (i) the Total Credit Facility, MINUS, the
total principal amount outstanding as of the date of determination under the
Revolving Credit Advances, the CAPEX Credit Advances, the Fixed Asset Advances,
and the Letter of Credit Obligations and (ii) $2,000,000.
1.1.107 "Overadvance Facility" means the credit facility for Overadvance
Advances described in SECTION 2.3 up to an aggregate principal amount of any one
time outstanding not to exceed the principal sum of $2,000,000.
1.1.108 "Participant" shall have the meaning set forth in SECTION 2.4.6.1.
1.1.109 "PBGC" means the Pension Benefit Guaranty Corporation or any
successor agency.
1.1.110 "Percentage" shall mean at any time for each Lender, the percentage
obtained by dividing such Lender's Commitment by the Total Credit Facility;
PROVIDED, THAT, if the Total Credit Facility has been terminated, the Percentage
of each Lender shall be determined by dividing such Lender's Commitment
immediately prior to such termination by the Total Credit Facility immediately
prior to such termination.
1.1.111 "Permitted Investments" means: (a) Investments of a Borrower in:
(i) negotiable certificates of deposit, time deposits and banker's acceptances
issued by any Lender or any Affiliate of any Lender or by any United States bank
or trust company having capital, surplus and undivided profits in excess of
$250,000,000, (ii) any direct obligation of the United States of America or any
agency or instrumentality thereof which has a remaining maturity at the time of
purchase of not more than one year and repurchase agreements relating to the
same, (iii) sales on credit in the ordinary course of business on terms
customary in the industry, and (iv) notes, accepted in the ordinary course of
business, evidencing overdue accounts receivable arising in the ordinary course
of business, and (b) other Investments of the Borrower, the net aggregate amount
of which does not at any time exceed $1,000,000.
1.1.112 "Permitted Liens" means: (a) Liens securing taxes, assessments and
other governmental charges or levies (excluding any Lien imposed pursuant to any
of the provisions of ERISA) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, but in all cases, only if payment shall not at
the time be required to be made in accordance with SECTION 7.4; (b) Liens
consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers'
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compensation, unemployment insurance or similar legislation or under surety or
performance bonds, in each case arising in the ordinary course of business; (c)
Liens constituting encumbrances in the nature of zoning restrictions, easements
and rights or restrictions of record on the use of the Real Estate; (d) Purchase
Money Liens securing Permitted Purchase Money Indebtedness; (e) Liens of the
Agent, for the benefit of the Lenders, arising under this Agreement and the
other Loan Documents; (f) Liens arising out of or resulting from any judgment or
award, the time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the applicable Borrower is fully protected by
Insurance or in respect of which such Borrower shall at any time in good faith
be prosecuting an appeal or proceeding for a review and in respect of which a
stay of execution pending such appeal or proceeding for review shall have been
secured, and as to which appropriate reserves have been established on the books
of such Borrower; and (g) Liens in existence immediately prior to the Effective
Date that are satisfied in full and released on the Effective Date or promptly
thereafter as a result of the application of the proceeds of the Loans or cash
on hand.
1.1.113 "Permitted Purchase Money Debt" means Purchase Money Debt (other
than Acquisition Debt) secured only by Purchase Money Liens and Capitalized
Lease Obligations, incurred by the Borrowers after the Agreement Date, up to an
aggregate amount outstanding at any time equal to $250,000.
1.1.114 "Person" means an individual, corporation, partnership,
association, entity, trust or unincorporated organization or a government or any
agency or political subdivision thereof.
1.1.115 "Pledge Agreement" shall mean an agreement in which Aero pledges to
Agent, as Agent for the Lenders, all of its rights in and to 100% of the
membership interests in American Aero and the equity interests, whether in
membership interest or stock or otherwise, in any Additional Borrower
substantially in the form attached as EXHIBIT 1.1.115.
1.1.116 "Potential Borrower" shall have the meaning set forth in
SECTION 4.3.
1.1.117 "Prime Rate" means the per annum rate of interest publicly
announced by the Reference Bank at its principal office as its "prime rate" for
any Business Day. The Prime Rate shall be increased or decreased, as the case
may be, by an amount equal to any increase or decrease in the Prime Rate, with
such adjustments to be effective as of the opening of business on the next
Business Day that any such change in the Prime Rate became effective. The Prime
Rate in effect on the Effective Date shall be the Prime Rate effective as of the
opening of business on the Effective Date; PROVIDED, THAT, if the Effective Date
is a date which is not a Business Day, the Prime Rate in effect on the Effective
Date shall be the Prime Rate in effect as of the opening of business on the last
Business Day immediately preceding the Effective Date. The Prime Rate is a
reference used by the Reference Bank in determining interest rates on certain
loans and is not intended to be the lowest rate of interest
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charged on any extension of credit to any debtor.
1.1.118 "Purchase Money Debt" means Debt created to finance the payment of
all or any part of the purchase price (not in excess of the fair market value
thereof) of any tangible personal property (other than inventory) and incurred
at the time of or within 10 days prior to or after the acquisition of such
tangible asset.
1.1.119 "Purchase Money Lien" means any Lien securing Purchase Money Debt,
but only if such Lien shall at all times be confined solely to the tangible
personal property (other than inventory) the purchase price of which was
financed through the incurrence of the Purchase Money Indebtedness secured by
such Lien.
1.1.120 "Real Estate" means all of the Borrowers now owned or hereafter
acquired estates or ownership interests in real property (immovable), including,
without limitation, all fees, leaseholds, future interests and easements
(servitudes), together with all of the Borrowers now owned or hereafter acquired
interests in the improvements and emblements thereon, the fixtures attached
thereto and the easements appurtenant thereto.
1.1.121 "Real Estate Appraisal" means an appraisal of the Real Estate
obtained by the Agent, at Borrowers' expense, acceptable to the Agent in its
sole discretion.
1.1.122 "Receivables" means (i) all rights to the payment of money or other
forms of consideration of any kind (whether classified under the UCC as
accounts, contract rights, chattel paper, general intangibles or otherwise)
including, but not limited to, accounts receivable, letters of credit and the
right to receive payment thereunder, chattel paper, tax refunds, insurance
proceeds, any rights under contracts not yet earned by performance and not
evidenced by an instrument or chattel paper, notes, drafts, instruments,
documents, acceptances and all other debts, obligations and liabilities in
whatever form from any Person, (ii) all guaranties, security and Liens securing
payment thereof, (iii) all goods, whether now owned or hereafter acquired, and
whether sold, delivered, undelivered, in transit or returned, which may be
represented by, or the sale or lease of which may have given rise to, any such
right to payment or other debt, obligation or liability, and (iv) all proceeds
of any of the foregoing.
1.1.123 "Reference Bank" means National Bank of Canada.
1.1.124 "Reimbursement Obligations" the Borrowers' joint or several, and
solidary obligations under SECTION 2.4.2 hereof to reimburse Lenders for any and
all Drawings honored on or by the Letter of Credit Bank under any and all of the
Letters of Credit, including without limitation, any and all interest which may
accrue thereon which have not yet converted into Revolving Credit Advances.
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1.1.125 "Related Company" means, as to any Person, any (a) corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as such Person, (b) partnership or other
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Code) with such Person, (c) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
such Person or any corporation described in CLAUSE (A) above or any partnership,
trade or business described in clause (b) above, or (d) any other entity
required to be aggregated with a Borrower pursuant to Section 414(o) of the
Code.
1.1.126 "Required Lenders" shall mean Non-Defaulting Lenders whose
Commitment (or if the Total Credit Facility is terminated, outstanding Advances
and the percentage of the Overadvance Advances and the Letter of Credit
Obligations) constitute greater than 66 2/3% of the Total Credit Facility (or if
the Total Credit Facility has been terminated, the total outstanding Advances
and the aggregate Percentage of the total outstanding Overadvance Advances and
the Letter of Credit Obligations at such time).
1.1.127 "Restricted Distribution" by any Person means (a) its retirement,
redemption, purchase, or other acquisition for value of any capital stock or
other equity securities or partnership interests or membership interests issued
by such Person, (b) the declaration or payment of any dividend or distribution
in cash or property on or with respect to any such securities or partnership
interests or membership interests, (c) any loan or advance by such Person to, or
other investment by such Person in, the holder of any of such securities or
partnership interests or membership interests, (d) any other payment by such
Person in respect of such securities or partnership interests or membership
interests, and (e) as to Aero, any issuance of convertible notes or other equity
interest of Aero which, upon conversion into membership interests or shares of
Aero, would give the holders thereof control (within the meaning set forth in
the definition "Affiliate") of Aero.
1.1.128 "Restricted Payment" means (a) any redemption, repurchase or
prepayment, defeasement or other retirement, prior to the stated maturity
thereof or prior to the due date of any regularly scheduled installment or
amortization payment with respect thereto, of any Indebtedness of a Person
(other than the Secured Obligations and trade debt), (b) any payment on or with
respect to any Subordinated Debt other than in accordance with the subordination
provisions thereof, (c) the payment by any Person of the principal amount of or
interest on any Indebtedness (other than trade debt or Acquisition Debt repaid
in accordance with its terms) owing to an Affiliate or to an Affiliate of an
Affiliate of such Person, and (d) the payment of any management, consulting or
similar fee by any Person to any Affiliate of such Person.
1.1.129 "Revolving Credit Availability" means, as of the date of
determination, the aggregate principal amount Revolving Credit Advances
available to be borrowed by the Borrowers hereunder at the time of determination
in accordance with SECTION 2.2, which
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shall be equal to the remainder derived by subtracting the aggregate principal
amount of Revolving Credit Advances outstanding on such date from an amount
equal to the lesser of (i) the Total Credit Facility; MINUS the total principal
amount outstanding as of the date of determination under the CAPEX Advances, the
Fixed Asset Advances, the Overadvance Advances and the Letter of Credit
Obligations; or (ii) the Borrowing Base on such date.
1.1.130 "Revolving Credit Advances" means loans or advances made to the
Borrowers pursuant to SECTION 2.2. Each advance made pursuant to a request under
SECTION 2.4 based on the Borrowing Base shall be a "Revolving Credit Advances"
and all such advances shall be the "Revolving Credit Advances."
1.1.131 "Revolving Facility" means the credit facility providing for
Revolving Credit Advances, the Fixed Asset Advances, and the CAPEX Advances
based upon the Borrowing Base, the Fixed Asset Borrowing Base and the CAPEX
Borrowing Base, respectively described in SECTION 2.2 up to an aggregate
principal amount at any one time outstanding not to exceed the principal sum of
$ 40,000,000.
1.1.132 "Revolving Loans" means the Revolving Credit Advances, the Fixed
Asset Advances and the CAPEX Credit Advances.
1.1.133 "Schedule of Equipment" means a schedule delivered by Borrower to
Agent pursuant to the provisions of SECTION 6.11.3.
1.1.134 "Schedule of Inventory" means a schedule delivered by Borrower to
Agent pursuant to the provisions of SECTION 6.11.3.
1.1.135 "Schedule of Receivables" means a schedule delivered by the
Borrowers to the Agent pursuant to the provisions of SECTION 6.11.3.
1.1.136 "Secured Obligations" means, in each case whether now in existence
or hereafter arising, (a) the principal of and interest and premium, if any, on
the Advances, (b) all obligations of the Borrowers to Agent, the Lenders or any
Affiliate of the Lenders under any Interest Rate Agreement, (c) the Letter of
Credit Obligations, and (d) all indebtedness, liabilities, obligations,
overdrafts, covenants and duties of the Borrowers to the Agent or Lenders or any
Affiliate of the Lenders of every kind, nature and description, direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated and whether or not evidenced by any note and whether
or not for the payment of money arising under or in respect of this Agreement,
any Note or any of the other Loan Documents or arising in connection with any
other transaction or agreement.
1.1.137 "Security Agreement" means a security agreement by Borrower
granting Agent, for the benefit of Lenders, a continuing security interest in
the Collateral constituting
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personal property under the UCC in a form acceptable to Lender in its sole
discretion, securing the Secured Obligations substantially in the form attached
as EXHIBIT 1.1.137 with all blanks appropriately filled.
1.1.138 "Security Documents" means any agreements, promises, covenants,
arrangements, understandings or other agreements created by law, contract or
otherwise, evidencing, governing, representing or creating a Security Interest
including without limitation the Pledge Agreement, the Security Agreement, the
Mortgage, the Deed of Trust and the Financing Statements.
1.1.139 "Security Interest" means the Liens of the Agent on and in the
Collateral effected hereby or by any of the Security Documents or pursuant to
the terms hereof or thereof
1.1.140 "Senior Secured Debt" means any interest bearing Debt other than
the Subordinated Debt.
1.1.141 "Subordinated Debt" means any Debt of a Borrower which is
subordinated to the Secured Obligations on terms and conditions acceptable to
the Required Lenders in their sole and absolute discretion.
1.1.142 "Subsidiary" when used to determine the relationship of a Person to
another Person, means a Person of which an aggregate of 50% or more of the stock
of any class or classes or 50% or more of other ownership interests is owned of
record or beneficially by such other Person or by one or more Subsidiaries of
such other Person or by such other Person and one or more Subsidiaries of such
Person, (i) if the holders of such stock or other ownership interests (A) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the directors (or other individuals performing similar
functions) of such Person, even though the right so to vote has been suspended
by the happening of such a contingency, or (B) are entitled, as such holders, to
vote for the election of a majority of the directors (or individuals performing
similar functions) of such Person, whether or not the right so to vote exists by
reason of the happening of a contingency, or (ii) in the case of such other
ownership interests, if such ownership interests constitute a majority voting
interest.
1.1.143 "Taxes". The term Taxes shall mean all taxes, withholdings, fees,
levies or other assessments, including, without limitation, all net income,
gross income, gross receipts, real or personal property, tollgate, capital, net
worth, sales, use, ad valorem, transfer, franchise, profits, license, leasing,
withholding, payroll, employment, social security, unemployment, excise,
estimated, severance, stamp, occupation, services, property or other taxes,
custom duties, fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any federal, state, local or other taxing authority, domestic or
foreign.
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1.1.144 "Termination Date" means the earlier of (a) the third anniversary
of the Effective Date Agreement or such later date to which the termination of
the Facilities shall be extended pursuant to SECTION 2.5, (b) March 31, 2001, or
(c) the date on which all Secured Obligations shall have been irrevocably paid
in full and the Facilities are terminated.
1.1.145 "Termination Event" means (a) a "Reportable Event" as defined in
Section 4043(b) of ERISA, but excluding any such event as to which the provision
for 30 days' notice to the PBGC is waived under applicable regulations, (b) the
filing of a notice of intent to terminate a Benefit Plan or the treatment of a
Benefit Plan amendment as a termination under Section 4041 of ERISA, or (c) the
institution of proceedings to terminate a Benefit Plan by the PBGC under Section
4042 of ERISA or the appointment of a trustee to administer any Benefit Plan.
1.1.146 "Title Company" means First American Title Insurance Corporation or
any other title insurance company acceptable to Agent in its sole discretion.
1.1.147 "Title Policy" means a Lender's policy of Title Insurance issued by
the Title Company in a form and amount acceptable to Agent in its sole
discretion, insuring that Agent's Liens on the Real Estate constitute first
priority Liens on the Real Estate effective as of the Effective Date.
1.1.148 "Total Credit Facility" means $40,000,000.
1.1.149 "UCC" means the Uniform Commercial Code as in effect from time to
time in the State of Louisiana, La. R.S. (S)(S) 10:1-101 et seq.
1.1.150 "Unfunded Vested Accrued Benefits" means, with respect to any
Benefit Plan at any time, the amount (if any) by which (a) the present value of
all vested nonforfeitable benefits under such Benefit Plan exceeds (b) the fair
market value of all Benefit Plan assets allocable to such benefits, as
determined using such reasonable actuarial assumptions and methods as are
specified in the Schedule B (Actuarial Information) to the most recent Annual
Report (Form 5500) filed with respect to such Benefit Plan.
1.1.151 "Wholly-Owned Subsidiary" when used to determine the relationship
of a Subsidiary to a Person means a Subsidiary all of the issued and outstanding
shares (other than directors qualifying shares) of capital stock, membership
interests or other equity interests of which shall at the time be owned by such
Person or one or more of such Persons Wholly-Owned Subsidiaries of by such
Persons and one or more of such Persons Wholly-Owned Subsidiaries.
1.1.152 "WIP" means work in progress.
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1.2 Other Referential Provisions.
(a) All terms in this Agreement, the Exhibits and Schedules hereto shall
have the same defined meanings when used in any other Loan Documents, unless the
context shall require otherwise.
(b) Except as otherwise expressly provided herein, all accounting terms not
specifically defined or specified herein shall have the meanings generally
attributed to such terms under GAAP including, without limitation, applicable
statements and interpretations issued by the Financial Accounting Standards
Board and bulletins, opinions, interpretations and statements issued by the
American Institute of Certified Public Accountants or its committees.
(c) All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural, and the plural shall include the singular.
(d) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provisions of this Agreement.
(e) Titles of Articles and Sections in this Agreement are for convenience
only, do not constitute part of this Agreement and neither limit nor amplify the
provisions of this Agreement, and all references in this Agreement to Articles,
Sections, subsections, paragraphs, clauses, subclauses, Schedules or Exhibits
shall refer to the corresponding Article, Section, subsection, paragraph, clause
or subclause of, or Schedule or Exhibit attached to, this Agreement, unless
specific reference is made to the articles, sections or other subdivisions or
divisions of, or to schedules or exhibits to, another document or instrument.
(f) Each definition of a document in this Agreement shall include such
document as amended, modified, supplemented or restated from time to time in
accordance with the terms of this Agreement.
(g) Except where specifically restricted, reference to a party to a Loan
Document includes that party and its successors and assigns permitted hereunder
or under such Loan Document.
(h) Unless otherwise specifically stated, whenever a time is referred to in
this Agreement or in any other Loan Document, such time shall be the local time
in the city in which the Agent's Office is located.
(i) Whenever the phrase "to the knowledge of the Borrower" or words of
similar import relating to the knowledge of a Borrower (or any of its officers
or members) are used herein, such
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phrase shall mean and refer to the actual knowledge of such Borrowers or its
officers or members; provided that such Persons are acting in conformance with
the duty of and in accordance with the diligence of an officer in a similar
position in other entities similar to Borrowers.
(j) The terms accounts, chattel paper, documents, equipment, instruments,
general intangibles and inventory, as and when used (without being capitalized)
in this Agreement or the Security Documents, shall have the meanings given those
terms in the UCC.
(k) The terms "payment", "prepayment", "distribution" and similar terms
used in the definitions of "Restricted Distribution" and "Restricted Payment"
and in SECTION 9.6, shall include payment by means of the transfer of funds or
of property and, in the event of a transfer of property, the payment shall be
deemed to be in an amount equal to the greater of the fair market value and the
book value of the property at the time of the transfer.
1.3 Exhibits and Schedules. All Exhibits and Schedules attached hereto
are by reference made a part hereof.
ARTICLE II
FACILITIES
1.4 CREDIT FACILITY NOTE. The Advances and the obligation of the
Borrowers to repay the Advances shall also be evidenced by a single Note payable
to the order of Agent, as Agent for the Lenders.
1.5 REVOLVING FACILITY
II.0.1 Revolving Credit Advances. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement and the Security Documents, the Lenders severally
(not jointly) shall make Revolving Credit Advances to the Borrowers from
time to time from the Effective Date to the Termination Date, as requested
by the Borrowers in accordance with the terms of SECTION 2.2.5, in an
aggregate principal amount outstanding not to exceed at any time the
Revolving Credit Availability. It is expressly understood and agreed that
the Lenders may and at present intend to use the amount referred to in the
preceding sentence as a maximum ceiling on Revolving Credit Advances;
PROVIDED, HOWEVER, that it is agreed that should Revolving Credit Advances
exceed the ceiling so determined or any other limitation set forth in this
Agreement, such Revolving Credit Advances shall nevertheless constitute
Secured Obligations and, as such, shall be entitled to all benefits thereof
and security therefor. The principal amount of any Revolving Credit
Advances which is repaid may be reborrowed by the Borrowers in accordance
with the terms of this SECTION 2.2.1. Agent is hereby authorized to record
each repayment of principal of the Revolving Credit Advances in its books
and records, such books and records constituting prima facie evidence of
the accuracy of the information contained therein.
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1.5.1 Fixed Asset Advances. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement and the Security Documents, the Lenders severally
(not jointly) shall make Fixed Asset Advances to the Borrowers from time to
time from the Effective Date to the Termination Date, as requested by the
Borrowers in accordance with the terms of SECTION 2.2.5, in an aggregate
principal amount outstanding not to exceed at any time Fixed Asset
Availability. It is expressly understood and agreed that the Lenders may
and at present intend to use the amount referred to in the preceding
sentence as a maximum ceiling on Fixed Asset Advances; PROVIDED, HOWEVER,
that it is agreed that should Fixed Asset Advances exceed the ceiling so
determined or any other limitation set forth in this Agreement, such Fixed
Asset Advances shall nevertheless constitute Secured Obligations and, as
such, shall be entitled to all benefits thereof and security therefor. The
principal amount of any Fixed Asset Advances which is repaid may be
reborrowed by the Borrowers in accordance with the terms of this SECTION
2.2.2. Agent is hereby authorized to record each repayment of principal of
the Fixed Asset Advances in its books and records, such books and records
constituting prima facie evidence of the accuracy of the information
contained therein.
1.5.2 CAPEX Credit Advances. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement and the Security Documents, the Lenders severally
(not jointly) shall make CAPEX Credit Advances to the Borrowers from time
to time from the Effective Date to the Termination Date, as requested by
the Borrowers in accordance with the terms of SECTION 2.2.5, in an
aggregate principal amount outstanding not to exceed at any time the CAPEX
Credit Availability. It is expressly understood and agreed that the Lenders
may and at present intend to use the amount referred to in the preceding
sentence; PROVIDED, HOWEVER, that it is agreed that should CAPEX Credit
Advances exceed the ceiling so determined or any other limitation set forth
in this Agreement, such CAPEX Credit Advances shall nevertheless constitute
Secured Obligations and, as such, shall be entitled to all benefits thereof
and security therefor. The principal amount of any CAPEX Credit Advances
which is repaid may be reborrowed by the Borrowers in accordance with the
terms of this SECTION 2.2.3. Agent is hereby authorized to record each
repayment of principal of the CAPEX Credit Advances in its books and
records, such books and records constituting prima facie evidence of the
accuracy of the information contained therein.
1.5.3 Revolving Loan Commitments. The following are applicable to
the Advances made under the Revolving Facility: (i) no Lender shall be
obligated to make advances in excess of such Lender's Commitment; and (ii)
each borrowing shall be made ratably by all
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the Lenders in accordance with their respective Percentages.
1.5.4 Manner of Borrowing Revolving Loans. Borrowings of the
Revolving Loans shall be made as follows:
1.5.4.1 Requests for Borrowing. A request for a borrowing
shall be made, or shall be deemed to be made, in the following
manner, and each such request shall be irrevocable: (i) the Borrower
shall give the Agent written notice (each a "Notice of Borrowing"),
including the interest rate selection, prior to 12:00 noon Eastern
Time (together with the written Depreciation Schedule for Capital
Expenditures) of the proposed borrowing date of their intention to
borrow specifying the amount of the proposed borrowing and the
proposed borrowing date substantially in the form attached as EXHIBIT
2.2.5.1.; PROVIDED, HOWEVER, that if any notice referred to in this
CLAUSE (I) is received after 12:00 noon Eastern Time, as applicable,
the proposed borrowing date will be postponed automatically to the
next Business Day (the "Borrowing Date"); (ii) whenever a check is
presented to the Agent for payment against the Controlled
Disbursement Account in an amount greater than the then available
balance in such account, such presentation shall be deemed to be a
request for a borrowing on the date of such notice in an amount equal
to the excess of such check over such available balance; and (iii)
unless payment is otherwise made by the Borrowers, the maturity of
any Secured Obligation required to be paid shall be deemed to be a
request for a borrowing, the interest rate selection on the due date
in the amount required to pay such Secured Obligations. For Advances
requested pursuant to CLAUSE (I) above, Agent shall give prompt
notice to each Lender (or telephonic notice promptly confirmed in
writing) of the proposed borrowing, of such Lender's proportionate
share thereof, if any, and of the other matters covered by the
Borrowers' request.
1.5.4.2 Disbursement of Revolving Loans. Each Lender no
later than 1:00pm on the Borrowing Date shall make available its pro-
rata share, if any, of each Revolving Loan in the manner provided
below. All amounts shall be made available to the Agent in Dollars
and immediately available funds at Agent's Office. Borrowers hereby
irrevocably authorize the Agent to disburse the proceeds of each
borrowing requested, or deemed to be requested, pursuant to this
SECTION 2.2.5 as follows: (i) the proceeds of each borrowing
requested under SECTION 2.2.5.1(I) OR (II) shall be disbursed by the
Agent, upon receipt of the funds, in lawful money of the United
States of America in immediately available funds, or in the case of
the initial borrowing, in accordance with the terms of the letter
from the Borrowers to the Agent referred to in SECTION 4.1.1.13, or
to such other account as may be agreed upon by and the Lender from
time to time; (ii) the proceeds of each borrowing requested under
SECTION 2.2.5.1(III) shall be disbursed by the Agent by way of direct
payment of the relevant principal, interest or other Secured
Obligation, as the case may be.
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Unless the Agent shall have been notified by any Lender prior to the
Borrowing Date that such Lender does not intend to make available to
the Agent its portion of the borrowing to be made on such date, the
Agent may assume that such Lender has made such amount available to
the Agent on such Borrowing Date, and the Agent, in reliance upon
such assumption, may (it its sole and absolute discretion and without
any obligation to do so) make available to the Borrowers, a
corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Lender and the Agent has made
available same to the Borrowers, the Agent shall be entitled to
recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify the Borrowers, and
Agent shall credit the account of Borrowers with a sum equal to such
Defaulting Lenders' Percentage of the Borrowing. Each Non-Defaulting
Lender shall immediately pay to Agent its Percentage of the amount
required to be paid by Agent on behalf of the Defaulting Lender.
Notwithstanding the foregoing, no Lender shall be required to fund
any borrowings which would exceed its applicable Commitment. The
Agent, on behalf of the Non-Defaulting Lenders, shall be entitled to
recover from the Defaulting Lender interest on such corresponding
amount in respect of each day from the date such corresponding amount
was made available by the Agent to the Borrowers to the date such
corresponding amount is recovered by the Agent, at a rate per annum
equal to the overnight Federal Funds rate.
1.5.5 Repayment of Revolving Loans. The Revolving Loans will be
repaid as follows: (a) the outstanding principal amount of all the
Revolving Loans is due and payable, and the Borrowers hereby agree, to
repay the same in full, together with accrued and unpaid interest on the
amount repaid to the date of repayment, on the Termination Date; (b) if at
any time the aggregate unpaid principal amount of the Revolving Loans then
outstanding exceeds the lesser of the amounts referred to in CLAUSES (A)
AND (B) OF SECTION 2.2.8, the Borrowers, jointly and severally, and
solidarialy shall repay the Revolving Loans in an amount sufficient to
reduce the aggregate unpaid principal amount of such Revolving Loans by an
amount equal to such excess, together with accrued and unpaid interest on
the amount repaid to the date of repayment; and (c) all interest due on the
outstanding Revolving Loans shall be paid on the first day of each month,
beginning after the Effective Date with all accrued but unpaid interest
being due on the Termination Date.
1.5.6 Reductions and Increases in Availability
1.5.6.1 Increase and Reduction of Fixed Asset Availability. The Fixed
Asset Availability shall be reduced or increased as follows:
1.5.6.1.1 Reductions. The Fixed Asset Availability shall be
reduced monthly based on a seven (7) year amortization beginning on
July 1, 1998.
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1.5.6.1.2 Increase. The Fixed Asset Availability may be
increased by Borrowers by obtaining an updated Equipment Appraisal
(acceptable to Required Lenders in their sole and absolute
discretion) and/or updated Real Estate Appraisal (acceptable to
Required Lenders in their sole and absolute discretion) showing a
change in value of the Eligible Equipment and/or the Eligible Real
Estate. Then, the Fixed Asset Availability may be increased by the
difference between the Fixed Asset Borrowing Base immediately after
to the updated appraisals and the Fixed Asset Borrowing Base
immediately prior to the updated appraisal. The new Fixed Asset
Availability created by the updated appraisal shall be reduced based
on a seven (7) year amortization beginning on the date of the
appraisal.
1.5.6.2 Reduction of CAPEX Facility. CAPEX Credit Availability shall
be reduced monthly based on a seven (7) year amortization beginning on July
1, 1998.
1.5.7 Maximum Availability of the Revolving Facility. Notwithstanding
anything to the contrary, the aggregate principal amount outstanding of the
Revolving Facility shall not exceed the lesser of (a) the Total Credit Facility,
MINUS, the sum of (i) the outstanding principal amount as of the date of
determination of the Overadvance Advances, and (ii) the Letter of Credit
Obligations, or (b) the sum of the Borrowing Base, the Fixed Asset Borrowing
Base and CAPEX Borrowing Base. It is expressly understood that the Lenders may
and at present intend to use the lesser of the amounts referred to in the
foregoing SUBCLAUSES (A) AND (B) as the maximum ceiling on the Revolving Loans;
PROVIDED, HOWEVER, that it is agreed that should Revolving Loans exceed the
ceiling so determined or any other limitation set forth in this Agreement, such
Revolving Loans shall nevertheless constitute Secured Obligations and, as such,
shall be entitled to all benefits thereof and security therefor. The principal
amount of any Revolving Loan which is repaid may be reborrowed by the Borrowers
in accordance with the terms of this SECTION 2.2.8 Agent is hereby authorized to
record each repayment of principal of the Revolving Credit Loans in its books
and records, such books and records constituting prima facie evidence of the
accuracy of the information contained therein.
1.6 Overadvance Facility
1.6.1 Overadvance Advances. Upon the terms and subject to the conditions
of, and in reliance upon the representations and warranties made under, this
Agreement and the Security Documents, the Agent shall make Overadvance Advances
to the Borrowers from time to time from the Effective Date to the Termination
Date, as requested by the Borrowers in accordance with the terms of SECTION
2.3.2.1, in an aggregate principal amount outstanding not to exceed at any time
the Overadvance Advances; PROVIDED, HOWEVER, that
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no borrowing of a Overadvance Advances shall exceed the Overadvance Availability
at the time of such borrowing. It is expressly understood and agreed that the
Agent may and at present intends to use the amount referred to in the foregoing
sentence as a maximum ceiling on Overadvance Advances; PROVIDED, HOWEVER, that
it is agreed that should Overadvance Advances exceed the ceiling so determined
or any other limitation set forth in this Agreement, such Overadvance Advances
shall nevertheless constitute Secured Obligations and, as such, shall be
entitled to all benefits thereof and security therefor. The principal amount of
any Overadvance Advances which is repaid may not be reborrowed by the Borrowers.
The Agent is hereby authorized to record each repayment of principal of the
Overadvance Advances in its books and records, such books and records
constituting prima facie evidence of the accuracy of the information contained
therein.
1.6.2 Manner of Borrowing Overadvance Advances. Borrowing of the
Overadvance Credit Advances shall be made as follows:
1.6.2.1 Requests for Borrowing. A request for a borrowing for an
Overadvance Advances shall be made in the following manner, and each such
request shall be irrevocable: whenever the total outstanding principal
amount of the sum of the Revolving Loans, the Overadvance Advances, and the
Letter of Credit Obligations exceed, the lesser of (i) the Total Credit
Facility, or (ii) the sum of the Borrowing Base, the Fixed Asset Borrowing
Base and the CAPEX Borrowing Base, such excess shall be deemed a request
for a borrowing on the date of such excess in an amount to reduce the
outstanding principal amount of the sum of the Revolving Loans, the
Overadvance Advances and the Letter of Credit Obligations to an amount less
than the lesser amount of CLAUSE (I) AND (II), above.
II.0.1.1 Disbursement of Advances. Borrowers hereby irrevocably
authorize the Agent to disburse the proceeds of each borrowing requested,
or deemed to be requested, pursuant to this SECTION 2.3.2 as follows: the
proceeds of each borrowing requested under SECTION 2.3.2.1 shall be
disbursed by the Agent by way of direct payment of the relevant principal,
interest or other Secured Obligation, as the case may be for the account of
the Revolving Facility where the overadvance necessitating the Overadvance
Advance occurred.
II.0.2 Repayment of Overadvance Credit Advances. The Overadvance
Credit Advances will be repaid as follows: (a) the outstanding principal
amount of all the Overadvance Credit Advances is due and payable, and the
Borrowers hereby agree, to repay the same in full, together with accrued
and unpaid interest on the amount repaid to the date of repayment, on the
Termination Date; (b) if at any time the aggregate unpaid principal amount
of the Overadvance Credit Advances then outstanding exceeds the lesser of
the amounts referred to in CLAUSES (I) AND (II) OF SECTION 2.3.2.1, the
Borrowers, jointly and severally, and solidarialy shall repay the
Overadvance Credit Advances in an amount sufficient to reduce the aggregate
unpaid principal amount of such Loans by an amount equal
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to such excess, together with accrued and unpaid interest on the amount
repaid to the date of repayment; and (c) all accrued but unpaid interest
due on the outstanding Overadvance Advances shall be due and payable on the
first of each month beginning after the Effective Date with all accrued but
unpaid interest being finally due on the Termination Date.
1.6.3 Reduction Facility. Overadvance Credit Availability shall be reduced
monthly based on an eighteen (18) month amortization beginning on the date the
Overadvance Facility is first used; PROVIDED, THAT if there are no Overadvance
Advances prior to January 1, 2000, then the amortization shall begin on that
date.
1.7 LETTER OF CREDIT FACILITY
1.7.1 Amounts, Terms and Issuance of Letters of Credit
1.7.1.1 The Agent shall, on the terms and subject to the conditions
herein set forth, from time to time but in no event later than the 30th day
prior to the Termination Date, cause the Letter of Credit Bank to issue for
the account of any one or more of the Borrowers, one or more Letters of
Credit; provided, however, that (i) the Agent's obligation hereunder to
cause the Letter of Credit Bank to issue for the account of any one or more
of the Borrowers, one or more Letters of Credit may be terminated by the
Agent upon the occurrence and during the continuation of an Event of
Default in accordance with the terms of SECTION 10.1 (but any such
termination shall be automatic upon the occurrence of any Event of Default
specified in SECTIONS 10.1.7 AND 10.1.8, (ii) each Letter of Credit must be
in form and substance satisfactory to Agent and the Letter of Credit Bank
and must expire no later than thirty (30) days prior to the Termination
Date, (iii) the proceeds of each Letter of Credit may be used only for a
purpose for which Borrowers could obtain a Revolving Loan hereunder, (iv)
no Letter of Credit shall be issued if, after giving effect to such
issuance, the then outstanding Letter of Credit Obligations exceed the
Letter of Credit Limit.
1.7.1.2 Whenever any Borrower desires to request a Letter of Credit,
it shall give the Agent prior written notice (or telephone notices if
promptly confirmed in writing) of such request (a "Letter of Credit
Request"), such Letter of Credit Request to be given prior to 11:00 a.m.
(Eastern Time) not less than five (5) Business Days prior to the requested
Date of Issuance of such Letter of Credit. Each Letter of Credit Request
shall be irrevocable and shall include (i) the form of the Letter of Credit
which a Borrower requests to be so issued and (ii) such other information
and documents regarding such Letter of Credit and any underlying
transactions as Agent or the Letter of Credit Bank may reasonably request.
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1.7.1.3 On or before the Date of Issuance of each Letter of Credit
and on each anniversary thereof, the Borrowers shall pay to the Agent, for
the benefit of the Letter of Credit Bank, the Letter of Credit Fee for such
Letter of Credit required under SECTION 3.2.5 below.
1.7.2 Reimbursement Obligations
1.7.2.1 Upon receipt by the Letter of Credit Bank of a Drawing under
any Letter of Credit, Agent shall promptly notify the Borrowers of the
amount of such Drawing and the date on which the payment thereof is to be
made by the Letter of Credit Bank to the beneficiary of such Letter of
Credit (but Agent's failure to give any such notice shall not affect the
Borrowers' Reimbursement Obligations hereunder). The Borrowers agree to
reimburse the Agent for the amount of each Drawing under or purported to be
made under any Letter of Credit which is paid or reimbursed by Agent, which
reimbursement by Borrowers shall be made in full at or prior to the time
Agent pays or reimburses the Letter of Credit Bank for such Drawing (but,
in the event Agent fails to give the Borrowers the aforesaid notice of its
intended payment or reimbursement of any Drawing, such reimbursement by the
Borrowers shall not be due until Agent gives the Borrowers notice of each
payment of such Drawing). PROVIDED, THAT, no Event of Default therein
exists under this Agreement or the other Loan Documents, any Drawing under
a Letter of Credit shall be deemed a request for a borrowing of a Revolving
Credit Advance with such funds being disbursed by Agent directly to the
Letter of Credit Bank. Should such a deemed request for borrowing exceed
the Revolving Credit Availability, such Advance shall nevertheless
constitute Secured Obligations and, as such, shall be entitled to all the
benefits and security therefor.
1.7.2.2 The Borrowers' Reimbursement Obligations hereunder with
respect to any particular Letter of Credit shall be absolute, unconditional
and irrevocable, and such reimbursement shall be made strictly in
accordance with the terms and conditions of this Agreement under all
circumstances whatsoever, including, without limitation, the following
circumstances: (i) any lack of validity or enforceability of the
transactions contemplated by or related to such Letter of Credit or any
other Letter of Credit; (ii) any amendment or waiver of or consent to
depart from all or any of the terms of the transactions contemplated by or
related to such Letter of Credit or any other Letter of Credit; (iii) the
existence of any claim, set-off, defense or other right which any Borrower
may have at any time against Lenders, Agent, the Letter of Credit Bank, any
Letter of Credit beneficiary, or any other Person, whether in connection
with this Agreement or the transactions contemplated herein, any Letter of
Credit or the transactions contemplated thereby or any unrelated
transactions; or (vi) the fact that any draft, affidavit, letter,
certificate, invoice, xxxx of lading or other documents presented under or
delivered in connection with such Letter of Credit or any
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other Letter of Credit proves to have been forged, fraudulent, invalid or
insufficient in any respect or any statement therein proves to have been
untrue or incorrect in any respect.
1.7.3 Increased Cost. If the introduction after the date of this
Agreement of any law or regulations, or any changes after the date of this
Agreement in a law or regulation or any interpretation thereof by any court or
administrative, banking or governmental authority charged or claiming to be
charged with the administration thereof, applicable to Agent or the Letter of
Credit Bank, shall (i) impose, modify or make applicable any reserve, special
deposit, deposit insurance premium, or other similar requirement against any of
the Letters of Credit, (ii) impose on Agent, Lenders or the Letter of Credit
Bank any other condition regarding this Agreement or any Letter of Credit, or
(iii) subject Agent, Lenders or the Letter of Credit Bank to any Taxes (other
than taxes based on gross revenues or income) of any kind whatsoever, and the
result of any event referred to in CLAUSE (I), (II) OR (III) above shall be to
increase the cost to Lenders or the Letter of Credit Bank of issuing or
maintaining any Letter of Credit hereunder (which increased cost shall be the
result of a reasonable allocation of the aggregate of such cost increases
resulting from such events), or to reduce the amount of principal, interest or
any fee or other compensation to be paid to Agent or Lenders, the Borrowers
shall pay Agent, from time to time as specified by Agent, additional amounts
which shall be sufficient to compensate Agent, Lenders or the Letter of Credit
Bank for such increased cost or such reduction. A certificate of Agent setting
forth in reasonable detail such increased costs or such reduction incurred by
Agent, Lenders or the Letter of Credit Bank as a result of any event referred to
in CLAUSE (I), (II) OR (III) above which may be submitted by Agent to the
Borrowers shall be conclusive, in the absence of manifest error, as to the
amount thereof, and each such certificate shall set forth the nature of the
occurrence giving rise to such compensation, the additional amount to be paid
hereunder on account thereof, and the method by which such amount was
determined. In determining such amount, Agent shall use reasonable averaging and
attribution methods. The obligations of the Borrowers under this SECTION 2.4.3
shall survive any termination of this Agreement.
1.7.4 Legal Restrictions on Letters of Credit. If any restrictions or
limitations are imposed upon or determined or held to be applicable to Agent,
Lenders, the Letter of Credit Bank or any Borrower by, under or pursuant to any
law or regulation, whether federal, state, local or foreign and whether now or
hereafter in effect, or by reason of any interpretation thereof by any
Governmental Authority, which in the judgment of Agent, Lenders or the Letter of
Credit Bank would prevent Agent, Lenders or the Letter of Credit Bank from
legally incurring liability under any Letter of Credit, then Agent shall notify
the Borrowers as soon as reasonably practical thereafter, whereupon the
Borrowers' rights to request and obtain additional Letters of Credit thereafter
shall cease; PROVIDED, HOWEVER, that no such cessation shall affect the
Borrowers' or Lenders' obligations hereunder with respect to any and all Letters
of Credit then issued and outstanding.
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1.7.5 Indemnification. In addition to any other amounts payable by the
Borrowers to Agent, Lenders or the Letter of Credit Bank under this Agreement
and without limiting any other indemnification provisions set forth herein, the
Borrowers hereby jointly and severally, and in solido agree to indemnify Agent,
Lenders and the Letter of Credit Bank from, and to hold Agent, Lenders and the
Letter of Credit Bank harmless against, any and all claims, liabilities, losses,
costs and expenses (including, without limitation, reasonable attorney's fees
and expenses actually incurred) which Agent, Lenders or the Letter of Credit
Bank may (other than as a result of the gross negligence or willful misconduct
of Agent, Lenders or the Letter of Credit Bank or the Letter of Credit Bank's
failure to honor its obligations under any Letter of Credit in accordance with
the terms thereof and such failure to honor was not acceptable under applicable
law) incur or be subject to as a consequence, directly or indirectly, of (i) for
the validity, sufficiency, genuineness or legal effect of any document submitted
in connection with the application for or issuance of or the making of any
Drawings under any Letter of Credit that appears on its fact to the Letter of
Credit Bank to be proper, even if it should in fact prove to be in any respect
invalid, insufficient, inaccurate, untrue, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or any rights or benefits
thereunder or any proceeds thereof, in whole or in part, that appears on its
face to the Letter of Credit Bank to be proper, even if it should prove to be
invalid or ineffective for any reason; (iii) for the failure of any beneficiary
of any Letter of Credit to comply fully with the conditions required in order to
effect a Drawing thereunder; (iv) for any errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, telecopy, telex or
otherwise; (v) for any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Drawing under any Letter of
Credit; or (vi) for any consequences arising from causes beyond the control of
Agent, Lenders or the Letter of Credit Bank. In furtherance and extension and
not in limitation of the specific provisions hereinabove set forth, any action
taken or omitted by Agent, Lenders or the Letter of Credit Bank under or in
connection with any Letter of Credit or any related certificates, drafts or
other documents if taken or omitted in good faith and in accordance with the
terms of the Letter of Credit Bank's obligations under such Letter of Credit
and, in the absence of gross negligence or willful misconduct on the part of
Agent, Lenders or the Letter of Credit Bank, shall be binding upon the Borrowers
and shall not result in any liability of Agent, Lenders or the Letter of Credit
Bank to the Borrower.
1.7.6 Letter of Credit Participants.
1.7.6.1 Immediately upon the issuance by the Letter of Credit
Bank of any Letter of Credit, the Letter of Credit Bank shall be deemed to
have sold and transferred to each other Lender, and each such Lender (each,
a "Participant") shall be deemed irrevocably and unconditionally to have
purchased and received from such Letter of Credit Bank, without recourse or
warranty, an undivided interest and participation, to the extent of such
Participant's Percentage, in such Letter of Credit,
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each substitute letter of credit, each Drawing made thereunder and the
obligations of the Borrowers under this Agreement with respect thereto.
1.7.6.2 In determining whether to pay under any Letter of Credit,
the Letter of Credit Bank shall not have any obligation relative to the
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they
appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Letter of Credit
Bank under or in connection with any Letter of Credit if taken or omitted
in the absence of gross negligence or willful misconduct, shall not create
for the Letter of Credit Bank any resulting liability.
1.7.6.3 In the event that the Letter of Credit Bank makes any
payment under any Letter of Credit and the Borrowers shall not have
reimbursed such amount in full to the Letter of Credit Bank pursuant to
SECTION 2.4.2, the Letter of Credit Bank shall promptly notify the Agent,
and the Agent shall promptly notify each Participant of such failure, and
each Participant shall promptly and unconditionally pay to the Agent for
the account of the Letter of Credit Bank, the amount of such Participant's
Percentage of such payment in Dollars and in same day funds; PROVIDED,
HOWEVER, that no Participant shall be obligated to pay the Agent its
Percentage of such unreimbursed amount for any wrongful payment made by the
Letter of Credit Bank under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part
of the Letter of Credit Bank. If the Agent so notifies any Participant
required to fund a payment under a letter of Credit prior to 11:00am on any
Business Day, such Participant shall make available to the Agent for the
account of the Letter of Credit Bank such Participant's Percentage of the
amount of such payment on such Business Day in same day funds. If and to
the extent such Participant shall not have so made its Percentage of the
amount of such payment available to the Agent for the account of the Letter
of Credit Bank, such Participant agrees to pay to the Agent for the account
of the Letter of Credit Bank, forthwith on demand such amount, together
with interest thereon, for each day from such date until the date such
amount is paid to the Agent for the account of the Letter of Credit Bank at
the overnight Federal Funds rate. The failure of any Participant to make
available to the Agent for the account of the Letter of Credit Bank its
Percentage of any payment under any Letter of Credit shall not relieve any
other Participant of its obligation hereunder to make available to the
Agent for the account of the Letter of Credit Bank its Percentage of any
payment under any Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to the Agent for the account of the Letter of
Credit Bank such other Participant's Percentage of any such payment.
1.7.6.4 Whenever the Letter of Credit Bank receives a payment
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of a Reimbursement Obligation as to which the Agent has received for the
account of the Letter of Credit Bank any payment from the Participants
pursuant to SECTION 2.4.6.3 above, the Letter of Credit Bank shall pay to
the Agent and the Agent shall promptly pay to each Participant which has
paid its Percentage thereof, in Dollars and in same day funds, an amount
equal to such Participant's Percentage of the principal amount thereof and
interest thereon accruing after the purchase of the respective
participations.
1.7.6.5 The obligations of the Participants to make payments to
the Agent for the account of the Letter of Credit Bank with respect to
Letters of Credit shall be irrevocable and not subject to counterclaim,
compensation, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following:
1.7.6.5.1 any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
1.7.6.5.2 the existence of any claim, set-off,
compensation, defense or other right which the Borrowers may have
at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, the Letter of Credit Bank,
any Lender, or other Person whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transaction between the Borrowers and the beneficiary named in any
such Letter of Credit);
1.7.6.5.3 any draft, certificate or other document
presented under the 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;
1.7.6.5.4 the surrender or impairment of any security
for the performance or observance of any of the terms of any of the
Loan Documents; or
1.7.6.5.5 the occurrence of any Event of Default.
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1.8 Extension of Facilities. If the Borrowers wish to obtain an
extension of the then effective Termination Date, the Borrowers shall provide
the Agent with a written notice to such effect not less than 60 days prior to
the then effective Termination Date. The Lenders may, in their sole and absolute
discretion, by written notice to the Borrowers, extend the Facilities for a
period of one year from the then effective Termination Date.
ARTICLE III
GENERAL LOAN PROVISIONS
1.9 Interest.
1.9.1 The Borrowers shall pay interest on the unpaid principal
amount of each Advance for each day from the day such Advance is made until
such Advance is due (whether at maturity, by reason of acceleration or
otherwise) at the rate per annum selected by the Borrowers in accordance
with SECTION 3.1.2 hereof out of the following options: (i) the sum of the
Prime Rate plus the Applicable Margin ("Prime Interest Rate"); or (ii) the
sum of LIBOR plus the LIBOR Applicable Margin ("LIBOR Interest Rate").
1.9.2 As of the Effective Date, Borrowers have selected the Prime
Interest Rate for the Initial Advances. Any selection of the LIBOR Interest
Rate shall be effective until the expiration of the applicable LIBOR
Interest Period at which time such rate of interest shall automatically
convert to the Prime Interest Rate unless an effective election to the
contrary has been made as provided below. Borrowers may by written notice
(or by telephonic notice promptly confirmed in writing) delivered to Agent
not later than 10:00 a.m. Eastern Time on the third Business Day prior to
the expiration of the applicable LIBOR Interest Period, direct that
interest accrue at the LIBOR Interest Rate on any or all of the Advances,
including any new Revolving Credit Advance, (or any portion of the Advances
which is in an amount of not less than $1,000,000 or greater integral
multiple of $100,000 thereof) as designated by the Borrowers in such
notice, as outstanding from time to time until the expiration of the LIBOR
Interest Period commencing on the third Business Day after the date on
which such election was effective as specified in the notice by Borrowers
and for the LIBOR Term selected by Borrowers in such notice. Upon
determining LIBOR and the LIBOR Interest Rate for the applicable LIBOR
Interest Period on which Borrowers election is effective, as stated in
Borrowers notice, Agent shall promptly notify Borrowers by telephone (which
shall be promptly confirmed in writing) of such determination and such
determination shall, in the absence of manifest error, be final, conclusive
and binding for all purposes.
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1.9.3 The Borrowers shall pay interest on the unpaid principal
amount of each Secured Obligation other than an Advance that is not a
Reimbursement Obligation for each day from the day such Secured Obligation
becomes due and payable until such Secured Obligation is paid at the
highest rate per annum applicable to Revolving Loans, payable on demand.
This SECTION 3.1.3 shall also apply the unpaid principal amount of any
Reimbursement Obligation and Overadvance Advance.
1.9.4 From and after the occurrence of an Event of Default, the
unpaid principal amount of each Secured Obligation shall bear interest
until paid in full (or, if earlier, until such Event of Default is cured or
waived in writing by the Required Lenders) at a rate per annum equal to the
Default Margin plus the rate otherwise in effect under SECTION 3.1.1,
3.1.2, OR 3.1.3, as applicable, payable on demand. The interest rate
provided for in this SECTION 3.1.4 shall to the extent permitted by
applicable law apply to and accrue on the amount of any judgment entered
with respect to any Secured Obligation and shall continue to accrue at such
rate during any proceeding described in SECTION 10.1.7 OR 10.1.8.
1.9.5 The interest rates provided for in SECTIONS 3.1.1, 3.1.2,
3.1.3 AND 3.1.4 shall be computed on the basis of a year of 360 days and
the actual number of days elapsed.
1.9.6 It is not intended by the Lenders or Agent, and nothing
contained in this Agreement or any Note shall be deemed, to establish or
require the payment of a rate of interest in excess of the maximum rate
permitted by applicable law (the "Maximum Rate"). If, in any month, the
Effective Interest Rate, absent such limitation, would have exceeded the
Maximum Rate, then the Effective Interest Rate for that month shall be the
Maximum Rate, and if, in future months, the Effective Interest Rate would
otherwise be less than the Maximum Rate, then the Effective Interest Rate
shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if
the same had not been limited by the Maximum Rate. In this connection, in
the event that, upon payment in full of the Secured Obligations, the total
amount of interest paid or accrued under the terms of this Agreement is
less than the total amount of interest which would have been paid or
accrued if the Effective Interest Rate had at all times been in effect,
then the Borrowers shall, to the extent permitted by applicable law, pay to
the Agent an amount equal to the difference between (i) the lesser of (A)
the amount of interest which would have been charged if the Maximum Rate
had, at all times, been in effect and (B) the amount of interest which
would have accrued had the Effective Interest Rate, at all times, been in
effect, and (ii) the amount of interest actually paid or accrued under this
Agreement. In the event the Lenders or Agent receives, collects or applies
as interest any sum in excess of the Maximum Rate, such excess amount shall
be applied to the reduction of the principal balance of the applicable
Secured Obligation, and, if no such principal is then outstanding, such
excess or part thereof remaining shall be paid to the Borrowers. For the
purposes of computing the Maximum Rate, to the extent permitted by
applicable law, all interest and charges, discounts, amounts, premiums or
fees deemed to constitute interest
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under applicable law, shall be amortized, prorated, allocated and spread in
substantially equal parts throughout the full term of this Agreement. The
provisions of this SECTION 3.1.5 shall be deemed to be incorporated into
every Loan Document (whether or not any provision of this SECTION 3.1.5 is
specifically referred to therein).
1.10 Fees.
1.10.1 Unused Line Fee. In connection with and as consideration for
the Lenders' commitment hereunder, subject to the terms hereof, to lend to
the Borrowers under the Revolving Facility, the Borrowers shall pay a fee
to the Agent, from the Effective Date until the Termination Date, in an
amount equal to 0.25% per annum of the average daily unused portion of the
Total Credit Facility, payable monthly in arrears on the first day of each
month and on the date of any permanent reduction in the Total Credit
Facility.
1.10.2 Facility Fee. The Borrowers shall pay to the Agent a closing
fee in the amount of 0.25% of the Total Credit Facility and in
consideration of the making of Loans under this Agreement and in order to
compensate the Agent for the costs associated with structuring, processing,
approving and closing the Revolving Facility and the Initial Advances, but
excluding expenses for which the Borrowers have agreed elsewhere in this
Agreement to reimburse the Agent. The closing fee shall be fully earned on
the Effective Date (notwithstanding any deferral and or forgiveness of
payment thereof as provided below) and shall be paid by the Borrowers on
the Effective Date.
1.10.3 Quarterly Audit Fee. Borrowers shall be responsible for all
Agent's audit fees incurred prior to the Effective Date. After the
Effective Date, for services performed by the Agent in connection with its
continuing administration of this Agreement and the credit facilities
provided hereunder and for monitoring the Collateral, the Borrowers shall
pay to the Agent an auditing fee of $500/day per auditor not to exceed
$2,500.00 per quarter plus expenses, payable so long as any Secured
Obligation shall remain outstanding or the Facilities shall not have been
terminated.
1.10.4 Letter of Credit Fee. The Borrowers shall pay to Agent, for
the account of the Letter of Credit Bank, a non-refundable Letter of Credit
Fee (the "Letter of Credit Fee") equal to one and one quarter (1.25%)
percent per annum of the stated amount of each Letter of Credit outstanding
pursuant to this Agreement. The Letter of Credit Fee for each Letter of
Credit shall be payable quarterly in advance on the issuance date of such
Letter of Credit (for the remainder of any calendar quarter then in
effect), and on the first xxx of each calendar quarter thereafter. In
addition, the Borrowers shall pay to Agent, for the account of the Letter
of Credit Bank, on demand, the drawing, transfer and other fees relating to
Letters of Credit customarily charged by the Letter of Credit Bank.
1.10.5 General. All fees shall be fully earned by the Lenders and/or
Agent when due and payable and, except as otherwise set forth herein or
required by applicable law, shall not be subject to refund or rebate. All
fees are for compensation for services and are not, and shall not be deemed
to be, interest or a charge for the use of money.
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1.11 Manner of Payment.
1.11.1 Each payment (including prepayments) by the Borrowers on
account of the principal of or interest on the Advances or of any fee or
other amounts payable to the Agent for its own account or for the account
of the Lenders or the Letter of Credit Bank under this Agreement or any
Note shall be made not later than 1:30 p.m. on the date specified for
payment under this Agreement (or if such day is not a Business Day, the
next succeeding Business Day) to the Agent at the Agent's Office, in
Dollars, in immediately available funds and shall be made without any
setoff, counterclaim or deduction whatsoever.
1.11.2 The Borrowers hereby irrevocably authorize the Agent and
Letter of Credit Bank to charge any account of a Borrower maintained with
the Agent or Letter of Credit Bank with such amounts as may be necessary
from time to time to pay any Secured Obligations which are not paid when
due (after giving effect to any applicable grace period).
1.12 Statements of Account. The Agent will account to the Borrowers within
30 days after the end of each calendar month with a statement of Revolving
Loans, charges and payments made pursuant to this Agreement during such calendar
month, and such account rendered by the Agent shall be deemed an account stated
as between the Borrowers and the Agent.
1.13 Reduction of Revolving Facility and Termination of Agreement
1.13.1 Reduction of Revolving Facility.
1.13.1.1 The Borrowers shall have the right, at any time and
from time to time, upon at least 30 days prior irrevocable, written
notice of Agent, to reduce permanently all or a portion of the
Revolving Facility; PROVIDED, HOWEVER, that any such partial
reduction shall be made in increments of not less than $5,000,000.
Any request for reduction over $5,000,000 shall be in increments of
not less than $5,000,000. As of the date of reduction as set forth in
such notice, the Revolving Facility shall be permanently reduced to
the amount stated in the Borrowers' notice for all purposes herein,
and the Borrowers shall pay the amount necessary to reduce the amount
of the Revolving Loans outstanding under the Revolving Facility as so
reduced, together with accrued interest on the amounts so prepaid.
Upon such reduction, each Lender's Commitment shall be reduced pro
rata according to the amount of such reduction.
1.13.1.2 The amount of the Revolving Facility shall be
automatically reduced to zero on the Termination Date.
1.13.1.3 The Revolving Facility or any portion thereof
reduced pursuant to this SECTION 3.5 may not be reinstated.
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1.13.2 Termination of Agreement. The Borrowers shall have the right,
at any time, to terminate this Agreement upon not less than thirty (30)
Business Days prior written notice to the Agent of the Borrowers' intention
to terminate this Agreement, which notice shall specify the effective date
of such termination; PROVIDED, HOWEVER, that the effective date of such
termination shall not be less than 90 days after the Effective Date. On the
date specified in such notice, such termination shall be effected; PROVIDED
that the Borrowers shall, on or prior to such day, (1) pay to the Agent, in
same day funds, an amount equal to the aggregate amount of all Revolving
Loans, Overadvance Advances and Letter of Credit Obligations outstanding on
such date, together with accrued interest thereon, all fees payable
pursuant to SECTION 3.2 accrued from the date last paid through the
effective date of termination, any amounts payable to the Agent pursuant to
the other provisions of this Agreement, including, without limitation,
SECTIONS 10.2, 13.12 and 13.13 and any and all other Secured Obligations
then outstanding, (2) provide the Agent with an indemnification agreement
in form and substance satisfactory to the Agent with respect to returned
and dishonored items and such other matters as the Agent shall require.
1.14 Prepayments of Advances with the LIBOR Interest Rate. Borrowers may
prepay any Advance for which Borrowers have elected the LIBOR Interest Rate
without penalty only on the last day of the applicable LIBOR Interest Period,
and if any such prepayment is made on the day that is not the last date of the
applicable LIBOR Interest Period, and if requested by Agent, the Borrowers shall
pay to Agent a prepayment penalty in an amount equal to, at Agent's option,
either (x) such compensation as may be due to Agent or Lenders under SECTION 3.7
hereof or (y) the excess (if any) of (1) the interest that would have been
payable with respect to such Advance at the LIBOR Interest Rate for the
remainder of such LIBOR Interest Period based on the LIBOR Interest Rate
originally applicable to such LIBOR Interest Period over (2) the interest that
would have been payable with respect to such Loan at the LIBOR Interest Rate for
the remainder of such LIBOR Interest Period based on the LIBOR Interest Rate as
in effect on the date of such prepayment.
1.15 Funding Losses. The Borrowers shall compensate Lenders and Agent,
upon Agent's written request to the Borrowers (which request shall set forth the
basis for requesting such amounts in reasonable detail and which request shall
be made in good faith and, absent manifest error, shall be final, conclusive and
binding upon all the parties hereto), for all losses, expenses and liabilities
(including, without limitation, any interest paid by Lenders, or Agent to
Lenders of funds borrowed by it to make or carry its Loans with LIBOR Interest
Rates hereunder, in either case to the extent not recovered by Lenders in
connection with the re-employment of such funds and including loss of
anticipated profits), which Lenders may sustain: (i) if for any reason (other
than a default by Lenders) a borrowing of any Advance with LIBOR Interest Rate
does not occur on the date specified therefor in a notice of
conversion/continuation given by Borrowers under SECTION 3.1.2 of this
Agreement, (ii) if any repayment (including any prepayment) of any Advance at
the LIBOR Interest Rate occurs on a date which is not the last day of an
Interest Period applicable thereto (except that any Lender may elect to receive
the prepayment penalty specified in SECTION 3.6 above in lieu of compensation
under this SECTION 3.7), or (iii) if, for any reason, the Borrowers default in
their obligation to repay
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Advance with the LIBOR Interest Rate when due as required by the terms of this
Agreement.
1.16 Increased Costs and Reduced Returns. The Borrowers agree that if any
law now or hereafter in effect and whether or not presently applicable to the
Lenders or Agent or any request, guideline or directive of any Governmental
Authority (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) or the interpretation or administration
thereof by any Governmental Authority, shall either (a)(i)impose, affect, modify
or deem applicable any reserve, special deposit, capital maintenance or similar
requirement against any Advance, (ii) impose on the Lender or the Agent any
other condition regarding any Advance, this Agreement, the Note or the
facilities provided hereunder, or (iii) result in any requirement regarding
capital adequacy (including any risk-based capital guidelines) affecting the
Lenders or Agent being imposed or modified or deemed applicable to the Lenders
or Agent, or (b) subject the Lenders or Agent to any Taxes, including any Taxes
on the recording, registration, notarization or other formalization of the
Advances or the Note, and the result of any event referred to in CLAUSE (A) or
(B) above shall be to increase the cost to the Lenders or Agent of making,
funding or maintaining any Advance or to reduce the amount of any sum receivable
by the Lenders or Agent, or the Lenders' rate of return on capital with respect
to any Advance to a level below that which the Agent or the Lenders could have
achieved but for such imposition, modification or deemed applicability (taking
into consideration the Agent's or the Lender's policies with respect to capital
adequacy) by an amount deemed by the Agent (in the exercise of its discretion)
to be material, then, upon demand by the Agent, the Borrowers shall immediately
pay to the Agent additional amounts which shall be sufficient to compensate the
Lenders for such increased cost, tax or reduced rate of return. A certificate of
the Agent to the Borrowers claiming compensation under this SECTION 3.8 shall be
final, conclusive and binding on all parties for all purposes in the absence of
manifest error. Such certificate shall set forth the nature of the occurrence
giving rise to such compensation, the additional amount or amounts to be paid to
it hereunder and the method by which such amounts were determined. In
determining such amount, the Agent may use any reasonable averaging and
attribution methods. Notwithstanding the foregoing, the Agent shall not be
entitled to demand, and the Borrowers shall not be required to pay compensation
pursuant to this Section attributable to a period more than 90 days prior to the
date of such notice and certificate.
1.17 Unconditional and Absolute Guaranty.
1.17.1 Guaranty. As to the Secured Obligations extended directly to
or incurred directly by each other Borrower, each Borrower hereby
unconditionally guarantees the punctual payment when due, whether at stated
maturity, by reason of acceleration or otherwise, and performance of all
Secured Obligations now or hereafter existing under this Agreement, the
Note or any other Loan Document, whether for principal, interest, fees,
expenses or otherwise (such obligations, as to each Borrower in respect of
the Secured Obligations extended to or incurred directly by each other
Borrower, the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including reasonable fees and expenses of counsel) incurred by
the Agent or the Lenders in enforcing any rights under this
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SECTION 3.9. Without limiting the generality of the foregoing, liability
hereunder shall extend to all amounts which constitute part of a Borrower's
Guaranteed Obligations and would be owed by any other Borrower to the Agent
or Lenders under any Loan Document but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Borrower. In
addition, each Borrower hereby unconditionally and irrevocably agrees that
upon default in the payment when due (whether at stated maturity, by
acceleration or otherwise) of any principal of, or interest on, any Advance
made to any other Borrower or such other amounts payable by such other
Borrower to the Agent or Lenders, it will forthwith pay the same, without
further notice or demand. The Borrowers acknowledge their business
interrelationship and hereby confirm to the Agent and the Lenders the
benefits to each Borrower by reason of the transactions contemplated by
this Agreement.
1.17.2 No Release. No payment or payments made by any of the
Borrowers or any other Person or received or collected by the Agent from
any of the Borrowers or any other Person by virtue of any action or
proceeding or any set-off or reduction of or in payment of the Guaranteed
Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any other Borrower under this SECTION 3.9, which shall,
notwithstanding any such payment or payments other than payments made by
such party in respect of the Guaranteed Obligations or payments received or
collected from such party in respect of the Guaranteed Obligations, remain
liable for the Secured Obligations until the Secured Obligations are paid
in full and the Facilities terminated.
1.17.3 Guarantee Absolute. Each Borrower guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms
of the Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Lender with respect thereto. The guarantee contained in this
SECTION 3.9 is a continuing guarantee of payment and not of collection; all
liabilities to which it applies or may apply under the terms hereof shall
be conclusively presumed to have been created in reliance hereon. The
liabilities under this guarantee shall be absolute and unconditional
irrespective of:
1.17.3.1 any lack of validity or enforceability of any Loan
Documents or any other agreement or instrument relating thereof;
1.17.3.2 any change in the time, manner or place of payment
of, or in any other term of, all or any part of the Guaranteed
Obligations, or any other amendment or waiver thereof or any consent
to departure therefrom, including, but not limited to, any increase
in the Guaranteed Obligations resulting from the extension of
additional credit to a Borrower or otherwise;
1.17.3.3 any taking, exchange, release or non-perfection of
any
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Collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the Guaranteed
Obligations;
1.17.3.4 any manner of application of collateral, or
proceeds thereof, to all or any of the Guaranteed Obligations, or any
manner of sale or other disposition of any collateral for all or any
of the Guaranteed Obligations or any other assets of a Borrower;
1.17.3.5 any change, restructuring or termination of the
corporate structure or existence of a Borrower; or
1.17.3.6 any other circumstances which might otherwise
constitute a defense available to, or a discharge of a Borrower or a
guarantor.
This guarantee shall continue to be effective or be reinstated as the
case may be, if at any time any payment of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by the Agent
upon the insolvency, bankruptcy or reorganization of a Borrower or
otherwise, all as though such payment has not been made.
1.17.4 Waivers. Each Borrower hereby expressly waives promptness,
diligence, notice of acceptance and any other notice (except any notice
specifically provided for in this Agreement) with respect to any of the
Guaranteed Obligations and this guarantee and any requirement that the
Agent protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against a Borrower may
otherwise have under applicable law.
1.17.5 Survival. This guarantee is a continuing guaranty and shall
(i) remain in full force and effect until indefeasible payment in full
(after the Termination Date) of the Guaranteed Obligations and all other
amounts payable under this guarantee, (ii) be binding upon each Borrower,
their respective successors and assigns, and (iii) inure to the benefit of
and be enforceable by the Agent, Lenders and their successors, transferees
and assigns. Without limiting the generality of the foregoing CLAUSE (III),
the Lenders may assign or otherwise transfer all or any portion of their
rights and obligations under the Loan Documents (including, but not limited
to, all or any portion of the Advances and the Note) to any other Person,
and the assignee shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise.
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1.18 Authorized Borrowed Representative. Each of American Aero and any
Additional Borrower hereby appoints Aero as its authorized representative and
instructs the Agent and the Lenders to accept from Aero all requests for
borrowings and instructions as to disbursement of proceeds thereof, to deliver
to Aero on behalf of American Aero, and any Additional Borrower all account
statements and other notices hereunder and otherwise to deal with Aero as the
representative of American Aero and any Additional Borrower for all purposes
under this Agreement, and the Agent and the Lenders shall be fully protected in
accepting and relying upon any such request or instructions or related item from
Aero.
1.19 Pro-Rata Borrowings. All borrowings of Advances (other than
Overadvance Advances) under this Agreement shall be made by the Lenders,
severally, on a pro-rata basis of their Commitment. It is understood that no
Lender shall be responsible for any default by any other Lender of its
obligation to make Revolving Loans hereunder and that each Lender shall be
obligated to make the Revolving Loans to be made by it hereunder, regardless of
the failure of any other Lender to fulfill its commitments.
ARTICLE IV
CONDITIONS PRECEDENT
1.20 Conditions Precedent to Initial Advances. Notwithstanding any other
provision of this Agreement, the Lenders' obligation to make the Initial
Advances is subject to the fulfillment of each of the following conditions prior
to or contemporaneously with the making of such Advances:
1.20.1 Closing Documents. The Agent shall have received each of the
following, all of which shall be satisfactory in form and substance to the
Agent and its counsel:
1.20.1.1 this Agreement, duly executed and delivered by
Borrowers;
1.20.1.2 the Note dated the Effective Date and duly executed
and delivered by the Borrowers;
1.20.1.3 certified copies of the certificate of articles of
organization and operating agreement and member agreements (or
articles of incorporation, bylaws, and shareholder agreement if such
Borrower is a corporation) of each Borrower as in effect on the
Effective Date and all entity action, including member or shareholder
approval, if necessary, taken by each Borrower and/or its members or
shareholders to authorize the execution, delivery and performance of
this Agreement and the other Loan Documents and the borrowing under
this Agreement.
1.20.1.4 certificates of incumbency and specimen signatures
with respect to each of the members and/or officers of each Borrower
and the manager (or the officers of each member and/or manager who is
a corporation or other entity) who
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are authorized to execute and deliver this Agreement or any other
Loan Document on behalf of such Borrower or any document, certificate
or instrument to be delivered in connection with this Agreement or
the other Loan Documents and to request borrowings under this
Agreement.
1.20.1.5 a certificate evidencing the good standing of each
Borrower in the jurisdiction of its organization and in each other
jurisdiction in which it is qualified as a foreign corporation to
transact business;
1.20.1.6 the Pledge Agreement duly executed and delivered by
Aero;
1.20.1.7 Financing Statements duly executed and delivered by
each Borrower, and evidence satisfactory to the Agent that the
Financing Statements have been filed in each jurisdiction where such
filing may be necessary or appropriate to perfect the Security
Interest;
1.20.1.8 a Schedule of Receivables, prepared as of May 31,
1998;
1.20.1.9 a Schedule of Equipment, prepared as of May 31,
1998;
1.20.1.10 a Schedule of Inventory, prepared as of May 31,
1998;
1.20.1.11 a Borrowing Base Certificate prepared as of the
Effective Date duly executed and delivered by the chief financial
officer of each Borrower demonstrating availability under the
Revolving Loans, after giving effect to the Initial Advances, of not
less than $4,000,000, together with such additional evidence of such
availability as the Agent shall require;
1.20.1.12 a letter from the Borrowers to the Agent requesting
the first advances under this Agreement (the "Initial Advances") and
specifying the method of disbursement;
1.20.1.13 copies of all financial statements referred to in
SECTION 5.1.13 and meeting the requirements thereof;
1.20.1.14 a certificate of the President of each Borrower
stating that, to the best of his knowledge, (a) all of the
representations and warranties made or deemed to be made under this
Agreement are true and correct as of the Effective Date, both with
and without giving effect to the Loans to be made at such time and
the application of the proceeds thereof, and (b) no Default or Event
of Default exists;
1.20.1.15 evidence satisfactory to the Agent of the release
and
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termination of (or, at the option of the Lender, agreement to release
and terminate) all Liens other than Permitted Liens;
1.20.1.16 a signed opinion of Xxxxx and Xxxxx, L.L.P.,
counsel for the Borrowers, and such local counsel as the Agent shall
deem necessary or desirable, opining as to such matters in connection
with this Agreement as the Agent or its counsel may reasonably
request;
1.20.1.17 copies of each of the other Loan Documents duly
executed by the parties thereto with evidence satisfactory to the
Lender and its counsel in their reasonable judgment of the due
authorization, binding effect and enforceability of each such Loan
Document on each such party and such other documents and instruments
as the Agent may reasonably request.
1.20.2 Acquisitions. The assets of Titan Industries, Inc. shall be
transferred to American Aero, and the assets listed on SCHEDULE 4.1.2 shall
have been transferred to American Aero;
1.20.3 Preferred Interests. The sale of the preferred equity
interests listed in SCHEDULE 4.1.3 in Aero shall have been consummated and
the consideration therefor shall have been fully paid.
1.20.4 Appraisals. Receipt by Agent of a Real Estate Appraisal and
Equipment Appraisal acceptable and satisfactory to Agent, in its sole and
absolute discretion.
1.20.5 Environmental Report. Receipt by Agent of Environmental
Reports on the Real Estate in form and content acceptable to Agent, in its
sole and absolute discretion.
1.20.6 Title Policies. Receipt by Agent of the Title Policies,
acceptable and satisfactory to Agent, in its sole and absolute discretion.
1.20.7 Survey. Receipt by Agent of surveys of the Real Estate
certified to Lenders, in a form satisfactory to Agent, in its sole
discretion.
1.20.8 Insurance. Receipt of Agent of proof of and certificates of
the insurance required on the Collateral, including Real Estate, herein and
in the Security Documents by Agent acceptable to Agent, in its sole and
absolute discretion.
1.20.9 Audit. Receipt by Agent of an audit report based on a field
examination conducted by Agent or outside auditors selected by Agent,
acceptable to Agent, in its sole and absolute discretion.
1.20.10 No Injunctions, Etc. No action, proceeding, investigation,
regulation or
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legislation shall have been instituted, threatened or proposed before any
court, governmental agency or legislative body to enjoin, restrain or
prohibit or to obtain substantial damages in respect of or which is related
to or arises out of this Agreement or the consummation of the transactions
contemplated hereby or which, in the Agent's sole discretion, would make it
inadvisable to consummate the transactions contemplated by this Agreement.
1.20.11 Material Adverse Change. As of the Effective Date, there
shall not have occurred any change which, in the Agent's sole and absolute
determination, has had or may have a Materially Adverse Effect as compared
to the condition of the Borrowers presented by the most recent unaudited
financial statements of the Borrowers described in SECTION 5.1.13 or as
compared to the condition of the Borrowers presented by preliminary drafts
of audited financial statements of the Borrowers for the fiscal year of the
Borrowers ended December 31, 1997.
1.20.12 Solvency. The Agent shall have received evidence satisfactory
to Agent that, after giving effect to the Initial Advances (i) each
Borrower has assets (excluding goodwill and other intangible assets not
capable of valuation) having value, both at fair value and at present fair
saleable value, greater than the amount of its liabilities, and (ii) each
Borrowers' assets are sufficient in value to provide such Borrower with
sufficient working capital to enable it profitably to operate its business
and to meet its obligations as they become due, and (iii) each Borrower has
adequate capital to conduct the business in which it is and proposes to be
engaged. Such evidence shall include a Consolidated and consolidating
balance sheet of Aero and its Consolidated Subsidiaries at May 31, 1998,
prepared by the Borrowers on a pro forma basis, giving effect to the
transactions contemplated by this Agreement and setting forth the
assumptions in which such balance sheet was prepared, together with a
restatement, to the extent necessary, of such balance sheet to reflect the
fair saleable value of the assets of the Borrowers; forecasted financial
statements consisting of balance sheets, cash flow statements and income
statements of Aero and its Consolidated Subsidiaries, giving effect to the
transactions contemplated by this Agreement and reflecting projected
borrowings hereunder and setting forth the assumptions on which such
forecasted financial statements were prepared, covering the five-year
period commencing on May 31, 1998, and prepared on a quarterly basis for
the first 12 months and on an annual basis for each of the four years
thereafter; and such other evidence as the Agent shall require supporting
the representation and warranty of the Borrowers set forth in SECTION
4.1.10, including without limitation, a certificate of the chief financial
officer of the Borrowers in the form of EXHIBIT 4.1.12.
1.21 All Advances. At the time of making of each Advance, including the
Initial Advances:
1.21.1 all of the representations and warranties made or deemed to
be made under this Agreement shall be true and correct at such time both
with and without giving effect to
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the Advances to be made and the application of the proceeds thereof, except
that representations and warranties which, by their terms, are applicable
only to the Effective Date shall be required to be true and correct only as
of the Effective Date,
1.21.2 the entity actions of the Borrowers referred to in SECTION
4.1.1.2 shall remain in full force and effect and the incumbency of
officers, members and officers of owners of Borrowers shall be as stated in
the certificates of incumbency delivered pursuant to SECTION 4.1.1.3 or as
subsequently modified and reflected in a certificate of incumbency
delivered to the Agent, and
1.21.3 the Agent may, without waiving either condition, consider the
conditions specified in SECTIONS 4.2.1 AND 4.2.2 fulfilled and a
representation by the Borrowers to such effect made if no written notice to
the contrary is received by the Agent from the Borrowers prior to the
making of the Advances then to be made.
1.22 Additional Borrower. At the request of the Borrowers then party to
this Agreement, and with the consent of the Majority Lenders, which consent may
be withheld by the Majority Lenders in their sole and absolute discretion, any
Wholly-Owned Subsidiary of Aero (a "Potential Borrower") may become a "Borrower"
hereunder upon receipt by the Agent of each of the following, all of which shall
be satisfactory in form and substance to the Majority Lenders and their counsel:
1.22.1 an Additional Borrower Certificate, duly executed and
delivered by the Potential Borrower and acknowledged by each Borrower;
1.22.2 certificates or other items acceptable to Agent in its sole
and absolute discretion of the Potential Borrower satisfying the
requirements of SECTIONS 4.1.1 THROUGH 4.1.17;
1.22.3 Financing Statements and Security Agreements duly executed
and delivered by the Potential Borrower, and evidence satisfactory to the
Agent that such Financing Statements have been filed in each jurisdiction
where such filing may be necessary or appropriate to perfect the Security
Interest;
1.22.4 Mortgages or Deeds of Trust duly executed and delivered by
the Potential Borrower covering Real Estate owned by the Potential
Borrower, and evidence satisfactory to Agent that such Mortgages or Deeds
of Trust have been properly recorded in the appropriate jurisdictions;
1.22.5 Pledge Agreements pledging to Agent the equity interests of
Aero in the Potential Borrower, whether membership interests, stock or
otherwise.
1.22.6 a signed opinion of Xxxxx and Xxxxx, L.L.P., counsel for the
Potential
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Borrower and the Borrowers, and such local counsel as the Agent shall deem
necessary or desirable, opining as to such matters in connection with this
Agreement as the Agent or its counsel may reasonably request;
1.22.7 updated Schedules to this Agreement as necessary to reflect
accurately the addition of the Potential Borrower as a Borrower hereunder;
and
1.22.8 such other documents and instruments as the Majority Lenders
may reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
1.23 Representations and Warranties. The Borrowers represent and warrant
to the Lenders and to Agent as follows:
1.23.1 Organization; Power; Qualification. Each Borrower is an
entity, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has the entity power and
authority to own its properties and to carry on its business as now being
and hereafter proposed to be conducted and is duly qualified and authorized
to do business in each jurisdiction in which failure to be so qualified and
authorized would have a Materially Adverse Effect. The jurisdictions in
which each Borrower is qualified to do business as a foreign entity are
listed on SCHEDULE 5.1.1.
1.23.2 Subsidiaries; Ownership of the Borrower; Shareholder
Agreements. Except as set forth in SCHEDULE 5.1.2, each Borrower has no
Subsidiaries. The outstanding membership interests or stock, as the case
may be, of each Borrower has been duly and validly issued. To the extent
the Borrower is a limited liability company, the members have made their
capital contributions and the number and owners of such interests of such
Borrower are set forth on SCHEDULE 5.1.2. To the extent such Borrower is a
corporation such stock is fully paid and non-assessable and the owners of
such shares of capital stock of each such Borrower is set forth on SCHEDULE
5.1.2. Except as set forth on SCHEDULE 5.1.2, there are no member
agreements, options, subscription agreements, shareholder agreement or
other agreements or understandings to which each Borrower is a party in
effect with respect to the membership interests or capital stock or other
equity interest of such Borrower, including, without limitation, agreements
providing for special voting requirements or arrangements for approval of
entity actions or other matters relating to entity governance or
restrictions on membership interest or share transfer or providing for the
issuance of any securities convertible into membership or share interests
of such Borrower, any warrants or other rights to acquire any convertible
into membership interests, or any agreement that obligates such Borrower,
either by its terms or at the election of any other Person, to repurchase
such membership interest or shares under any circumstances.
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1.23.3 Authorization of Agreement, Notes, Loan Documents and
Borrowing. Each Borrower has the right and power and has taken all
necessary action to authorize it to execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a party in
accordance with their respective terms and to borrow hereunder. This
Agreement and each of the other Loan Documents to which it is a party have
been duly executed and delivered by the duly authorized member, agent or
officer of each Borrower and each is, or when executed and delivered in
accordance with this Agreement will be, a legal, valid and binding
obligation of such Borrower, enforceable in accordance with its terms,
except as the same may be subject to and affected by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar laws
from time to time in effect and affecting the rights of creditors generally
and to the extent that the remedy of specific performance or other
equitable remedies may be unavailable in any jurisdiction or may be
withheld as a matter of judicial discretion.
1.23.4 Compliance of Agreement, Notes, Loan Documents and Borrowing
with Laws, Etc. The execution, delivery and performance of this Agreement
and each of the other Loan Documents to which a Borrower is a party in
accordance with their respective terms and the borrowings hereunder do not
and will not, by the passage of time, the giving of notice or otherwise,
(i) require any Governmental Approval or violate any applicable law
relating to such Borrower or any of its Affiliates, (ii) conflict with,
result in a breach of or constitute default under (A) the certificate or
articles of organization, certificate or articles of incorporation,
operating agreement, bylaws or any members' or shareholders' agreement of
such Borrower, (B) any indenture, agreement or other instrument to which
such Borrower is a party or by which any of its property may be bound or
(c) any Governmental Approval relating to the Borrower, or, (iii) result in
or require the creation or imposition of any Lien upon or with respect to
any property now owned or hereafter acquired by such Borrower other than
the Security Interest.
1.23.5 Business. Each Borrower is engaged principally in the
business described on SCHEDULE 5.1.5.
1.23.6 Compliance with Law; Governmental Approvals. Except as set
forth in SCHEDULE 5.1.6, each Borrower (i) has all Governmental Approvals,
including permits relating to federal, state and local Environmental Laws,
ordinances and regulations required by any applicable law for it to conduct
its business, each of which is in full force and effect, is final and not
subject to review on appeal and is not the subject of any pending or, to
the knowledge of such Borrower, threatened attack by direct or collateral
proceeding, and (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other applicable laws relating
to it, including, without being limited to, all Environmental Laws and all
occupational health and safety laws applicable to such Borrower or its
properties, except for instances of noncompliance which would not, singly
or in the
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aggregate, cause a Default or Event of Default or have a Materially Adverse
Effect and in respect of which adequate reserves have been established on
the books of such Borrower.
1.23.7 Titles to Properties. Except as set forth in SCHEDULE 5.1.7,
each Borrower has good and marketable title to or a valid leasehold
interest in all its Real Estate and valid and legal title to or a valid
leasehold interest in all personal property and assets used in or necessary
to the conduct of such Borrower's business, including, but not limited to,
those reflected on the most recent balance sheet of the Borrowers delivered
pursuant to SECTION 5.1.13.
1.23.8 Liens. Except as set forth in SCHEDULE 5.1.8, none of the
properties and assets of a Borrower is subject to any Lien, except
Permitted Liens. Other than the Financing Statements, no financing
statement under the Uniform Commercial Code of any state which names a
Borrower as debtor and which has not been terminated has been filed in any
state or other jurisdiction, and no Borrower has signed any such financing
statement or any security agreement authorizing any secured party
thereunder to file any such financing statement, except to perfect those
Liens listed in SCHEDULE 5.1.8 and Permitted Liens.
1.23.9 Indebtedness and Guaranties. Set forth on SCHEDULE 5.1.9 is a
complete and correct listing of all of each Borrower's (i) Debt and (ii)
Guaranties. No Borrower is in default of any material provision of any
agreement evidencing or relating to any such Debt or Guaranty.
1.23.10 Litigation. Except as set forth on SCHEDULE 5.1.10, there are
no actions, suits or proceedings pending (nor, to the knowledge of
Borrowers, are there any actions, suits or proceedings threatened, nor is
there any basis therefor) against or in any other way relating adversely to
or affecting any Borrower or any of its property in any court or before any
arbitrator of any kind or before or by any governmental body, except
actions, suits and proceedings that would not, singly or in the aggregate,
have a Materially Adverse Effect.
1.23.11 Tax Returns and Payments. Except as set forth on SCHEDULE
5.1.11, to the best of Borrowers' knowledge, all United States federal,
state and local and foreign national, provincial and local and all other
tax returns of each Borrower required by applicable law to be filed have
been duly filed, and all United States federal, state and local and foreign
national, provincial and local and all other taxes, assessments and other
governmental charges or levies upon each Borrower and its property, income,
profits and assets which are due and payable have been paid, except any
such nonpayment which is at the time permitted under SECTION 7.4. The
charges, accruals and reserves on the books of each Borrower in respect of
United States federal, state and local taxes and foreign national,
provincial and local taxes for all fiscal years and portions thereof since
the organization of such Borrower are in the judgment of such Borrower
adequate, and such Borrower knows of no reason to anticipate any additional
assessments for any of such years which, singly or in the aggregate,
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might have a Materially Adverse Effect.
1.23.12 Burdensome Provisions. No Borrower is a party to any
indenture, agreement, lease or other instrument, or subject to any charter
or other restriction, Governmental Approval or applicable law, compliance
with the terms of which might have a Materially Adverse Effect.
1.23.13 Financial Statements. The Borrowers have furnished to the
Agent a copy of (i) the draft unaudited pro forma Consolidated and
consolidating balance sheet of Aero and its Consolidated Subsidiaries as at
December 31, 1997 and the related statements of income, cash flow and
retained earnings for the twelve-month period then ended and (ii) the
unaudited pro forma Consolidated and consolidating balance sheet Aero and
its Consolidated Subsidiaries as at March 31, 1998 and the related
statements of income, cash flow and retained earnings for the four month
period then ended and (iii) the unaudited pro forma Consolidated and
consolidating balance sheet of Aero and its Consolidated Subsidiaries as at
April 30, 1998 and the related statement of income for the one month period
then ended. To the best of Borrowers' knowledge, such financial statements
are complete and correct and present fairly and in all material respects in
accordance with GAAP the financial position of Aero and its Consolidated
Subsidiaries as at the dates thereof and the results of operations of Aero
and its Consolidated Subsidiaries for the periods then ended. Except as
disclosed or reflected in such financial statements, no Borrower had any
material liabilities, contingent or otherwise, and there were no material
unrealized or anticipated losses of a Borrower.
1.23.14 Adverse Change. To the best of Borrowers' knowledge, since
the date of the most recent audited financial statements described in
SECTION 5.1.13, (i) no change in the business, assets, liabilities,
condition (financial or otherwise), results of operations or business
prospects of a Borrower has occurred that has had, or may have, a
Materially Adverse Effect, and (ii) no event has occurred or failed to
occur which has had, or may have, a Materially Adverse Effect.
1.23.15 ERISA. No Borrower or any Related Company maintains or
contributes to any Benefit Plan other than those listed on SCHEDULE 5.1.15.
Each Benefit Plan is in substantial compliance with ERISA, and no Borrower
or any Related Company has received any notice asserting that a Benefit
Plan is not in compliance with ERISA. No material liability to the PBGC or
to a Multiemployer Plan has been, or is expected by a Borrower to be,
incurred by such Borrower or any Related Company.
1.23.16 Absence of Defaults. No Borrower is in default under its
certificate or articles of organization, certificate or articles of
incorporation, operating agreement or bylaws, and no event has occurred
which has not been remedied, cured or waived (i) that constitutes a Default
or an Event of Default or (ii) that (x) constitutes or that, with the
passage of time or giving of notice, or both, would constitute a default or
event of default by a Borrower under any material agreement (other than
this Agreement) or judgment, decree or order to which
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such Borrower is a party or by which such Borrower or any of its properties
may be bound, which default or event of default would have a Materially
Adverse Effect, or (y) would require such Borrower to make any payment
thereunder prior to the scheduled maturity date therefor.
1.23.17 Accuracy and Completeness of Information. All written
information, reports and other papers and data produced by or on behalf of
a Borrower and furnished to the Agent were, at the time the same were so
furnished, complete and correct in all material respects to the extent
necessary to give the recipient a true and accurate knowledge of the
subject matter, no fact is known to a Borrower which has had, or may in the
future have (so far as such Borrower can foresee), a Materially Adverse
Effect which has not been set forth in the financial statements or
disclosure delivered prior to the Effective Date, in each case referred to
in SECTION 5.1.13, or in such written information, reports or other papers
or data or otherwise disclosed in writing to the Agent prior to the
Effective Date. No document furnished or written statement made to the
Agent or the Lenders by a Borrower in connection with the negotiation,
preparation or execution of this Agreement or any of the Loan Documents
contains or will contain any untrue statement of a fact material to the
creditworthiness of such Borrower or omits or will omit to state a material
fact necessary in order to make the statements contained therein not
misleading.
1.23.18 Solvency. In each case after giving effect to the
Indebtedness represented by the Loans outstanding and to be incurred and
the transactions contemplated by this Agreement, each Borrower is solvent,
having assets of a fair value which exceeds the amount required to pay its
debts (including contingent, subordinated, unmatured and unliquidated
liabilities) as they become absolute and matured, and each Borrower is able
to and anticipates that it will be able to meet its debts as they mature
and has adequate capital to conduct the business in which it is or proposes
to be engaged.
1.23.19 Status of Receivables. Each Receivable reflected in the
computations included in any Borrowing Base Certificate meets the criteria
enumerated in CLAUSES (A) through (P) of the definition of Eligible
Receivables, except as disclosed in such Borrowing Base Certificate or as
disclosed in a timely manner in a subsequent Borrowing Base Certificate or
otherwise in writing to the Lender.
1.23.20 Chief Executive Office. The chief executive office of each
Borrower and the books and records relating to the Receivables are located
at the address or addresses set forth on SCHEDULE 5.1.20, and except as set
forth SCHEDULE 5.1.20 such Borrower has not maintained its chief executive
officer or the books and records relating to any Receivable at any other
address at any time during the five (5) years immediately preceding the
Agreement Date.
1.23.21 Equipment. The Equipment is located in either Louisiana,
Alabama or Texas.
1.23.22 Real Property. Set forth on SCHEDULE 5.1.22 is xxx xxxxxxx
(xxxxxx, xxxx, xxxxxx xxx xxxxx) of each parcel of Real Estate owned or
leased by a Borrower.
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1.23.23 Corporate and Fictitious Names: Trade Names. Except as
otherwise disclosed on SCHEDULE 5.1.23, during the one-year period
preceding the Agreement Date, each Borrower or its predecessors has not
been known as or used any corporate or fictitious name other than the
entity name of such Borrower on the Effective Date. All trade names or
styles under which a Borrower creates Receivables, or to which instruments
in payment of Receivables are made payable, are listed on SCHEDULE 5.1.23.
1.23.24 Federal Regulations. No Borrower is engaged, principally or
as one of its important activities, in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock" (as each of
the quoted terms is defined or used in Regulations G and U of the Board of
Governors of the Federal Reserve System).
1.23.25 Investment Company Act. No Borrower is an "investment
company" or a company "controlled" by an "investment company" (as each of
the quoted terms is defined or used in the Investment Company Act of 1940,
as amended).
1.23.26 Employee Relations. Except as set forth on SCHEDULE 5.1.26,
no Borrower is party to any collective bargaining agreement nor has any
labor union been recognized as the representative of a Borrower's
employees; no Borrower knows of any pending, threatened or contemplated
strikes, work stoppage or other labor disputes involving its employees or
those of its Subsidiaries.
1.23.27 Intellectual Property. Each Borrower owns or possesses all
Intellectual Property required to conduct its business as now and presently
planned to be conducted without, to its knowledge, conflict with the rights
of others, and SCHEDULE 5.1.27 lists all Intellectual Property owned by
each Borrower.
1.23.28 Bank Accounts, Lockboxes, Etc. SCHEDULE 5.1.28 is a complete
and correct list of all checking accounts, deposit accounts, lockboxes and
other bank accounts maintained by any Borrower.
1.24 Survival of Representations and Warranties, Etc. All representations
and warranties set forth in this ARTICLE V and all statements contained in any
certificate, financial statement or other instrument delivered by or on behalf
of a Borrower pursuant to or in connection with this Agreement or any of the
Loan Documents (including, but not limited to, any such representation, warranty
or statement made in or in connection with any amendment thereto) shall
constitute representations and warranties made under this Agreement. All
representations and warranties made under this Agreement shall be made or deemed
to be made at and as of the Agreement Date, at and as of the Effective Date and
at and as of the date of each Advance, except that representations and
warranties which, by their terms are applicable only to one such date shall be
deemed to be made only at and as of such date. All representations and
warranties made or deemed to be made under this Agreement shall survive and not
be waived by the execution and delivery of this Agreement, any investigation
made by or on behalf of the Agent or Lenders or any borrowing hereunder.
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ARTICLE VI
COLLATERAL COVENANTS
In addition, not in lieu of any covenants contained in the Security
Documents, until the Facilities have been terminated and all the Secured
Obligations have been indefeasibly paid in full, unless the Required Lenders
shall otherwise consent in the manner provided in SECTION 13.11:
1.25 Verification and Notification. The Agent shall have the right (a) at
any time and from time to time, in the name of the Agent or in the name of the
applicable Borrower, to verify the validity, amount or any other matter relating
to any Receivables by mail, telephone, telegraph or otherwise, and (b) upon the
occurrence and during the continuance of an Event of Default, to notify the
Account Debtors or obligors under any Receivables of the assignment of such
Receivables to the Agent, for the account of the Lenders, and to direct such
Account Debtor(s) or obligors to make payment of all amounts due or to become
due thereunder directly to the Agent and, upon such notification and at the
expense of such Borrower, to enforce collection of any such Receivables and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Borrower might have done.
1.26 Disputes, Returns and Adjustments.
1.26.1 In the event amounts due and owing under Receivables in
excess of $250,000 are in dispute between the Account Debtor and a
Borrower, such Borrower shall provide the Agent with prompt written notice
thereof.
1.26.2 Each Borrower shall notify the Agent promptly of all material
returns and credits in respect of Receivables, which notice shall specify
the Receivables affected.
1.26.3 Each Borrower may, in the ordinary course of business and
prior to a Default or an Event of Default, grant any extension of time for
payment of any Receivable or compromise, compound or settle the same for
less than the full amount thereof or release wholly or partly any Person
liable for the payment thereof or allow any credit or discount whatsoever
thereon; PROVIDED, THAT, (i) no such action results in the reduction of
more than $250,000 in the amount payable with respect to Receivable of any
Account Debtor or of more than $250,000 with respect to all Receivables in
any fiscal year of the Borrowers, and (ii) the Agent is promptly notified
of the amount of such adjustments and the Receivable(s) affected thereby.
1.27 Invoices. Upon the request of the Agent, the Borrowers shall deliver
to the Agent, at the Borrowers' expense, copies of customers' invoices or the
equivalent, original shipping and delivery receipts or other proof of delivery,
customers' statements, the original copy of all documents, including, without
limitation, repayment histories and present status reports, relating to
Receivables and such other documents and information relating to the Receivables
as the Agent shall specify.
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1.28 Delivery of Instruments. In the event any Receivable in an amount in
excess of $250,000 is, or Receivables in excess of $250,000 in the aggregate
are, at any time evidenced by a promissory note or notes, trade acceptance or
any other instrument for the payment of money, the applicable Borrower shall not
endorse, negotiate or otherwise transfer such notes, trade acceptances or other
instruments to any Person other than Agent; PROVIDED, THAT, such Receivable is
included in the Borrowing Base.
1.29 Ownership and Defense of Title.
1.29.1 Except for Permitted Liens, a Borrower shall at all times be
the sole owner of each and every item of Collateral and shall not create
any Lien on, or sell, lease, exchange, assign, transfer, pledge,
hypothecate, grant a security interest or security title in or otherwise
dispose of, any of the Collateral or any interest therein, except as
otherwise expressly contemplated herein or in the Security Document. Except
as otherwise provided in the Security Documents, Borrowers shall be allowed
to sell Inventory in the ordinary course of business.
1.29.2 Each Borrower shall defend its title in and to the Collateral
and shall defend the Security Interest in the Collateral against the claims
and demands of all Persons.
1.29.3 In addition to, and not in derogation of, the foregoing and
the requirements of any of the Security Documents, each Borrower shall (i)
protect and preserve all properties material to its business, including
Intellectual Property and maintain all tangible property in good and
workable condition in all material respects, with reasonable allowance for
wear and tear, and (ii) from time to time make or cause to be made all
needed and appropriate repairs, renewals, replacements and additions to
such properties necessary for the conduct of its business, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times.
1.30 Insurance. Each Borrower shall at all times maintain insurance with
responsible insurance companies against such risks and in such amounts as is
customarily maintained by similar businesses or as may be required by applicable
law, including such public liability, products liability, third party property
damage and business interruption insurance as is consistent with reasonable
business practices, and from time to time deliver to the Agent upon its request
a detailed list of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.
1.31 Location of Offices and Collateral. No Borrower will change the
location of its chief executive office or the place where it keeps its books and
records relating to the Collateral or change its name, identity or corporate
structure without giving the Agent thirty (30) days' prior written notice
thereof.
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1.32 Records Relating to Collateral. Each Borrower will at all times keep
complete and accurate records of all Collateral.
1.33 Inspection. The Lenders and Agent (by any of their officers,
employees or agents) shall have the right, to the extent that the exercise of
such right shall be within the control of a Borrower, at any time or times
(prior to the occurrence of a Default or Event of Default, during normal
business hours) to (a) visit the properties of such Borrower, inspect the
Collateral and the other assets of such Borrower and its Subsidiaries and
inspect and make extracts from the books and records of such Borrower and its
Subsidiaries, including, but not limited to, management letters prepared by
independent accountants, all during customary business hours at such premises,
(b) discuss such Borrower's business, assets, liabilities, financial condition,
results of operations and business prospects, insofar as the same are reasonably
related to the rights of the Agent or Lenders hereunder or under any of the Loan
Documents, with such Borrower's and its Subsidiaries' (i) principal officers,
(ii) independent accountants and other professionals providing services to such
Borrower, and (iii) any other Person (except that any such discussion with any
third parties shall be conducted only in accordance with the Agent's standard
operating procedures relating to the maintenance of confidentiality of
confidential information of Borrowers), and (c) verify the amount, quantity,
value and condition of, or any other matter relating to, any of the Collateral
and in this connection to review, audit and make extracts from all records and
files related to any of the Collateral. Each Borrower will deliver to the Agent
any instrument necessary to authorize an independent accountant or other
professional to have discussions of the type outlined above with the Agent or
for the Agent to obtain records from any service bureau maintaining records on
behalf of such Borrower.
1.34 Maintenance of Equipment. Each Borrower shall maintain all physical
property that constitutes Equipment in good and workable condition in all
material respects, with reasonable allowance for wear and tear, and shall
exercise proper custody over all such property, except to the extent the failure
to do any of the foregoing does not have a Materially Adverse Effect.
1.35 Information and Reports.
1.35.1 Schedule of Receivables. The Borrowers shall deliver to the
Agent (i) on or before the Effective Date, a Schedule of Receivables as of
a date not more than three (3) Business Days prior to the Effective Date
setting forth a detailed aged trial balance of all of their then existing
Receivables, specifying the name of and the balance due from (and any
rebate due to) each Account Debtor obligated on a Receivable so listed, and
(ii) no later than 30 days after the end of each month, a Schedule of
Receivables as of the last Business Day of the immediately preceding month
setting forth (A) a detailed aged trial balance of all the Borrowers then
existing Receivables, specifying the name of and the balance due from (and
any rebate due to) each Account Debtor obligated on a Receivable so listed
and (B) a reconciliation to the Schedule of Receivables delivered in
respect of the next preceding month.
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1.35.2 Schedule of Inventory. The Borrowers shall deliver to Agent
(i) on or before the Effective Date, a Schedule of Inventory as of a date
not more than three (3) Business Days prior to Effective Date (ii) no later
than thirty (30) days after the end of a month, a Schedule of Inventory
dated as of the last business Day of the immediately preceding month.
1.35.3 Schedule of Equipment. The Borrowers shall deliver to Agent
on or before the Effective Date, a Schedule of Equipment as of a date not
more than three (3) Business Days prior to Effective Date.
1.35.4 Borrowing Base Certificate. The Borrowers shall deliver to
the Agent not later than fifteen (15) days from the last day of each month,
a Borrowing Base Certificate prepared as of the close of business on the
last day of such month signed by Borrowers' chief financial officers or
other employees of Borrowers acceptable to Agent.
1.35.5 Notice of Diminution of Value. The Borrowers shall give
prompt notice to the Agent of any matter or event which has resulted in, or
may result in, the actual or potential diminution in excess of $250,000 in
the value of any of its Collateral, except for any diminution in the value
of any Collateral in the ordinary course of business which has been
appropriately reserved against, as reflected in the financial statements
previously delivered to the Agent pursuant to ARTICLE VIII.
1.35.6 Certification. Each of the schedules delivered to the Agent
pursuant to this SECTION 6.11 shall be certified by the chief financial
officer or other employee of the Borrowers acceptable to Agent to be true,
correct and complete as of the date indicated thereon.
1.35.7 Other Information. The Agent or the Lenders may, in its
reasonable discretion, from time to time require the Borrowers to deliver
the schedules described in SECTION 6.11.1, 6.11.2 AND 6.11.3 more or less
often and on different schedules than specified in such Section, and the
Borrowers will comply with such requests. The Borrowers shall also furnish
to the Agent or the Lenders such other information with respect to the
Collateral as the Agent or the Lenders may from time to time reasonably
request.
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1.36 Power of Attorney. Each Borrower hereby appoints the Agent as its
attorney, with power (a) to endorse the name of such Borrower on any checks,
notes, acceptances, money orders, drafts or other forms of payment or security
that may come into the Agent's possession, and (b) to sign the name of such
Borrower on any invoice or xxxx of lading relating to any Receivables or other
Collateral, on any drafts against customers related to letters of credit, on
schedules and assignments of Receivables furnished to the Agent by such
Borrower, on notices of assignment, financing statements and other public
records relating to the perfection or priority of the Security Interest or
verifications of account and on notices to or from customers.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Borrowers covenant and agree that the Borrowers will duly and
punctually pay, jointly, severally and in solido, the principal of, and interest
on, and all other amounts payable with respect to, the Loans and all other
Secured Obligations in accordance with the terms of the Security Documents and
the other Loan Documents and that until the Facilities have been terminated and
all the Secured Obligations have been indefeasibly paid in full, unless the
Required Lenders shall otherwise consent in the manner provided for in SECTION
13.11, each Borrower will:
1.37 Preservation of Entity Existence and Similar Matters. Preserve and
maintain its entity existence, rights, franchises, licenses and privileges in
the jurisdiction of its organization and qualify and remain qualified as a
foreign limited liability company or corporation, as the case may be, and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.
1.38 Compliance with Applicable Law. Comply with all applicable laws
relating to such Borrower.
1.39 Conduct of Business. Engage only in businesses substantially the same
as those conducted on the Effective Date.
1.40 Payment of Taxes and Claims. Pay or discharge when due (a) all Taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any properties belonging to it, and (b) all lawful
claims of materialmen, mechanics, carriers, warehousemen and landlords for
labor, materials, supplies and rentals which, if unpaid, might become a Lien on
any properties of such Borrower, EXCEPT that this SECTION 7.4 shall not require
the payment or discharge of any such Tax, assessment, charge, levy or claim
which is not yet delinquent or which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established on
the appropriate books.
1.41 Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete), as may be required or as
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may be necessary to permit the preparation of financial statements in accordance
with GAAP.
1.42 Use of Proceeds. Not use any part of such proceeds to purchase or
carry, or to reduce or retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulation G or U of the Board of
Governors of the Federal Reserve System) or for any other purpose which would
involve a violation of such Regulation G or U or Regulation T or X of such Board
of Governors or for any other purpose prohibited by law or by the terms and
conditions of this Agreement.
1.43 Subordinated Debt. Lenders acknowledge that American Aero has Debt in
the original principal amount of $__________ owed to Weatherford Enterra U.S.,
Limited Partnership and Weatherford U.S., Inc. (collectively "Weatherford"). The
Subordinated Debt owed to Weatherford is subject to a Subordination Agreement
dated effective as of September 18, 1997 (the "Weatherford Subordination
Agreement"). Borrowers shall provide Agent written notice of any defaults under
the Subordinated Debt Loan Documents, as defined in the Weatherford
Subordination Agreement, together with a copy of any Standstill Notice, as
defined in the Weatherford Subordination Agreement. Borrowers acknowledge and
agree that if within thirty (30) days prior to the expiration of the Standstill
Period Borrowers have not cured such default, Agent shall have the right on
behalf of the Lenders, to make an Advance hereunder to pay in full the amounts
owed to Weatherford. Any such Advance shall be considered a Revolving Credit
Advance; PROVIDED, THAT, if such advance exceeds the ceiling for Revolving
Credit Advances, such Advance nevertheless shall constitute Secured Obligations
and, as such, shall entitle Lenders to all benefits thereof and security
therefor.
1.44 Accuracy of Information. All written information, reports, statements
and other papers and data furnished to the Agent or the Lenders, whether
pursuant to ARTICLE VIII or any other provision of this Agreement or any of the
other Loan Documents, shall be, at the time the same is so furnished, complete
and correct in all material respects to the extent necessary to give the Lender
true and accurate knowledge of the subject matter.
ARTICLE VIII
INFORMATION
Until the Facilities have been terminated and all the Secured Obligations
have been indefeasibly paid in full, unless the Required Lenders shall otherwise
consent in the manner set forth in SECTION 13.11, the Borrowers will furnish to
the Agent at the Agent's Office:
1.45 Financial Statements.
1.45.1 Audited Year-End Statements. As soon as available, but in any
event within one-hundred twenty (120) days after the end of
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each fiscal year of the Borrowers, copies of the Consolidated balance sheet
of Aero and its Consolidated Subsidiaries as at the end of such fiscal year
and the related statements of income, shareholders' or members' equity and
cash flow for such fiscal year, in each case setting forth in comparative
form the figures for the previous year of such Persons and reported on,
without qualification, by a nationally recognized firm of certified public
accountants selected by the Borrowers and acceptable to the Agent.
1.45.2 Monthly Financial Statements. As soon as available, but in
any event within 30 days after the end of each accounting month of the
Borrowers, copies of the unaudited Consolidated and consolidating balance
sheet of Aero and its Consolidated Subsidiaries as at the end of such month
and the related unaudited income statement for Aero and its Consolidated
Subsidiaries for such month and for the portion of the fiscal year of Aero
and its Consolidated Subsidiaries through such month, certified by the
chief financial officer of the Borrowers to the best of his knowledge as
presenting fairly the financial condition and results of operations of Aero
and its Consolidated Subsidiaries as at the date thereof and for the
periods ended on such date, subject to normal year end adjustments.
1.45.3 Annual Budget. As soon as available, but in any event within
60 days before the end of each fiscal year of the Borrowers, a pro forma
balance sheet, income statement and statement of cash flows of Aero and its
Consolidated Subsidiaries for the next succeeding fiscal year, prepared on
a monthly basis, reflecting the Borrowers' reasonable projections.
1.45.4 Acquisitions. As soon as available, but in any event not
later than 30 days prior to the consummation of any Acquisition of a
Business Unit by Aero, a pro forma balance sheet of Aero and its
Consolidated Subsidiaries as of a date on or about the effectiveness of
such Acquisition and giving effect thereto, together with (i) audited
balance sheets for the Business Unit to be acquired for the last three (3)
years; (ii) projected financial statement giving effect to such Acquisition
for the next three (3) years; and (iii) a revision of the annual budget
required under SECTION 8.1.3 hereof as may be necessary to reflect the
consummation of such Acquisition.
1.46 Accountants' Certificate. Together with each delivery of financial
statements required by SECTION 8.1.1, a certificate of the accountants who
performed the audit in connection with such statements (a) stating that they
have reviewed this Agreement and that, in making the audit necessary to the
issuance of a report on such financial statements, they have obtained no
knowledge of any Default or Event of Default or, if such accountants have
obtained knowledge of a Default or Event of Default, specifying the nature and
period of existence thereof, and (b) setting forth the calculations necessary to
establish whether or not the Borrowers were in compliance with the covenants
contained in SECTIONS 9.1, 9.2, 9.5 AND 9.6 as of the date of such statements.
The Borrowers authorize the Agent to discuss the financial condition of the
Borrowers with the Borrowers' independent certified public accountants and agree
that such discussion or communication shall be without liability to either the
Agent or the Borrowers'
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independent certified public accountants. The Borrowers shall deliver a letter
addressed to such accountants, upon Agent's request, authorizing them to comply
with the provisions of this SECTION 8.2.
1.47 Officer's Certificate. Together with each delivery of financial
statements at the end of each month as required by SECTIONS 8.1.1 AND 8.1.2, a
certificate of the Borrowers' Presidents or chief financial officers in the form
attached hereto as EXHIBIT 8.3 (a) stating that, based on an examination
sufficient to enable him to make an informed statement, no Default or Event of
Default exists or, if such is not the case, specifying such Default or Event of
Default and its nature, when it occurred, whether it is continuing and the steps
being taken by the Borrowers with respect to such Default or Event of Default,
and (b) setting forth the calculations necessary to establish whether or not the
Borrowers were in compliance with the covenants contained in SECTIONS 9.1, 9.2,
9.5 AND 9.6 as of the date of such statements.
1.48 Copies of Other Reports.
1.48.1 Promptly upon receipt thereof, copies of all reports, if any,
submitted to a Borrower or its Board of Directors or Managers by its
independent public accountants, including, without limitation, all
management letters.
1.48.2 As soon as practicable, copies of all financial statements
and reports that Aero shall send to its members or shareholders generally
and of all registration statements and all regular or periodic reports that
Aero shall file with the Securities and Exchange Commission or any
successor commission if Aero becomes required to so.
1.48.3 From time to time and promptly upon each request, such
forecasts, data, certificates, reports, statements, opinions of counsel,
documents or further information regarding the business, assets,
liabilities, financial condition, results of operations or business
prospects of the Borrowers as the Agent may reasonably request. The rights
of the Agent under this SECTION 8.4.3 are in addition to and not in
derogation of its rights under any other provision of this Agreement or any
Loan Document.
1.48.4 If requested by the Agent, statements in conformity with the
requirements of Federal Reserve Form G-1 or U-1 referred to in Regulations
G and U. respectively, of the Board of Governors of the Federal Reserve
System.
1.49 Notice of Litigation and Other Matters. Prompt notice of:
1.49.1 the commencement, to the extent a Borrower is aware of the
same, of all proceedings and investigations by or before any governmental
or nongovernmental body and all actions and proceedings in any court or
before any arbitrator against or in any other way relating adversely to, or
adversely affecting, such Borrower or any Affiliate of such Borrower
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or any of their respective properties, assets or businesses which might,
singly or in the aggregate, cause a Default or an Event of Default or have
a Materially Adverse Effect,
1.49.2 any amendment of the certificate or articles of organization,
certificate or articles of incorporation, bylaws or operating agreement of
a Borrower or any change in the Federal tax identification number of a
Borrower,
1.49.3 any change in the business, assets, liabilities, financial
condition, results of operations or business prospects of a Borrower or any
Affiliate of such Borrower which has had or may have any Materially Adverse
Effect and any change in the President or chief financial officer of a
Borrower, and
1.49.4 any (i) Default or Event of Default, or (ii) event that
constitutes or that, with the passage of time or giving of notice or both,
would constitute a default or event of default by a Borrower under any
material agreement (other than this Agreement) to which such Borrower is a
party or by which such Borrower or any of its property may be bound if the
exercise of remedies thereunder by the other party to such agreement would
have, either individually or in the aggregate, a Materially Adverse Effect.
1.50 ERISA. As soon as possible and in any event within 30 days after a
Borrower knows, or has reason to know, that:
1.50.1 any Termination Event with respect to a Benefit Plan has
occurred or will occur,
1.50.2 the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans has increased to an amount in excess of $0,
1.50.3 such Borrower is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
required by reason of its complete or partial withdrawal (as described in
Section 4203 or 4205 of ERISA) from such Multiemployer Plan, or
1.50.4 a certificate of the President or the chief financial officer
of such Borrower setting forth the details of such of the events described
in SECTIONS 8.6.1 through 8.6.3 as applicable and the action which is
proposed to be taken with respect thereto and, simultaneously with the
filing thereof, copies of any notice or filing which may be required by the
PBGC or other agency of the United States government with respect to such
of the events described in SECTIONS 8.6.1 through 8.6.3 as applicable.
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ARTICLE IX
NEGATIVE COVENANTS
Until the Facilities have been terminated and all the Secured Obligations
have been indefeasibly paid in full, unless the Required Lenders shall otherwise
consent in the manner set forth in SECTION 13.11, the Borrowers will not
directly or indirectly:
1.51 Financial Ratios.
1.51.1 Minimum Interest Charge Coverage. Permit the ratio of total
EBITDA to Interest Expense, in each case on a Consolidated basis for Aero
and its Consolidated Subsidiaries, at any time to be less than 1.25 to 1.0:
1.51.2 Minimum Capital. Permit the Consolidated Net Worth of Aero
and its Consolidated Subsidiaries plus the Subordinated Debt at any time to
be less than the Net Worth of Aero and its Consolidated Subsidiaries as
shown on the pro forma balance sheet provided pursuant to its April 30,
1998 Consolidated and consolidating Balance Sheet. Each fiscal quarter such
Consolidated Net Worth shall be adjusted to the greater of (i) the actual
increase in actual Net Worth or (ii) by at least 50% of Net Income. There
shall be no downward adjustment. For any upward adjustment to be made
pursuant to any Acquisition or the merger contemplated in ARTICLE XI,
Borrowers shall provide Agent a pro forma Consolidated and consolidating
balance sheet, giving effect to such Acquisition or merger, thirty (30)
days in advance of the requested adjustment. Any adjustment contemplated by
this SECTION 9.1.2 shall require the consent of the Majority Lenders, in
their sole and absolute discretion.
1.51.3 Quarterly Net Loss. Permit any Borrower to have consecutive
quarterly Net Losses.
1.52 Debt. Create, assume, or otherwise become or remain obligated in
respect of, or permit or suffer to exist or to be created, assumed or incurred
or to be outstanding any Debt, other than Debt described on SCHEDULE 9.2.
1.53 Guaranties. Become or remain liable with respect to any Guaranty of
any obligation of any other Person, except for the Guaranteed Obligations and
Guaranties described on SCHEDULE 9.3.
1.54 Investments. Acquire any Investment or permit any Investment to be
outstanding, other than Permitted Investments.
1.55 Acquisitions. Acquire any Business Unit that is not in the same or
similar business as Borrowers.
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1.56 Restricted Distributions and Payments. Declare or make any Restricted
Distribution or Restricted Payment other than the Restricted Payment set forth
on SCHEDULE 9.6.
1.57 Merger, Consolidation and Sale of Assets. Merge or consolidate with
any other Person or sell, lease or transfer or otherwise dispose of all or a
substantial portion of its assets to any Person except as set forth on
SCHEDULE 9.7.
1.58 Transactions with Affiliates. Effect any transaction with any
Affiliate on a basis less favorable to a Borrower than would be the case if such
transaction had been effected with a Person not an Affiliate.
1.59 Liens. Create, assume or permit or suffer to exist or to be created
or assumed any Lien on any of the property or assets of a Borrower, real,
personal or mixed, tangible or intangible, except for Permitted Liens.
1.60 Operating Leases. Enter into any lease other than a Capitalized Lease
which would cause the annual payment obligations of the Borrowers under all
leases (other than leases of Real Estate listed on SCHEDULE 9.11 and Capitalized
Leases) to exceed $1,000,000 in the aggregate.
1.61 Benefit Plans. Permit, or take any action which would result in, the
aggregate present value of the Unfunded Vested Accrued Benefits under all
Benefit Plans of the Borrowers to exceed $0.
1.62 Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing from such Person of real or personal property which
has been or is to be sold or transferred, directly or indirectly, by a Borrower
to such Person to exceed $1,000,000 in the aggregate; PROVIDED, THAT, prior to
entering into any such arrangement no matter the value, Borrowers shall give
Agent ten (10) days notice of such transaction.
1.63 Amendments of Other Agreements. Amend in any way the interest rate
or principal amount or schedule of payments of principal and interest with
respect to any Indebtedness (other than the Secured Obligations) other than to
reduce the interest rate or extend the schedule of payments with respect
thereto.
ARTICLE X
DEFAULT
1.64 Events of Default. Each of the following shall constitute an Event of
Default, whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment or
order of any court or any order, rule or regulation of any governmental or
nongovernmental body:
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1.64.1 Default in Payment of Advances. The Borrowers shall default
in any payment of principal of, or interest on, any Advance, Reimbursement
Obligations or Note when and as due (whether at maturity, by reason of
acceleration or otherwise).
1.64.2 Other Payment Default. The Borrowers shall default in the
payment, as and when due, of principal of or interest on, any other Secured
Obligation.
1.64.3 Misrepresentation. Any representation or warranty made or
deemed to be made by a Borrower under this Agreement or any other Loan
Document or any amendment hereto or thereto shall at any time prove to have
been incorrect or misleading in any material respect when made and such
default is not cured within thirty (30) days after notice by Agent to
Borrowers.
1.64.4 Defaulting Performance. The Borrowers shall default in the
performance or observance of any term, covenant, condition or agreement
contained in (i) ARTICLES 6, 7, 8, OR 9, or (ii) this Agreement (other than
as specifically provided for otherwise in this SECTION 10.1) and such
default is not cured within thirty (30) days after notice by Agent to
Borrowers.
1.64.5 Debt Cross-Default. (i) A Borrower shall fail to pay when due
and payable the principal of or interest on any Debt (other than the
Advances, Reimbursement Obligations or Note) where the principal amount of
such Debt is in excess of $250,000, or (ii) the maturity of any such Debt
shall have (A) been accelerated in accordance with the provisions of any
indenture, contract or instrument providing for the creation of or
concerning such Debt, or (B) been required to be prepaid prior to the
stated maturity thereof, or (iii) any event shall have occurred and be
continuing which, with or without the passage of time or the giving of
notice, or both, would permit any holder or holders of such Debt, any
trustee or agent acting on behalf of such holder or holders or any other
Person so to accelerate such maturity and such default is not cured within
thirty (30) days after notice by Agent to Borrower.
1.64.6 Other Cross-Defaults. A Borrower shall default in the payment
when due or in the performance or observance of any material obligation or
condition of any agreement, contract or lease (other than the Security
Documents or any such agreement, contract or lease relating to
Indebtedness), if the exercise of remedies thereunder by the other party to
such agreement could have a Materially Adverse Effect and such default is
not cured at the earlier of (i) thirty (30) days after notice from Agent to
Borrowers or (ii) the commencement of the exercise of remedies thereunder.
1.64.7 Voluntary Bankruptcy Proceeding. A Borrower shall (i)
commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (ii) commence a proceeding seeking to take advantage
of any other laws, domestic or foreign,
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relating to bankruptcy, insolvency, reorganization, winding up or
composition for adjustment of debts, (iii) consent to or fail to contest in
a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws, (iv) apply for
or consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as
they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any entity action for the purpose of authorizing
any of the foregoing.
1.64.8 Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against a Borrower in any court of competent
jurisdiction seeking (i) relief under the federal bankruptcy laws (as now
or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Borrower or of all or any
substantial part of the assets, domestic or foreign, of such Borrower, and
such case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive calendar days, or an order granting the relief requested
in such case or proceeding against such Borrower (including, but not
limited to, an order for relief under such federal bankruptcy laws) shall
be entered.
1.64.9 Loan Documents. Any event of default or "Event of Default"
under any other Loan Document shall occur (and any grace period applicable
thereto pursuant to such Loan Document shall have expired) or a Borrower
shall default in the performance or observance of any material term,
covenant, condition or agreement contained in, or the payment of any other
sum covenanted to be paid by such Borrower under, any such Loan Document or
any provision of this Agreement, or of any other Loan Document after
delivery thereof hereunder, shall for any reason cease to be valid and
binding, other than a nonmaterial provision rendered unenforceable by
operation of law, or a Borrower or other party thereto (other than the
Lender) shall so state in writing, or this Agreement or any other Loan
Document, after delivery thereof hereunder, shall for any reason (other
than any action taken independently by the Lenders or Agent and except to
the extent permitted by the terms thereof) cease to create a valid,
perfected and, except as otherwise expressly permitted herein, first
priority Lien on, or security interest in, any of the Collateral purported
to be covered thereby; provided, however, if such default is a non-monetary
default, Borrowers shall have thirty (30) days after notice by Agent to
Borrowers in which to cure such default.
1.64.10 Failure of Agreements. A Borrower shall challenge the
validity and binding effect of any provision of any Loan Document after
delivery thereof hereunder or shall state in writing its intention to make
such a challenge, or any Security Document, after delivery thereof
hereunder, shall for any reason (except to the extent permitted by the
terms thereof) cease to create a valid and perfected first priority Lien
(except for Permitted Liens) on, or security interest in, any of the
Collateral purported to be covered thereby.
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1.64.11 Judgment. A final, unappealable judgment or order for the
payment of money in an amount that exceeds the uncontested insurance
available therefor by $1,000,000 or more shall be entered against a
Borrower by any court.
1.64.12 Attachment. A writ of attachment or sequestration or similar
process which exceeds $250,000 in value shall be issued against any
property of a Borrower or a writ of execution or fieri facias or similar
process which exceeds $250,000 in value shall be issued against any
property of a Borrower and such there has not been an appropriate bond
obtained against such process.
1.64.13 ERISA. (i) Any Termination Event with respect to a Benefit
Plan shall occur that, after taking into account the excess, if ant, of (A)
the fair market value of the assets of any other Benefit Plan with respect
to which a Termination Event occurs on the same day (but only to the extent
that such excess is the property of Borrower) over (B) the present value on
such day of all vested nonforfeitable benefits under such other Benefit
Plan, results in an Unfunded Vested Accrued Benefit in excess of $0, (ii)
any Benefit Plan shall incur an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA) for which a
waiver has not been obtained in accordance with the applicable provisions
of the Code and ERISA, or (iii) a Borrower is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan resulting from such Borrower's complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such Multiemployer Plan.
1.64.14 Qualified Audits. The independent certified public
accountants retained by the Borrowers shall refuse to deliver an
unqualified opinion with respect to the annual financial statements of a
Borrower.
1.64.15 Material Adverse Effect. There occurs any act, omission,
situation, circumstance, event or undertaking or combination of acts,
omissions, situations, circumstances, events or undertakings which have, or
in the sole judgment of the Agent or Required Lenders would likely have, a
Materially Adverse Effect.
1.64.16 Change of Control. Should more than 35% of the interests in
Aero International, L.L.C. become owned by any Person other than XxXxxxx X.
Xxxxxxx, Xx. or Xxxxxxx X. Xxxx, Xx. or who or which was not on the
Effective Date a member of Aero International, L.L.C., except pursuant to
the Merger pursuant to the Merger Letter Agreement. Should the group
composed of the members of Aero International, L.L.C. as of the Effective
Date or the group composed of XxXxxxx X. Xxxxxxx, Xx., Xxxxxxx X. Xxxx,
Xx., Xxxxx X. Xxxxx, Xx., Xxxxxx X. Xxxxxxxxx and W. Xxxxxx XxXxxxxx cease
to own 10% of the issued and outstanding stock of the entity which survives
the Merger.
1.64.17 Change of Management. (A) Prior to or the consummation of the
Merger pursuant to the Merger Letter Agreement, should the President of
Aero International, L.L.C. by any Person who or which was not on the
Effective Date a member of Aero International, L.L.C.; or (B) Following the
consummation of the Proposed Combination as defined in the Merger Letter
Agreement, should more than a majority of the members of the board of
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directors of Aero International, Inc. (as constituted following
consummation of the Proposed Combination as defined in the Merger Letter
Agreement) not meet at least one of the following criteria: (i) have been a
member of Aero International, L.L.C. on the Effective Date, or be XxXxxxx
X. Xxxxxxx, Xx. or Xxxxxxx X. Xxxx, Xx.; (ii) be nominated for election to
such board of directors with the approval of, or elected to such board of
directors with the ratification of, at least 80% of (x) the group composed
of members of Aero International, L.L.C. as of the Effective Date, as to
approvals or ratifications made by shareholders; or (y) the group composed
of XxXxxxx X. Xxxxxxx, Xx., Xxxxxxx X. Xxxx, Xx., Xxxxx X. Xxxxx, Xx.,
Xxxxxx X. Xxxxxxxxx and W. Xxxxxx XxXxxxxx, as to approvals or
ratifications made by members of the board of directors.
1.65 Remedies.
1.65.1 Automatic Acceleration and Termination of Facilities.
Upon the occurrence of an Event of Default specified in SECTION 10.1.7 OR
10.1.8, (i) the principal of and the interest on the Advances and the Notes
at the time outstanding, and all other amounts owed to the Lenders under
this Agreement or any of the Loan Documents and all other Secured
Obligations, shall thereupon become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly
waived, anything in this Agreement or any of the Loan Documents to the
contrary notwithstanding, and (ii) the Facilities and the commitment of the
Lenders to make advances thereunder or under this Agreement shall
immediately terminate.
1.65.2 Other Remedies. If any Event of Default (other than as
specified in SECTION 10.1.7 OR 10.1.8) shall have occurred and be
continuing, the Agent, on behalf of the Lenders, in its sole and absolute
discretion, may do any of the following:
1.65.2.1 declare the principal of and interest on the
Advances and the Notes at the time outstanding, and all other amounts
owed to the Lenders, Agent or Letter of Credit Bank under this
Agreement or any of the Loan Documents and all other Secured
Obligations, to be forthwith due and payable, whereupon the same
shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly
waived, anything in this Agreement or the Loan Documents to the
contrary notwithstanding;
1.65.2.2 terminate the Facilities and any commitment of the
Lender to make advances hereunder;
1.65.2.3 notify, or request the Borrower to notify, in
writing or otherwise, any Account Debtor or obligor with respect to
any one or more of the Receivables to make payment to the Agent or
any agent or designee of the Agent, at such address as may be
specified by the Agent, and, if, notwithstanding the giving of
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any notice, any Account Debtor or other such obligor shall make
payments to a Borrower, such Borrower shall hold all such payments it
receives in trust for the Lenders, without commingling the same with
other funds or property of, or held by, such Borrower and shall
deliver the same to the Agent or any such agent or designee
immediately upon receipt by such Borrower in the identical form
received, together with any necessary endorsements;
1.65.2.4 settle or adjust disputes and claims directly with
Account Debtors and other obligors on Receivables for amounts and on
terms which the Agent considers advisable and in all such cases only
the net amounts received by the Agent in payment of such amounts,
after deductions of costs and attorneys' fees, shall constitute
Collateral, and the Borrowers shall have no further right to make any
such settlements or adjustments or to accept any returns of
merchandise;
1.65.2.5 without notice, demand or other process, and
without payment of any rent or any other charge, enter any of the
Borrowers' premises and, without breach of the peace, until the Agent
completes the enforcement of its rights in the Collateral, take
possession of such premises or place custodians in exclusive control
thereof, remain on such premises and use the same and any of the
Borrowers' equipment, for the purpose of collecting any Receivable,
and the Agent is hereby granted a license or sublicense and all other
rights as may be necessary, appropriate or desirable to use the
Intellectual Property in connection with the foregoing, and the
rights of the Borrowers under all licenses and franchise agreements
shall inure to the Agent's benefit (provided, however, that any use
of any federally registered trademarks as to any goods shall be
subject to the control as to the quality of such goods of the owner
of such trademarks and the goodwill of the business symbolized
thereby);
1.65.2.6 exercise any and all of its rights under any and
all of the Security Documents and other Loan Documents;
1.65.2.7 apply any cash Collateral to the payment of the
Secured Obligations in any order in which the Agent may elect or use
such cash in connection with the exercise of any of its other rights
hereunder or under any of the Security Documents;
1.65.2.8 establish or cause to be established one or more
lockboxes or other arrangement for the deposit of proceeds of
Receivables, and, in such case, the Borrowers shall cause to be
forwarded to the Agent at the Agent's Office, on a daily basis,
copies of all checks and other items of payment and deposit slips
related thereto deposited in such lockboxes, together with collection
reports in form and substance satisfactory to the Agent; and
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1.65.2.9 exercise all of the rights and remedies of a
secured party under the UCC (whether or not the UCC is applicable)
and under any other applicable law, including, without limitation,
the right, without notice except as specified below and with or
without taking the possession thereof, to sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any
location chosen by the Agent, for cash, on credit or for future
delivery and at such price or prices and upon such other terms as the
Lender may deem commercially reasonable. The Borrowers agree that, to
the extent notice of sale shall be required by law, at least 10 days'
notice to the Borrowers of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
reasonable notice, but notice given in any other reasonable manner or
at any other reasonable time shall also constitute reasonable
notification. The Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Agent
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
1.66 Application of Proceeds. All proceeds from each sale of, or other
realization upon, all or any part of the Collateral following an Event of
Default shall be applied or paid over as follows:
1.66.1 First: to the payment of all costs and expenses incurred in
connection with such sale or other realization, including attorneys' fees,
1.66.2 Second: to the payment of the Secured Obligations (with the
Borrowers remaining liable for any deficiency) in any order which the Agent
may elect, and
1.66.3 Third: the balance (if any) of such proceeds shall be paid to
the Borrowers or, subject to any duty imposed by law or otherwise, to
whomsoever is entitled thereto.
1.67 Power of Attorney. In addition to the authorizations granted to the
Agent or Lenders under SECTION 6.14 or under any other provision of this
Agreement or any of the Loan Documents, upon the occurrence and during the
continuance of an Event of Default, each Borrower hereby irrevocably designates,
makes, constitutes and appoints the Agent (and all Persons designated by the
Agent from time to time) as such Borrowers true and lawful attorney and agent in
fact, and the Agent or any agent of the Agent may, without notice to Borrowers,
and at such time or times as the Agent or any such agent in its sole discretion
may determine, in the name of such Borrower or the Agent, (a) demand payment of
the Receivables, enforce payment thereof by legal proceedings or otherwise,
settle, adjust, compromise, extend or renew any or all of the Receivables or any
legal proceedings brought to collect the Receivables, discharge and release the
Receivables or any of them and exercise
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all of such Borrower's rights and remedies with respect to the collection of
Receivables, (b) prepare, file and sign the name of such Borrower on any proof
of claim in bankruptcy or any similar document against any Account Debtor or any
notice of Lien, assignment or satisfaction of Lien or similar document in
connection with any of the Collateral, (c) endorse the name of such Borrower
upon any chattel paper, document, instrument, notice, freight xxxx, xxxx of
lading or similar document or agreement relating to the Receivables or any other
Collateral, (d) use the stationery of such Borrower, open Borrower's mail,
notify the post office authorities to change the address for delivery of such
Borrowers' mail to an address designated by the Agent and sign the name of such
Borrower to verifications of the Receivables and on any notice to the Account
Debtors, (e) use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to the Receivables or
other Collateral to which each Borrower or any Subsidiary of each Borrower has
access.
1.68 Miscellaneous Provisions Concerning Remedies.
1.68.1 Rights Cumulative. The rights and remedies of the Agent and
Lenders under this Agreement, the Note and each of the Loan Documents shall
be cumulative and not exclusive of any rights or remedies which it or they
would otherwise have. In exercising such rights and remedies, the Agent or
Lenders may be selective and no failure or delay by the Agent or Lenders in
exercising any right shall operate as a waiver of such right nor shall any
single or partial exercise of any power or right preclude its other or
further exercise or the exercise of any other power or right.
1.68.2 Waiver of Marshaling. Each Borrower hereby waives any right
to require any marshaling of assets and any similar right.
1.68.3 Limitation of Liability. Nothing contained in this ARTICLE X
or elsewhere in this Agreement or in any of the Loan Documents shall be
construed as requiring or obligating the Lender or any agent or designee of
the Lender to make any demand or to make any inquiry as to the nature or
sufficiency of any payment received by it or to present or file any claim
or notice or take any action with respect to any Receivable or any other
Collateral or the moneys due or to become due thereunder or in connection
therewith or to take any steps necessary to preserve any rights against
prior parties, and neither the Agent nor any of its agents or designees
shall have any liability to Borrower for actions taken pursuant to this
ARTICLE X, any other provision of this Agreement or any of the Loan
Documents, so long as the Agent or such agent or designee shall act
reasonably and in good faith.
1.68.4 Appointment of Receiver. In any action under this ARTICLE X,
the Agent shall be entitled to the appointment of a receiver, without
notice of any kind whatsoever, to take possession of all or any portion of
the Collateral and to exercise such power as the court shall confer upon
such receiver.
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1.69 Dividends; Redemption. Any dividends or redemption rights under any
equity and/or debt outstanding shall cease upon the occurrence of an Event of
Default.
1.70 Performance in Lenders. Should a Borrower fail to perform any
covenant, duty or agreement contained herein or any other Loan Documents, Agent,
at the request of or with the consent of the Required Lenders, may (but shall be
obligated to) perform or attempt to perform such covenant, duty or agreement on
behalf of such Borrower. In such event, Borrowers shall, at the request of Agent
or Lenders, promptly pay any amount expended by Agent or Lenders in such
performance to Agent at Agent's Office, together with interest thereon from the
date of expenditure until paid. Notwithstanding the foregoing, it is expressly
understood that neither Lenders or Agent assume any liability or responsibility
for the performance of any duties of Borrowers hereunder or under any of the
Loan Documents or other control over the management and affairs of Borrower.
1.71 Trademark License. Each Borrower hereby grants to the Agent the
nonexclusive right and license to use any trademark then used by such Borrower,
for the purposes set forth in SECTION 10.2.2.8 and for the purpose of enabling
the Agent to realize on the Collateral and to permit any purchaser of any
portion of the Collateral through a foreclosure sale or any other exercise of
the Agent's or Lenders' rights and remedies under the Loan Documents to use,
sell or otherwise dispose of the Collateral bearing any such trademark. Such
right and license is granted free of charge, without the requirement that any
monetary payment whatsoever be made to each Borrower or any other Person by the
Lender. Each Borrower hereby represents, warrants, covenants and agrees that it
presently has, and shall continue to have, the right, without the approval or
consent of others, to grant the license set forth in this SECTION 10.6.
ARTICLE XI
MERGER WITH INTERNATIONAL TOOL & SUPPLY, PLC
1.72 Merger with ITS. Lenders acknowledge that Borrowers intend to merge
with ITS pursuant to the terms of the Merger Letter Agreement (the "Merger").
1.72.1 Formation of Aero International, Inc. Upon the formation of
Aero International, Inc., subject to the terms and conditions contained in
this Agreement, including without limitation SECTION 4.3, Aero
International, Inc. shall become an Additional Borrower hereunder.
1.72.2 ITS Subsidiaries. Upon the completion of the Merger, subject
to the terms and conditions contained in this Agreement, including without
limitation SECTION 4.3, all Wholly-Owned Subsidiaries of Aero
International, Inc. shall become Additional Borrowers under this Agreement.
1.72.3 Definitive Agreement. Borrower shall give Agent at least five
(5) days advance notice of the proposed date of execution of the Definitive
Agreement, as defined in
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the Merger Letter Agreement, together with the last draft of the Definitive
Agreement. Agent shall have five (5) days from the receipt of the
Definitive Agreement (i) to provide Borrowers with Agent's comments to such
Agreement; and, (ii) to propose modification if the Definitive Agreement
differs from the overall transactions described in the Merger Letter
Agreement. If the Definitive Agreement differs substantially from the
terms of the Merger Letter Agreement, the Merger shall require the Required
Lenders' prior written approval.
1.72.4 Updated Borrowing Base Certificate. Borrowers shall provide
twenty (20) days prior to closing of the Merger transaction a proposed
Borrowing Base Certificate taking into account the transaction contemplated
by the Merger Letter Agreement.
1.73 Obligations. Lenders and Agent shall upon consummation of the Merger
be obligated to do the following in addition to any other obligations under this
Agreement, including without limitation, SECTION 4.3:
1.73.1 Obligations of Borrowers.
1.73.1.1 Thirty (30) days prior to the consummation of the
Merger, Borrowers shall provide Agent with a pro forma Consolidated
and consolidating balance sheet of Aero International, Inc. and its
Consolidated Subsidiaries as of a date on or about the effectiveness
of such merger and giving effect thereto, together with (i) audited
balance sheet of ITS for the last three (3) years; (ii) projected
financial statements for the next three (3) years giving effect to
the merger; and (iii) a revision of the annual budget required under
SECTION 8.1.3 hereof as may be necessary to reflect to consummation
of such merger. Such financial statements shall be acceptable to
Majority Lenders in their sole and absolute discretion.
1.73.1.2 Simultaneous with the Merger, Aero International,
Inc. and its Wholly-Owned Subsidiaries (giving effect to the merger)
shall grant to Agent for the ratable benefit of Lenders a first
priority Lien on all of such Additional Borrowers Inventory and
Receivables. The definition of Aero herein shall then mean Aero
International, Inc.
1.73.1.3 Borrowers shall pay all Debts of Aero
International, Inc. and its Wholly-Owned Subsidiaries (giving effect
to the Merger).
1.73.1.4 On the date of the closing of the transactions
contemplated by the Merger Letter Agreement, Borrowers shall provide
Agent with a Borrowing Base Certificate giving effect to such Merger.
1.73.2 Obligations of Lenders. Provided, that an Event of Default
has not occurred:
1.73.2.1 And provided, that there is sufficient Revolving
Credit
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Availability, Lenders shall make a Revolving Credit Advance in order
for Borrowers to fill their obligations under SECTION 11.2.1.3.
1.73.2.2 Within sixty (60) days of the completion of the
Merger contemplated by the Merger Letter Agreement, Agent shall
release its Liens on the Equipment and the Real Estate.
1.74 Termination of Certain Availability. Upon the consummation of the
Merger contemplated by the Merger Letter Agreement, all Fixed Asset Availability
and Credit CAPEX Availability shall cease, and Borrowers shall have no further
right to any Fixed Asset Advances or CAPEX Credit Advances. Upon consummation of
the Merger and giving effect to the Merger, should the outstanding Advances
exceed the Revolving Credit Availability, Borrowers agree to reduce immediately
the outstanding Advances to the Revolving Credit Availability.
1.75 Debt and Equity Offerings. Aero intends to issue $75,000,000 worth of
Subordinated Debt in connection with the Merger. Any offering of debt or equity
by Aero or its Wholly-Owned Subsidiaries shall be subject to the prior approval
of the Majority Lenders and subject to documentation acceptable to Agent and its
counsel.
ARTICLE XII
AGENT
1.76 Appointment. Each future Lender, by accepting a participation
interest and any other Lender hereby irrevocably designate and appoint National
Canada Finance Corp. as Agent of such Bank (such term to include for purposes of
this SECTION 12.1, National Canada Finance Corp. acting as Collateral Agent) to
act as specified herein and in the other Loan Documents, and each such Lender
hereby irrevocably authorizes National Canada Finance Corp. as the Agent to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent agrees to act as such upon the express conditions contained
in SECTION 12.1. Notwithstanding any provision to the contrary elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Lenders' Agent. The
provisions of this SECTION 12.1 are solely for the benefit of the Agent and the
Lenders, and Borrowers 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 the Agent does
not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for Aero or any of its Subsidiaries.
1.77 Consultation with Counsel. Lenders agree that Agent may consult with
legal counsel
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selected by it and shall not be liable for any action taken or suffered in good
faith by it in accordance with the advice of such counsel.
1.78 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents or attorneys-in-
fact and shall be entitled to advise of counsel concerning all matters
pertaining to such duties. The Agent shall not be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected by it with reasonable
care except to the extent otherwise required by SECTION 12.4.
1.79 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the other Loan Documents (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by Borrowers or any of their respective
officers contained in this Agreement or the other Loan Documents, any other
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document or for any failure of Borrowers or any of
their respective officers to perform its obligations hereunder or thereunder.
The Agent shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or the other Loan Documents, or to inspect
the properties, books or records of Borrowers. The Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the Agent to
the Lenders or by or on behalf of a Borrower to the Agent or any Lender or be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Advances or Letters of Credit or
of the existence or possible existence of any Default or Event of Default.
1.80 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, facsimile, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advise and statements of legal counsel (including,
without limitation, counsel to Borrowers), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting,
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under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
1.81 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Agent has actually received notice from a Lender, or a Borrower referring to
this Agreement, describing 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 prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Banks; provided, that unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
1.82 Non-Reliance on Agent, and other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of Borrowers, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, assets, operations, property, financial and other condition,
prospects and creditworthiness of Borrowers. The Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial and other
condition, prospects or creditworthiness of Borrowers which may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
1.83 Indemnification. The Lenders agree to indemnify the Agent in its
capacity as such ratably according to their respective Percentages from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgements, suits, costs, reasonable expenses, attorneys' fees or
disbursements of any kind whatsoever which may at any time (including without
limitation the Secured Obligations) be imposed on, incurred by or asserted
against the Agent in its capacity as such in any way relating to or arising out
of this Agreement or any other Loan Documents, or any documents contemplated by
or referred to herein or the transactions contemplated hereby or any action
taken or omitted to be taken by the Agent under or in connection with any of the
foregoing, but only to the extent any of the foregoing is not paid by Borrowers;
PROVIDED, THAT, no Lender shall be liable to the Agent for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgment, suits, costs, expenses or disbursements resulting solely from the
gross negligence or willful misconduct of the Agent. To the extent any Lender
would be required to indemnify the Agent pursuant to the immediately preceding
sentence but for the fact that it is a
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Defaulting Lender, such Defaulting Lender shall not be entitled to receive any
portion of any payment or other distribution hereunder until each other Lender
shall have been reimbursed for the excess, if any, of the aggregate amount paid
by such Lender under this SECTION 12.8 over the aggregate amount such Lender
would have been obligated to pay had such first Lender not been a Defaulting
Lender. If any indemnity furnished to the Agent for any purposes shall, in the
opinion of the Agent be insufficient or become impaired, the Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
SECTION 12.8 shall survive the payment of all Secured Obligations.
1.84 Agent in its Individual Capacity. The Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrowers as though the Agent were not the Agent hereunder. With
respect to the Advances made by it and all Secured Obligations owing to it, the
Agent shall have the same rights and powers under this Agreement as any Lender
and may exercise the same as though it were not the Agent and the terms "Lender"
and "Lenders" shall include the Agent in its individual capacity.
1.85 Resignation of the Agent; Successor Agent. The Agent may resign as
the Agent upon twenty (20) days' notice to the Lenders. Upon the resignation of
the Agent, the Required Lenders shall appoint from among the Lenders a successor
Agent, which is a bank or a trust company, for the Lenders subject to prior
approval by the Borrowers in its discretion, whereupon such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall include such successor agent effective upon its appointment, and
the resigning Agent's rights, powers and duties as the Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the resignation of the
Agent hereunder, the provisions of this SECTION 12.2 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
1.86 Certain Action Requiring Consent of Majority Banks. Notwithstanding
anything to the contrary, Agent shall not without the consent of the Majority
Lenders: (a) increase the Commitment of any Lender; (b) change the repayment
schedule, waive any payments, change the maturity dates or change the rates of
interest per annum payable to the Lenders from the rates currently allowed to be
selected by Borrowers hereunder; (c) change the definitions of Required Lenders
or Majority Lenders; (d) discharge any Secured Obligations under this Agreement
or the Loan Documents; (e) release any Collateral; (f) increase the Percentage
of any Lender; (g) increase the Total Credit Facility; (h) release any Borrower
or guarantor of the Secured Obligations; or (i) amend the provisions of this
SECTION 12.11.
1.87 Benefit of Article XII. The agreements contained in this ARTICLE XII
are solely for the benefit of Agent and Lenders, and are not for the benefit of,
or to be relied upon by Borrower, or any other Person.
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ARTICLE XIII
MISCELLANEOUS
1.88 Notices.
1.88.1 Method of Communication. Except as specifically provided in
this Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by telephone
subsequently confirmed in writing. Notices in writing shall be delivered
personally or sent by overnight courier service, by certified or registered
mail, postage pre-paid, or by facsimile transmission and shall be deemed
received, in the case of personal delivery, when delivered, in the case of
overnight courier service, on the next Business Day after delivery to such
service, in the case of mailing, on the third day after mailing (or, if
such day is a day on which deliveries of mail are not made, on the next
succeeding day on which deliveries of mail are made) and, in the case of
facsimile transmission, upon transmittal by confirmed transmission;
PROVIDED, THAT in the case of notices to the Agent, the Agent shall be
charged with knowledge of the contents thereof only when such notice is
actually received by the Agent. A telephonic notice to the Agent as
understood by the Agent will be deemed to be the controlling and proper
notice in the event of a discrepancy with or failure to receive a
confirming written notice.
1.88.2 Addresses for Notices. Notices to any party shall be sent to
it at the following addresses, (or, effective 10 days after the giving of
notice thereof, any other address of which all the other parties are
notified in writing).
If to a Borrower: Aero International, L.L.C.
000 Xx. Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: XxXxxxx X. Xxxxxxx, Xx.
Facsimile: (000) 000-0000
With a copy to: Xxxxx & Xxxxx, L.L.P.
0000 Xxx Xx. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Xx. Esq.
Facsimile: (000) 000-0000
If to the Agent: National Bank of Canada
Atlanta Branch
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Vice President
Facsimile: (000) 000-0000
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National Bank of Canada
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, V.P., Senior Credit Officer
Facsimile: (000) 000-0000
With a copy to: XxXxxxxxxx Xxxxxxxx
0xx Xxxxx, Xxx Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attention: R. Xxxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to a Lender: At the address listed on SCHEDULE 1
1.88.3 Agent's Office. The Agent hereby designates its office
located at National Bank of Canada, Atlanta Branch, 000 Xxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, or any subsequent office which shall
have been specified for such purpose by written notice to the Borrowers, as
the office to which payments due are to be made and at which Advances will
be disbursed.
1.89 Expenses. The Borrowers agree to pay or reimburse on demand all costs
and expenses incurred by the Agent, Lenders and Letter of Credit Bank,
including, without limitation, the reasonable fees and disbursements of counsel,
in connection with (a) the negotiation, preparation, execution, delivery,
administration, enforcement and termination of this Agreement and each of the
other Loan Documents, whenever the same shall be executed and delivered,
including, without limitation, (i) the out-of-pocket costs and expenses incurred
in connection with the administration and interpretation of this Agreement and
the other Loan Documents, (ii) the costs and expenses of appraisals of the
Collateral, (iii) the costs and expenses of lien searches, and (iv) taxes, fees
and other charges of filing the Financing Statements and continuations and the
costs and expenses of taking other actions to perfect, protect, and continue the
Security Interest; (b) the preparation, execution and delivery of any waiver,
amendment, supplement or consent by the Agent or Lenders relating to this
Agreement or any of the Loan Documents; (c) sums paid or obligations incurred in
connection with the payment of any amount or taking any action required of a
Borrower under the Loan Documents that such Borrower fails to pay or take; (d)
costs of inspections and verifications of the Collateral, including, without
limitation, standard per diem fees, charged by the Agent or Lenders, travel,
lodging, and meals for inspections of the Collateral and the Borrowers
operations and books and records by the Agent's agents up to four times per year
and whenever an Event of Default exists; (e) costs and expenses of forwarding
loan proceeds, collecting checks and other items of payment, and establishing
and maintaining the Controlled Disbursement Account; (f) after the occurrence of
a Default, costs and expenses of preserving and protecting the Collateral; (g)
after the occurrence of
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a Default, consulting with and obtaining opinions and appraisals from one or
more Persons, including personal property appraisers, accountants and lawyers,
concerning the value of any Collateral for the Secured Obligations or related to
the nature, scope or value of any right or remedy of the Agent or the Lenders
hereunder or under any of the Loan Documents, including any review of factual
matters in connection therewith, which expenses shall include the fees and
disbursements of such Persons; and (h) costs and expenses paid or incurred to
obtain payment of the Secured Obligations, enforce the Security Interest, sell
or otherwise realize upon the Collateral and otherwise enforce the provisions of
the Loan Documents, or to prosecute or defend any claim in any way arising out
of, related to or connected with, this Agreement or any of the Loan Documents,
which expenses shall include the reasonable fees and disbursements of counsel
and of experts and other consultants retained by the Lender.
The foregoing shall not be construed to limit any other provisions of the
Loan Documents regarding costs and expenses to be paid by the Borrowers. The
Borrowers hereby authorize the Agent, upon ten (10) days' notice by the Agent to
the Borrowers, to debit the Borrowers' loan accounts (by increasing the
principal amount of the Revolving Loans) in the amount of any such costs and
expenses owed by the Borrowers when due.
1.90 Stamp and Other Taxes. The Borrowers will pay any and all stamp,
registration, recordation and similar taxes, fees or charges and shall indemnify
the Agent and the Lenders against any and all liabilities with respect to or
resulting from any delay in the payment or omission to pay any such taxes, fees
or charges, which may be payable or determined to be payable in connection with
the execution, delivery, performance or enforcement of this Agreement and any of
the Loan Documents or the perfection of any rights or security interest
thereunder.
1.91 Setoff. In addition to any rights now or hereafter granted under
applicable law, and not by way of limitation of any such rights, upon and after
the occurrence of any Default or Event of Default, the Agent, Lenders, any
Affiliate of the Lenders and any participant with the Lenders in the Loans are
hereby authorized by the Borrowers at any time or from time to time, without
notice to the Borrowers or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by the Lender, any
Affiliate of the Lender or any participant to or for the credit or the account
of Borrowers against and on account of the Secured Obligations irrespective or
whether or not (a) the Agent shall have made any demand under this Agreement or
any of the Loan Documents, or (b) the Agent shall have declared any or all of
the Secured Obligations to be due and payable as permitted by SECTION 11.2 and
although such Secured Obligations shall be contingent or unmatured.
1.92 Litigation. EACH OF THE LENDER AND EACH BORROWER HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN
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ACTION MAY BE COMMENCED BY OR AGAINST SUCH BORROWER OR THE LENDER ARISING OUT OF
THIS AGREEMENT, THE COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF ANY
OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN A BORROWER AND THE LENDER OF ANY KIND
OR NATURE. EACH BORROWER AND THE LENDER HEREBY AGREE THAT THE FEDERAL COURT OF
THE EASTERN DISTRICT OF LOUISIANA OR, AT THE OPTION OF THE LENDER, ANY COURT IN
WHICH THE LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS
SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY AND WHICH SITS IN A
JURISDICTION IN WHICH SUCH BORROWER TRANSACTS BUSINESS SHALL HAVE NON-EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN SUCH BORROWER
AND THE LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR THE LOAN
DOCUMENTS OR TO ANY MATTER ARISING THEREFROM. EACH BORROWER EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS, HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT OR OTHER PROCESS OR PAPERS ISSUED THEREIN AND AGREEING THAT SERVICE OF
SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AND ITS COUNSEL AT THE RESPECTIVE
ADDRESSES SET FORTH IN SECTION 13.1.2, WHICH SERVICE SHALL BE DEEMED MADE UPON
RECEIPT THEREOF. THE NON-EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE THE SAME IN
ANY APPROPRIATE JURISDICTION.
1.93 Waiver of Rights. EACH BORROWER HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY WAIVES ALL RIGHTS WHICH SUCH BORROWER HAS UNDER CHAPTER 14 OF TITLE
44 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR PROVISION OF APPLICABLE
LAW TO NOTICE AND TO A JUDICIAL HEARING PRIOR TO THE ISSUANCE OF A WRIT OF
POSSESSION ENTITLING THE LENDER, ITS SUCCESSORS AND ASSIGNS TO POSSESSION OF THE
COLLATERAL UPON DEFAULT OR EVENT OF DEFAULT. WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING AND WITHOUT LIMITING ANY OTHER RIGHT WHICH THE LENDER MAY HAVE,
EACH BORROWER CONSENTS THAT, IF THE LENDER FILES A PETITION FOR AN IMMEDIATE
WRIT OF POSSESSION IN COMPLIANCE WITH SECTIONS 00-00-000 AND 00-00-000 OF THE
OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR PROVISION OF APPLICABLE LAW AND
THIS WAIVER OR A COPY HEREOF IS ALLEGED IN SUCH PETITION AND ATTACHED THERETO,
THE COURT BEFORE WHICH SUCH PETITION IS FILED MAY DISPENSE WITH ALL RIGHTS AND
PROCEDURES HEREIN WAIVED AND MAY ISSUE FORTHWITH AN IMMEDIATE WRIT OF POSSESSION
IN ACCORDANCE WITH CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR IN
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ACCORDANCE WITH ANY SIMILAR PROVISION OF APPLICABLE LAW, WITHOUT THE NECESSITY
OF AN ACCOMPANYING BOND AS OTHERWISE REQUIRED BY SECTION 00-00-000 OF THE
OFFICIAL CODE OF GEORGIA OR IN ACCORDANCE WITH ANY SIMILAR PROVISION OF
APPLICABLE LAW. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS READ AND FULLY
UNDERSTANDS THE TERMS OF THIS WAIVER AND THE EFFECT HEREOF.
1.94 Reversal of Payments. To the extent a Borrower makes a payment or
payments to the Agent or the Agent receives any payment or proceeds of the
Collateral for such Borrower's benefit, which payment(s) or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, the Agent shall have the continuing and exclusive right to apply, reverse
and re-apply any and all payments to any portion of the Secured Obligations,
and, to the extent of such payment or proceeds received, the Secured Obligations
or part thereof intended to be satisfied shall be revived and continued in full
force and effect, as if such payment or proceeds had not been received by the
Agent.
1.95 Injunctive Relief. Each Borrower recognizes that, in the event a
Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Lenders; therefore, such Borrower agrees that the Agent, at the
Agent's option, shall be entitled to temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages.
1.96 Accounting Matters. All financial and accounting calculations,
measurements and computations made for any purpose relating to this Agreement,
including, without limitation, all computations utilized by a Borrower to
determine whether it is in compliance with any covenant contained herein, shall,
unless there is an express written direction or consent by the Agent to the
contrary, be performed in accordance with GAAP.
1.97 Assignment; Participation. All the provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrowers may not assign or
transfer any of their respective rights under this Agreement. The Lenders may
assign to one or more Persons, or sell participations to one or more Persons in,
all or a portion of its rights and obligations hereunder and under the Note and,
in connection with any such assignment or sale of a participation, may assign
its rights and obligations under the Security Documents. The Lenders may, in
connection with any assignment or proposed assignment or sale or proposed sale
of a participation, disclose to the assignee or proposed assignee or participant
or proposed participant any information relating to a Borrower furnished to the
Lenders by or on behalf of such Borrower, PROVIDED, THAT, prior to any such
disclosure, each such assignee, proposed assignee, participant or proposed
participant shall agree with the Borrowers or the Lenders (which in the case of
an agreement with only the Lenders, the Borrowers shall be recognized as third
party beneficiaries thereof) to preserve the confidentiality of any confidential
information relating to the
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Borrowers received from the Lenders. Any assignment or sale of participation
interests by a Lender shall require the prior written approval of the Required
Lenders.
1.98 Amendments. Any term, covenant, agreement or condition of this
Agreement or any of the other Loan Documents may be amended or waived and any
departure therefrom may be consented to if, but only if, such amendment, waiver
or consent is in writing signed by the Agent at the direction of the Required
Lenders and, in the case of an amendment, by the Borrowers. Unless otherwise
specified in such waiver or consent, a waiver or consent given hereunder shall
be effective only in the specific instance and for the specific purpose for
which given. Any request for a waiver or consent by Agent hereunder shall be
made by Borrowers in writing together with a minimum payment to Agent of
$2,500.00 in addition to any fees due under SECTION 13.2 or otherwise. The
election of whether or not to waive or consent to any matter shall be in
Required Lenders' or Agent's sole discretion.
1.99 Performance of Borrowers' Duties. The Borrowers' obligations under
this Agreement and each of the Loan Documents shall be performed by the
Borrowers at their sole cost and expense. If a Borrower shall fail to do any act
or thing which it has covenanted to do under this Agreement or any of the Loan
Documents, the Agent may (but shall not be obligated to), upon ten (10) days'
notice by the Agent to the applicable Borrower, do the same or cause it to be
done either in the name of the Agent or in the name and on behalf of such
Borrower, and such Borrower hereby irrevocably authorizes the Agent so to act.
1.100 Indemnification. Each Borrower agrees to reimburse the Lenders for
all reasonable costs and expenses, including counsel fees and disbursements,
incurred and to indemnify and hold the Lender harmless from and against all
losses suffered by the Agent or Lenders, other than losses resulting from the
Agent's or Lender's gross negligence or willful misconduct, in connection with
(a) the exercise by the Agent or Lenders of any right or remedy granted to it
under this Agreement or any of the Loan Documents, (b) any claim, and the
prosecution or defense thereof, arising out of or in any way connected with this
Agreement or any of the Loan Documents, except in the case of a dispute between
such Borrower and the Agent and/or Lenders in which such Borrower prevails in a
final unappealed or unappealable judgment, and (c) the collection or enforcement
of the Secured Obligations or any of them.
1.101 All Powers Coupled with Interest. All powers of attorney and other
authorizations granted to the Agent, Lender and any Persons designated by the
Agent or Lenders pursuant to any provisions of this Agreement or any of the Loan
Documents shall be deemed coupled with an interest and shall be irrevocable so
long as any of the Secured Obligations remain unpaid or unsatisfied or the
Facilities have not been terminated.
1.102 Survival. Notwithstanding any termination of this Agreement, (a)
until all Secured Obligations have been paid in full and the Facilities
terminated, the Agent shall retain its Security Interest and shall retain all
rights under this Agreement and each of the Security Documents with
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respect to the Collateral as fully as though this Agreement had not been
terminated, and (b) the indemnities to which the Lender is entitled under the
provisions of this ARTICLE XIII and any other provision of this Agreement and
the other Loan Documents shall continue in full force and effect and shall
protect the Agent or Lenders against events arising after such termination as
well as before.
1.103 Severability of Provisions. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remainder of such
provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
1.104 Governing Law. This Agreement and the Note shall be construed in
accordance with and governed by the law of the State of Louisiana without giving
effect to those provisions of Louisiana law that may require another law to
apply.
1.105 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
1.106 Reproduction of Documents. This Agreement, each of the Loan Documents
and all documents relating thereto, including, without limitation, (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by the Agent, and (c) financial statements, certificates and other information
previously or hereafter furnished to the Agent, may be reproduced by the Agent
by any photographic, photostatic, microcard, microfilm, miniature photographic
or other similar process, and the Agent may destroy any original document so
reproduced. Each party hereto stipulates that, to the extent permitted by
applicable laws any such reproduction shall be as admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original shall be in existence and whether or not such reproduction was made by
such Agent in the regular course of business), and any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
ARTICLE XIV
NAME CHANGE
The parties hereto acknowledge that Aero and American Aero intend to change
their names to Aero Holdings, L.L.C. and Aero International, L.L.C.,
respectively. Upon any name change, the definition of Aero herein shall mean
and include the entity under its new name and the definition of American Aero
shall mean and include the entity under its new name. Borrowers, upon any name
change, shall execute any and all documents deemed necessary by Agent to assure
Borrowers' compliance with the terms and conditions of this Agreement or the
Loan Documents.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized members in several counterparts all as of the
day and year first written above.
WITNESSES: BORROWERS:
________________________________ AERO INTERNATIONAL, L.L.C., A LOUISIANA
LIMITED LIABILITY COMPANY
By: /s/XxXxxxx X. Xxxxxxx, Xx.
________________________________ _______________________________
Name: XxXxxxx X. Xxxxxxx, Xx.
Title: President
WITNESS: AMERICAN AERO CRANES, L.L.C., A
LOUISIANA LIMITED LIABILITY COMPANY
________________________________
By: /s/ W. Xxxxxx XxXxxxxx
_______________________________
Name: W. Xxxxxx XxXxxxxx
Title: President
WITNESS: AGENT:
________________________________ NATIONAL CANADA FINANCE CORP., A DELAWARE
CORPORATION
By: /s/
________________________________ _______________________________
Name:
Title:
WITNESS: LENDERS:
________________________________ NATIONAL CANADA FINANCE CORP., A DELAWARE
CORPORATION
By: /s/
________________________________ _______________________________
Name:
Title:
Date:
LIST OF EXHIBITS
Exhibit 1.1.6 Additional Borrower Certificate
Exhibit 1.1.16 ASI Account Letter
Exhibit 1.1.20 Borrowing Base Certificate
Exhibit 1.1.39 Deed of Trust
Exhibit 1.1.96 Merger Letter Agreement
Exhibit 1.1.97 Mortgage
Exhibit 1.1.102 Note
Exhibit 1.1.115 Pledge Agreement
Exhibit 1.1.137 Security Agreement
Exhibit 2.2.5.1 Notice of Borrowing
Exhibit 4.1.12 Form CFO Certificate
Exhibit 8.3 Form Officer's Certificate
LIST OF SCHEDULES
Schedule 1 Lenders
Schedule 4.1.2 Mobile Pulley Assets
Schedule 4.1.3 Preferred Offering
Schedule 5.1.1 Qualification in Foreign Jurisdiction
Schedule 5.1.2 Equity Interests/Subsidiaries
Schedule 5.1.5 Statement of Principal Business
Schedule 5.1.6 Violations of Laws/Governmental Approvals
Schedule 5.1.7 Exceptions to Title
Schedule 5.1.8 Liens
Schedule 5.1.9 Debt and Guaranties
Schedule 5.1.10 Litigation
Schedule 5.1.11 Tax Returns
Schedule 5.1.15 Benefit Plans
Schedule 5.1.20 Chief Executive Office
Schedule 5.1.22 Address of Real Estate
Schedule 5.1.23 Trade Names
Schedule 5.1.26 Labor Agreements
Schedule 5.1.27 Intellectual Property
Schedule 5.1.28 Bank Accounts
Schedule 6.4 Invoice Names
Schedule 9.2 Debt
Schedule 9.3 Guaranties
Schedule 9.6 Restricted Payments
Schedule 9.7 Merger
Schedule 9.11 Real Estate Leases
SCHEDULE I
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Lender's Name and Address Commitment
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National Canada Finance Corp. $25,000,000
Atlanta Branch
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Vice President
Facsimile: (000) 000-0000
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Citizens Business Credit, a division of $15,000,000
Citizens Leasing Corporation
Citizens Bank Building
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, President
Facsimile: (000) 000-0000
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