Exhibit 10.1
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
This Fifth Amended and Restated Credit Agreement dated as of July
12, 2002 (as amended, restated, supplemented or modified from time to time, the
"Agreement") is entered into among Aerocell Structures, Inc., an Arkansas
corporation, Triad International Maintenance Corporation, a Delaware
corporation, Aircraft Interior Design, Inc., a Florida corporation, TIMCO Engine
Center, Inc., a Delaware corporation, TIMCO Aviation Services, Inc., a Delaware
corporation, the institutions and funds from time to time a party hereto as
Lenders, whether by execution of this Agreement or an Assignment and Acceptance,
the institutions from time to time a party hereto as Issuing Banks, whether by
execution of this Agreement or an Assignment and Acceptance, and Citicorp USA,
Inc., a Delaware corporation, in its capacity as agent for the Lenders and the
Issuing Banks hereunder (in such capacity, the "Agent").
WITNESSETH:
WHEREAS, Aviation Sales Distribution Company, a Delaware
corporation ("Distribution"), Aerocell Structures, Inc., an Arkansas corporation
("Aerocell"), AVS/M-2, Inc., a Delaware corporation ("Xxxxx/Xxxxx"), Whitehall
Corporation, a Delaware corporation ("Whitehall"), Triad International
Maintenance Corporation, a Delaware corporation ("TIMCO"), AVS/M-3, Inc., an
Arizona corporation ("Apex"), AVS/CAI, Inc., a Florida corporation ("Caribe"),
Aircraft Interior Design, Inc., a Florida corporation ("Design"), Aviation Sales
Leasing Company, a Delaware corporation ("Leasing"), and TIMCO Engine Center,
Inc., a Delaware corporation ("Engine Center"), entered into that certain Fourth
Amended and Restated Credit Agreement dated as of May 31, 2000, as heretofore
amended, in the capacity of "Borrowers", with Citicorp USA, Inc., as agent,
Citicorp USA, Inc. and certain other financial institutions and funds as
lenders, and Citibank, N.A., as issuing bank (the "Predecessor Agreement"),
pursuant to which Predecessor Agreement the aforesaid lenders and issuing bank
have made certain extensions of credit and other financial accommodations to or
for the benefit of such "Borrowers" and their Affiliates;
WHEREAS, Aerocell, TIMCO, Design and Engine Center have requested
that the Predecessor Agreement be amended and restated on the terms and
conditions set forth in this Agreement and are desirous of continuing to make
Borrowings and obtain Letters of Credit and other financial accommodations under
the terms of this Agreement for the benefit of themselves and their Affiliates;
WHEREAS, Distribution, Xxxxx-Xxxxx, Whitehall, Apex, Caribe, and
Leasing have requested that they each no longer constitute borrowers under this
Agreement but acknowledge that they will continue to receive benefit from the
Loans and Letters of Credit outstanding hereunder, whether made or issued under
the Predecessor Agreement or under this Agreement, and have agreed to guaranty
the full payment and performance of the Obligations;
WHEREAS, certain of the "Lenders" under the Predecessor Agreement
have assigned all of their rights and obligations with respect to the loans
outstanding and letters of credit issued under the Predecessor Agreement to the
Lenders;
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WHEREAS, the Parent and Borrowers have requested that all Events
of Default existing as of the date hereof under the Predecessor Agreement be
waived; the Lenders have agreed to waive the rights and remedies arising due to
the existence of the aforesaid Events of Default; and the parties hereto have
agreed to amend and restate the Predecessor Agreement on the terms and
conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings, applicable both to the singular and
the plural forms of the terms defined:
"Accommodation Obligation" means any Contractual Obligation,
contingent or otherwise, of one Person with respect to any Indebtedness,
obligation or liability of another, if the primary purpose or intent thereof by
the Person incurring the Accommodation Obligation is to provide assurance to the
obligee of such Indebtedness, obligation or liability of another that such
Indebtedness, obligation or liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders thereof
will be protected (in whole or in part) against loss in respect thereof
including, without limitation, direct and indirect guarantees, endorsements
(except for collection or deposit in the ordinary course of business), notes
co-made or discounted, recourse agreements, take-or-pay agreements, keep-well
agreements, agreements to purchase or repurchase such Indebtedness, obligation
or liability or any security therefor or to provide funds for the payment or
discharge thereof, agreements to maintain solvency, assets, level of income, or
other financial condition, and agreements to make payment other than for value
received. The amount of any Accommodation Obligation shall be equal to the
amount of the Indebtedness, obligation or liability so guaranteed or otherwise
supported; provided, that (i) if the liability of the Person extending such
guaranty or support is limited with respect thereto to an amount less than the
Indebtedness, obligation or liability guaranteed or supported, or is limited to
recourse against a particular asset or assets of such Person, the amount of the
corresponding Accommodation Obligation shall be limited (in the case of a
guaranty or other support limited by amount) to such lesser amount or (in the
case of a guaranty or other support limited by recourse to a particular asset or
assets) to the higher of the Fair Market Value of such asset or assets at the
date for determination of the amount of the Accommodation Obligation or the
value at which such asset or assets would, in conformity with GAAP, be reflected
on or valued for the purposes of preparing a consolidated balance sheet of such
Person as at such determination date; and (ii) if any obligation or liability is
guaranteed or otherwise supported jointly and severally by a Person and others,
then the amount of the obligation or liability of such Person with respect to
such guaranty or other support to be included in the amount of such Person's
Accommodation Obligation shall be the whole principal amount so guaranteed or
otherwise supported.
"Aerocell" means Aerocell Structures, Inc., an Arkansas
corporation and wholly-owned Subsidiary of Parent.
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"Affiliate", as applied to any Person, means any other Person
that directly or indirectly controls, is controlled by, or is under common
control with, that Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means (i) the
possession, directly or indirectly, of the power to vote ten percent (10.0%) or
more of the Securities having voting power for the election of directors of such
Person or otherwise to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting Securities or
by contract or otherwise, or (ii) the ownership of (a) a general partnership
interest or (b) a limited partnership interest representing ten percent (10.0%)
or more of the outstanding limited partnership interests of a Person.
"Agent" means Citicorp and each successor agent appointed
pursuant to the terms of Article XIII of this Agreement.
"Agent Advance" is defined in Section 2.01(c)(i)(B).
"Agreement" is defined in the preamble hereto.
"Apex" means AVS/M-3, Inc., an Arizona corporation and
wholly-owned Subsidiary of Manufacturing formerly known as Apex Manufacturing,
Inc.
"Appraisals" means those certain appraisals of Inventory dated
March 31, 2002, and Equipment dated October 15, 2001, prepared by MB Valuations.
"Approved Fund" means, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor; provided that such management,
advisory capacity or affiliation is confirmed in writing by such Lender to the
Agent.
"Assignment and Acceptance" means an Assignment and Acceptance in
substantially the form of Exhibit A attached hereto and made a part hereof (with
blanks appropriately completed) delivered to the Agent in connection with an
assignment of a Lender's interest under this Agreement in accordance with the
provisions of Section 15.01.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C.(S)(S) 101 et seq.), as amended from time to time, and any successor
statute.
"Base Eurodollar Rate" means, with respect to any Eurodollar
Interest Period applicable to a Borrowing of Eurodollar Rate Loans, the rate per
annum at which deposits in Dollars are offered by the principal office of
Citibank in London, England to major banks in the London interbank market at
approximately 11:00 a.m. (London time) on the Eurodollar Interest Rate
Determination Date for such Eurodollar Interest Period for a period equal to
such Eurodollar Interest Period in an amount substantially equal to the amount
of the Eurodollar Rate Loan to be outstanding to Citicorp for such Eurodollar
Interest Period.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
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(i) the rate of interest announced publicly by Citibank in New
York, New York from time to time, as Citibank's base rate; and
(ii) the sum (adjusted to the nearest one-quarter of one
percent (0.25%) or, if there is no nearest one-quarter of one percent
(0.25%), to the next higher one-quarter of one percent (0.25%)) of (A)
one-half of one percent (0.50%) per annum plus (B) the rate per annum
obtained by dividing (I) the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average (adjusted to the basis of a year
of 360 days) being determined weekly on each Monday (or, if such day is
not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday (or, if such day is not
a Business Day, on the next preceding Business Day) by Citibank on the
basis of such rates reported by certificate of deposit dealers to, and
published by, the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three (3) New York
certificate of deposit dealers of recognized standing selected by
Citibank, by (II) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the
Federal Reserve Board (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank in
respect of liabilities which consist of or which include (among other
liabilities) three-month Dollar nonpersonal time deposits in the United
States plus (C) the average during such three-week period of the annual
assessment rates estimated by Citibank for determining the then current
annual assessment payable by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring Dollar deposits of Citibank
in the United States; and
(iii) the sum of (A) one-half of one percent (0.50%) per annum
plus (B) the Federal Funds Rate in effect from time to time during such
period.
"Base Rate Loans" means all Revolving Loans which bear interest
at a rate determined by reference to the Base Rate and Base Rate Margin as
provided in Section 5.01(a).
"Base Rate Margin" means three percent (3.00%) per annum.
"Benefit Plan" means a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan or Foreign Employee Benefit
Plan) in respect of which any Borrower or any ERISA Affiliate is, or within the
immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA.
"BofA Note" means, collectively, the BofA Shareholder Supported
Note and the BofA 2002 Note.
"BofA Shareholder Supported Note" means that certain Replacement
Term Loan Note dated the Effective Date in the principal amount of $5,000,000
executed by the Borrowers
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and payable to Bank of America, N.A., a copy of which is attached hereto as part
of Schedule 1.01.1.
"BofA 2002 Note" means that certain Replacement Term Loan Note
dated the Effective Date in the principal amount of $2,500,000 executed by the
Borrowers and payable to Bank of America, N.A., a copy of which is attached
hereto as part of Schedule 1.01.1.
"BofA Documents" means the BofA Note and other agreements,
instruments and documents executed and delivered to Bank of America, N.A. in
connection therewith which remain in effect on the Effective Date or are
thereafter executed, including, without limitation, guaranties of the
liabilities evidenced by the BofA Note.
"BofA Intercreditor Agreement" means that certain Amended and
Restated Intercreditor Agreement dated as of the Effective Date, to which the
Agent, CUSA, and Bank of America, N.A. are parties, acknowledged by the
Borrowers, the Guarantors, and each other guarantor of the BofA Note.
"Borrower" means, individually, any of Aerocell Structures, Inc.,
an Arkansas corporation; Aircraft Interior Design, Inc., a Florida corporation;
Triad International Maintenance Corporation, a Delaware corporation; and TIMCO
Engine Center, Inc., a Delaware corporation; and "Borrowers" means,
collectively, all of such Persons.
"Borrowing" means a borrowing consisting of Loans of the same
type made, continued or converted on the same day.
"Borrowing Base" means, as of any date of determination, an
amount equal to the sum of:
(i) up to seventy-five percent (75%) of the face amount of
Eligible Receivables of Aerocell (net of maximum discounts,
allowances, retainage and any other amounts deferred with respect
thereto), plus
(ii) up to fifty percent (50%) of the face amount of Eligible
Receivables of Design (net of maximum discounts, allowances,
retainage and any other amounts deferred with respect thereto),
plus
(iii) up to eighty-five percent (85%) of the face amount of
Eligible Receivables of TIMCO (net of maximum discounts,
allowances, retainage and any other amounts deferred with respect
thereto), plus
(iv) up to fifty percent (50%) of the face amount of earned, but
unbilled for periods less than sixty-one (61) days, Receivables
of TIMCO (net of maximum discounts, allowances, retainage and any
other amounts deferred with respect thereto) and arising with
respect to services performed and sales of Inventory other than
Conversion Kits, plus
(v) up to fifty percent (50%) of the face amount of earned, but
unbilled Receivables of TIMCO (net of maximum discounts,
allowances, retainage and any other amounts deferred with respect
thereto) arising with respect to sales of Conversion Kits the
shipment or installation of which is scheduled to occur within
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ninety (90) days after the date of the Conversion Shipping
Schedule attached to the corresponding Borrowing Base
Certificate, plus
(vi) up to twenty-seven percent (27%) of the book value (net of
maintenance reserves) of Eligible Inventory of TIMCO, plus
(vii) up to twelve percent (12%) of the book value of Eligible
Inventory of Design; plus
(viii) up to twenty-one percent (21%) of the book value of
Eligible Inventory of Aerocell; plus
(ix) up to eighty-five percent (85%) of the amount of input
xxxxxxxx of XXXXX with respect to aircraft service orders upon
execution of a maintenance agreement or upon delivery of the
subject aircraft to a TIMCO facility for maintenance, repair and
overhaul services; provided, however, that (A) such input billing
shall remain unpaid as of the time of any Borrowing for which
determination of the related Revolving Credit Availability is
made including such input billing as part of the Borrowing Base;
(B) such input billing is permissible under the terms of the
agreement between TIMCO and the subject account debtor with
respect thereto; and (C) in the event any such input billing is
for an amount greater than $500,000, inclusion in the Borrowing
Base shall be permitted only upon review of the underlying
circumstances by the Agent's field examiners; plus
(x) $1,000,000 of availability based on Borrowers' Equipment;
minus
(xi) the Interest Reserve; minus
(xii) the amount equal to ten percent (10%) of the then
effective Revolving Credit Commitments; minus
(xiii) from the Effective Date until receipt of proceeds (in
cash) of the transaction described on Schedule 10.02-E, a reserve
in the amount of $1,250,000; minus
(xiv) from and after receipt of proceeds (in cash) of the
transaction described on Schedule 10.02-E, a reserve in the
amount of $3,500,000.
For purposes of this definition, (1) Eligible Receivables and Eligible
Inventory, in each case and as of any date of determination, shall be determined
after deduction of all Eligibility Reserves then effective with respect to such
items and (2) the book value referenced shall be determined on the bases
described in the Borrowing Base Certificate as reflected on the books and
records of the Borrowers. In no event shall (a) the aggregate availability under
clauses (iv) and (v) above exceed $6,000,000 or (b) the aggregate availability
under clauses (vi) through (viii) exceed the amount equal to fifty percent (50%)
of the availability under clauses (i) through (x) above. In the event the
Borrowers make a voluntary prepayment of the Term Loans as permitted under
Section 4.01(a)(i), the amount of the reserve set forth in clause (xiv) above
shall be reduced by the amount of such prepayment of the Term Loans.
"Borrowing Base Certificate" means a certificate, in
substantially the form of Exhibit B attached hereto and made a part hereof,
setting forth Eligible Receivables, Eligible Inventory (including
classifications, quantities, valuations and condition of the Eligible Inventory
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and the respective advance percentages with respect thereto), and the
calculation of the resultant Borrowing Base, in each instance, as of the date of
such certificate, accompanied by an Conversion Shipping Schedule dated the date
of the Borrowing Base Certificate.
"Business Activity Report" means (A) a Notice of Business
Activities Report from the State of New Jersey Division of Taxation or (B) a
Minnesota Business Activity Report from the Minnesota Department of Revenue.
"Business Day" means a day, in the applicable local time, which
is not a Saturday or Sunday or a legal holiday and on which banks are not
required or permitted by law or other governmental action to close (i) in New
York, New York and (ii) in the case of Letter of Credit transactions for a
particular Issuing Bank, in the place where its office for issuance or
administration of the pertinent Letter of Credit is located and (iii) in the
case of Eurodollar Rate Loans, in London, England.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures (whether payable in cash or other Property or accrued as a
liability (but without duplication)) during such period that, in conformity with
GAAP, are required to be included in or reflected by the Parent's or any of its
Subsidiaries' fixed asset accounts as reflected in any of their respective
balance sheets; provided, however, (i) Capital Expenditures shall include,
whether or not such a designation would be in conformity with GAAP, (A)
expenditures for the purchase or development of computer software and systems,
(B) that portion of Capital Leases which is capitalized on the consolidated
balance sheet of the Parent and its Subsidiaries and (C) expenditures for
Equipment which is purchased simultaneously with the trade-in of existing
Equipment owned by the Parent or any of its Subsidiaries, to the extent the
gross purchase price of the purchased Equipment exceeds the book value of the
Equipment being traded in at such time; and (ii) Capital Expenditures shall
exclude, whether or not such a designation would be in conformity with GAAP,
expenditures made in connection with the replacement or restoration of Property,
to the extent reimbursed or financed from insurance or condemnation proceeds not
constituting Net Cash Proceeds of Sale.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) by a Person as lessee which, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means, with respect to any Person, any capital
stock of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls or
claims of any character with respect thereto.
"Caribe" means AVS/CAI, Inc., a Florida corporation and
wholly-owned Subsidiary of Parent formerly known as Caribe Aviation, Inc.
"Cash Collateral" means cash or Cash Equivalents held by the
Agent, any of the Issuing Banks or any of the Lenders as security for the
Obligations.
"Cash Collateral Account" means an interest bearing account at
Citibank's offices in New York, New York designated by the Agent into which Cash
Collateral shall be deposited. The Cash Collateral Account shall be under the
sole dominion and control of the Agent, provided
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that all amounts deposited therein shall be held by the Agent for the benefit of
the Holders and shall be subject to the terms of Section 12.03.
"Cash Equivalents" means (i) marketable direct obligations issued
or unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; and (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances,
commercial paper, and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Rating Group, a
division of XxXxxx-Xxxx, Inc., or P-1 (or better) by Xxxxx'x Investors Services,
Inc.; provided, that (x) the maturities of such Cash Equivalents shall not
exceed one year and (y) such Cash Equivalents shall be maintained in investment
and other accounts of the Agent at Citibank or accounts at other investment
banks or financial institutions acceptable to the Agent and pledged to the Agent
as part of the Collateral.
"Cash Interest Expense" means, for any Person for any period,
total interest expense, whether paid or accrued, but without duplication,
(including the interest component of Capital Leases but net of the difference
between payments received by such Person and its Subsidiaries on all Hedge
Agreements and payments made by such Person and its Subsidiaries on all Hedge
Agreements other than the initial payments made to enter into such Hedge
Agreements) of such Person and its Subsidiaries, which is payable in cash, all
as determined in conformity with GAAP.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.ss.ss.9601 et seq., any
amendments thereto, any successor statutes, and any regulations promulgated
thereunder.
"Change of Control" means (i) with respect to the Parent, (a) the
occurrence of a change in more than fifty percent (50%) of the Parent Board or
(b) any Person acquiring, directly or indirectly, voting control of thirty-five
percent (35%) or more of the issued and outstanding Capital Stock of Parent and
(ii) with respect to any Borrower, the Parent ceasing to own, directly or
indirectly, and retain voting control of all issued and outstanding Capital
Stock of such Borrower, in the case of any of (i)(a), (i)(b) or (ii), without
the prior written consent of the Lenders, which consent shall not be
unreasonably withheld.
"Citibank" means Citibank, N.A., a national banking association.
"Citicorp" means Citicorp USA, Inc., a Delaware corporation.
"Claim" means any claim or demand, by any Person, of whatever
kind or nature for any alleged Liabilities and Costs, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"Class Action Litigation" means the securities class action
litigation filed against Parent and certain of its former directors and officers
in the United States District Court for the Southern District of Florida (Case
No. 99-2560-CIV-XXXXXX).
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"Co-Agents" means Citicorp and UPS Capital Corporation.
"Collateral" means all Property and interests in Property now
owned or hereafter acquired by any Borrower or any Guarantor upon which a Lien
is granted under any of the Loan Documents.
"Collection Account" means each lock-box and blocked depository
account maintained by a Borrower or any Guarantor subject to a Collection
Account Agreement for the collection of Receivables and other proceeds of
Collateral.
"Collection Account Agreement" means a written agreement,
substantially in the form attached hereto as Exhibit C with such modifications
as the Agent, from time to time, deems acceptable, among a Borrower or a
Guarantor, the Agent, and, as applicable, each of the banks at which a Borrower
or a Guarantor maintains a Collection Account.
"Commercial Letter of Credit" means any documentary letter of
credit issued by an Issuing Bank pursuant to Section 3.01 for the account of a
Borrower or for the account of any of a Borrower's Subsidiaries or Leasing if
the Borrowers are jointly and severally liable for reimbursement of amounts
drawn under such letter of credit, which is drawable upon presentation of
documents evidencing the sale or shipment of goods purchased by a Borrower, such
a Subsidiary or Leasing in the ordinary course of its business.
"Commission" means the Securities and Exchange Commission and any
Person succeeding to the functions thereof.
"Compliance Certificate" is defined in Section 8.01(d).
"Concentration Account" means the depository account maintained
at Citibank in New York, New York, or such other financial institution
designated for such purpose by the Agent into which collections of Receivables,
other proceeds of Collateral and other amounts are transferred pursuant to the
terms of the Collection Account Agreements or otherwise as described in Section
4.04.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, radioactive materials, asbestos (in any form or condition),
polychlorinated biphenyls (PCBs), or any constituent of any such substance or
waste, and includes, but is not limited to, these terms as defined in federal,
state or local laws or regulations.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person is a party or by which
it or any of its properties is bound, or to which it or any of its properties is
subject.
"Conversion Kits" means cargo conversion kits developed by TIMCO
at the request of a customer of TIMCO, in accordance with such customers'
Supplemental Type
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Certificates, pursuant to a Contractual Obligation between TIMCO and such
customer under which such customer is committed to purchase such kits.
"Conversion Shipping Schedule" means the schedule as of the date
of a given Borrowing Base Certificate, determined based on records of TIMCO
maintained weekly on a consistent basis in the ordinary course of its business,
of shipping dates for respective Conversion Kits.
"Cure Loans" is defined in Section 4.02(b)(v)(C).
"Customary Permitted Liens" means
(i) Liens (other than Environmental Liens and Liens in favor of
the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(iii) Liens (other than any Lien in favor of the PBGC) incurred
or deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety,
appeal and performance bonds; provided that (A) all such Liens do not
in the aggregate materially detract from the value of a Borrower's or
any of its Subsidiaries' assets or Property or materially impair the
use thereof in the operation of their respective businesses, and (B)
all Liens of attachment or judgment and Liens securing bonds to stay
judgments or in connection with appeals do not secure at any time an
aggregate amount exceeding $500,000; and
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of Real Property which do not interfere with
the ordinary conduct of the business of a Borrower or any of its
Subsidiaries.
"Design" means Aircraft Interior Design, Inc., a Florida
corporation and wholly-owned Subsidiary of Parent.
"Designated Prepayment" means each mandatory prepayment required
by clauses (i) and (ii) of Section 4.01(b).
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"Distribution" means Aviation Sales Distribution Company, a Delaware
corporation and wholly-owned Subsidiary of Parent.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender, such
Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrowers and the Agent.
"EBITDA" means, for any Person for any period, the amount calculated,
without duplication, for such period as (i) Net Income of such Person, plus (ii)
depreciation and amortization expense of such Person and its Subsidiaries, plus
(iii) Cash Interest Expense of such Person, plus (iv) federal, state, and local
income taxes deducted from Net Income of such Person in accordance with GAAP,
plus (v) any other items that may be approved by the Agent and the Requisite
Lenders (in their sole discretion) which have been included in the determination
of Net Income of such Person, minus (vi) extraordinary gains of such Person and
its Subsidiaries.
"Effective Date" means July 12, 2002.
"Eligibility Reserves" means, as of the third (3rd) Business Day after
the date of written notice of any determination thereof is delivered to the
Borrowers by the Agent, or to the Borrowers and the Agent by the Requisite
Lenders, such amounts as the Agent, or the Requisite Lenders, as the case may
be, in the exercise of its or their reasonable credit judgment, may from time to
time establish against the gross amounts of Eligible Inventory and Eligible
Receivables to reflect risks or contingencies arising after the Effective Date
which may affect such items.
"Eligible Assignee" means (i) a Lender or any Affiliate thereof or any
Approved Fund; (ii) a commercial bank having total assets in excess of
$2,500,000,000; (iii) the central bank of any country which is a member of the
Organization for Economic Cooperation and Development; or (iv) a finance
company, insurance company, other financial institution or fund, acceptable to
the Agent, which is regularly engaged in making, purchasing or investing in
loans and having total assets in excess of $300,000,000, and (v) in the cases of
Persons described in clauses (ii) through (iv) above, are consented to by TIMCO,
which consent shall not be unreasonably withheld or delayed (and shall not be
required upon the occurrence and during the continuance of an Event of Default).
"Eligible Inventory" means, as of the date of determination therefor,
all Inventory of the Borrowers consisting of commercial aircraft spare parts
which, when scheduled to the Agent on a Borrowing Base Certificate and at all
times thereafter, (i) is in the required quantity and in the required condition
as set forth on such Borrowing Base Certificate, (ii) is located at a Borrower's
owned or leased warehouses in the United States or is an engine located in the
United States on a bailee's premises undergoing conversion or repair, (iii)
subject to a first
11
priority perfected Lien in favor of the Agent for the benefit of the Holders,
and (iv) does not consist of:
(1) goods in transit; or
(2) goods held on consignment or any similar arrangement, including,
without limitation, goods held by a Borrower but owned by a customer of a
Borrower, except to the extent permitted above; or
(3) goods which are subject to a Lien in favor of a bailee, except with
respect to aircraft engines undergoing conversion or repair in possession of
bailees, Liens in favor of such bailees which have executed a letter agreement
in form and substance satisfactory to the Agent (and substantially in the
applicable form attached as part of Exhibit D); or
(4) goods located on premises with respect to which the Agent has not
received a landlord's waiver in form and substance satisfactory to the Agent
(and substantially in the applicable form attached as part of Exhibit D) within
the time required by the terms of this Agreement; or
(5) goods constituting "Scrap/Out of Date Material" or parts attached to or
removed from airframes and held for resale; or
(6) goods of Distribution which (A) as of the Effective Date, were acquired
in or prior to 1997, (B) as of November 30, 2002, were acquired in or prior to
1998, (C) as of November 30, 2003, were acquired in or prior to 1999; or
(7) goods consisting of Leased Inventory.
"Eligible Receivables" means each Receivable of the Borrowers which,
when scheduled to the Agent and at all times thereafter, is not of any of the
following types:
(i) it is due or unpaid more than ninety (90) days after the date of
the original invoice issued by the applicable Borrower with respect to the
sale giving rise thereto; or
(ii) it arises out of (a) a sale not made in the ordinary course of
the applicable Borrower's business or (b) a sale to a Person which is an
Affiliate of a Borrower or controlled by an Affiliate of a Borrower; or
(iii) it fails to meet or violates any warranty, representation or
covenant contained in this Agreement or any of the other Loan Documents
relating directly or indirectly to the Receivables of the Borrowers; or
(iv) the account debtor (a) is also the applicable Borrower's
supplier or creditor and the Receivable is or may become subject to any
right of setoff by the account debtor, and such account debtor has not
entered into an agreement with the Agent with respect to the waiver of
rights of setoff which is in form and substance satisfactory to the Agent,
or (b) has disputed liability with respect to
12
such Receivable, or made any claim with respect to any other Receivable
due from such account debtor to such Borrower, in which cases the
Receivable shall be ineligible to the extent of (I) such setoff with
respect to which an agreement as described in clause (a) above is not in
effect, (II) such dispute or (III) such claim; or
(v) it is billed to an account debtor which has paid a deposit to
the applicable Borrower, to the extent such deposit has not been applied
to the subject Receivables owing by such account debtor; or
(vi) the account debtor has filed a petition for bankruptcy or any
other petition for relief under the Bankruptcy Code or any similar statute
(unless the account debtor is a debtor-in-possession in a Chapter 11 case
and has available debtor-in-possession financing from sources and under
terms reasonably acceptable to the Agent and the Receivable is entitled to
priority under Section 507 of the Bankruptcy Code as an administrative
expense allowed under Section 503(b) of the Bankruptcy Code), made an
assignment for the benefit of creditors, or if any petition or other
application for relief under the Bankruptcy Code or any similar statute
has been filed against the account debtor, or if the account debtor has
failed, suspended its business operations, become insolvent, suffered a
receiver or a trustee to be appointed for any of its assets or affairs; or
(vii) the sale is to an account debtor outside the United States,
unless (a) the account debtor's obligations (or that portion of such
obligations which is acceptable to the Agent) with respect to such sale is
secured by a letter of credit, guaranty or eligible bankers' acceptance
having terms, and from such issuers and confirmation banks, as are
acceptable to the Agent or (b) such account debtor is acceptable to the
Requisite Lenders as confirmed by the Agent to TIMCO in writing or (c)
such account debtor is located in a foreign jurisdiction acceptable to
Requisite Lenders as confirmed by the Agent to TIMCO in writing; or
(viii) the sale is on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, or any other repurchase or
return basis; or
(ix) the Agent believes, in the exercise of its reasonable credit
judgment, or the Requisite Lenders believe, in the exercise of their
reasonable credit judgment, that collection of such Receivable is insecure
or that such Receivable may not be paid by reason of the account debtor's
financial inability to pay; or
(x) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable
Borrower assigns its right to payment of such Receivable to the Agent
pursuant to the Assignment of Claims Act of 1940, as amended, (31 U.S.C.
(S) 3727); or
(xi) the Inventory of the applicable Borrower, the sale of which has
given rise to such Receivable, has not been shipped and delivered to the
account debtor by such Borrower and accepted by the account debtor or the
services, the
13
performance of which has given rise to such Receivable, have not been
performed by such Borrower and accepted by the account debtor; or
(xii) the Receivable(s) of the respective account debtor exceed(s) a
credit limit determined by the Agent, in the exercise of its reasonable
credit judgment, or determined by the Requisite Lenders, in the exercise
of their reasonable credit judgment, at any time or times hereafter, in
which case such Receivable(s) shall be ineligible to the extent such
Receivable(s) exceed(s) such limit; or
(xiii) the Agent does not have a senior, perfected security interest
in such Receivable or such Receivable is subject to a Lien which is not
permitted under Section 10.03; or
(xiv) the account debtor is located in the state of New Jersey or
Minnesota and the applicable Borrower has not filed and maintained
effective (unless exempt from the requirements for filing) a current
Business Activity Report with the appropriate Governmental Authority in
the states of Minnesota and/or New Jersey, as applicable; or
(xv) it is owing by an account debtor for which fifty percent (50%)
or more of the Receivables owing by such account debtor to the applicable
Borrower are due or unpaid more than ninety (90) days after the date of
the original invoices issued by such Borrower with respect to the sales
giving rise thereto; or
(xvi) it is subject to contractual allowances, in which case such
Receivable(s) shall be ineligible to the extent of the amount of such
contractual allowances; or
(xvii) the account debtor is United Airlines (or any Affiliate
thereof), to the extent the Receivables owing from such account debtor
equal or exceed thirty-one percent (31%) of the Borrowers' aggregate
Receivables; or
(xviii) it is an unbilled Receivable, except to the extent
specifically provided in the clause (iv) or clause (v) of the definition
of the term "Borrowing Base"; or
(xix) the account debtor is a Person other than United Airlines (or
any Affiliate thereof), to the extent the Receivables owing from such
account debtor equal or exceed twenty-five percent (25%) of the Borrowers'
aggregate Receivables; or
(xx) it is a Receivable transferred to a Borrower or Guarantor as
part of the transactions referenced in Section 6.01(h).
"Environmental, Health or Safety Requirements of Law" means all laws,
rules, regulations and determinations of any arbitrator, court or other
Governmental Authority derived from or relating to any federal, state or local
law, ordinance, rule, regulation, Permit, license or other binding determination
of any Governmental Authority relating to, imposing liability or
14
standards concerning, or otherwise addressing, the environment, health and/or
safety, including, but not limited to the Clean Air Act, the Clean Water Act,
CERCLA, RCRA, any so-called "Superfund" or "Superlien" law, the Toxic Substances
Control Act, OSHA, and applicable public health codes, each as from time to time
in effect.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental, Health or Safety
Requirement of Law, or (ii) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Environmental Property Transfer Acts" means any applicable
Requirement of Law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the transfer, sale, lease or closure of
any Property or deed or title for any Property for environmental reasons,
including, but not limited to, any so-called "Industrial Site Recovery Acts" or
"Responsible Property Transfer Acts".
"Equipment" means, with respect to any Person, all of such Person's
present and future (i) equipment, including, without limitation, machinery,
manufacturing, distribution, selling, data processing and office equipment,
assembly systems, tools, molds, dies, fixtures, appliances, furniture,
furnishings, vehicles, vessels, aircraft, aircraft engines, and trade fixtures,
(ii) other tangible personal property (other than such Person's Inventory), and
(iii) any and all accessions, parts and appurtenances attached to any of the
foregoing or used in connection therewith, and any substitutions therefor and
replacements, products and proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C.(S)(S) 1000 et seq., any amendments thereto, any successor statutes, and
any regulations or guidance promulgated thereunder.
"ERISA Affiliate" means (i) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Internal Revenue Code) as the Borrowers; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with the Borrower;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Internal Revenue Code) as the Borrowers, any corporation
described in clause (i) above or any partnership or trade or business described
in clause (ii) above.
"Eurodollar Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under the
heading "Eurodollar Affiliate" on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such Affiliate of a
Lender as it may from time to time specify by written notice to TIMCO and the
Agent.
"Eurodollar Interest Payment Date" means the first day of each
calendar month (for the immediately preceding calendar month).
"Eurodollar Interest Period" is defined in Section 5.03 (b).
15
"Eurodollar Interest Rate Determination Date" is defined in Section
5.03(c).
"Eurodollar Lending Office" means, with respect to any Lender, the
office or offices of such Lender (if any) set forth below such Lender's name
under the heading "Eurodollar Lending Office" on the signature pages hereof or
on the Assignment and Acceptance by which it became a Lender or such office or
offices of such Lender as it may from time to time specify by written notice to
TIMCO and the Agent.
"Eurodollar Rate" means, with respect to any Eurodollar Interest
Period applicable to a Eurodollar Rate Loan, an interest rate per annum obtained
by dividing (i) the Base Eurodollar Rate applicable to that Eurodollar Interest
Period by (ii) a percentage equal to 100% minus the Eurodollar Reserve
Percentage in effect on the relevant Eurodollar Interest Rate Determination
Date.
"Eurodollar Rate Loans" means those Revolving Loans which bear
interest at a rate determined by reference to the Eurodollar Rate and the
Eurodollar Rate Margin as provided in Section 5.01(a).
"Eurodollar Rate Margin" means four and one-half percent (4.50%) per
annum.
"Eurodollar Reserve Percentage" means, for any day, that percentage
which is in effect on such day, as prescribed by the Federal Reserve Board for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York, New York with deposits exceeding Five
Billion Dollars ($5,000,000,000) in respect of "Eurocurrency Liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Rate Loans is determined or
any category of extensions of credit or other assets which includes loans by a
non-United States office of any bank to United States residents.
"Event of Default" means any of the occurrences set forth in Section
12.01 after the expiration of any applicable grace period, as expressly provided
in Section 12.01.
"Fair Market Value" means, with respect to any asset, the value of the
consideration obtainable in a sale of such asset in the open market, assuming a
sale by a willing seller to a willing purchaser dealing at arm's length and
arranged in an orderly manner over a reasonable period of time, each having
reasonable knowledge of the nature and characteristics of such asset, neither
being under any compulsion to act, and, if in excess of $250,000, as determined
in an appraisal of such asset, provided that for purposes of Section 10.02 such
appraisal was performed relatively contemporaneously with such sale by an
independent third party appraiser and the basic assumptions underlying such
appraisal have not materially changed since the date thereof.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day in New York, New York, for the next preceding
Business Day) in New York, New York by the Federal Reserve
16
Bank of New York, or if such rate is not so published for any day which is a
Business Day in New York, New York, the average of the quotations for such day
on such transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any Governmental Authority succeeding to its functions.
"Fee Letter" means, collectively, (i) that certain fee letter
addressed to the Agent dated April 9, 2002 and (ii) that certain fee letter
addressed to the Co-Agents dated June 14, 2002.
"Financial Statements" means (i) statements of income and retained
earnings, statements of cash flow, and balance sheets, (ii) such other financial
statements as the Parent and/or and its Subsidiaries shall routinely and
regularly prepare and (iii) such other financial statements as the Agent or the
Requisite Lenders may from time to time reasonably specify.
"Fiscal Quarter" means a fiscal quarter in a Fiscal Year.
"Fiscal Year" means the fiscal year of the Parent and its Subsidiaries
for accounting and tax purposes, which shall be the 52-week period ending on
December 31 of each calendar year.
"Fixed Charge Coverage Ratio" means, for any Person for any period,
the ratio of (a) the amount calculated as (i) EBITDA of such Person minus (ii)
the aggregate amount of Capital Expenditures made in cash during such period by
such Person and its Subsidiaries to (b) the sum of (i) the aggregate amount of
interest paid in cash on Indebtedness of such Person and its Subsidiaries during
such period (net of amounts under Hedge Agreements and interest income, in each
case actually received in cash, without duplication) plus (ii) the aggregate
amount of scheduled payments of principal of Funded Debt of such Person during
such period plus (iii) all taxes paid in cash during such period by such Person
and its Subsidiaries (net of tax refunds received in cash during such period by
such Person and its Subsidiaries).
"Foreign Employee Benefit Plan" means any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of a Borrower, any of its Subsidiaries, or any of its
ERISA Affiliates and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
"Foreign Subsidiary" means any Subsidiary of Parent or a Borrower
which is domiciled outside of the United States of America and its states,
districts and possessions.
"Fronting Fee" is defined in Section 5.02(a).
"Funded Debt" means, with respect to any Person, Indebtedness of such
Person and its Subsidiaries for borrowed money (determined in accordance with
GAAP), including, without limitation, Indebtedness under Capital Leases and the
TROL Lease.
"Funding Date" means, with respect to any Loan, the date of funding of
such Loan.
17
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the American Institute of Certified Public
Accountants' Accounting Principles Board and Financial Accounting Standards
Board or in such other statements by such other entity as may be in general use
by significant segments of the accounting profession as in effect on the date
hereof (unless otherwise specified herein as in effect on another date or
dates).
"General Intangibles" means, with respect to any Person, all of such
Person's present and future (i) general intangibles, (ii) rights, interests,
choses in action, causes of action, claims and other intangible property of
every kind and nature (other than Receivables), (iii) corporate and other
business records, (iv) loans, royalties, and other obligations receivable, (v)
trademarks, registered trademarks, trademark applications, service marks,
registered service marks, service xxxx applications, patents, registered
patents, patent applications, trade names, rights of use of any name, labels,
fictitious names, inventions, designs, trade secrets, computer programs,
software, printouts and other computer materials, goodwill, registrations,
copyrights, copyright applications, permits, licenses, franchises, customer
lists, credit files, correspondence, and advertising materials, (vi) customer
and supplier contracts, firm sale orders, rights under license and franchise
agreements, rights under tax sharing agreements, and other contracts and
contract rights, (vii) interests in partnerships and joint ventures, (viii) tax
refunds and tax refund claims, (ix) right, title and interest under leases,
subleases, licenses and concessions and other agreements relating to property,
(x) deposit accounts (general or special) with any bank or other financial
institution, (xi) credits with and other claims against third parties (including
carriers and shippers), (xii) rights to indemnification and with respect to
support and keep-well agreements, (xiii) reversionary interests in pension and
profit sharing plans and reversionary, beneficial and residual interests in
trusts, (xiv) proceeds of insurance of which such Person is beneficiary, (xv)
letters of credit, guarantees, Liens, security interests and other security held
by or granted to such Person, (xvi) uncertificated securities, and (xvii)
dividends and distributions and claims with respect to dividends and
distributions.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor" means any of the Parent, Manufacturing, Property
Management, Distribution, Xxxxx-Xxxxx, Whitehall, Leasing, Apex, Caribe,
Hydroscience, TIMCO Engineered Systems and AVSRE, L.P., a Delaware limited
partnership, and each Subsidiary of a Borrower or one of the foregoing named
Guarantors which is not a Foreign Subsidiary or a Borrower.
"Hedge Agreement" means any agreement, including, without limitation,
interest rate exchange, swap, collar or cap agreement, interest rate future or
option contract, currency swap agreement, currency future or option contract,
and other similar agreement, evidencing an agreement or arrangement intended to
protect against fluctuation in interest rates and/or foreign exchange rates,
conversion rates for conversion of foreign currencies to Dollars, or inability
of any foreign Person to transfer Dollars to a Person in the United States.
"Holder" means any Person entitled to enforce any of the Obligations,
whether or not such Person holds any evidence of Indebtedness, including,
without limitation, the Agent, each Lender and each Issuing Bank.
18
"Hydroscience" means Hydroscience, Inc., a Texas corporation and
wholly-owned Subsidiary of Whitehall.
"Impermissible Qualification" means any qualification or exception to
any opinion or certification of an independent public accountant which (i)
expresses concern about whether or not the subject Person will be able to meet
its obligations as such become due, or otherwise will be able to operate or
conduct its business in the future, (ii) related to the limited scope of
examination of matters relevant to such financial statement, or (iii) relates to
the treatment or classification of any item in the subject Financial Statement
and which, as a condition to its removal, would require an adjustment to such
item the effect of which would be to cause there to be a Potential Event of
Default or Event of Default.
"Indebtedness", as applied to any Person, means, at any time, without
duplication, (a) all indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any accrued interest, fees
and charges relating thereto, (ii) under profit payment agreements or in respect
of obligations to redeem, repurchase or exchange any Securities of such Person
or to pay dividends in respect of any stock, (iii) with respect to letters of
credit issued for such Person's account, (iv) to pay the deferred purchase price
of property or services, except accounts payable and accrued expenses arising in
the ordinary course of business, (v) in respect of Capital Leases including,
without limitation, the TROL Lease, (vi) which are Accommodation Obligations or
(vii) under warranties and indemnities; (b) all indebtedness, obligations or
other liabilities of such Person or others secured by a Lien on any property of
such Person, whether or not such indebtedness, obligations or liabilities are
assumed by such Person, all as of such time; (c) all indebtedness, obligations
or other liabilities of such Person in respect of Hedge Agreements, net of
liabilities owed to such Person by the counterparties thereon; (d) all preferred
stock subject (upon the occurrence of any contingency or otherwise) to mandatory
redemption; (e) all ERISA obligations currently due and payable; and (f) all
contingent Contractual Obligations with respect to any of the foregoing.
"Indemnified Matters" is defined in Section 15.03.
"Indemnitees" is defined in Section 15.03.
"Interest Reserve" means $150,000.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any successor
statute and any regulations or guidance promulgated thereunder.
"Inventory" means, with respect to any Person, all of such Person's
present and future (i) inventory, (ii) goods, merchandise and other personal
property furnished or to be furnished under any contract of service or intended
for sale or lease, and all consigned goods and all other items which have
previously constituted Equipment of such Person but are then currently being
held for sale or lease in the ordinary course of such Person's business, (iii)
raw materials, work-in-process and finished goods, (iv) materials and supplies
of any kind, nature or description used or consumed in such Person's business or
in connection with the manufacture,
19
production, packing, shipping, advertising, finishing or sale of any of the
property described in clauses (i) through (iii) above, (v) goods in which such
Person has a joint or other interest or right of any kind (including, without
limitation, goods in which such Person has an interest or right as consignee),
and (vi) goods which are returned to or repossessed by such Person; in each case
whether in the possession of such Person, a bailee, a consignee, or any other
Person for sale, storage, transit, processing, use or otherwise, and any and all
documents for or relating to any of the foregoing.
"Investment" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person, (ii) any purchase by that Person of all
or substantially all of the assets of a business conducted by another Person,
and (iii) any loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, accounts receivable,
advances to employees and similar items made or incurred in the ordinary course
of business) or capital contribution by that Person to any other Person,
including all Indebtedness to such Person arising from a sale of property by
such Person other than in the ordinary course of its business. The amount of any
Investment shall be the original cost of such Investment, plus the cost of all
additions thereto less the amount of any return of capital or principal to the
extent such return is in cash with respect to such Investment without any
adjustments for increases or decreases in value or write-ups, write-downs or
write-offs with respect to such Investment.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Issuing Banks" means Citibank and each Lender designated as an
"Issuing Bank" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became a Lender and each other Lender
approved by the Agent and TIMCO who has agreed to become an Issuing Bank for the
purpose of issuing Letters of Credit pursuant to Section 3.01.
"Junior Subordinated Notes" means the 8% Junior Subordinated
Convertible PIK Notes due 2007 to be issued by the Parent in connection with its
settlement of the Class Action Litigation and pursuant to terms no less
favorable to the Parent and Lenders than the PIK Subordinated Debt outstanding
under the 8% Senior Subordinated Convertible PIK Notes due 2006 issued by the
Parent issued under that certain Indenture dated as of February 28, 2002.
"Junior Subordinated Notes Guaranties" means, collectively, the
unsecured guaranties of payment of the Junior Subordinated Notes executed by the
Borrowers and Guarantors which are Subsidiaries of Parent.
"Xxxxx-Xxxxx" means AVS/M-2, Inc., a Delaware corporation and
wholly-owned Subsidiary of Manufacturing formerly known as AVS/Xxxxx-Xxxxx
Machine Company.
"Leased Inventory" means aircraft spare parts Inventory which is
subject to any lease agreement or arrangement.
"Leasing" means Aviation Sales Leasing Company, a Delaware corporation
and a wholly-owned Subsidiary of the Parent.
20
"Lender" means, as of the Effective Date, each of Citicorp,UPS Capital
Corporation, Salomon Brothers Holding Company, Inc, and ARK CLO 2000-1, Limited,
and, at any other given time, each financial institution which is a party hereto
as a Lender, whether as aforesaid or pursuant to an Assignment and Acceptance.
"Lender Affiliate" means any financial institution that directly or
indirectly controls or is controlled by or is under common control with a
Lender.
"Letter of Credit" means any Commercial Letter of Credit or Standby
Letter of Credit.
"Letter of Credit Fee" is defined in Section 5.02(a).
"Letter of Credit Obligations" means, at any particular time, the sum
of (i) all outstanding Reimbursement Obligations, plus (ii) the aggregate
undrawn face amount of all outstanding Letters of Credit, plus (iii) the
aggregate face amount of all Letters of Credit requested by the Borrowers but
not yet issued (unless the request for an unissued Letter of Credit has been
denied by the designated Issuing Bank as referenced in Section 3.01(c)(i)).
"Letter of Credit Reimbursement Agreement" means, with respect to a
Letter of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken together) as
the Issuing Bank from which the Letter of Credit is requested may employ in the
ordinary course of business for its own account, with such modifications thereto
as may be agreed upon by the Issuing Bank and the applicant Borrower and as are
not materially adverse (in the judgment of the Issuing Bank and Agent) to the
interests of the Lenders; provided, however, in the event of any conflict
between the terms of any Letter of Credit Reimbursement Agreement and this
Agreement, the terms of this Agreement shall control.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death, punitive damages,
economic damages, consequential damages, treble damages, intentional, willful or
wanton injury, damage or threat to the environment, natural resources or public
health or welfare, costs and expenses (including, without limitation, attorney,
expert and consulting fees and costs and fees and costs associated with any
investigation, feasibility or Remedial Action studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale or other title retention agreement, deposit
arrangement, security interest, encumbrance (including, without limitation,
easements, rights-of-way, zoning restrictions and the like), lien (statutory or
other and including, without limitation, any Environmental Lien), option,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever in respect of any property of a Person, whether
granted voluntarily or imposed by law, and includes the interest of a lessor
under a Capital Lease or under any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement or similar notice (other than a financing statement filed by a "true"
lessor pursuant to ss. 9-505 of the Uniform Commercial Code), naming the owner
of such
21
property as debtor, under the Uniform Commercial Code or other comparable law of
any jurisdiction.
"Loan" means any Revolving Loan or Term Loan and "Loans" means,
collectively, all Revolving Loans and Term Loans.
"Loan Account" is defined in Section 4.03(b).
"Loan Documents" means this Agreement, the Notes, Hedge Agreements to
which any Lender or any Affiliate of a Lender is a party, and all other
instruments, agreements and written Contractual Obligations between any
Guarantor, any Borrower or any Subsidiary of a Borrower, and any of the Agent,
any Lender or any Issuing Bank delivered to either the Agent, such Lender or
such Issuing Bank pursuant to or in connection with the transactions
contemplated hereby.
"Manufacturing" means AVS/M-1, Inc., a Delaware corporation and
wholly-owned Subsidiary of Parent, formerly known as Aviation Sales
Manufacturing Company.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means a material adverse effect upon (i) the
financial condition, operations, assets or prospects of the Borrowers or the
Borrowers and the Guarantors taken as a whole, (ii) the ability of the Borrowers
or any Guarantor to perform their respective obligations under the Loan
Documents, or (iii) the ability of the Lenders, the Issuing Banks or the Agent
to enforce any of the Loan Documents.
"Maximum Revolving Credit Amount" means, at any particular time, the
amount equal to the lesser of (i) the amount equal to the Revolving Credit
Commitments at such time minus the Texas Tax Reserve at such time, if such Texas
Tax Reserve exceeds $200,000, and (ii) the Borrowing Base at such time minus the
Texas Tax Reserve at such time, if such Texas Tax Reserve exceeds $200,000.
"MIS" means computerized management information system for recording
and maintenance of information regarding purchases, sales, aging,
categorization, and locations of Inventory, creation and aging of Receivables,
and accounts payable (including agings thereof).
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA (other than a Foreign Employee Benefit Plan) which
is, or within the immediately preceding six (6) years was, contributed to by
either a Borrower or any ERISA Affiliate or in respect of which a Borrower or
any ERISA Affiliate has assumed any liability.
"Net Cash Proceeds of Issuance of Equity Securities" means net cash
proceeds (including cash, equivalents readily convertible into cash, and such
proceeds of any notes received as consideration or any other non-cash
consideration) received by any Borrower or Guarantor on account of the issuance
of (i) equity Securities of the Parent, (ii) equity Securities of a Borrower or
Subsidiary of the Parent to any Person other than the Parent, (iii) equity
Securities of any Subsidiary of a Borrower to any Person other than such
Borrower.
22
"Net Cash Proceeds of Issuance of Indebtedness" means net cash
proceeds (including cash, equivalents readily convertible into cash, and such
proceeds of any notes received as consideration or any other non-cash
consideration) received by any Borrower or Guarantor on account of the issuance
of (i) Indebtedness (other than Indebtedness permitted under Section 10.01) of
any Borrower or any Subsidiary of a Borrower or (ii) Indebtedness (other than
Indebtedness of Parent described on Schedule 1.01.5 attached hereto and made a
part hereof) of the Parent, in each case net of all transaction costs and
underwriters' discounts with respect thereto.
"Net Cash Proceeds of Sale" means (i) proceeds received by any
Borrower or Guarantor in cash (including cash, equivalents readily convertible
into cash, and such proceeds of any notes received as consideration or any other
non-cash consideration) from the sale, assignment or other disposition of (but
not the lease or license of) any Property, other than sales permitted under
clauses (c), (d)(ii)(A) and (e) of Section 10.02 and Property identified on
Schedule 10.10, net of (a) the costs of sale, assignment or other disposition,
(b) any income, franchise, transfer or other tax liability arising from such
transaction and (c) amounts applied to the repayment of Indebtedness (other than
the Obligations) secured by a Lien permitted by Section 10.03 on the asset
disposed of, if such net proceeds arise from any individual sale, assignment or
other disposition or from any group of related sales, assignments or other
dispositions; and (ii) to the extent provided in Section 9.08, proceeds of
insurance on account of the loss of or damage to any such Property or
Properties, and payments of compensation for any such Property or Properties
taken by condemnation or eminent domain.
"Net Income" means, for any Person for any period, the net earnings
(or loss) after taxes of such Person and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with GAAP.
"Non Pro Rata Loan" is defined in Section 4.02(b)(v).
"Note" means a promissory note in the applicable form attached hereto
as Exhibit E payable to a Lender, evidencing Loans made by such Lender and
executed by the Borrowers upon the request of a Lender as required by Section
4.03(a), as the same may be amended, supplemented, modified or restated from
time to time; "Notes" means, collectively, all of such Notes outstanding at any
given time.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit F attached hereto and made a part hereof.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit G attached hereto and made a part hereof.
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrowers to the Agent, any
Lender, any Issuing Bank, any Affiliate of the Agent, any Lender or any Issuing
Bank, or any Person entitled to indemnification pursuant to Section 15.03 of
this Agreement, of any kind or nature, present or future, arising under this
Agreement, the Notes or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising by
23
reason of an extension of credit, opening or amendment of a Letter of Credit or
payment of any draft drawn thereunder, loan, guaranty, indemnification, foreign
exchange contract, Hedge Agreement or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising and however acquired. The
term includes, without limitation, all interest, charges, expenses, fees,
attorneys' fees and disbursements and any other sum chargeable to the Borrowers
under this Agreement or any other Loan Document and all "Obligations"
outstanding as of the Effective Date under the Predecessor Agreement.
"Officer's Certificate" means a certificate executed on behalf of a
Borrower by its president, chief financial officer, or treasurer or on behalf of
the Borrowers by the president, chief financial officer or treasurer of any of
them.
"Operating Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which is not
a Capital Lease.
"Organizational Documents" means, with respect to any corporation,
limited liability company, or partnership (i) the articles/certificate of
incorporation (or the equivalent organizational documents) of such corporation
or limited liability company, (ii) the partnership agreement executed by the
partners in the partnership, (iii) the by-laws (or the equivalent governing
documents) of the corporation, limited liability company or partnership, and
(iv) any document setting forth the designation, amount and/or relative rights,
limitations and preferences of any class or series of such corporation's Capital
Stock or such limited liability company's or partnership's equity or ownership
interests.
"OSHA" means the Occupational Safety and Health Act of 1970, 29
U.S.C.ss.ss.651 et seq., any amendments thereto, any successor statutes and any
regulations or guidance promulgated thereunder.
"Parent" means TIMCO Aviation Services, Inc., a Delaware corporation
formerly known as Aviation Sales Company.
"Parent Board" means Board of Directors of the Parent comprised of
those Persons who are members of such Board of Directors on the Effective Date
and identified on Schedule 1.01.2 attached hereto and made a part hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Permits" means any permit, approval, authorization license, variance,
or permission required from a Governmental Authority or other Person under an
applicable Requirement of Law.
"Permitted Equity Securities Options" means the subscriptions,
options, warrants, rights, convertible securities and other agreements or
commitments relating to the issuance of equity Securities of the Parent
identified as such on Schedule 1.01.3.
24
"Permitted Existing Accommodation Obligations" means those
Accommodation Obligations identified as such on Schedule 1.01.4.
"Permitted Existing Indebtedness" means the Indebtedness of the Parent
and its Subsidiaries identified as such on Schedule 1.01.5.
"Permitted Existing Investments" means those Investments identified as
such on Schedule 1.01.6.
"Permitted Existing Liens" means the Liens on assets of the Parent and
its Subsidiaries identified as such on Schedule 1.01.7.
"Person" means any natural person, corporation, limited liability
company, limited partnership, general partnership, joint stock company, joint
venture, association, company, trust, bank, trust company, land trust, business
trust or other organization, whether or not a legal entity, any other
non-governmental entity, and any Governmental Authority.
"PIK Subordinated Debt" means Indebtedness evidenced by the Junior
Subordinated Notes and the 8% Senior Subordinated Convertible PIK Notes due 2006
issued by the Parent under that certain Indenture dated as of February 28, 2002.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
(other than a Foreign Employee Benefit Plan) in respect of which a Borrower or
any ERISA Affiliate is, or within the immediately preceding six (6) years was,
an "employer" as defined in Section 3(5) of ERISA or a Borrower or any ERISA
Affiliate has assumed any liability.
"Potential Event of Default" means an event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"Predecessor Agreement" is defined in the preamble of this Agreement.
"Process Agent" is defined in Section 15.17(a).
"Projections" means the consolidated and consolidating financial
projections of (i) the Parent and its Subsidiaries and (ii) the Borrowers and
their Subsidiaries (a) by business segment for each calendar month during the
period June - December 2002 and (b) for each Fiscal Quarter ending in 2003
(including, without limitation, capital expenditure budget) together with
related assumptions, prepared by Parent and dated May 23, 2002.
"Property" means any Real Property or personal property, plant,
building, facility, structure, underground storage tank or unit, Equipment,
Inventory, General Intangible, Receivable, or other asset owned, leased or
operated by a Borrower or any Guarantor, as applicable, (including any surface
water thereon, and soil and groundwater thereunder).
"Property Management" means Aviation Sales Property Management Corp.,
a Delaware corporation and wholly-owned Subsidiary of Parent.
25
"Pro Rata Share" means, with respect to any Lender, the percentage
obtained by dividing (i) the sum of such Lender's Revolving Credit Commitment
and outstanding principal balance of such Lender's Term Loan (in each case, as
adjusted from time to time in accordance with the provisions of this Agreement
or any Assignment and Acceptance to which such Lender is a party) by (ii) the
aggregate amount of all of the Revolving Credit Commitments (notwithstanding the
termination of any Revolving Credit Commitments) and the outstanding principal
balance of all Term Loans.
"Protective Advance" is defined in Section 13.09(a).
"Xxxxxxx Documents" means, collectively, the Xxxxxxx Note, the Xxxxxxx
Texas Transaction Documents, the Xxxxxxx Release, and other agreements,
instruments and documents executed and delivered to or by Xxxxxx Xxxxxxx or
Xxxxxx X. Xxxxxxx in connection therewith.
"Xxxxxxx Note" means that certain Term Loan Note dated the Effective
Date in the principal amount of $1,000,000 executed by the Borrowers and payable
to Xxxxxx Xxxxxxx and Xxxxxx X. Xxxxxxx, a copy of which is attached hereto as
part of Schedule 1.01.1.
"Xxxxxxx Release" means that certain Mutual Release dated the
Effective Date executed and delivered by Xxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxx, the
Borrowers and Guarantors.
"Xxxxxxx Texas Transaction Documents" means, collectively, the
agreements, instruments and documents identified on Schedule 10.02-H attached
hereto and made a part hereof.
"RCRA" means the Resource Conservation and Recovery Act of 1976, 42
U.S.C.(S)(S) 6901 et seq., any amendments thereto, any successor statutes, and
any regulations promulgated thereunder.
"Real Property" means, with respect to any Person, all of such
Person's present and future right, title and interest (including, without
limitation, any leasehold estate) in (i) any plots, pieces or parcels of land,
(ii) any improvements, buildings, structures and fixtures now or hereafter
located or erected thereon or attached thereto of every nature whatsoever (the
rights and interests described in clauses (i) and (ii) above being the
"Premises"), (iii) all easements, rights of way, gores of land or any lands
occupied by streets, ways, alleys, passages, sewer rights, water courses, water
rights and powers, and public places adjoining such land, and any other
interests in property constituting appurtenances to the Premises, or which
hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all
hereditaments, gas, oil, minerals (with the right to extract, sever and remove
such gas, oil and minerals), and easements, of every nature whatsoever, located
in or on the Premises and (v) all other rights and privileges thereunto
belonging or appertaining and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to or of any of the rights
and interests described in clauses (iii) and (iv) above.
"Receivables" means, with respect to any Person, all of such Person's
present and future (i) accounts, (ii) contract rights, chattel paper,
instruments, documents, deposit accounts, and other rights to payment of any
kind, whether or not arising out of or in connection with the
26
sale or lease of goods or the rendering of services, and whether or not earned
by performance, (iii) any of the foregoing which are not evidenced by
instruments or chattel paper, (iv) intercompany receivables, and any security
documents executed in connection therewith, (v) proceeds of any letters of
credit or insurance policies on which such Person is named as beneficiary, (vi)
claims against third parties for advances and other financial accommodations and
any other obligations whatsoever owing to such Person, (vii) rights in and to
all security agreements, leases, guarantees, instruments, securities, documents
of title and other contracts securing, evidencing, supporting or otherwise
relating to any of the foregoing, together with all rights in any goods,
merchandise or Inventory which any of the foregoing may represent, and (viii)
rights in returned and repossessed goods, merchandise and Inventory which any of
the same may represent, including, without limitation, any right of stoppage in
transit.
"Register" is defined in Section 15.01(c).
"Regulation A" means Regulation A of the Federal Reserve Board as in
effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"Reimbursement Date" is defined in Section 3.01(d)(i)(A).
"Reimbursement Obligations" means the aggregate non-contingent
reimbursement or repayment obligations of the Borrowers with respect to amounts
drawn under Letters of Credit.
"Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, injection, deposit, disposal, abandonment, or discarding of
barrels, containers or other receptacles, discharge, emptying, escape,
dispersal, leaching or migration into the indoor or outdoor environment or into
or out of any Property, including the movement of Contaminants through or in the
air, soil, surface water, groundwater or Property.
"Remedial Action" means actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.
"Replacement Proceeds" means the amount of (i) proceeds of insurance
paid on account of the loss of or damage to any Property and awards of
compensation for Property taken by condemnation or eminent domain to the extent
actually used to replace, rebuild or restore the Property so lost, damaged or
taken, provided that (a) TIMCO shall have delivered written notice
27
to the Agent that it, the other applicable Borrower, or the applicable Guarantor
intends to so replace, rebuild or restore such Property and (b) the applicable
Borrower or such applicable Guarantor replaces or commences the restoration or
rebuilding of such Property within 180 days after the Agent's receipt of the
proceeds of such insurance payment or condemnation award and (ii) insurance paid
on account of a business interruption occurrence to the extent actually used in
the restoration or conduct of the business interrupted.
"Reportable Event" means any of the events described in Section
4043(b) of ERISA and the regulations promulgated thereunder as in effect from
time to time other than an event for which the thirty (30) day notice
requirement has been waived by the PBGC.
"Requirements of Law" means, as to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or Permit or any Environmental, Health or
Safety Requirement of Law.
"Requisite Lenders" means Lenders whose Pro Rata Shares, in the
aggregate, are greater than fifty percent (50%); provided, however, that, in the
event any of the Lenders shall have failed to fund its Pro Rata Share of any
Loan requested by or on behalf of a Borrower which Lenders are obligated to fund
under the terms of this Agreement and any such failure has not been cured, then
for so long as such failure continues, "Requisite Lenders" means Lenders
(excluding all Lenders whose failure to fund their respective Pro Rata Shares of
such Loans have not been so cured) whose Pro Rata Shares represent more than
fifty percent (50%) of the aggregate Pro Rata Shares of such Lenders; provided,
further, however, that, in the event that the Revolving Credit Commitments have
been terminated pursuant to the terms of this Agreement, "Requisite Lenders"
means Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans are greater than
fifty percent (50%).
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any equity Securities of a
Borrower or any Guarantor which is a Subsidiary of Parent now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Securities
of a Borrower or any Guarantor which is a Subsidiary of Parent now or hereafter
outstanding, (iii) any payment or prepayment of principal of, premium, if any,
or interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Indebtedness owing at any time to any
Affiliate of a Borrower, (iv) any payment made to redeem, purchase, repurchase
or retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire equity Securities of a Borrower or any Guarantor which
is a Subsidiary of Parent now or hereafter outstanding, and (v) any fees or
other remuneration paid to Parent, Manufacturing, or any Subsidiary of a
Borrower by a Borrower or any Guarantor.
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"Revolving Credit Availability" means, at any particular time, the
amount by which the Maximum Revolving Credit Amount at such time exceeds the sum
of (i) the Revolving Credit Obligations at such time plus (ii) the outstanding
balance of Protective Advances at such time.
"Revolving Credit Commitment" means, with respect to any Lender, the
obligation of such Lender to make Revolving Loans and to participate in Letters
of Credit pursuant to the terms and conditions of this Agreement, in an
aggregate amount at any time outstanding which shall not exceed the principal
amount set forth on Schedule 1.01.8 attached hereto and made a part hereof under
the heading "Revolving Credit Commitment" thereon or on the signature page of
the Assignment and Acceptance executed by it, as modified from time to time
pursuant to the terms of this Agreement, or to give effect to any applicable
Assignment and Acceptance, and "Revolving Credit Commitments" means the
aggregate principal amount of the Revolving Credit Commitments of all the
Lenders, the maximum amount of which shall be $30,000,000, as reduced from time
to time pursuant to Section 4.01.
"Revolving Credit Obligations" means, at any particular time, the sum
of (i) the outstanding principal amount of the Revolving Loans at such time,
plus (ii) the Letter of Credit Obligations at such time.
"Revolving Credit Termination Date" means the earlier to occur of (i)
January 31, 2004 (or, if not a Business Day, the next preceding Business Day)
and (ii) the date of termination of the Revolving Credit Commitments pursuant to
the terms of this Agreement.
"Revolving Loan" and "Revolving Loans" are defined in Section
2.01(a)(iii).
"Securities" means any stock, shares, voting trust certificates,
limited partnership certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
in general any instruments commonly known as "securities", including, without
limitation, any "security" as such term is defined in Section 8-102 of the
Uniform Commercial Code, or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include the Notes, any other evidence of the
Obligations, the Supplemental Term Note or the Supplemental Term Loan Warrant.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute.
"Senior Subordinated Notes" means, collectively, (i) the 8-1/8% Senior
Subordinated Notes due 2008 issued by the Parent under that certain Indenture
dated as of February 17, 1998, as amended and supplemented prior to the
Effective Date and (ii) the 8% Senior Subordinated Convertible PIK Notes due
2006 issued by the Parent under that certain Indenture dated as of February 28,
2002.
29
"Senior Subordinated Notes Guaranties" means, collectively, the
unsecured guaranties of payment of the Senior Subordinated Notes executed by the
Borrowers and Guarantors which are Subsidiaries of Parent.
"Shareholder Guarantees" means those guarantees of payment and
performance of the Bof A Note identified on Exhibit B to the Shareholder
Intercreditor Agreement.
"Shareholder Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of the Effective Date to which the Agent, Citicorp USA, Inc.,
Bank of America, N.A., Xxxxxx Xxxxxxx, Xxx X. Xxxxxxx, LJH, Ltd., and Xxxxx
Investments, Inc. are parties, acknowleged by the Borrowers and Guarantors.
"Shareholder Security Agreement" means that certain Security Agreement
dated as of the Effective Date to which Xxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxx, Xxx
X. Xxxxxxx, LJH, Ltd., Xxxxx Investments, Inc. (as secured parties) and the
Borrowers and Guarantors (as grantors) are parties.
"Shareholder Subrogation Claims" means those claims against the
Borrowers and Guarantors, if any, of Xxx X. Xxxxxxx, LJH, Ltd., and/or Xxxxx
Investments, Inc. arising in the event such Persons are subrogated to the rights
of Bank of America, N.A. with respect to Indebtedness evidenced by the BofA Note
by virtue of the performance of their obligations under the Shareholder
Guarantees.
"Solvent", when used with respect to any Person, means that at the
time of determination:
(i) the Fair Market Value of its assets is in excess of the total
amount of its liabilities (including, without limitation, contingent
liabilities); and
(ii) the present fair saleable value of its assets is greater than
its probable liability on its existing debts as such debts become absolute
and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments) as
they mature; and
(iv) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
"Standby Letter of Credit" means any letter of credit issued by an
Issuing Bank pursuant to Section 3.01 for the account of a Borrower, or for the
account of Leasing or any Subsidiary of a Borrower if the Borrowers are jointly
and severally liable for reimbursement of amounts drawn under such letter of
credit, which is not a Commercial Letter of Credit.
"Subordinated Debt Restructuring" means the restructuring of the
Parent's Senior Subordinated Notes due 2008 as described in the Parent's
Prospectus and Consent Solicitation in respect of the Exchange Offer for and
Consent Solicitation with Respect to all outstanding 8 1/8% Senior Subordinated
Notes due 2008 dated January 9, 2002, and evidenced by (i) that certain
Supplemental Indenture dated as of February 28, 2002 with respect to its 8 1/8%
Senior
30
Subordinated Notes due 2008, and (ii) that certain Indenture dated February 28,
2002 with respect to 8.00% Senior Subordinated Convertible PIK Notes due 2006.
"Subordinated Notes Documents" means, collectively, the Senior
Subordinated Notes, Senior Subordinated Notes Guaranties, Junior Subordinated
Notes, and Junior Subordinated Notes Guaranties and " Subordinated Notes
Document" means, any of the same, individually.
"Subsidiary" of a Person means any corporation, limited liability
company, general or limited partnership, trust, or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
with respect to such entity are at the time directly or indirectly owned or
controlled by such Person, one or more of the other subsidiaries of such Person
or any combination thereof, or in the case of an entity which is a partnership,
of which such Person is a general partner.
"Supplemental Term Loan" means that certain term loan made by Citicorp
USA, Inc., to the Borrowers pursuant to the Amended and Restated Term Loan Note
dated May 31, 2000, as amended prior to the Effective Date.
"Supplemental Term Loan Warrant" means that certain Common Stock
Warrant Certificate issued by Parent to Citicorp USA, Inc. in connection with
the extension of credit evidenced by the Supplemental Term Loan Note, as such
Common Stock Warrant Certificate has heretofore been, and may hereafter be,
amended from time to time.
"Tangible Net Worth" means the amount calculated as (i) the
consolidated net worth of the Parent and its Subsidiaries minus (ii) the
consolidated intangibles of the Parent and its Subsidiaries including, without
limitation, goodwill, trademarks, tradenames, copyrights, patents, patent
applications, licenses and rights in any thereof and other items treated as
intangibles in accordance with GAAP. For purposes of determination of Tangible
Net Worth, the PIK Subordinated Debt shall be deemed to be equity so long as no
interest with respect thereto has been paid in cash.
"Taxes" is defined in Section 14.01(a).
"Term Loans" means the loans in the aggregate principal amount of
$7,000,000 made by the Lenders on the Effective Date as more particularly
described in Section 2.01(a).
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of any Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which such Borrower or such ERISA Affiliate
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations which results in the termination of employment of 20% of
Benefit Plan participants who are employees of any Borrower or any ERISA
Affiliate; (iii) the imposition of an obligation on any Borrower or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which could reasonably be
expected to constitute grounds under Section 4042 of
31
ERISA for the termination of, or the appointment of a trustee to administer, any
Benefit Plan; or (vi) the partial or complete withdrawal of any Borrower or any
ERISA Affiliate from a Multiemployer Plan.
"Texas Tax Reserve" means, at any time, a reserve in an amount equal to
the taxes payable by the Borrowers and Guarantors under the statutes of the
State of Texas with respect to which a tax lien attaches to Property of the
Borrowers and Guarantors located in the State of Texas pursuant to ss.32.01 of
the Texas Tax Code, which amount shall be determined by TIMCO as of the date of
each Borrowing Base Certificate and, if in excess of $200,000, disclosed by
TIMCO thereon.
"TIMCO" means Triad International Maintenance Corporation, a Delaware
corporation and wholly-owned Subsidiary of Parent.
"TIMCO Engine" means TIMCO Engine Center, Inc., a Delaware corporation
and wholly-owned Subsidiary of Parent.
"TIMCO Engineered Systems" means TIMCO Engineered Systems, Inc., a
Delaware corporation and wholly-owned Subsidiary of TIMCO.
"Transaction Costs" means the (i) fees, costs and expenses payable by
the Borrowers and Guarantors, or any of them, in connection with the execution
and delivery of the Loan Documents and TROL Documents and (ii) fees, costs and
expenses payable by the Borrowers and Guarantors, or any of them, in connection
with the execution and delivery of amendments, waivers and consents with respect
to the TROL Documents, provided that with respect to fees payable in connection
with such amendments, waivers and consents, the same are determined by the
Agent, in its sole judgment, to be reasonable under then prevailing current
market conditions.
"TROL Documents" means, collectively, the TROL Guaranties, TROL
Participation Agreement, TROL Lease, Agency Agreement between the Parent, as
construction agent and First Security Bank, National Association (now known as
Xxxxx Fargo Bank Northwest, National Association), as owner trustee under the
Aviation Sales Trust 1998-1, as lessor, and Credit Agreement among First
Security Bank, National Association (now known as Xxxxx Fargo Bank Northwest,
National Association), as owner trustee for the Aviation Sales Trust 1998-1, as
borrower, the lender parties thereto and NationsBank, National Association (now
known as Bank of America, N.A.) as administrative agent for such lender parties,
in each instance dated as of December 16, 1998 and as amended through the
Effective Date.
"TROL Guaranties" means, collectively, (i) the unsecured guaranties of
payment of certain Indebtedness evidenced by Series A Notes issued by First
Security Bank, National Association (now known as Xxxxx Fargo Bank Northwest,
National Association), as trustee under Aviation Sales Trust 1998-1, a trust
formed under the laws of the State of Florida, executed and delivered by Parent,
Borrowers and all of the other Subsidiaries of the Parent, with the exception of
Aviation Sales Company FSC, Ltd., and (ii) the unsecured guaranty of payment and
performance of Parent's obligations under the TROL Lease executed and delivered
by the
32
Borrowers and such other Subsidiaries of the Parent, in each instance, in the
form attached hereto as Exhibit H and made a part hereof.
"TROL Lease" means that certain lease agreement as amended through the
Effective Date, a copy of which is attached hereto as Exhibit I and made a part
hereof, entered into by and between Parent, as lessee, and First Security Bank,
National Association (now known as Xxxxx Fargo Bank Northwest, National
Association), as trustee under Aviation Sales Trust 1998-1, a trust formed under
the laws of the State of Florida, as lessor.
"TROL Participation Agreement" means that certain participation
agreement as amended through the Effective Date, a copy of which is attached
hereto as Exhibit J and made a part hereof, executed and delivered by Parent.
"Uniform Commercial Code" means the Uniform Commercial Code as enacted
in the State of New York, as it may be amended from time to time.
"Unused Commitment Fee" is defined in Section 5.02(b)(i).
"Whitehall" means Whitehall Corporation, a Delaware corporation and
wholly-owned Subsidiary of Parent.
"Working Capital" means, as at any date of determination, the excess,
if any, of (i) the Parent and its Subsidiaries' consolidated current assets,
except cash and Cash Equivalents, over (ii) the Parent and its Subsidiaries'
consolidated current liabilities, except current maturities of long-term debt,
and current maturities of the Revolving Credit Obligations as of such date.
1.02. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03. Accounting Terms. Subject to Section 15.04, for purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
1.04. Financial Covenant Calculations. Notwithstanding any requirements
under GAAP, calculations made with respect to (a) the definitions of "EBITDA",
"Net Income", "Fixed Charge Coverage Ratio", and "Tangible Net Worth" and (b)
determination of compliance with the financial covenants set forth in Article
XI, unless otherwise agreed as described in Section 15.04, each shall be made
without regard to changes in requirements under GAAP which become effective
after the Effective Date.
33
1.05. Other Terms. All other terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the Uniform Commercial Code to the extent the same are defined therein.
34
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. Revolving Credit Facility; Term Loans.
(a) Outstanding Balance of Revolving Loans on the Effective Date;
Making and Repayment of Term Loans; Revolving Loans Availability.
(i) The principal balance of the "Loans" made under the
Predecessor Agreement and outstanding on the Effective Date is
$4,798,569, all of which shall continue as Revolving Loans hereunder
and shall be subject to and governed by the terms and provisions of
this Agreement.
(ii) Subject to the terms and conditions set forth in this
Agreement, each Lender hereby severally, and not jointly, agrees to
make a term loan, in Dollars (each individually a "Term Loan") to the
Borrowers on the Effective Date in the original principal amount set
forth on Schedule 2.01-A attached hereto and made a part hereof. All
Term Loans shall be made by the Lenders simultaneously, it being
understood that no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make a Term Loan hereunder
nor shall the obligation of any Lender to make its Term Loan be
increased or decreased as a result of any such failure.
(A) The principal amount of the Term Loans shall be repaid in
(I) six (6) quarterly installments in the amount of $500,000 each on
the last day of each calendar quarter during the period commencing on
September 30, 2002 and ending on December 31, 2003, and (II) one final
installment in the amount of $4,000,000 on January 31, 2004; provided
however that in the event the Revolving Credit Termination Date occurs
prior to January 31, 2004, the then outstanding principal balance of
the Term Loan shall be due and payable on the Revolving Credit
Termination Date. All payments made with respect to the Term Loan shall
be shared by the Lenders in accordance with their respective Pro Rata
Shares.
(B) In addition to the scheduled payments on the Term Loans set
forth above, the Borrowers may make voluntary prepayments as and when
described in Section 4.01(a)(i) and shall make the mandatory
prepayments required under Section 4.01(b), for credit against such
scheduled payments on the Term Loans pursuant to the provisions of
Section 4.01(a)(i) or Section 4.01(b)(vi), as applicable.
(iii) Subject to the terms and conditions set forth in this
Agreement, each Lender hereby severally and not jointly agrees to make
loans, in Dollars (each individually, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrowers from time to time
during the period from the Effective Date to the Business Day next
preceding the Revolving Credit Termination Date, in an amount not to
exceed such Lender's Pro Rata Share of the Revolving Credit
Availability at such time. All Revolving Loans comprising the same
Borrowing under this Agreement shall be made by the Lenders
simultaneously and proportionately to their then respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any
failure by any other Lender to perform its obligation
35
to make a Revolving Loan hereunder nor shall the Revolving Credit
Commitment of any Lender be increased or decreased as a result of any
such failure. Subject to the provisions of this Agreement, the
Borrowers may repay any outstanding Revolving Loan on any day which is
a Business Day and any amounts so repaid may be reborrowed, up to the
amount available under this Section 2.01(a) at the time of such
Borrowing, through the Business Day next preceding the Revolving Credit
Termination Date; provided, however, the Borrowers shall, without
notice or demand of any kind, immediately make such repayments of the
Revolving Loans to the extent necessary to reduce the aggregate
outstanding principal amount of the Loans to an amount less than or
equal to the difference between the then Maximum Revolving Credit
Amount and the Letter of Credit Obligations as of such time. Each
requested Borrowing of Revolving Loans funded on any Funding Date for
Revolving Loans shall be in a principal amount of at least $500,000 and
in integral multiples of $100,000 in excess of that amount.
(b) Notice of Borrowing. When the Borrowers desire to borrow under
this Section 2.01, TIMCO, on behalf of the Borrowers, shall deliver to the Agent
a Notice of Borrowing, signed by TIMCO, (i) no later than 11:00 a.m. (New York
time) on the proposed Funding Date, in the case of a Borrowing of Base Rate
Loans, and (ii) no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed Funding Date therefor, in the case of a
Borrowing of Eurodollar Rate Loans. Such Notice of Borrowing shall specify (i)
the proposed Funding Date (which shall be a Business Day), (ii) the amount of
the proposed Borrowing, (iii), if a Revolving Loan, the Revolving Credit
Availability as of the date of such Notice of Borrowing, and (iv) instructions
for the disbursement of the proceeds of the proposed Borrowing, and shall be
accompanied by the then most recently delivered Borrowing Base Certificate duly
completed and signed by TIMCO's chief financial officer, chief executive
officer, treasurer or controller in compliance with Section 8.03. In lieu of
delivering such a Notice of Borrowing (except with respect to a Borrowing of
Loans on the Effective Date), TIMCO may give the Agent telephonic notice of any
proposed Borrowing by the time required under this Section 2.01(b), if TIMCO
confirms such notice by delivery of the required Notice of Borrowing to the
Agent by facsimile transmission promptly, but in no event later than 5:00 p.m.
(New York time) on the same day, the original of which facsimile copy shall be
delivered to the Agent within three (3) days after the date of such
transmission. Any Notice of Borrowing (or telephonic notice in lieu thereof)
given pursuant to this Section 2.01(b) shall be irrevocable.
(c) Making of Loans.
(i) Promptly after receipt of a Notice of Borrowing under Section
2.01(b) (or telephonic notice in lieu thereof), the Agent, at its
option and in its sole discretion, shall do either of the following:
(A) The Agent shall notify each Lender by telecopy, or other
similar form of transmission, of the proposed Borrowing. Subject to the
fulfillment of the conditions precedent set forth in Section 6.01 or
Section 6.02, as applicable, each Lender shall deposit an amount equal
to its Pro Rata Share of the amount requested by TIMCO to be made as
Term Loans or Revolving Loans with the Agent at its office in New York,
New York, in immediately available funds, (A) on the Effective Date
with respect to the Borrowing of Loans on such date specified in the
initial Notice of Borrowing and (B) not
36
later than 1:00 p.m. (New York time) on any other Funding Date for
Revolving Loans and the Agent shall make the proceeds of such amounts
received by it available to the Borrowers at the Agent's office in New
York, New York on such Funding Date (or on the date received if later
than such Funding Date) and shall disburse such proceeds in accordance
with the disbursement instructions set forth in the applicable Notice
of Borrowing. The failure of any Lender to deposit the amount described
above with the Agent on the applicable Funding Date shall not relieve
any other Lender of its obligations hereunder to make its Term Loan or
Revolving Loan on such Funding Date. In the event the conditions
precedent set forth in Section 6.01 or 6.02, as applicable, are not
fulfilled as of the proposed Funding Date for any Borrowing, the Agent
shall promptly return, by wire transfer of immediately available funds,
the amount deposited by each Lender to such Lender.
or
(B) Subject to the fulfillment of the conditions precedent set
forth in Section 6.01 or Section 6.02, as applicable, the Agent shall,
provided that the requested Borrowing of Revolving Loans is of an
amount which is less than the amount of Citicorp's unused Revolving
Credit Commitment (after taking into account all other then outstanding
Agent Advances) as of the Funding Date for such Borrowing, advance the
amount of the proposed Borrowing (an "Agent Advance") to the Borrowers
out of the Agent's own funds. The Lenders, upon notice (in the form
provided for in clause (A) above) from the Agent as to the amount
required to do so, shall remit to the Agent on a weekly or more
frequent basis that amount which is necessary to conform each Lender's
Revolving Loans outstanding at such time to its Pro Rata Share thereof.
Each Lender shall make available the amount required from it as
aforesaid to the Agent in Dollars and in immediately available funds
not later than 1:00 p.m. (New York time) on the day such notice is
given by the Agent. In the event of the making of any such Agent
Advance, each Lender's share of the interest allocable thereto shall be
adjusted as necessary to account for the period of time the same is
outstanding from the Agent. Any payment by a Lender to the Agent
pursuant to this clause (B) shall constitute a Revolving Loan to the
Borrowers and an assignment by Citicorp of a portion of its Revolving
Loans to such Lender equal to the amount of the payment received by the
Agent from such Lender.
(ii) In connection with the funding of Loans pursuant to Section
2.01(c)(i)(A), unless the Agent shall have been notified by any Lender
on the Business Day immediately preceding the applicable Funding Date
in respect of any Borrowing of Loans that such Lender does not intend
to fund its Loan requested to be made on such Funding Date, the Agent
may assume that such Lender has funded its Loan and is depositing the
proceeds thereof with the Agent on the Funding Date therefor, and the
Agent in its sole discretion may, but shall not be obligated to,
disburse a corresponding amount to the Borrowers on the applicable
Funding Date. If the Loan proceeds corresponding to that amount are
advanced to the Borrowers by the Agent but are not in fact deposited
with the Agent by such Lender on or prior to the applicable Funding
Date or a Lender's Pro Rata Share of an Agent Advance is not remitted
to the Agent as and when required pursuant to Section 2.01(c)(i)(B),
the Lender not making such deposit or remitting such amount agrees to
pay, and in addition the Borrowers agree to repay, to the Agent
forthwith on
37
demand such corresponding amount, together with interest thereon, for
each day from the date such amount is disbursed to or for the benefit
of the Borrowers until the date such amount is paid or repaid to the
Agent, (A) in the case of the Borrowers, at the interest rate
applicable to such Borrowing and (B) in the case of such Lender, at the
Federal Funds Rate for the first three (3) Business Days, and
thereafter at the interest rate applicable to such Borrowing. If such
Lender shall pay to the Agent the corresponding amount, the amount so
paid shall constitute such Lender's Loan, and if both such Lender and
the Borrowers shall pay and repay such corresponding amount, the Agent
shall promptly pay to the Borrowers such corresponding amount. This
Section 2.01(c)(ii) does not relieve any Lender of its obligation to
make its Loan on any applicable Funding Date as and when required under
Section 2.01(c)(i)(A) or to remit its Pro Rata Share of any Agent
Advance as and when required under Section 2.01(c)(i)(B).
(d) Revolving Credit Termination Date. Unless earlier terminated
in accordance with the provisions of Section 4.01, the Revolving Credit
Commitments shall terminate on the Revolving Credit Termination Date. Each
Lender's obligation to make Revolving Loans shall terminate on the Business Day
next preceding the Revolving Credit Termination Date. All outstanding Revolving
Credit Obligations shall be paid in full (or, in the case of unmatured Letter of
Credit Obligations, provision for payment in cash shall be made to the
satisfaction of the Issuing Banks and the Requisite Lenders) (i) if the
Revolving Credit Commitments are terminated pursuant to Section 4.01, on the
Revolving Credit Termination Date, and (ii) otherwise, on the earlier to occur
of (A) January 31, 2004 or, if not a Business Day, the next preceding Business
Day, and (B) the date of acceleration of the Obligations pursuant to Section
12.02.
(e) Maximum Revolving Credit Facility. Notwithstanding anything in
this Agreement to the contrary, in no event shall the aggregate principal
Revolving Credit Obligations exceed the lesser of (i) the Maximum Revolving
Credit Amount and (ii) $30,000,000, such amount in clause (ii) being reduced by
the amount of each permanent reduction of the Revolving Credit Commitments made
pursuant to Section 4.01(a) and Section 4.01(b).
2.02. Authorized Officers and Agents. On the Effective Date, TIMCO
shall deliver, and from time to time thereafter TIMCO may deliver, to the Agent
an Officer's Certificate setting forth the names of (a) TIMCO's officers,
employees and agents authorized to request Loans and Letters of Credit on behalf
of the Borrowers and (b) the officers of each respective Guarantor authorized to
act for such Person in respect of all matters relating to the Loan Documents, in
each instance containing a specimen signature of each such officer, employee or
agent. The Chairman of the Board of Directors of TIMCO shall also be authorized
to act for the Borrowers in respect of all other matters relating to the Loan
Documents. The Agent, Lenders and Issuing Banks shall be entitled to rely
conclusively on such officers', employees' or agents' authority to request
Revolving Loans and Letters of Credit and on such officers' of TIMCO and the
Guarantors authority to execute and deliver all instruments and agreements
pertaining to the Loan Documents and taking other actions attendant thereto
until the Agent, Lenders and Issuing Banks receive written notice to the
contrary. None of the Agent, the Lenders, or the Issuing Banks shall have any
duty to verify the authenticity of the signature appearing on any such Officer's
Certificate, written Notice of Borrowing or any other document, and, with
respect to an oral request for such a Loan or Letter of Credit, the
38
Agent shall have no duty to verify the identity of any person representing
himself or herself as one of TIMCO's officers, employees or agents authorized to
make such request or otherwise to act on behalf of the Borrowers. None of the
Agent, any Lender or any Issuing Bank shall incur any liability to any Borrower
or any other Person in acting upon any telephonic or facsimile notice referred
to above which the Agent, such Lender, or such Issuing Bank believes to have
been given by a duly authorized officer or other person authorized to borrow on
behalf of the Borrowers.
2.03. Use of Proceeds of Loans. The proceeds of the Term Loans
shall be used to repay amounts outstanding under the Supplemental Term Loan on
the Effective Date. The proceeds of the Revolving Loans shall be used to pay the
Transaction Costs and amounts outstanding under the Supplemental Term Loan, for
working capital in the ordinary course of business of the Borrowers and their
Subsidiaries, and for other lawful general corporate purposes of the Borrowers
and their Subsidiaries not prohibited by the terms of this Agreement. In no
event shall proceeds of the Loans be used, directly or indirectly, without the
prior written consent of the Lenders, to:
(a) provide a deposit, in escrow or otherwise, or cash collateral
for any obligation under the TROL Documents or any letter of credit issued in
support of the TROL Documents, which is not a Letter of Credit, or to make any
payment of Indebtedness incurred under or in connection with the TROL Documents
(other than Transaction Costs and obligations incurred under the TROL Lease in
the ordinary course of business of Parent),
(b) provide a deposit, in escrow or otherwise, or cash collateral
for any obligation under any Subordinated Notes Documents or make any cash
payment of Indebtedness incurred under or in connection with the Subordinated
Notes Documents (except to the extent otherwise not prohibited by the terms of
this Agreement), or
(c) provide a deposit, in escrow or otherwise, or cash collateral
for any obligation under any BofA Documents or make any payment of Indebtedness
incurred under or in connection with the BofA Documents (other than ordinary
course interest payments and as otherwise referenced in Article VI).
39
ARTICLE III
LETTERS OF CREDIT
3.01. Letters of Credit. Subject to the terms and conditions set
forth in this Agreement, each Issuing Bank hereby severally agrees to issue for
the account of the Borrowers, or for the account of any Subsidiary of a
Borrower, if the Borrowers are jointly and severally liable for reimbursement of
amounts drawn under such Letter of Credit, one or more Letters of Credit,
subject to the following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any
obligation to issue, amend or extend, and shall not issue, amend or extend, any
Letter of Credit at any time:
(i) if the aggregate Letter of Credit Obligations with respect
to such Issuing Bank, after giving effect to the issuance, amendment or
extension of the Letter of Credit requested hereunder, shall exceed any
limit imposed by law or regulation upon such Issuing Bank;
(ii) if the Issuing Bank receives written notice from the Agent
at or before 11:00 a.m. (New York time) on the date of the proposed
issuance, amendment or extension of such Letter of Credit that (A)
immediately after giving effect to the issuance, amendment or extension
of such Letter of Credit, (I) the Letter of Credit Obligations at such
time would exceed $13,000,000, or (II) the Revolving Credit Obligations
at such time would exceed the Maximum Revolving Credit Amount at such
time, or (B) one or more of the conditions precedent contained in
Sections 6.01 or 6.02, as applicable, would not on such date be
satisfied, unless such conditions are thereafter satisfied and written
notice of such satisfaction is given to the Issuing Bank by the Agent
(it being understood that an Issuing Bank shall not otherwise be
required to determine that, or take notice whether, the conditions
precedent set forth in Sections 6.01 or 6.02, as applicable, have been
satisfied);
(iii) if the expiration date therefor is later than the earlier of
(A) the date one (1) year after the date of issuance (without regard to
any automatic renewal provisions thereof) or (B) the Business Day next
preceding the scheduled Revolving Credit Termination Date;
(iv) if the requested Letter of Credit is in a currency other
than Dollars and Borrowers have not obtained a Hedge Agreement with
respect thereto satisfactory to the Agent; or
(v) for the purpose of supporting, directly or indirectly,
Indebtedness under the TROL Documents or incurred in connection with
the development of and construction on the Property financed
thereunder;
(b) Conditions. In addition to being subject to the satisfaction
of the conditions precedent contained in Sections 6.01 and 6.02, as applicable,
the obligation of an Issuing Bank to issue, amend or extend any Letter of Credit
is subject to the satisfaction in full of the following conditions:
40
(i) if the Issuing Bank so requests, the Borrowers or, in the case of
Letters of Credit issued for the account of any Subsidiary of a Borrower,
the Borrowers and such Subsidiary of a Borrower, as applicable, shall have
executed and delivered to such Issuing Bank and the Agent a Letter of
Credit Reimbursement Agreement and such other documents and materials as
may be required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be satisfactory
to the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit.
(i) TIMCO, on behalf of the Borrowers shall give an Issuing Bank and
the Agent written notice that it has selected such Issuing Bank to issue a
Letter of Credit not later than 11:00 a.m. (New York time) on the third
(3rd) Business Day preceding the requested date for issuance thereof under
this Agreement, or such shorter notice as may be acceptable to such Issuing
Bank and the Agent. Such notice shall be irrevocable unless and until such
request is denied by the applicable Issuing Bank and shall specify (A) that
the requested Letter of Credit is either a Commercial Letter of Credit or a
Standby Letter of Credit, (B) that such Letter of Credit is solely for the
account of the Borrowers, jointly and severally, or that such Letter of
Credit is for the account of the Borrowers and a Subsidiary of a Borrower,
jointly and severally, providing the name of the Subsidiary of such
Borrower which is jointly and severally applying for such Letter of Credit,
(C) the stated amount of the Letter of Credit requested, (D) the effective
date (which shall be a Business Day) of issuance of such Letter of Credit,
(E) the date on which such Letter of Credit is to expire (which shall be a
Business Day and no later than the Business Day immediately preceding the
scheduled Revolving Credit Termination Date), (F) the Person for whose
benefit such Letter of Credit is to be issued, (G) other relevant terms of
such Letter of Credit, (H) the Revolving Credit Availability at such time,
and (I) the amount of the then outstanding Letter of Credit Obligations.
Such Issuing Bank shall notify the Agent immediately upon receipt of a
written notice from TIMCO requesting that a Letter of Credit be issued, or
that an existing Letter of Credit be extended or amended and, upon the
Agent's request therefor, send a copy of such notice to the Agent.
(ii) The Issuing Bank shall (A) give the Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of the
issuance, amendment or extension of a Letter of Credit and (B) promptly
after issuance thereof, provide the Agent with a copy of each Letter of
Credit issued and each amendment thereto.
(d) Reimbursement Obligations; Duties of Issuing Banks.
(i) Notwithstanding any provisions to the contrary in any Letter of
Credit Reimbursement Agreement:
(A) the Borrowers shall reimburse, or cause the applicable Subsidiary
of a Borrower, if applicable, for whose account a Letter of Credit is
issued to reimburse, the Issuing Bank for amounts drawn under such Letter
of Credit, in Dollars, no later than the
41
date (the "Reimbursement Date") which is the earlier of (I) the time
specified in the applicable Letter of Credit Reimbursement Agreement and
(II) one (1) Business Day after TIMCO receives written notice from the
Issuing Bank that payment has been made under such Letter of Credit by the
Issuing Bank; and
(B) all Reimbursement Obligations with respect to any Letter of
Credit shall bear interest at the rate applicable in accordance with
Section 5.01(a) from the date of the relevant drawing under such Letter of
Credit until the Reimbursement Date and thereafter at the rate applicable
in accordance with Section 5.01(c).
(ii) The Issuing Bank shall give the Agent written notice, or
telephonic notice confirmed promptly thereafter in writing, of all drawings
under a Letter of Credit issued under this Agreement and the payment (or
the failure to pay when due) by the Borrowers or a Subsidiary of a
Borrower, as applicable, on account of a Reimbursement Obligation.
(iii) No action taken or omitted in good faith by an Issuing Bank
under or in connection with any Letter of Credit issued under this
Agreement shall put such Issuing Bank under any resulting liability to any
Lender, any Borrower, any Subsidiary of a Borrower, or, so long as it is
not issued in violation of Section 3.01(a), relieve any Lender of its
obligations hereunder to such Issuing Bank. Solely as between the Issuing
Banks and the Lenders, in determining whether to pay under any such Letter
of Credit, the respective Issuing Bank shall have no obligation to the
Lenders other than to confirm that any documents required to be delivered
under a respective Letter of Credit appear to have been delivered and that
they appear on their face to comply with the requirements of such Letter of
Credit.
(e) Participations.
(i) Immediately upon issuance by an Issuing Bank of any Letter of
Credit in accordance with the procedures set forth in this Section 3.01,
each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from that Issuing Bank, without recourse or
warranty, an undivided interest and participation in such Letter of Credit
and the related Letter of Credit Reimbursement Agreement to the extent of
such Lender's Pro Rata Share, including, without limitation, all rights of
the Issuing Bank with respect to obligations of the Borrowers with respect
thereto (other than amounts owing to the Issuing Bank under Section
3.01(g)) and any security therefor and guaranty pertaining thereto.
(ii) If any Issuing Bank makes any payment under any Letter of
Credit issued under this Agreement and the Borrowers, or the Subsidiary of
a Borrower for whose account such Letter of Credit was issued, as
applicable, do/does not repay such amount to the Issuing Bank on the
Reimbursement Date, the Issuing Bank shall promptly notify the Agent, which
shall promptly notify each Lender, and each Lender shall promptly and
unconditionally pay to the Agent for the account of such Issuing Bank, in
immediately available funds, the amount of such Lender's Pro Rata Share of
such payment (net of that portion of such payment, if any, made by such
Lender in its capacity as an Issuing Bank), and the Agent shall promptly
pay to the Issuing Bank such amounts received by it, and
42
any other amounts received by the Agent for the Issuing Bank's account,
pursuant to this Section 3.01(e). If a Lender does not make its Pro Rata
Share of the amount of such payment available to the Agent, such Lender
agrees to pay to the Agent for the account of the Issuing Bank, forthwith
on demand, such amount together with interest thereon, for the first three
(3) Business Days after the date such payment was first due at the Federal
Funds Rate, and thereafter at the interest rate then applicable in
accordance with Section 5.01(a). The failure of any Lender to make
available to the Agent for the account of an Issuing Bank its Pro Rata
Share of any such payment shall neither relieve any other Lender of its
obligation hereunder to make available to the Agent for the account of such
Issuing Bank such other Lender's Pro Rata Share of any payment on the date
such payment is to be made nor increase the obligation of any other Lender
to make such payment to the Agent.
(iii) Whenever an Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to which the
Agent has previously received payments from any Lender for the account of
such Issuing Bank pursuant to this Section 3.01(e), such Issuing Bank shall
promptly pay to the Agent and the Agent shall promptly pay to such Lender
an amount equal to such Lender's Pro Rata Share thereof. Each such payment
shall be made by such Issuing Bank or the Agent, as the case may be, on the
Business Day on which such Person receives the funds paid to such Person
pursuant to the preceding sentence, if received prior to 11:00 a.m. (New
York time) on such Business Day, and otherwise on the next succeeding
Business Day.
(iv) Upon the request of any Lender, an Issuing Bank shall furnish
such Lender copies of any Letter of Credit or Letter of Credit
Reimbursement Agreement to which such Issuing Bank is party and such other
documentation as reasonably may be requested by such Lender.
(v) The obligations of a Lender to make payments to the Agent for
the account of any Issuing Bank with respect to a Letter of Credit issued
under this Agreement shall be irrevocable, shall not be subject to any
qualification or exception whatsoever except willful misconduct or gross
negligence of such Issuing Bank, and shall be honored in accordance with
this Article III (irrespective of the satisfaction of the conditions
described in Sections 6.01 and 6.02, as applicable) under all
circumstances, including, without limitation, any of the following
circumstances:
(A) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other right
which any Borrower may have at any time against a beneficiary named in a
Letter of Credit or any transferee of a beneficiary named in a Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, the Issuing Bank, any Lender, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transactions between the account party and beneficiary named in any Letter
of Credit);
43
(C) any draft, certificate or any other document presented under the
Letter of Credit having been determined to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(D) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(E) any failure by that Issuing Bank to make any reports required
pursuant to Section 3.01(h) or the inaccuracy of any such report; or
(F) the occurrence of any Event of Default or Potential Event of
Default.
(f) Payment of Reimbursement Obligations.
(i) The Borrowers, jointly and severally, unconditionally agree to
pay, or cause the Subsidiary of a Borrower for whose account a Letter of
Credit is issued, as applicable, to pay, to each Issuing Bank, in Dollars,
the amount of all Reimbursement Obligations, interest and other amounts
payable to such Issuing Bank under or in connection with the Letters of
Credit when such amounts are due and payable, irrespective of any claim,
setoff, defense or other right which any Borrower or such Subsidiary of a
Borrower may have at any time against any Issuing Bank or any other Person.
(ii) In the event any payment by the Borrowers or such Subsidiary
received by an Issuing Bank with respect to a Letter of Credit and
distributed by the Agent to the Lenders on account of their participations
is thereafter set aside, avoided or recovered from such Issuing Bank in
connection with any receivership, liquidation or bankruptcy proceeding,
each Lender which received such distribution shall, upon demand by such
Issuing Bank, contribute such Lender's Pro Rata Share of the amount set
aside, avoided or recovered together with interest at the rate required, if
any, to be paid by such Issuing Bank upon the amount required to be repaid
by it.
(g) Issuing Bank Charges. The Borrowers shall pay, or cause a
Borrower's Subsidiary for whose account a Letter of Credit is issued, as
applicable, to pay, to each Issuing Bank, solely for its own account, the
standard charges assessed by such Issuing Bank in connection with the issuance,
administration, amendment and payment or cancellation of Letters of Credit and
such compensation in respect of such Letters of Credit for the Borrower's or
such Subsidiary's account, as applicable, as may be agreed upon by TIMCO and
such Issuing Bank from time to time.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank shall, no
later than the tenth (10th) Business Day following the last day of each calendar
month, provide to the Agent, TIMCO, and each Lender separate schedules for
Commercial Letters of Credit and Standby Letters of Credit issued as Letters of
Credit, in form and substance reasonably satisfactory to the Agent, setting
forth the aggregate Letter of Credit Obligations outstanding to it at the end of
each month and, to the extent not otherwise provided in accordance with the
provisions of Section 3.01(c)(ii), any information requested by the Agent or the
Borrower relating to the date of issue, account party, amount, expiration date
and reference number of each Letter of Credit issued by it.
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(i) Indemnification; Exoneration.
(i) In addition to all other amounts payable to an Issuing Bank,
the Borrowers, jointly and severally, hereby agree to defend, indemnify,
and save the Agent, each Issuing Bank and each Lender harmless from and
against any and all claims, demands, liabilities, penalties, damages,
losses (other than loss of profits), costs, charges and expenses (including
reasonable attorneys' fees but excluding taxes) which the Agent, such
Issuing Bank or such Lender may incur or be subject to as a consequence,
direct or indirect, of (A) the issuance of any Letter of Credit other than
as a result of the gross negligence or willful misconduct of the Issuing
Bank, as determined by a court of competent jurisdiction, or (B) the
failure of the Issuing Bank issuing a Letter of Credit to honor a drawing
under such Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto
government or Governmental Authority.
(ii) As between the Borrowers and any Subsidiary of any Borrowers'
for whose account a Letter of Credit is issued, as applicable, on the one
hand and the Agent, the Lenders and the Issuing Banks on the other hand,
the Borrowers, jointly and severally, assume all risks of the acts and
omissions of, or misuse of Letters of Credit by, the respective
beneficiaries of the Letters of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the Letter of
Credit Reimbursement Agreements, the Issuing Banks and the Lenders shall
not be responsible for: (A) the form, validity, legality, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of the Letters of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity,
legality or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply duly with conditions required
in order to draw upon such Letter of Credit; (D) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit or of the proceeds thereof; (G)
the misapplication by the beneficiary of a Letter of Credit of the proceeds
of any drawing under such Letter of Credit; and (H) any consequences
arising from causes beyond the control of the Agent, the Issuing Banks or
the Lenders.
3.02. Obligations Several. The obligations of each Issuing Bank and
each Lender under this Article III are several and not joint, and no Issuing
Bank or Lender shall be responsible for the obligation to issue Letters of
Credit or participation obligation hereunder, respectively, of any other Issuing
Bank or Lender.
3.03. Transitional Provisions. Schedule 3.03 contains a schedule of
certain "Letters of Credit" outstanding under the Predecessor Agreement which
remain outstanding on the Effective Date. Such letters of credit shall
automatically and without further action of the parties hereto be
45
continued as Letters of Credit and be deemed issued pursuant to this Article III
and subject to the provisions of this Agreement; no additional Fronting Fee
shall be required under the provisions of Section 5.02(a) with respect thereto;
the undrawn face amount of such Letters of Credit shall be included in the
calculation of Letter of Credit Obligations; and all liabilities with respect
thereto shall constitute Obligations.
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ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.01. Prepayments; Reductions in Revolving Credit Commitments.
(a) Voluntary Prepayments/Reductions.
(i) Notice; Application of Prepayments. The Borrowers may repay
or prepay the Loans, without prior written notice to the Agent or any
Lender, at any time and from time to time. Voluntary prepayments of the
Term Loans shall be applied to installments due thereunder in the
inverse order of maturity.
(ii) Voluntary Revolving Credit Commitment Reductions. The
Borrowers, upon at least three (3) Business Days' prior written notice
to the Agent (which the Agent shall promptly transmit to each Lender),
shall have the right, at any time and from time to time, to terminate
in whole or permanently reduce in part the Revolving Credit
Commitments; provided that the Borrowers shall have made whatever
payment may be required to reduce the Revolving Credit Obligations to
an amount less than or equal to the Revolving Credit Commitments as
reduced or terminated. Any partial reduction of the Revolving Credit
Commitments shall be in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount, and shall
reduce the Revolving Credit Commitment of each Lender proportionately
in accordance with its Pro Rata Share. Any notice of termination or
reduction given to the Agent under this Section 4.01(a)(ii) shall
specify the date (which shall be a Business Day) of such termination or
reduction and, with respect to a partial reduction, the aggregate
principal amount thereof. When notice of termination or reduction is
delivered as provided herein, the principal amount of the Revolving
Loans specified in the notice shall become due and payable on the date
specified in such notice.
(b) Mandatory Prepayments/Reductions.
(i) Net Cash Proceeds of Sale. Immediately upon the receipt by
any Borrower or Guarantor of any Net Cash Proceeds of Sale, the
Borrowers shall make or cause to be made a mandatory prepayment of the
Obligations in an amount equal to one hundred percent (100%) of such
Net Cash Proceeds of Sale. Notwithstanding the foregoing, upon the
written request of TIMCO to the Agent, on the date of such receipt of
Net Cash Proceeds of Sale, that the Borrowers be permitted to use
certain of such Net Cash Proceeds of Sale for working capital purposes
attendant to the operations of their respective businesses, in the
ordinary course thereof, (A) the Borrowers shall be permitted to retain
Net Cash Proceeds of Sale in an amount not to exceed $500,000 in the
aggregate during the period commencing on the Effective Date and ending
on the Revolving Credit Termination Date; provided that (I) such Net
Cash Proceeds of Sale arise from a transaction permitted under Section
10.02 or otherwise consented to by the Requisite Lenders, (II) such
written request includes a disclosure of the amount of Net Cash
Proceeds of Sale received, the portion thereof which is subject to the
request, and the aggregate amount of Net Cash Proceeds of Sale retained
by the Borrowers for such purposes after giving effect to the then
current request, (III) the Agent shall have received
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a copy of the agreement(s) evidencing the transaction giving rise to
such Net Cash Proceeds of Sale no less than five (5) Business Days
prior to the consummation of such transaction, (IV) no Event of Default
or Potential Event of Default shall have occurred and then continue,
and (V) no interest shall have been paid in cash with respect to the
PIK Subordinated Debt, and (B) the mandatory prepayment otherwise
required under this Section 4.01(b)(i) in the amount of Net Cash
Proceeds of Sale requested to be retained shall not be required to be
made.
(ii) Net Cash Proceeds of Issuance of Equity Securities or
Indebtedness. Immediately upon the receipt by any Borrower or Guarantor
of any Net Cash Proceeds of Issuance of Equity Securities or Net Cash
Proceeds of Issuance of Indebtedness, the Borrowers shall make or cause
to be made a mandatory prepayment of the Obligations in an amount equal
to one hundred percent (100%) of such Net Cash Proceeds of Issuance of
Equity Securities or Indebtedness.
(iii) Tax Refunds. Immediately upon the receipt by any Borrower
or Guarantor of any tax refund, the Borrowers shall make or cause to be
made a mandatory prepayment of the Revolving Loans in an amount equal
to one hundred percent (100%) of such tax refund.
(iv) Sale/Leasebacks. Immediately upon receipt by any Borrower
or Guarantor of cash proceeds of sale of any Property identified on
Schedule 10.10, the Borrowers shall make or cause to be made a
mandatory prepayment of the Revolving Loans in an amount equal to one
hundred percent (100%) of such proceeds.
(v) Section 10.02(e) Sale. In the event the transaction
described on Schedule 10.02-E is consummated, (A) up to $3,500,000 of
the cash proceeds thereof may be used by the Borrowers, on the date of
receipt of such proceeds, to (1) repay the Indebtedness evidenced by
the Xxxxxxx Note and (2) repay the Indebtedness evidenced by the BofA
2002 Note or the Shareholder Subrogation Claim of Xxxxx Investments,
Inc. arising with respect to the BofA 2002 Note, and (B) the balance of
the cash proceeds thereof may be used to make a voluntary prepayment of
the Term Loans in accordance with Section 4.01(a)(i). In the event
either no prepayment of the Term Loans is made as described in clause
(B) above or only a portion of the balance of such cash proceeds is
used to make such voluntary prepayment of the Term Loans, the Borrowers
shall make or cause to be made a mandatory prepayment of of the
Revolving Loans in an amount equal to the balance of such cash proceeds
not so used.
(vi) Insufficient Collateral. The Borrowers shall, immediately
and without notice or demand of any kind, make repayments of the
Revolving Loans to the extent necessary to reduce the outstanding
principal amount of the Revolving Credit Obligations to an amount not
to exceed the Borrowing Base.
(vii) No Waiver or Consent. Nothing in this Section 4.01(b) shall
be construed to constitute the Lenders' consent to any transaction
referenced above which is not expressly permitted by Article X.
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(viii) Notice. TIMCO shall give the Agent prior written notice or
telephonic notice promptly confirmed in writing (each of which the
Agent shall promptly transmit to each Lender), when a Designated
Prepayment will be made (which date of prepayment shall be no later
than the date on which such Designated Prepayment becomes due and
payable pursuant to this Section 4.01(b)).
(ix) Application of Prepayments.
(A) Designated Prepayments shall be allocated and applied first
to reduce amount, if any, by which the outstanding principal amount of
the Revolving Credit Obligations exceeds the Borrowing Base at the time
of receipt of such Designated Prepayments by application to repayment
of the Revolving Loans then outstanding, second to the outstanding
principal balance of theTerm Loan until paid in full, third to the
outstanding principal balance of the Revolving Loans until paid in
full, fourth to the Letter of Credit Obligations (or, to the extent
such Letter of Credit Obligations are contingent, deposited in the Cash
Collateral Account to provide Cash Collateral in respect of such Letter
of Credit Obligations).
(B) Designated Prepayments shall be allocated and applied to the
applicable Loans owing to the respective Lenders, ratably, in
accordance with such Lenders' respective Pro Rata Shares and, in the
case of applications made to the Term Loan, shall be applied to
installments due with respect thereto in the inverse order of maturity.
(C) In the event any balance of Designated Prepayments remains
after application as aforesaid, the same shall be remitted to the
Borrowers.
(D) In the event any Designated Prepayment, or portion thereof,
is deposited in the Cash Collateral Account to provide Cash Collateral
in respect of Letter of Credit Obligations as required by Section
4.01(b)(ix)(A), the Letter of Credit Obligations shall be deemed
reduced by the amount of such Cash Collateral for purposes of
determination of Revolving Credit Availability.
4.02. Payments.
(a) Manner and Time of Payment. All payments of principal of and
interest on the Loans and Reimbursement Obligations and other Obligations
(including, without limitation, fees and expenses) which are payable to the
Agent, the Lenders or any Issuing Bank shall be made in Dollars without
condition or reservation of right, and, with respect to payments made other than
from application of deposits in the Concentration Account, in immediately
available funds, delivered to the Agent (or, in the case of Reimbursement
Obligations, to the pertinent Issuing Bank) not later than 1:00 p.m. (New York
time) on the date and at the place due, to such account of the Agent (or such
Issuing Bank) as it may designate, for the account of the Agent, the Lenders or
such Issuing Bank, as the case may be; and funds received by the Agent,
including, without limitation, funds in respect of any Loans to be made on that
date, not later than 1:00 p.m. (New York time) on any given Business Day shall
be credited against payment to be made that day and funds received by the Agent
after that time shall be deemed to have been
49
paid on the next succeeding Business Day. Payments actually received by the
Agent for the account of the Lenders or the Issuing Banks, or any of them, shall
be paid to them by the Agent promptly after receipt thereof.
(b) Apportionment of Payments.
(i) Subject to the provisions of Section 4.01 and Section
4.02(b)(v), all payments of principal and interest in respect of
outstanding Loans, all payments in respect of Reimbursement
Obligations, all payments of fees and all other payments in respect of
any other Obligations, shall be allocated among such of the Lenders and
Issuing Banks as are entitled thereto, in proportion to their
respective Pro Rata Shares, or otherwise as provided herein. Except as
provided in Section 4.02(b)(ii) with respect to payments and proceeds
of Collateral received after the occurrence of an Event of Default, all
such payments and any other amounts received by the Agent from or for
the benefit of the Borrowers shall be applied:
(A) first, to pay principal of and interest on any portion of the
Revolving Loans which the Agent may have advanced on behalf of any
Lender other than Citicorp for which the Agent has not then been
reimbursed by such Lender or the Borrowers,
(B) second, to pay principal of and interest on any Protective
Advance for which the Agent or Lenders have not then been reimbursed by
the Borrowers,
(C) third, to pay the principal of the Loans then due and payable
and interest on such Loans then due and payable, ratably, based on the
then outstanding balances of such Loans and the Lenders' respective Pro
Rata Shares,
(D) fourth, to pay all other Obligations then due and payable,
ratably, and
(E) fifth, as TIMCO, on behalf of the Borrowers, so designates.
(ii) After the occurrence of an Event of Default and while the
same is continuing, the Agent shall apply all payments in respect of
any Obligations and all proceeds of Collateral in the following order:
(A) first, to pay principal of and interest on any portion of the
Revolving Loans which the Agent may have advanced on behalf of any
Lender other than Citicorp for which the Agent has not then been
reimbursed by such Lender or the Borrowers;
(B) second, to pay principal of and interest on any Protective
Advance for which the Agent or Lenders have not then been reimbursed by
the Borrowers;
(C) third, to pay Obligations in respect of any fees then due to
the Agent, Lenders and Issuing Banks and any expense reimbursements or
indemnities then due to the Agent, first, to the fees and expense
reimbursements and indemnities due to the Agent until paid in full,
second, to fees due to the Issuing Banks until paid in full, and then
to fees due to the Lenders;
50
(D) fourth, to pay principal of and interest on Letter of Credit
Obligations (or, to the extent such Obligations are contingent,
deposited in the Cash Collateral Account to provide Cash Collateral in
respect of such Obligations);
(E) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(F) sixth, to pay interest due in respect of the Loans, ratably,
in accordance with the Lenders' respective Pro Rata Shares;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on all Loans;
(H) eighth, to the ratable payment of Hedge Agreements to which
any of the Lenders or any Affiliate of any of the Lenders is a party;
and
(I) ninth, to the ratable payment of all other Obligations.
The order of priority set forth in this Section 4.02(b) and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Agent, the Lenders, the Issuing Banks and other Holders as
among themselves.
(iii) The Agent, in its sole discretion subject only to the terms
of this Section 4.02(b)(iii), may pay from the proceeds of Loans made
to the Borrowers hereunder, whether made following a request by TIMCO
pursuant to Section 2.02 or this Section 4.02(b)(iii), all amounts
payable by the Borrowers hereunder when due, including, without
limitation, amounts payable with respect to payments of principal,
interest, Reimbursement Obligations and fees and all reimbursements for
expenses pursuant to Section 15.02. The Borrowers hereby irrevocably
authorize the Lenders to make Loans, in each case, upon notice from the
Agent as described in the following sentence for the purpose of paying
principal, interest, Reimbursement Obligations and fees due from the
Borrowers, reimbursing expenses pursuant to Section 15.02 and paying
any and all other amounts due and payable by the Borrowers hereunder or
under the Notes, and agrees that all such Loans so made shall be deemed
to have been requested by TIMCO on behalf of the Borrowers pursuant to
Section 2.02 as of the date of the aforementioned notice. The Agent
shall request Loans on behalf of the Borrowers as described in the
preceding sentence by notifying the Lenders by telecopy, telegram or
other similar form of transmission (which notice the Agent shall
thereafter promptly transmit to TIMCO), of the amount and Funding Date
of the proposed Borrowing and that such Borrowing is being requested on
the Borrowers' behalf pursuant to this Section 4.02(b)(iii). On the
proposed Funding Date for such Loan, the Lenders shall make the
requested Loans in accordance with the procedures and subject to the
conditions specified in Section 2.02.
(iv) Subject to Section 4.02(b)(v), the Agent shall promptly
distribute to each Lender and Issuing Bank at its primary address set
forth on the appropriate signature page hereof or the signature page to
the Assignment and Acceptance by which it became a Lender or Issuing
Bank, or at such other address as a Lender, an Issuing Bank or other
51
Holder may request in writing, such funds as such Person may be
entitled to receive hereunder; provided that the Agent shall under no
circumstances be bound to inquire into or determine the validity, scope
or priority of any interest or entitlement of any Holder and may
suspend all payments or seek appropriate relief (including, without
limitation, instructions from the Requisite Lenders or an action in the
nature of interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby.
(v) In the event that any Lender fails to fund its Pro Rata Share
of any Revolving Loan requested by TIMCO on behalf of the Borrowers
which such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Loan being hereinafter referred
to as a "Non Pro Rata Loan"), until the earlier of such Lender's cure
of such failure and the termination of the Revolving Credit
Commitments, the proceeds of all amounts thereafter repaid to the Agent
by the Borrowers and otherwise required to be applied to such Lender's
share of all other Obligations pursuant to the terms of this Agreement
shall be advanced to the Borrowers by the Agent on behalf of such
Lender to cure, in full or in part, such failure by such Lender, but
shall nevertheless be deemed to have been paid to such Lender in
satisfaction of such other Obligations. Notwithstanding anything in
this Agreement to the contrary:
(A) the foregoing provisions of this Section 4.02(b)(v) shall
apply only with respect to the proceeds of payments of Obligations;
(B) a Lender shall be deemed to have cured its failure to fund
its Pro Rata Share of any Revolving Loan at such time as an amount
equal to such Lender's original Pro Rata Share of the requested
principal portion of such Loan is fully funded to the Borrowers,
whether made by such Lender itself or by operation of the terms of this
Section 4.02(b)(v), and whether or not the Non Pro Rata Loan with
respect thereto has been repaid;
(C) amounts advanced to the Borrowers to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Revolving Loan ("Cure Loans") shall bear interest at the rate in effect
from time to time pursuant to the terms of Section 5.01; and
(D) regardless of whether or not an Event of Default has occurred
or is continuing, and notwithstanding the instructions of TIMCO as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Section 4.02, would be applied
to the outstanding Revolving Loans shall be applied first, ratably to
all such Loans constituting Non Pro Rata Loans, second, ratably to such
Loans other than those constituting Non Pro Rata Loans or Cure Loans
and, third, ratably to such Loans constituting Cure Loans.
(c) Payments on Non-Business Days. Whenever any payment to be
made by the Borrowers hereunder or under the Notes is stated to be due on a day
which is not a Business Day, the payment shall instead be due on the next
succeeding Business Day, and any such
52
extension of time shall be included in the computation of the payment of
interest and fees hereunder.
4.03. Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay. The Borrowers, jointly and severally,
hereby agree to pay when due the principal amount of each Loan which is made to
them, and further agree to pay all unpaid interest accrued thereon, in
accordance with the terms of this Agreement and the Notes. If requested in
writing by any Lender, the Borrowers shall execute and deliver to such Lender
promptly following such request, promissory notes evidencing the Loans made by
such Lender, in form and substance acceptable to the Agent and in substantially
the form attached hereto as Exhibit E. On the Effective Date, the "Revolving
Notes" executed and delivered under the terms of the Predecessor Agreement and
the Supplemental Term Loan Note shall be delivered to the Agent for return to
TIMCO, subject to issuance of substitute Notes in accordance with the foregoing.
(b) Loan Account. Each Lender shall maintain in accordance with
its usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of the Borrowers to such Lender resulting from each Loan owing to
such Lender from time to time, including the amount of principal and interest
payable and paid to such Lender from time to time hereunder and under the Notes.
(c) Control Account. The Register maintained by the Agent
pursuant to Section 15.01(c) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the type of Loan
comprising such Borrowing, (ii) the effective date and amount of each Assignment
and Acceptance delivered to and accepted by it and the parties thereto, (iii)
the amount of any principal and interest due and payable or to become due and
payable from the Borrower to each Lender hereunder or under the Notes, and (iv)
the amount of any sum received by the Agent from the Borrowers hereunder and
each Lender's share thereof. All entries in the Register shall be made in
accordance with the Agent's customary accounting practices as in effect from
time to time.
(d) Entries Binding. The entries made in the Register and each
Loan Account shall be conclusive and binding for all purposes, absent manifest
error; in the event there are discrepancies between the Register and any
individual Loan Account, entries in the Register shall govern.
4.04. Proceeds of Collateral; Concentration Account Arrangements.
(a) Establishment. The Borrowers and Parent shall establish and
maintain depository accounts and Parent shall cause the other Guarantors to
establish and maintain depository accounts subject to Collection Account
Agreements into which all collections of Receivables shall be deposited and
promptly transferred directly (or, so long as such account remains active,
through Bank of America account no. 003661094818 without delay) to the
Concentration Account. The Borrowers and Parent shall cause all proceeds of
Collateral to be deposited in the Concentration Account or pursuant to other
similar arrangements for the
53
collection of such amounts established by the Borrowers, Guarantors, and the
Agent. All collections of Receivables and proceeds of Collateral which are
received directly by any Borrower or any Guarantor shall be deemed to have been
received by such Borrower or such Guarantor as the Agent's trustee and, upon
such Borrower's or such Guarantor's receipt thereof, such Borrower or Guarantor
shall immediately transfer or cause to be transferred, all such amounts into the
Concentration Account in their original form. All collections of Receivables and
proceeds of other Collateral deposited in the Concentration Account as described
above shall be deemed to have been received by the Agent and will be held by the
Agent, for the benefit of the Holders, as Cash Collateral for the Obligations,
subject to the rights of the Borrower set forth in Section 4.04(b) and the
rights of the Agent set forth in Section 12.03.
(b) Pre-Default Withdrawals from Concentration Account. The Agent
shall, so long as no Event of Default shall have occurred and be continuing or
unwaived, from time to time, (i) apply funds in the Concentration Account (A)
promptly after deposit therein to payment of the outstanding Loans, (B) to
payment of other Obligations as they become due and payable, (ii) invest funds
on deposit in the Concentration Account and accrued interest thereon, after
giving effect to the aforesaid payments, reinvest proceeds of any such
investments which may mature or be sold, and invest interest or other income
received from such investments, in such Cash Equivalents as TIMCO may select,
and (iii) upon TIMCO's request therefor on behalf of the Borrowers, transfer
funds on deposit in the Concentration Account after giving effect to the
payments described in clause (i) above to a Borrower's or Guarantor's designated
accounts. Such funds, interest, proceeds, or income which are not so disbursed,
invested or reinvested shall be deposited and held in the Concentration Account
for the benefit of the Holders as provided in Section 4.04(a). None of the
Agent, any Lender or any Issuing Bank shall be liable to any Borrower or
Guarantor for, or with respect to, any decline in value of amounts on deposit in
the Concentration Account which shall have been invested pursuant to this
Section 4.04(b). Cash Equivalents from time to time purchased and held pursuant
to this Section 4.04(b) shall constitute Cash Collateral and shall, for purposes
of this Agreement, be deemed to be part of the funds held in the Concentration
Account in amounts equal to their respective outstanding principal amounts.
(c) Reasonable Care. The Agent shall exercise reasonable care in
the custody and preservation of any funds held in the Concentration Account and
shall be deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own like property,
it being understood that the Agent shall not have any responsibility for taking
any steps necessary to preserve rights against any parties with respect to any
such funds but may do so at its option. In the event the Agent takes any such
steps, it shall provide TIMCO with prompt written notice thereof. All reasonable
expenses incurred in connection therewith shall be for the sole account of the
Borrowers and shall constitute Obligations hereunder.
4.05. Cash Collateral Account.
(a) Investments. If requested by TIMCO, the Agent shall, so long
as no Event of Default shall have occurred and be continuing, from time to time
invest funds on deposit in the Cash Collateral Account and accrued interest
thereon, reinvest proceeds of any such investments which may mature or be sold,
and invest interest or other income received from any
54
such Investments, in each case in such Cash Equivalents as TIMCO may select.
Such funds, interest, proceeds or income which are not so invested or reinvested
in Cash Equivalents shall, except as otherwise provided in Section 4.05(b) and
Section 12.03, be deposited and held by the Agent in the Cash Collateral
Account. None of the Agent, any Lender or any Issuing Bank shall be liable to
any Borrower for, or with respect to, any decline in value of amounts on deposit
in the Cash Collateral Account which shall have been invested pursuant to this
Section 4.05(a) at the direction of TIMCO. Cash Equivalents from time to time
purchased and held pursuant to this Section 4.05(a) shall constitute Cash
Collateral and shall, for purposes of this Agreement, be deemed to be part of
the funds held in the Cash Collateral Account in amounts equal to their
respective outstanding principal amounts.
(b) Withdrawal Rights. No Borrower and no Person or entity
claiming on behalf of or through a Borrower shall have any right to withdraw any
of the funds held in the Cash Collateral Account, except that, upon the later to
occur of (i) the expiration or termination of all of the Letters of Credit in
accordance with their respective terms and (ii) the payment in full in cash of
the Obligations, any funds remaining in the Cash Collateral Account shall be
returned by the Agent to the Borrowers or paid to whomever may be legally
entitled thereto.
(c) Additional Deposits. If at any time the Agent determines that
any funds held in the Cash Collateral Account are subject to any interest,
right, claim or Lien of any Person other than the Agent, the Borrowers will,
forthwith upon demand by the Agent, pay to the Agent, as additional funds to be
deposited and held in the Cash Collateral Account, an amount equal to the amount
of funds subject to such interest, right, claim or Lien.
(d) Reasonable Care. The Agent shall exercise reasonable care in
the custody and preservation of any funds held in the Cash Collateral Account
and shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Agent accords its own like
property, it being understood that the Agent shall not have any responsibility
for taking any necessary steps to preserve rights against any parties with
respect to any such funds but may do so at its option. In the event the Agent
takes any such steps, it shall provide TIMCO with prompt written notice thereof.
All reasonable expenses incurred in connection therewith shall be for the sole
account of the Borrowers and shall constitute Obligations hereunder.
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ARTICLE V
INTEREST AND FEES
5.01. Interest on the Loans and Other Obligations.
(a) Rate of Interest. All Loans and the outstanding principal
balance of all other Obligations shall bear interest on the unpaid principal
amount thereof from the date such Loans are made and such other Obligations are
incurred until paid in full, except as otherwise provided in Section 5.01(c) or
Section 14.06, as follows:
(i) If a Base Rate Loan, at a rate per annum equal to the sum of
(A) the Base Rate, as in effect from time to time as interest accrues
plus (B) the applicable Base Rate Margin;
(ii) If a Eurodollar Rate Loan, at a rate per annum equal to the
sum of (A) the Eurodollar Rate determined for the applicable Eurodollar
Interest Period plus (B) the applicable Eurodollar Rate Margin; and
(iii) If the Term Loan, at a rate per annum equal to 12%.
The applicable basis for determining the rate of interest on the
Revolving Loans shall be selected by TIMCO at the time a Notice of Borrowing or
a Notice of Conversion/Continuation is delivered by TIMCO to the Agent;
provided, however, that TIMCO may not select the Eurodollar Rate as the
applicable basis for determining the rate of interest on such Loan if at the
time of such selection an Event of Default or a Potential Event of Default would
occur or has occurred and is continuing. If on any day any Revolving Loan is
outstanding with respect to which notice has not been timely delivered to the
Agent in accordance with the terms of this Agreement specifying the basis for
determining the rate of interest on that day, then for that day interest on that
Loan shall be determined by reference to the Base Rate.
(b) Interest Payments.
(i) Interest accrued on each Base Rate Loan and each Term Loan
shall be payable in arrears (A) on the first day of each calendar month
(for the immediately preceding calendar month), commencing on the first
such day following the making of such Loan, (B) upon conversion thereof
to a Eurodollar Rate Loan, and (C) if not theretofore paid in full, at
maturity (whether by acceleration or otherwise) of such Loan.
(ii) Interest accrued on each Eurodollar Rate Loan shall be
payable in arrears (A) on each Eurodollar Interest Payment Date
applicable to such Loan and (B) if not theretofore paid in full, at
maturity (whether by acceleration or otherwise) of such Loan.
(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on the first day of each
calendar month, commencing on the first such day following the
incurrence of such Obligation, (B) upon repayment thereof in full or in
part, and (C) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or
otherwise).
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(c) Default Interest. Notwithstanding the rates of interest
specified in Section 5.01(a), effective immediately upon the occurrence of an
Event of Default, and for as long thereafter as such Event of Default shall be
continuing unwaived, the principal balance of all Revolving Loans and of all
other Obligations, shall bear interest at a rate which is two percent (2.0%) per
annum in excess of the rate of interest specified in Section 5.01(a)(i) and all
Term Loans shall bear interest at the rate of 14% per annum.
(d) Computation of Interest. Interest on all Obligations shall be
computed on the basis of the actual number of days elapsed in the period during
which interest accrues and a year of 360 days. In computing interest on any
Loan, the date of the making of the Loan shall be included and the date of
payment shall be excluded; provided, however, if a Loan is repaid on the same
day on which it is made, one (1) day's interest shall be paid on such Loan.
(e) Conversion or Continuation.
(i) The Borrowers shall have the option (A) to convert at any
time all or any part of outstanding Base Rate Loans to Eurodollar Rate
Loans; (B) to convert all or any part of outstanding Eurodollar Rate
Loans having Eurodollar Interest Periods which expire on the same date
to Base Rate Loans on such expiration date; or (C) to continue all or
any part of an outstanding Eurodollar Rate Loan at the expiry of the
applicable Eurodollar Interest Period, and the succeeding Eurodollar
Interest Period of such continued Revolving Loans shall commence on
such expiration date; provided, however, no such outstanding Loan may
be continued as, or be converted into, a Eurodollar Rate Loan (1) if
the continuation of, or the conversion into, would violate any of the
provisions of Section 5.03 or (2) if an Event of Default or a Potential
Event of Default would occur or has occurred and is continuing
unwaived. Any conversion into or continuation of Eurodollar Rate Loans
under this Section 5.01(e) shall be in a minimum amount of $1,000,000
and in integral multiples of $100,000 in excess of that amount except
in the case of a conversion into or a continuation of an entire
Borrowing or Non-Pro Rata Loans.
(ii) To convert or continue a Loan under Section 5.01(e)(i), TIMCO
shall deliver a Notice of Conversion/Continuation to the Agent no later
than 11:00 a.m. (New York time) at least three (3) Business Days in
advance of the proposed conversion/continuation date. A Notice of
Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the
principal amount of the Revolving Loan to be converted/continued, (C)
whether such Loan shall be converted and/or continued, and (D) in the
case of a conversion to, or continuation of, a Eurodollar Rate Loan,
the requested Eurodollar Interest Period. In lieu of delivering a
Notice of Conversion/Continuation, TIMCO may give the Agent telephonic
notice of any proposed conversion/continuation by the time required
under this Section 5.01(e)(ii), and such notice shall be confirmed in
writing delivered to the Agent by facsimile transmission promptly (but
in no event later than 5:00 p.m. (New York time) on the same day), the
original of which facsimile copy shall be delivered to the Agent within
three (3) days after the date of such transmission. Promptly after
receipt of a Notice of Conversion/Continuation under this Section
5.01(e)(ii) (or telephonic notice in lieu thereof), the Agent shall
notify each Lender by telecopy, or other similar form of
57
transmission, of the proposed conversion/continuation. Any Notice of
Conversion/Continuation for conversion to, or continuation of, a
Revolving Loan (or telephonic notice in lieu thereof) shall be
irrevocable, and the Borrowers shall be bound to convert or continue in
accordance therewith.
5.02. Fees.
(a) Letter of Credit Fee. In addition to any charges paid
pursuant to Section 3.01(g), the Borrowers shall pay (i) to the Issuing Bank, a
fee (the "Fronting Fee") accruing at a rate equal to one-quarter of one percent
(0.25%) per annum on the undrawn face amount of each outstanding Letter of
Credit issued by such Issuing Bank, payable quarterly, in arrears, on the first
day of each calendar quarter (for the immediately preceding calendar quarter)
and (ii) to the Agent, for the account of the Lenders based on their respective
Pro Rata Shares, a fee (the "Letter of Credit Fee") accruing at a rate equal to
the Eurodollar Rate Margin applicable from time to time on the undrawn face
amount of each outstanding Letter of Credit, payable quarterly, in arrears, on
the first day of each calendar quarter (for the immediately preceding calendar
quarter); provided, however, upon the occurrence of an Event of Default, and for
so long thereafter as such Event of Default shall be continuing, the rate at
which the (A) Fronting Fee shall accrue and be payable shall be equal to two and
one-quarter percent (2.25%) per annum and (B) Letter of Credit Fee shall accrue
and be payable at a rate equal to the Eurodollar Rate Margin applicable at the
time of such occurrence plus two percent (2.00%) per annum.
(b) Unused Commitment Fee.
(i) The Borrowers shall pay to the Agent, for the account of the
Lenders in accordance with their respective Pro Rata Shares, a fee (the
"Unused Commitment Fee"), accruing at the rate of one-half of one
percent (0.50%) per annum on the average daily amount by which the
Revolving Credit Commitments exceed the sum of (A) the outstanding
principal amount of the Revolving Loans, plus (B) the outstanding
Reimbursement Obligations, plus (C) the aggregate undrawn face amount
of all outstanding Letters of Credit, for the period commencing on the
Effective Date and ending on the Revolving Credit Termination Date,
such Unused Commitment Fee being payable (I) monthly, in arrears,
commencing on the first day of the calendar month next succeeding the
Effective Date and (II) on the Revolving Credit Termination Date.
(ii) Notwithstanding the foregoing, in the event that any Lender
fails to fund its Pro Rata Share of any Revolving Loan requested by the
Borrowers which such Lender is obligated to fund under the terms of
this Agreement, (A) such Lender shall not be entitled to any Unused
Commitment Fees with respect to its Revolving Credit Commitment until
such failure has been cured in accordance with Section 4.02(b)(v)(B)
and (B) until such time, the Unused Commitment Fee shall accrue in
favor of the Lenders which have funded their respective Pro Rata Shares
of such requested Revolving Loan, shall be allocated among such
performing Lenders ratably based upon their relative Revolving Credit
Commitments, and shall be calculated based upon the average amount by
which the aggregate Revolving Credit Commitments of such performing
Lenders exceeds the sum of (1) the outstanding principal amount of the
Revolving Loans owing to such performing Lenders, plus (2) the
outstanding Reimbursement Obligations owing to such
58
performing Lenders, plus (3) the aggregate participation interests of
such performing Lenders arising pursuant to Section 3.01(e) with
respect to undrawn and outstanding Letters of Credit.
(c) Amendment Fee. The Borrowers shall pay to the Agent, on the
Effective Date, for the account of the Lenders in accordance with their
respective Pro Rata Shares, a fee in the amount of $185,000, which fee shall be
earned on the Effective Date and non-refundable when paid.
(d) Other Fees. The Borrowers shall pay to the Agent, in addition
to any other fee referenced in this Agreement, those certain fees described in
the Fee Letter.
(e) Calculation and Payment of Fees. All of the above fees which
accrue from time to time shall be calculated on the basis of the actual number
of days elapsed in a 360 day year. All of the above fees shall be payable in
addition to, and not in lieu of, interest, compensation, expense reimbursements,
indemnification and other Obligations. Fees shall be payable to the Agent at its
office in New York, New York in immediately available funds. All fees shall be
fully earned and nonrefundable when paid. All fees specified or referred to
(directly or by reference to an agreement pursuant to which such fees are
payable) in this Agreement due to the Agent, any Issuing Bank or any Lender
shall bear interest, if not paid when due, at the interest rate described in
Section 5.01(c), shall constitute Obligations and shall be secured by all of the
Collateral.
5.03. Special Provisions Governing Eurodollar Rate Loans. With
respect to Eurodollar Rate Loans:
(a) Amount of Eurodollar Rate Loans. Each Eurodollar Rate Loan
shall be for a minimum amount of $1,000,000 and in integral multiples of
$100,000 in excess of that amount.
(b) Determination of Eurodollar Interest Period. By giving notice
as set forth in Section 2.01(b) (with respect to a Borrowing of Eurodollar Rate
Loans) or Section 5.01(e) (with respect to a conversion into or continuation of
Eurodollar Rate Loans), the Borrowers shall have the option, subject to the
provisions of this Section 5.03, to select an interest period (each a
"Eurodollar Interest Period") to apply to the Revolving Loans described in such
notice, subject to the following provisions:
(i) Borrowers may only select, as to a particular Borrowing of
Eurodollar Rate Loans, a Eurodollar Interest Period of one (1), three
(3), six (6), or, if available to all Lenders, nine (9) or twelve (12)
months in duration;
(ii) In the case of immediately successive Eurodollar Interest
Periods applicable to a Borrowing of Eurodollar Rate Loans, each
successive Eurodollar Interest Period shall commence on the day on
which the next preceding Eurodollar Interest Period expires;
(iii) If any Eurodollar Interest Period would otherwise expire on
a day which is not a Business Day, such Eurodollar Interest Period
shall be extended to expire on the next succeeding Business Day if the
next succeeding Business Day occurs in the same
59
calendar month, and if there will be no succeeding Business Day in such
calendar month, the Eurodollar Interest Period shall expire on the
immediately preceding Business Day;
(iv) The Borrowers may not select a Eurodollar Interest Period
as to any Loan if such Eurodollar Interest Period terminates later than
the scheduled Revolving Credit Termination Date;
(v) The Borrowers may not select a Eurodollar Interest Period
with respect to any portion of principal of a Loan which extends beyond
a date on which the Borrowers are required to make a scheduled payment
of such portion of principal; and
(vi) There shall be no more than eight (8) Eurodollar Interest
Periods in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable on
the second Business Day prior to the first day of each Eurodollar Interest
Period (the "Eurodollar Interest Rate Determination Date"), the Agent shall
determine (pursuant to the procedures set forth in the definition of "Eurodollar
Rate") the interest rate which shall apply to the Eurodollar Rate Loans for
which an interest rate is then being determined for the applicable Eurodollar
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to TIMCO and to each Lender. The Agent's
determination shall be presumed to be correct, absent manifest error, and shall
be binding upon the Borrowers.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that at least one (1) Business Day before the Eurodollar Interest Rate
Determination Date:
(i) the Agent is advised by Citibank that deposits in Dollars
(in the applicable amounts) are not being offered by Citibank in the
London interbank market for such Eurodollar Interest Period; or
(ii) the Agent determines that adequate and fair means do not
exist for ascertaining the applicable interest rates by reference to
which the Eurodollar Rate then being determined is to be fixed; or
(iii) the Requisite Lenders advise the Agent that the Eurodollar
Rate for Eurodollar Rate Loans comprising such Borrowing will not
adequately reflect the cost to such Requisite Lenders of obtaining
funds in Dollars in the London interbank market in the amount
substantially equal to such Lenders' Eurodollar Rate Loans in Dollars
and for a period equal to such Eurodollar Interest Period;
then the Agent shall forthwith give notice thereof to TIMCO, whereupon (until
the Agent notifies TIMCO that the circumstances giving rise to such suspension
no longer exist) the right of the Borrowers to elect to have Loans bear interest
based upon the Eurodollar Rate shall be suspended and each outstanding
Eurodollar Rate Loan shall be converted into a Base Rate Loan on the last day of
the then current Eurodollar Interest Period therefor, notwithstanding any prior
election by the Borrowers to the contrary.
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(e) Booking of Eurodollar Rate Loans. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of, its Eurodollar
Lending Office or Eurodollar Affiliate or its other offices or Affiliates. No
Lender shall be entitled, however, to receive any greater amount under Article
XIV as a result of the transfer of any such Eurodollar Rate Loan to any office
(other than such Eurodollar Lending Office) or any Affiliate (other than such
Eurodollar Affiliate) than such Lender would have been entitled to receive
immediately prior thereto, unless (i) the transfer occurred at a time when
circumstances giving rise to the claim for such greater amount did not exist and
(ii) such claim would have arisen even if such transfer had not occurred.
(f) Affiliates Not Obligated. No Eurodollar Affiliate or other
Affiliate of any Lender shall be deemed a party to this Agreement or shall have
any liability or obligation under this Agreement.
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ARTICLE VI
CONDITIONS TO LOANS AND LETTERS OF CREDIT
6.01. Conditions Precedent to the Effectiveness of Agreement. This
Agreement shall become effective upon and be subject to the satisfaction on the
Effective Date of all of the following conditions precedent:
(a) Documents. The Agent shall have received on or before the
Effective Date all of the following:
(i) this Agreement and all other agreements, documents and
instruments relating to the loan and other credit transactions contemplated
by this Agreement and described in the List of Closing Documents attached
hereto as Exhibit K and made a part hereof, each duly executed where
appropriate and in form and substance satisfactory to the Agent; without
limiting the foregoing, Parent and the Borrowers hereby direct their
counsel, Akerman, Senterfitt & Xxxxxx, P.A., and their special New York
counsel, Paul, Hastings, Xxxxxxxx & Xxxxxx, to prepare and deliver to the
Agent, the Lenders and the Issuing Banks, the legal opinions referred to in
such List of Closing Documents;
(ii) audited Financial Statements of Parent and its Subsidiaries for
the Fiscal Year ended December 31, 2001 in form and substance satisfactory
to the Agent and Lenders and the report on the Financial Statements of
Parent and its Subsidiaries for such Fiscal Year and related management
letter of Xxxxxxxx LLP;
(iii) unaudited Financial Statements of Parent and its Subsidiaries
on a consolidated and consolidating basis for the Fiscal Quarter ending
March 31, 2002 and Compliance Certificates for the Fiscal Year ending
December 31, 2001 and March 31, 2002;
(iv) the Projections, in form and substance satisfactory to the
Agent and Lenders;
(v) an Officer's Certificate executed and delivered on behalf of
Parent and TIMCO (on behalf of the Borrowers) certifying that all
conditions precedent set forth herein have been met and no Potential Event
of Default or Event of Default has occurred;
(vi) a Borrowing Base Certificate dated July 5, 2002;
(vii) all agreements, documents and instruments relating to amendment
of the "TROL Documents" (as defined in the Predecessor Agreement) in form
and substance satisfactory to the Agent and Lenders;
(viii) all agreements, documents and instruments relating to reduction
in the amount, extension of maturity and other amendments, of the "BofA
Note" (as defined in the Predecessor Agreement) and guaranties executed and
delivered in connection therewith, in form and substance satisfactory to
the Agent and Lenders;
62
(ix) a certificate of insurance with respect to all insurance
required to be maintained under the terms of this Agreement, naming the
Agent as additional insured, and a loss payable endorsement with respect
thereto in form and substance satisfactory to the Agent;
(x) a release agreement in form and substance satisfactory to the
Agent with respect to any and all claims against the Agent, Issuing Bank
and Lenders under the Predecessor Agreement executed by the Borrowers and
their Affiliates; and
(xi) such additional documentation as the Agent may reasonably
request based on its and its counsel's review of documentation executed and
delivered in connection with the Predecessor Agreement;.
(b) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and the Agent shall not have
received any notice that litigation is pending or threatened which is likely to,
(i) enjoin, prohibit or restrain this Agreement becoming effective as of the
Effective Date or the making of the Loans and/or the issuance of Letters of
Credit requested to be made or issued, as applicable, on the Effective Date or
(ii) result in a Material Adverse Effect.
(c) No Change in Condition. No material adverse change shall have
occurred (as certified to the Agent and the Lenders by the respective chief
financial officers) in the business, assets, management, operations, financial
condition or prospects of Parent or any Borrower since December 31, 2001.
(d) Interim Liabilities and Equity. Since December 31, 2001, no
Borrower and no Guarantor shall have (i) entered into any material (as
determined in good faith by the Agent) commitment or transaction, including,
without limitation, transactions for borrowings and capital expenditures, which
are not in the ordinary course of such Person's business, except with respect to
the consummation of the transactions contemplated hereby, the Subordinated Debt
Restructuring, and the settlement of the Class Action Litigation on the terms
described in Schedule 6.01-D attached hereto and made a part hereof, (ii)
declared or paid any distribution or dividend, (iii) established or assumed any
obligations with respect to compensation or employee benefit plans other than
plans with respect to the Permitted Equity Securities Options, or (iv) redeemed,
repurchased, or issued any equity Securities other than in connection with the
Subordinated Debt Restructuring.
(e) No Loss of Material Agreements and Licenses. Since December 31,
2001, no Permit, agreement, lease, or license which, in the judgment of the
Agent, is material to the business, operations or employee relations of any
Borrower or any Guarantor, including without limitation, any TROL Document and
any Subordinated Notes Document, shall have been terminated, modified (except as
permitted under the terms of the Predecessor Agreement and consents and
amendments executed and delivered in connection therewith), revoked, breached,
or declared to be in default, or if breached or declared to be in default during
such period, such breach or default shall have been cured or waived on terms
satisfactory to the Agent and Lenders.
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(f) No Default. No Event of Default or Potential Event of Default
under the terms of the Predecessor Agreement shall have occurred after April 19,
2002. No obligee under the TROL Documents, Senior Subordinated Notes, BofA Note
Documents or any other material Contractual Obligation of the Borrowers or
Guarantors shall have exercised any right or remedy thereunder and the obligees
under the TROL Documents and BofA Note Documents shall have waived all defaults
thereunder existing as of the Effective Date, if any, and their rights and
remedies with respect thereto.
(g) TROL Documents Amendment; BofA Documents. The TROL Documents
referenced in Section 6.01(a)(vii) shall have been executed and copies delivered
to the Agent and become effective and the BofA Documents referenced in Section
6.01(a)(viii) and BofA Intercreditor Agreement shall have been executed and
copies delivered to the Agent and become effective concurrent with a $2,500,000
reduction of the Indebtedness outstanding under the "BofA Note" (as defined in
the Predecessor Agreement) on terms satisfactory to the Lenders and Agent, in
each instance, as certified to the Agent and Lenders, in writing, by the chief
financial officer of the Parent.
(h) Xxxxxxx Documents; Shareholder Documents. The Xxxxxxx Documents
and Shareholder Intercreditor Agreement shall have been executed and copies
delivered to the Agent and become effective on terms satisfactory to the Lenders
and Agent, as certified to the Agent and Lenders, in writing, by the chief
financial officer of the Parent.
(i) No Litigation. The Lenders shall have reviewed all litigation
pending or threatened against any Borrower and/or any Guarantor and determined
to their satisfaction that no Material Adverse Effect will, or is reasonably
likely to, result from the existence thereof.
(j) Capital Structure, Officers and Senior Management of Parent and
Its Subsidiaries. The corporate and capital structure, officers and senior
management of the Parent and its Subsidiaries shall be satisfactory to the
Lenders. None of the members of Parent's Board of Directors as of March 31, 2002
shall have ceased acting as members of such Board of Directors.
(k) Representations and Warranties. All of the representations and
warranties contained in Section 7.01 and in any of the other Loan Documents
shall be true and correct in all material respects on and as of the Effective
Date.
(l) Repayment of Supplemental Term Loan Note. The Indebtedness
evidenced by the Supplemental Term Loan Note shall have, concurrently with the
making of Loans under this Agreement on the Effective Date, been paid in full,
in cash.
(m) Fees and Expenses Paid. There shall have been paid to the
Agent, for the accounts of (i) the lenders and issuing bank under the
Predecessor Agreement, as applicable, all interest, fees and expenses accrued
and payable through the Effective Date under or in connection with the
Predecessor Agreement and (ii) the Lenders, Issuing Banks, and the Agent, as
applicable, all fees and expenses due and payable on or before the Effective
Date in connection with the execution and delivery of this Agreement, including,
without limitation, fees payable in accordance with the terms of the Fee Letter.
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6.02. Conditions Precedent to All Subsequent Loans and Letters of
Credit. The obligation of each Lender to make any Revolving Loan requested to be
made by it on any Funding Date and the agreement of each Issuing Bank to issue
any Letter of Credit on any date is subject to the following conditions
precedent as of each such date, both before and after giving effect to the
Revolving Loans to be made and/or the Letter of Credit to be issued on such
date:
(a) Representations and Warranties. All of the representations and
warranties of the Borrowers contained in Section 7.01 and in any other Loan
Document (other than representations and warranties which expressly speak as of
a different date) shall be true and correct in all material respects.
(b) No Defaults. No Event of Default or Potential Event of Default
shall have occurred and be continuing or would result from the making of the
requested Loan or issuance of the requested Letter of Credit.
(c) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and the Agent shall not have
received from any Lender or Issuing Bank notice that, in the judgment of such
Lender or Issuing Bank, litigation is pending or threatened which is likely to,
enjoin, prohibit or restrain, or impose or result in the imposition of any
material adverse condition upon, (i) such Lender's making of the requested
Revolving Loan or participation in the requested Letter of Credit or (ii) such
Issuing Bank's issuance of the requested Letter of Credit.
(d) No Material Adverse Effect. No event shall have occurred since
the date of this Agreement which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.
Each submission by TIMCO to the Agent of a Notice of Borrowing with respect to
any Loan, each acceptance by the Borrowers of the proceeds of each Loan made
hereunder, each submission by TIMCO to an Issuing Bank of a request for issuance
of a Letter of Credit and the issuance of such Letter of Credit, shall
constitute a representation and warranty by the Borrowers as of the Funding Date
in respect of such Loan and the date of issuance of such Letter of Credit, that
all the conditions contained in this Section 6.02 have been satisfied or waived
in accordance with Section 15.07.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01. Representations and Warranties of Parent and the Borrowers. In
order to induce the Lenders and the Issuing Banks to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrowers
and to issue the Letters of Credit described herein, the Parent and each
Borrower hereby represents and warrants to each Lender, each Issuing Bank and
the Agent that the following statements are true, correct and complete:
(a) Organization; Powers.
(i) Each of Distribution Xxxxx-Xxxxx, TIMCO, Whitehall,
Manufacturing, Leasing, Property Management, and Parent is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and of each other jurisdiction in which failure to be so
qualified and in good standing will result, or is reasonably likely to
result, in a Material Adverse Effect. Aerocell is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Arkansas and of each other jurisdiction in which failure to be so
qualified and in good standing will result, or is reasonably likely to
result, in a Material Adverse Effect. Apex is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Arizona and of each other jurisdiction in which failure to be so qualified
and in good standing will result, or is reasonably likely to result, in a
Material Adverse Effect. Caribe and Design are corporations duly organized,
validly existing and in good standing under the laws of the State of
Florida and of each other jurisdiction in which failure to be so qualified
and in good standing will result, or is reasonably likely to result, in a
Material Adverse Effect. AVSRE, L.P. is a limited partnership duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is in good standing under the laws of the State of
Texas. Leasing is duly qualified to do business and is in good standing
under the laws of the state of Florida and of each other jurisdiction in
which failure to be so qualified and in good standing will result, or is
reasonably likely to result, in a Material Adverse Effect. TIMCO is duly
qualified to do business and in good standing under the laws of the state
of North Carolina and of each other jurisdiction in which failure to be so
qualified and in good standing will result, or is reasonably likely to
result, in a Material Adverse Effect. Each Borrower and Guarantor (A) has
filed and maintained effective (unless exempt from the requirements for
filing) a current Business Activity Report with the appropriate
Governmental Authority in the states of Minnesota and New Jersey, (B)
(other than AVSRE, L.P.) is a corporation for federal income tax purposes,
and (C) has all requisite corporate power and authority to own, operate and
encumber its Property and to conduct its business as presently conducted
and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by this Agreement. Each of
Aviation Sales Finance Company, Aviation Sales Company FSC, Ltd., Aero
Hushkit Corporation, Aviation Sales Maintenance, Repair & Overhaul Company,
and Aviation Sales SPS I, Inc., formerly wholly-owned Subsidiaries of
Parent, have been dissolved in accordance with all Requirements of Law.
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(ii) True, correct and complete copies of the Organizational
Documents identified on Schedule 7.01-A attached hereto have been delivered
to the Agent, each of which is in full force and effect, has not been
modified or amended except to the extent indicated therein or as may be
permitted pursuant to Section 10.14 and, to the best of each Borrower's
knowledge, there are no defaults under such Organizational Documents and no
events which, with the passage of time or giving of notice or both, would
constitute a default under such Organizational Documents.
(b) Authority.
(i) Each Borrower and Guarantor has the requisite power and
authority (A) to execute, deliver and perform each of the Loan Documents,
the TROL Documents and the BofA Documents which are required to be executed
on behalf of such Person as required by this Agreement on or prior to the
Effective Date and (B) to file or record the Loan Documents which have been
filed or recorded by it as required by this Agreement on or prior to the
Effective Date, with any Governmental Authority.
(ii) The execution, delivery, performance and filing or recording,
as the case may be, of each of the agreements or documents which are
required to be executed, filed or recorded by or on behalf of the Borrowers
and the Guarantors in connection with or as required by this Agreement on
or prior to the Effective Date and to which any Borrower or any Guarantor
is party and the consummation of the transactions contemplated thereby are
within such Person's, as applicable, corporate powers, have been duly
authorized by all necessary corporate action and such authorization has not
been rescinded. No other corporate action or proceedings on the part of any
Borrower or any Guarantor are necessary to consummate such transactions.
(iii) Each of the Loan Documents to which any Borrower or any
Guarantor is a party (A) has been duly executed, delivered, filed or
recorded, as the case may be, on behalf of such Person, as applicable, (B)
where applicable, creates valid and perfected first Liens in the Collateral
covered thereby (except for Customary Permitted Liens which might be senior
to the Liens granted under the Loan Documents) securing the payment of all
of the obligations purported to be secured thereby, (C) constitutes such
Person's, as applicable, legal, valid and binding obligation, enforceable
against such Person, as applicable, in accordance with its terms, and (D)
is in full force and effect and no material term or condition thereof has
been amended, modified or waived from the terms and conditions contained
therein as delivered to the Agent without the prior written consent of the
Lenders required to consent to such amendment, modification or waiver. All
parties to the Loan Documents have performed and complied with all the
terms, provisions, agreements and conditions set forth therein and required
to be performed or complied with by such parties on or before the Effective
Date, all filings and recordings and other actions which are necessary or
desirable to perfect and protect the Liens granted pursuant to the Loan
Documents and preserve their required priority have been duly taken, and no
Potential Event of Default, Event of Default or breach of any covenant by
any such party exists thereunder.
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(iv) Each of the BofA Documents and TROL Documents to which any
Borrower or any Guarantor is a party is in full force and effect. No
material term or condition of any BofA Document has been amended, modified
or waived from the terms and conditions contained therein as delivered to
the Agent, without the prior written consent of the Requisite Lenders and
no default or breach of any covenant thereunder by any party thereto
exists. Since the Effective Date, no amendment or other modification of any
TROL Document has been effected which would have the effect of shortening
the tenor of the obligations thereunder, increasing the pricing associated
with such obligations (other than due to Transaction Costs otherwise
permitted under the terms of this Agreement), accelerating the scheduled
payments due thereunder, or modifying the prepayment requirements
thereunder without the prior written consent of the Requisite Lenders and
no default or breach of any covenant thereunder by any party thereto has
occurred and is continuing without cure or waiver.
(c) Corporate Affiliates; Ownership of Equity Securities. Schedule
7.01-C attached hereto (i) contains a diagram indicating the corporate structure
of the Parent and each Person in which the Parent holds a direct or indirect
partnership, joint venture, or other equity interest and indicates the nature of
such interest with respect to each Person included in such diagram; and (ii)
accurately sets forth (A) the correct legal name of such Person, the
jurisdiction of its incorporation or organization and the jurisdictions in which
it is qualified to transact business as a foreign corporation or otherwise, and
(B) the authorized, issued and outstanding shares or interests of each class of
equity Securities of the Parent and each such Person, and, with respect to
Subsidiaries of the Parent, the owners of such shares or interests. None of such
issued and outstanding Securities is subject to any vesting, redemption, or
repurchase agreement (other than those Securities issued with respect to the PIK
Subordinated Debt), and there are no warrants or options (other than Permitted
Equity Securities Options) outstanding with respect to such Securities. The
outstanding Capital Stock of each Borrower and each Guarantor is duly
authorized, validly issued, fully paid and nonassessable and (except for the
Capital Stock of the Parent) is not Margin Stock, are free and clear of all
Liens, except for Liens granted pursuant to the Loan Documents, are not subject
to any option or purchase rights, conversion or exchange rights, call,
commitment or claim of any right, title or interest therein or thereto, and have
been issued in compliance with all applicable Requirements of Law.
(d) No Conflict. The execution, delivery and performance of each of
the Loan Documents to which any Borrower or any Guarantor is a party do not and
will not (i) conflict with the Organizational Documents of such Person a party
thereto, (ii) to the best of each Borrower's and each Guarantor's knowledge,
constitute a tortious interference with any Contractual Obligation of any Person
or conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law or Contractual
Obligation (including without limitation, the TROL Documents, the BofA
Documents, agreements relating to the Senior Subordinated Notes, and, from and
after issuance of the Junior Subordinated Notes, agreements relating thereto) of
any Borrower or any Guarantor or require termination of any Contractual
Obligation, the consequences of which violation, breach, default or termination,
singly or in the aggregate, will result, or is reasonably likely to result, in a
Material Adverse Effect or may subject the Agent, any of the Lenders or any of
the Issuing Banks to any liability, (iii) result in or require the creation or
imposition of any Lien whatsoever upon any of the Property or assets of a
Borrower or such Guarantor, other than Liens
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contemplated by the Loan Documents, or (iv) require any approval of the
shareholders of such Person.
(e) Governmental Consents. The execution, delivery and performance
of each of the Loan Documents to which any Borrower or any Guarantor is a party
do not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by any Governmental Authority, except (i)
filings, consents or notices which have been made, obtained or given and (ii)
filings necessary to create or perfect security interests in the Collateral.
(f) Governmental Regulation. No Borrower or Guarantor is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, or the Investment Company Act of 1940,
or any other federal or state statute or regulation which limits its ability to
incur indebtedness or its ability to consummate the transactions contemplated by
the Loan Documents.
(g) Restricted Junior Payments. During the period commencing on
December 31, 2001 and ending on the Effective Date, no Borrower or Guarantor
directly or indirectly declared, ordered, paid or made, or set apart any sum or
Property for, any payment or distribution (other than by dividend of the amounts
required to enable the Parent to make its cash interest payments with respect to
the Senior Subordinated Notes in March, 2002) which would constitute a
Restricted Junior Payment under this Agreement, or agreed to do so.
(h) Financial Position. Complete and accurate copies of the
following Financial Statements, materials and other information have been
delivered to the Agent: (i) the Projections and (ii) the audited financial
statements of the Parent for the Fiscal Year ended on December 31, 2001. All
financial statements included in such materials were prepared in all material
respects in conformity with GAAP, except as otherwise noted therein, and fairly
present in all material respects the respective financial positions, and the
results of operations and cash flows for each of the periods covered thereby of
the applicable Person as at the respective dates thereof. No Borrower or
Guarantor has, as of the Effective Date, any Accommodation Obligation,
contingent liability or liability for any taxes, long-term leases or
commitments, not disclosed in writing to the Agent and the Lenders prior to the
Effective Date.
(i) Projections. The Projections are reasonable based on the
information available to Parent at the time so furnished.
(j) Indebtedness. Schedule 1.01.5 sets forth all Indebtedness for
borrowed money of each Borrower and Guarantor as of the Effective Date; there
are no defaults in the payment of principal or interest on any Indebtedness of
any Borrower or Guarantor and no payments under such Indebtedness have been
deferred or extended beyond their stated maturity (except as disclosed on such
Schedule).
(k) Litigation; Adverse Effects. There is no action, suit,
proceeding, Claim, investigation or arbitration before or by any Governmental
Authority or private arbitrator pending or, to the knowledge of any Borrower,
threatened against any Borrower or any Guarantor or any of their respective
Property (i) challenging the validity or the enforceability of any of the Loan
Documents, (ii) which will, or is reasonably likely to, result in any Material
69
Adverse Effect, or (iii) under the Racketeering Influenced and Corrupt
Organizations Act or any similar federal or state statute or law under any
jurisdiction outside of the United States where such Person is a defendant in a
criminal indictment that provides for the forfeiture of assets to any
Governmental Authority as a criminal penalty. There is no material loss
contingency within the meaning of GAAP which has not been reflected in the
Financial Statements of the Parent and its Subsidiaries. No Borrower or
Guarantor is subject to or in default with respect to any final judgment, writ,
injunction, restraining order or order of any nature, decree, rule or regulation
of any court or Governmental Authority which will, or is reasonably likely to,
result in a Material Adverse Effect. All pending litigation to which any
Borrower or Guarantor is a party as of the Effective Date is disclosed on
Schedule 7.01-K attached hereto and made a part hereof.
(l) Predecessor Agreement Events of Default; No Material Adverse
Effect. All Events of Default existing on the Effective Date (prior to giving
effect to this Agreement) under the terms of the Predecessor Agreement are
disclosed on Schedule 7.01-L attached hereto and made a part hereof. Since April
19, 2002, there has occurred no event with respect to any Borrower or any
Guarantor which has resulted, or is reasonably likely to result, in a Material
Adverse Effect.
(m) Payment of Taxes. Except as disclosed on Schedule 7.01-M
attached hereto and made a part hereof, all tax returns and reports of each
Borrower and Guarantor required to be filed have been timely filed or the filing
date therefor has been properly extended, and all taxes, assessments, fees and
other charges of Governmental Authorities thereupon and upon or relating to
their respective Properties, assets, income and franchises which are shown in
such returns or reports to be due and payable have been paid, except to the
extent (i) such taxes, assessments, fees and other charges are being contested
in good faith by an appropriate proceeding diligently pursued as permitted by
the terms of Section 9.04 and (ii) non-payment of the amounts thereof would not,
individually or in the aggregate, result in a Material Adverse Effect. None of
the Parent or Borrowers has any knowledge of any proposed tax assessment against
any Borrower or any Guarantor, or any Property of any of them, that will, or is
reasonably likely to, result in a Material Adverse Effect.
(n) Performance. No Borrower or Guarantor has received any notice,
citation, or allegation, or has actual knowledge, that (i) any of them is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
any of them, (ii) any of the Property of any such Person is in violation of any
Requirement of Law, or (iii) any condition exists which, with the giving of
notice or the lapse of time or both, would constitute a default with respect to
any such Contractual Obligation, in each case, except where such default or
defaults, if any, will not, or is not reasonably likely to, result in a Material
Adverse Effect.
(o) Disclosure. The representations and warranties of Parent, each
Borrower, and each Guarantor contained in the Loan Documents, and all
certificates and other documents delivered to the Agent pursuant to the terms
thereof, do not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. None of the Parent, Borrowers or Guarantors has intentionally
withheld any fact from the Agent,
70
the Issuing Banks or the Lenders in regard to any matter which will, or is
reasonably likely to, result in a Material Adverse Effect.
(p) Requirements of Law. Each of the Borrowers and Guarantors is in
compliance with all Requirements of Law applicable to it and its respective
business, in each case where the failure to so comply individually or in the
aggregate will, or is reasonably likely to, result in a Material Adverse Effect.
(q) Environmental Matters.
(i) Except as disclosed on Schedule 7.01-Q attached hereto:
(A) the operations of each Borrower and each Guarantor and their
respective Properties comply in all material respects with all applicable
Environmental, Health or Safety Requirements of Law;
(B) each Borrower and each Guarantor has obtained all
environmental, health and safety Permits necessary for its respective
operations and Properties, and all such Permits are in good standing and
each Borrower and each Guarantor is currently in material compliance with
all terms and conditions of such Permits;
(C) no Borrower or Guarantor, or any of their present or past
Property or operations, is subject to or the subject of any judicial or
administrative proceeding, order, judgment, decree, dispute, negotiations,
agreement, or settlement respecting (I) any Environmental, Health or Safety
Requirements of Law, (II) any Remedial Action, (III) any Claims or
Liabilities and Costs arising from the Release or threatened Release of a
Contaminant into the environment, or (IV) any violation of or liability
under any Environmental, Health or Safety Requirement of Law that a
Borrower or such Guarantor reasonably believes will result in an
expenditure over $250,000;
(D) no Borrower or Guarantor has filed any notice under any
applicable Requirement of Law (I) reporting a Release of a Contaminant,
(II) under Section 103(c) of CERCLA, indicating past or present treatment,
storage or disposal of a hazardous waste, as that term is defined under 40
C.F.R. Part 261 or any state equivalent; or (III) reporting a violation of
any applicable Environmental, Health or Safety Requirement of Law;
(E) none of the present or past Property of any Borrower or any
Guarantor is listed or proposed for listing on the National Priorities List
("NPL") pursuant to CERCLA or on the Comprehensive Environmental Response
Compensation Liability Information System List ("CERCLIS") or any similar
state list of sites requiring Remedial Action;
(F) no Borrower or Guarantor has sent or directly arranged for the
transport of any waste to any current or proposed NPL site, CERCLIS or any
similar state list of sites requiring Remedial Action;
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(G) there is not now in connection with or resulting from any
Borrower's or any Guarantor's operations, nor, to any Borrower's knowledge,
has there ever been on or in any of the Property (I) any treatment,
recycling, storage or disposal of any hazardous waste requiring a Permit
under 40 C.F.R. Parts 264 and 265 or any state equivalent,(II) any
landfill, waste pile, underground storage tank or surface impoundment,
(III) any asbestos-containing material; or (IV) a Release of any
polychlorinated biphenyls (PCB) used in hydraulic oils, electrical
transformers or other Equipment;
(H) no Borrower or Guarantor has received any notice or Claim to
the effect that it is or may be liable to any Person as a result of the
Release or threatened Release of a Contaminant into the environment;
(I) to no Borrower's or Guarantor's knowledge, have there been any
Releases of any Contaminants to the environment from any Property except in
compliance with Environmental, Health or Safety Requirements of Law, or
which have not been corrected to the satisfaction of the appropriate
Governmental Authorities;
(J) to no Borrower's or Guarantor's knowledge, has any Borrower or
any Guarantor any contingent liability in connection with any Release or
threatened Release of any Contaminants into the environment;
(K) no Environmental Lien has attached to any Property; and
(L) none of the Property is subject to any Environmental Property
Transfer Act, or to the extent such acts are applicable to any such
Property, the Borrower or Guarantor owning, leasing or operating such
Property has fully complied with the requirements of such acts.
(ii) each Borrower and each Guarantor is conducting and will
continue to conduct its respective business and operations in an
environmentally responsible manner in material compliance with
Environmental, Health or Safety Requirements of Law and no Borrower or
Guarantor has been, nor has any reason to believe that it will be, subject
to Liabilities and Costs arising out of or relating to environmental,
health or safety matters that have or will result in cash expenditures by a
Borrower or Guarantor in excess of $250,000 in the aggregate for any
calendar year ending after the Effective Date.
(r) ERISA. No Borrower, Guarantor, or ERISA Affiliate maintains or
contributes to any Benefit Plan or Multiemployer Plan other than those listed on
Schedule 7.01-R attached hereto. Each Plan which is intended to be qualified
under Section 401(a) of the Internal Revenue Code as currently in effect either
(i) has received a favorable determination letter from the IRS that the Plan is
so qualified or (ii) an application for determination of such tax-qualified
status will be made to the IRS prior to the end of the applicable remedial
amendment period under Section 401(a) of the Internal Revenue Code as currently
in effect, and each Borrower, Guarantor, and ERISA Affiliate shall diligently
seek to obtain a determination letter with respect to such application. Except
as identified on Schedule 7.01-R, no Borrower or Guarantor maintains or
contributes to any employee welfare benefit plan within the meaning of Section
3(1) of ERISA which provides benefits to employees after termination of
employment
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other than as required by Section 601 of ERISA. Each Borrower and each of the
Guarantors are in compliance in all material respects with the responsibilities,
obligations and duties imposed on it by ERISA and the Internal Revenue Code with
respect to all Plans. No Benefit Plan has incurred any accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Internal
Revenue Code) whether or not waived. No Borrower, ERISA Affiliate, or any
fiduciary of any Plan which is not a Multiemployer Plan (i) has engaged in a
nonexempt prohibited transaction described in Sections 406 of ERISA or 4975 of
the Internal Revenue Code or (ii) has taken or failed to take any action which
would constitute or result in a Termination Event. No Borrower or ERISA
Affiliate has any potential liability under Sections 4063, 4064, 4069, 4204 or
4212(c) of ERISA. No Borrower or ERISA Affiliate has incurred any liability to
the PBGC which remains outstanding other than the payment of premiums, and there
are no premium payments which have become due which are unpaid. Schedule B to
the most recent annual report filed with the IRS with respect to each Benefit
Plan and furnished to the Agent is complete and accurate in all material
respects. Since the date of each such Schedule B, there has been no material
adverse change in the funding status or financial condition of the Benefit Plan
relating to such Schedule B. No Borrower or ERISA Affiliate has (i) failed to
make a required contribution or payment to a Multiemployer Plan or (ii) made a
complete or partial withdrawal under Sections 4203 or 4205 of ERISA from a
Multiemployer Plan. No Borrower or ERISA Affiliate has failed to make a required
installment or any other required payment under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other payment. No
Borrower or ERISA Affiliate is required to provide security to a Benefit Plan
under Section 401(a)(29) of the Internal Revenue Code due to a Benefit Plan
amendment that results in an increase in current liability for the plan year.
Except as disclosed on Schedule 7.01-R, no Borrower or Guarantor, by reason of
the transactions contemplated hereby has any obligation to make any payment to
any employee pursuant to any Plan or existing contract or arrangement. Each
Borrower has given to the Agent copies of all of the following: each Benefit
Plan and related trust agreement (including all amendments to such Plan and
trust) in existence or committed to as of the Effective Date and in respect of
which such Borrower or any ERISA Affiliate is currently an "employer" as defined
in section 3(5) of ERISA, and the most recent summary plan description,
actuarial report, determination letter issued by the IRS and Form 5500 filed in
respect of each such Benefit Plan in existence; a listing of all of the
Multiemployer Plans with the aggregate amount of the most recent annual
contributions required to be made by such Borrower and all ERISA Affiliates to
each such Multiemployer Plan, any information which has been provided to such
Borrower or an ERISA Affiliate regarding withdrawal liability under any
Multiemployer Plan and the collective bargaining agreement pursuant to which
such contribution is required to be made.
(s) Labor Matters. No Borrower or Guarantor is a party to any
collective bargaining agreement.
(t) Securities Activities. No Borrower or Guarantor is engaged in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(u) Solvency. After giving effect to this Agreement the Loans
outstanding on or to be made and the Letters of Credit outstanding on or to be
issued on the Effective Date or such other date as Loans requested hereunder are
made or Letters of Credit requested hereunder are
73
issued, and the disbursement of the proceeds of such Loans pursuant to TIMCO's
instructions, each Borrower and each Guarantor is Solvent.
(v) Patents, Trademarks, Permits, Etc.; Government Approvals.
(i) Each Borrower and Guarantor, as applicable, owns, is licensed
or otherwise has the lawful right to use, or has all Permits, patents,
trademarks, trade names, copyrights, technology, know-how, permits and
processes used in or necessary for the conduct of its respective business
as currently conducted which are material to its condition (financial or
otherwise), operations, performance and prospects. No claims are pending
or, to the best of each Borrower's knowledge following diligent inquiry,
threatened that any Borrower or Guarantor is infringing or otherwise
adversely affecting the rights of any Person with respect to such Permits
and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how, permits and processes, except for such
claims and infringements as do not, in the aggregate, give rise to any
liability on the part of any Borrower or Guarantor which will, or is
reasonably likely to, result in a Material Adverse Effect.
(ii) The consummation of the transactions contemplated by the Loan
Documents will not impair the ownership of or rights under (or the license
or other right to use, as the case may be) any Permits and governmental
approvals, patents, trademarks, trade names, copyrights, technology,
know-how, permits or processes by any Borrower or any Guarantor in any
manner which will, or is reasonably likely to, result in a Material Adverse
Effect.
(w) Assets and Properties. Each Borrower and Guarantor has good and
marketable title to all of the assets and Property (tangible and intangible)
owned by it (except insofar as marketability may be limited by any laws or
regulations of any Governmental Authority affecting such assets), and all such
assets and Property are free and clear of all Liens, except Liens securing the
Obligations and Liens permitted under Section 10.03. Substantially all of the
assets and Property owned by, leased to, or used by any Borrower and/or
Guarantor is in adequate operating condition and repair, ordinary wear and tear
excepted (other than Inventory classified as "AR", "R", and "BER"), is free and
clear of any known defects except such defects as do not substantially interfere
with the continued use thereof in the conduct of normal operations, and is able
to serve the function for which they are currently being used, except in each
case where the failure of such asset to meet such requirements would not, or is
not reasonably likely to, result in a Material Adverse Effect. Neither this
Agreement nor any other Loan Document, nor any transaction contemplated under
any such agreement, will affect any right, title or interest of any Borrower or
any Guarantor in and to any of such assets in a manner that would, or is
reasonably likely to, result in a Material Adverse Effect.
(x) Insurance. Schedule 7.01-X attached hereto accurately sets
forth as of the Effective Date all insurance policies and programs currently in
effect with respect to the respective Property and assets and business of each
Borrower and Guarantor, specifying for each such policy and program, (i) the
amount thereof, (ii) the risks insured against thereby, (iii) the name of the
insurer and each insured party thereunder, (iv) the policy or other
identification number thereof, (v) the expiration date thereof, (vi) the annual
premium with respect thereto, and
74
(vii) a list of claims and awards made thereunder during the immediately
preceding three (3) calendar years. TIMCO has delivered to the Agent copies of
all such insurance policies. Such insurance policies and programs are currently
in full force and effect, in compliance with the requirements of Section 9.05
and are in amounts sufficient to cover the replacement value of the respective
Property and assets of the Borrowers and Guarantors.
(y) Pledge of Securities. The grant and perfection of the security
interest in the equity Securities of Borrowers, each Borrower's Subsidiaries,
and each Guarantor other than the Parent as contemplated by the Loan Documents
is not made in violation of any Requirement of Law.
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ARTICLE VIII
REPORTING COVENANTS
Each Borrower, and to the extent specifically stated herein below the
Parent, covenants and agrees that so long as any Revolving Credit Commitments
are outstanding and thereafter until payment in full of all of the Obligations
(other than indemnities not yet due), unless the Requisite Lenders shall
otherwise give their prior written consent thereto:
8.01. Financial Statements. The Parent and each Borrower shall
maintain, and cause each of the other Guarantors to maintain, a system of
accounting established and administered in accordance with sound business
practices to permit preparation of consolidated and consolidating Financial
Statements in conformity with GAAP and each of the Financial Statements
described below shall be prepared from such system and records. Parent and the
Borrowers shall deliver or cause to be delivered to the Agent and the Lenders:
(a) Monthly Reports. As soon as practicable, and in any event
within (i) thirty (30) days after the end of each calendar month which is not
the last month of a Fiscal Quarter and (ii) forty-five (45) days after the end
of each calendar month which is the last month of a Fiscal Quarter, (A) the
consolidated and consolidating balance sheets of the Parent and its Subsidiaries
as at the end of such period and (B) the related consolidated and consolidating
statement of income of the Parent and its Subsidiaries and consolidated
statements of shareholders' equity and cash flow of the Parent and its
Subsidiaries, in each instance, for such calendar month, setting forth in each
case in comparative form the corresponding figures with respect to consolidated
statements for the corresponding calendar month referenced in the business plan
pertaining to such period certified by the chief financial officer of Parent as
fairly presenting the consolidated and consolidating financial position of the
Parent and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the calendar months indicated in accordance with
GAAP, subject to normal year end adjustments. Notwithstanding the foregoing, in
the event (i) the filing of the Parent's Form 10-Q with the Commission with
respect to any Fiscal Quarter is delayed for any reason and Parent has provided
Agent with written notice of such delay by the due date for the reports required
for such a calendar month which is the last month of a Fiscal Quarter under this
clause (a) and (ii) the Borrowers shall deliver either the required reports or
interim good faith estimates of the information required to be reported under
this clause (a) within fifty-five (55) days after the end of such month, upon
delivery of such required reports or interim estimates within such period the
Borrowers shall be deemed to have complied with the requirements of this clause
(a) with respect to such month; provided that Borrowers deliver the required
reporting substantially concurrently with Parent's filing of its Form 10-Q with
the Commission.
(b) Quarterly Reports. As soon as practicable, and in any event
within forty-five (45) days after the end of each Fiscal Quarter in each Fiscal
Year, the consolidated and consolidating balance sheets of the Parent and its
Subsidiaries as at the end of such period and the related consolidated and
consolidating statement of income of the Parent and its Subsidiaries and
consolidated statements of shareholders' equity and cash flow of the Parent and
its Subsidiaries, in each instance, for such Fiscal Quarter, setting forth in
comparative form the corresponding figures with respect to consolidated
statements for the corresponding period referenced in the business plan
pertaining to such period and the corresponding figures from the
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financial forecast for the current Fiscal Year delivered on the Effective Date
or pursuant to Section 8.01(f), as applicable, certified by the chief financial
officer of Parent as fairly presenting the respective consolidated and
consolidating financial positions of the Parent and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP, subject to normal year end
adjustments and excluding footnotes. Notwithstanding the foregoing, in the event
(i) the filing of the Parent's Form 10-Q with the Commission with respect to any
Fiscal Quarter is delayed for any reason and Parent has provided Agent with
written notice of such delay by the due date for the reports required for such
Fiscal Quarter under this clause (b) and (ii) the Borrowers shall deliver either
the required reports or interim good faith estimates of the information required
to be reported under this clause (b) within fifty-five (55) days after the end
of such Fiscal Quarter, upon delivery of such required reports or interim
estimates within such period the Borrowers shall be deemed to have complied with
the requirements of this clause (b) with respect to such Fiscal Quarter;
provided that Borrowers deliver the required reporting substantially
concurrently with Parent's filing of its Form 10-Q with the Commission.
(c) Annual Reports. As soon as practicable, and in any event within
ninety (90) days after the end of each Fiscal Year, (i) the consolidated and
consolidating balance sheets of (A) the Parent and its Subsidiaries as at the
end of such Fiscal Year and (B) to the extent the same are routinely and
regularly prepared, each Borrower and its Subsidiaries as at the end of such
Fiscal Year and (ii) the related consolidated and consolidating statements of
income, shareholders' equity and cash flow of (A) the Parent and its
Subsidiaries and (B) to the extent the same are routinely and regularly
prepared, Leasing and its Subsidiaries and each Borrower and its Subsidiaries
for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding figures
from the financial forecast for the current Fiscal Year delivered on the
Effective Date or pursuant to Section 8.01(f), as applicable, and (ii) a report
on such consolidated Financial Statements of the Parent and its Subsidiaries of
KPMG Peat Marwick LLP or other independent certified public accountants
acceptable to the Agent, which report shall be unqualified as to the scope of
the audit performed and as to the "going concern" status of the Parent and its
Subsidiaries, shall not contain any other Impermissible Qualification, and shall
state that such Financial Statements fairly present the consolidated financial
position of the Parent and its Subsidiaries and, to the extent included in the
Parent's annual Financial Statements, Leasing and its Subsidiaries and each
Borrower and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
KPMG Peat Marwick LLP or any such other independent certified public
accountants, if applicable, shall concur and which shall have been disclosed in
the notes to the Financial Statements) and that the examination by such
accountants in connection with such Financial Statements has been made in
accordance with generally accepted auditing standards. Notwithstanding the
foregoing, in the event (A) the filing of the Parent's annual report with the
Commission with respect to any Fiscal Year is delayed for any reason and Parent
has provided Agent with written notice of such delay by the due date for the
reports required for such Fiscal Year under this clause (c) and (B) the
Borrowers shall deliver either the required reports or interim good faith
estimates of the information required to be reported under this clause (c)
within one hundred five (105) days after the end of such Fiscal Year, upon
delivery of such required reports or interim estimates within such period the
Borrowers shall be deemed to have complied with the requirements of this clause
(c) with
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respect to such Fiscal Year; provided that Borrowers deliver the required
reporting substantially concurrently with Parent's filing of its annual report
with the Commission.
(d) Officer's Certificate. Together with each delivery of any
Financial Statement pursuant to this Section 8.01, (i) an Officer's Certificate
on behalf of Parent and the Borrowers substantially in the form of Exhibit L
attached hereto and made a part hereof, stating that the Person signatory
thereto has reviewed the terms of the Loan Documents, and has made, or caused to
be made under his/her supervision, a review in reasonable detail of the
transactions and financial condition Parent, of the Borrowers and their
Subsidiaries during the accounting period covered by such Financial Statements,
that such review has not disclosed the existence during or at the end of such
accounting period, and that such Person does not have knowledge of the existence
as at the date of such Officer's Certificate, of any condition or event which
constitutes an Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action any Borrower, any Guarantor, or any Subsidiary
of a Borrower has taken, is taking and proposes to take with respect thereto;
and (ii) a certificate (the "Compliance Certificate"), signed by Parent's and
TIMCO's chief financial officer, setting forth calculations (with such
specificity as the Agent may reasonably request) for the period then ended which
demonstrate compliance, when applicable, with the provisions of Section 9.17 and
Article XI.
(e) Accountant's Statement and Privity Letter. Together with each
delivery of the Financial Statements referred to in Section 8.01(c), a written
statement, in form and substance satisfactory to the Agent, of the firm of
independent certified public accountants giving the report thereon (i) stating
that their audit examination has included a review of the terms of this
Agreement as it relates to accounting matters, (ii) stating whether, in
connection with their audit examination, any condition or event which
constitutes an Event of Default or Potential Event of Default has come to their
attention, and if such condition or event has come to their attention,
specifying the nature and period of existence thereof; provided that such
accountants shall not be liable by reason of any failure to obtain knowledge of
any such condition or event that would not be disclosed in the course of their
audit examination, and (iii) stating that based on their audit examination
nothing has come to their attention which causes them to believe that the
information contained in either or both of the certificates delivered therewith
pursuant to Section 8.01(d) (as the information contained in such certificates
relates to the covenants set forth in Article XI) is not correct or that the
matters set forth in the Compliance Certificate delivered therewith pursuant to
Section 8.01(d)(ii) for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement. The statement referred to above shall be
accompanied by (x) a copy of the management letter or any similar report
delivered to any Borrower or Guarantor or to any officer or employee thereof by
such accountants in connection with such Financial Statements, to the extent
then available, and (y) a letter in substantially the form of Exhibit M attached
hereto and made a part hereof from the Parent to such accountants informing such
accountants that the Lenders are relying upon the Financial Statements audited
by such accountants and delivered to the Agent and the Lenders pursuant to
Section 8.01(c) and that a primary intent of the Parent in having such Financial
Statements audited is to induce the Lenders to continue to make Loans to the
Borrowers under this Agreement. The Agent and each Lender may, with the written
consent of TIMCO (which consent shall not be unreasonably withheld or delayed),
communicate directly with such accountants. To the extent a management letter or
any similar report referenced in clause (x) is not delivered concurrently with
the
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aforesaid accountants' written statement, such letter or report shall be
delivered to the Agent and Lenders no later than June 30 of the calendar year
immediately succeeding the Fiscal Year for which such written statement is
delivered, commencing with the Fiscal Year ending in 2001.
(f) Budgets; Business Plans; Financial Projections.
(i) General. As soon as practicable and in any event not later than
January 31, 2003 for the Fiscal Year ending in 2003, (1) a monthly budget
for each Borrower and its Subsidiaries for such Fiscal Year; (2) an annual
business plan for each Borrower and its Subsidiaries for such Fiscal Year,
substantially in the form of the business plans heretofore delivered to the
Agent and the Lenders, accompanied by a report reconciling all changes and
departures from the business plans delivered to the Agent and the Lenders
for the preceding Fiscal Year; and (3) a plan and financial forecast,
prepared in accordance with the Parent's and TIMCO's normal accounting
procedures applied on a consistent basis, including, without limitation,
(I) forecasted consolidated and consolidating balance sheets and statements
of cash flow of the Parent and its Subsidiaries and each Borrower and its
Subsidiaries for such Fiscal Year, (II) forecasted consolidated and
consolidating balance sheets, statements of earnings and retained earnings,
and cash flow of the Parent and its Subsidiaries, Leasing and its
Subsidiaries, and each Borrower and its Subsidiaries for and as of the end
of each fiscal quarter of such Fiscal Year, (III) the amount of forecasted
Capital Expenditures for such Fiscal Year, and (IV) forecasted compliance
with the provisions of Article XI.
(ii) Quarterly Projections. Quarterly, on the date Financial
Statements are required to be delivered pursuant to Section 8.01(b) and
commencing with the due date for Financial Statements for the Fiscal
Quarter ending March 31, 2002, (A) a financial forecast for the first three
months of the next succeeding four Fiscal Quarter period and for the last
three Fiscal Quarters of such period, prepared in accordance with the
Parent's and TIMCO's normal accounting procedures applied on a consistent
basis, including, without limitation, (i) forecasted consolidated and
consolidating balance sheets and statements of cash flow of the Parent and
its Subsidiaries and each Borrower and its Subsidiaries, (ii) forecasted
consolidated and consolidating balance sheets, statements of earnings and
retained earnings, and cash flow of the Parent and its Subsidiaries,
Leasing and its Subsidiaries, and each Borrower and its Subsidiaries, and
(iii) the amount of forecasted Capital Expenditures, and (B) forecasted
compliance with the provisions of Article XI for each of such four Fiscal
Quarters.
(iii) Cash Flow Projections. On Friday of each week, eight-week
projected cash flow statements of Parent and its Subsidiaries, by week, in
form and substance satisfactory to the Agent and Requisite Lenders.
(g) TIMCO Payables Reports. On Wednesday of each week, a report of
the accounts payable of each Borrower and Guarantor, in each instance, including
a then current aging of the same.
8.02. Off-Site Inventory Reports. On the Effective Date, TIMCO shall
deliver to the Agent and the Lenders a report detailing information regarding
bailed, consigned and field
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warehoused Inventory of each Borrower and its respective Subsidiaries in the
form of Exhibit N attached hereto and made a part hereof.
8.03. Borrowing Base Certificate; Appraisals.
(a) Borrowing Base Certificate. TIMCO shall provide the Agent and
the Revolving Lenders (i) on Wednesday of each calendar week, or if a Wednesday
is not a Business Day, the immediately succeeding Business Day, with a Borrowing
Base Certificate for Eligible Receivables as of the immediately preceding
Friday, (ii) on a bi-weekly basis, on Wednesday of the applicable week, or if a
Wednesday is not a Business Day, the immediately succeeding Business Day, with a
Borrowing Base Certificate for Eligible Inventory of TIMCO as of the immediately
preceding Friday, and (iii) on a monthly basis, on the second Wednesday of each
month, or if a Wednesday is not a Business Day, the immediately succeeding
Business Day, with a Borrowing Base Certificate for Eligible Inventory of
Persons other than TIMCO as of the immediately preceding month end, in each
instance, together with a calculation of the Texas Tax Reserve as of the date
thereof if such Texas Tax Reserve exceeds $200,000 and such supporting documents
as the Agent deems desirable, all certified as being true and correct by the
chief financial officer, chief executive officer, or controller of TIMCO. The
Borrowing Base Certificates shall be accompanied by such supporting information
as the Agent and Requisite Lenders shall from time to time request and include,
without limitation, (A) weekly agings of all unbilled Receivables and (B) weekly
adjustments of all input xxxxxxxx of XXXXX included in the Borrowing Base under
clause (ix) thereof by location and for all locations.
(b) Appraisals. Annually, on each anniversary of the Effective
Date, TIMCO shall provide the Agent and the Lenders with appraisals of (i) the
Borrowers' Inventory and (ii) if requested by the Agent and Requisite Lenders,
each Guarantor's Inventory, in each case, prepared by an independent appraiser
satisfactory to the Agent and on the same basis as the Appraisals. After the
occurrence and during the continuance of an Event of Default, TIMCO shall
provide the Agent and Lenders with such appraisals as the Agent may request from
such appraisers and on such same basis as the Appraisals.
8.04. Events of Default. Promptly upon any of the chairman of the
board of directors, president, chief executive officer, chief operating officer,
chief financial officer, treasurer or controller of Parent or TIMCO obtaining
knowledge (a) of any condition or event which constitutes an Event of Default or
Potential Event of Default, or becoming aware that any Lender or the Agent has
given any notice with respect to a claimed Event of Default or Potential Event
of Default under this Agreement, (b) that any Person has given any notice to any
Borrower or Guarantor or taken any other action with respect to a claimed
default or event or condition of the type referred to in Section 12.01(e), or
(c) of any condition or event which has resulted, or is reasonably likely to
result, in a Material Adverse Effect or affect the value of, or the Agent's
interest in, the Collateral in any material respect, such Borrower shall deliver
to the Agent and the Lenders an Officer's Certificate specifying (i) the nature
and period of existence of any such claimed default, Event of Default, Potential
Event of Default, condition or event, (ii) the notice given or action taken by
such Person in connection therewith, and (iii) what action the applicable
Borrower has taken, is taking and proposes to take with respect thereto. Parent
and TIMCO shall, by 11:00 a.m. (New York time), on the day immediately preceding
the day on which any cash payment of the Parent's obligations under the
Subordinated Note Documents is to be made (whether then due or not due), deliver
to the Agent
written notice as to whether, after giving effect to the Obligations outstanding
as of the close of business of the Agent on such preceding day, the Revolving
Credit Availability is at least $3,000,000 (exclusive of the Borrowing Base
reserve then in effect pursuant to clause (xii) of the definition of "Borrowing
Base".
8.05. Lawsuits.
(a) Institution of Proceedings. Promptly upon Parent or any
Borrower obtaining knowledge of the institution of, or written threat of, any
action, suit, proceeding, governmental investigation or arbitration against or
affecting any Borrower, any Guarantor, or any Property not previously disclosed
pursuant to Section 7.01(k), which action, suit, proceeding, governmental
investigation or arbitration exposes, or in the case of multiple actions, suits,
proceedings, governmental investigations or arbitrations arising out of the same
general allegations or circumstances which expose, in such Borrower's reasonable
judgment, the Borrowers and/or any Guarantor to liability in an amount
aggregating $1,000,000 or more (exclusive of claims covered by insurance
policies of the Borrowers and Guarantors unless the insurers of such claims have
disclaimed coverage or reserved the right to disclaim coverage on such claims),
such Borrower shall give written notice thereof to the Agent and the Lenders and
provide such other information as may be reasonably available to enable each
Lender and the Agent and its counsel to evaluate such matters.
(b) Quarterly Reports. As soon as practicable and in any event
within forty-five (45) days after the end of each fiscal quarter of Parent,
TIMCO shall provide a written quarterly report to the Agent and the Lenders
covering the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration (not previously reported) against or
affecting any Borrower, any Guarantor, or any Property not previously disclosed
by Parent or the Borrowers to the Agent and the Lenders, and shall provide such
other information at such time as may be reasonably available to enable each
Lender and the Agent and its counsel to evaluate such matters.
(c) Additional Reports Upon Request. In addition to the
requirements set forth in clauses (a) and (b) of this Section 8.05, Parent and
TIMCO, upon the request of the Agent or the Requisite Lenders, shall promptly
give written notice of the status of any action, suit, proceeding, governmental
investigation or arbitration covered by a report delivered pursuant to either of
such clauses (a) or (b) and provide such other information as may be reasonably
available to it to enable each Lender and the Agent and its counsel to evaluate
such matters.
8.06. Insurance. As soon as practicable and in any event by the 15th
day of August in each calendar year, TIMCO shall deliver to the Agent and the
Lenders (a) a report in form and substance reasonably satisfactory to the Agent
and the Lenders outlining (i) all material insurance coverage maintained as of
the date of such report by the Borrowers and Guarantors and the duration of such
coverage and (ii) the claims and awards, if any, made under such insurance for
the twelve (12) calendar month period then ending, (b) evidence that all
premiums with respect to such coverage have been paid when due, and (c) to the
extent not theretofore delivered, a loss payable endorsement for such insurance
naming the Agent as loss payee.
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8.07. ERISA Notices. Parent and TIMCO shall deliver or cause to be
delivered to the Agent and the Lenders, at the Borrowers' expense, the following
information and notices as soon as reasonably possible, and in any event:
(a) within ten (10) Business Days after any Borrower or any ERISA
Affiliate knows or has reason to know that a Termination Event has occurred, a
written statement of the chief financial officer of TIMCO describing such
Termination Event and the action, if any, which such Borrower or any ERISA
Affiliate has taken, is taking or proposes to take with respect thereto, and
when known, any action taken or threatened by the IRS, DOL or PBGC with respect
thereto;
(b) within ten (10) Business Days after any Borrower knows or has
reason to know that an assessment of a prohibited transaction excise tax under
Section 4975 of the Internal Revenue Code has occurred, a statement of the chief
financial officer of TIMCO describing such transaction and the action which such
Borrower or any ERISA Affiliate has taken, is taking or proposes to take with
respect thereto;
(c) within three (3) Business Days after the filing of the same
with the DOL, IRS or PBGC, copies of each annual report (form 5500 series),
including Schedule B thereto, filed with respect to each Benefit Plan;
(d) within three (3) Business Days after receipt by any Borrower or
any ERISA Affiliate of each actuarial report for any Benefit Plan or
Multiemployer Plan and each annual report for any Multiemployer Plan, copies of
each such report;
(e) within three (3) Business Days after the filing of the same
with the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by any Borrower or any ERISA
Affiliate with respect to such request;
(f) within three (3) Business Days after the occurrence any
material increase in the benefits of any existing Benefit Plan or the
establishment of any new Benefit Plan or the commencement of contributions to
any Benefit Plan to which any Borrower or any ERISA Affiliate was not previously
contributing, notification of such increase, establishment or commencement;
(g) within three (3) Business Days after any Borrower or any ERISA
Affiliate receives notice of the PBGC's intention to terminate a Benefit Plan or
to have a trustee appointed to administer a Benefit Plan, copies of each such
notice;
(h) within three (3) Business Days after any Borrower or any
Guarantor receives notice of any unfavorable determination letter from the IRS
regarding the qualification of a Plan under Section 401(a) of the Internal
Revenue Code, copies of each such notice and letter;
(i) within three (3) Business Days after any Borrower or any ERISA
Affiliate receives notice from a Multiemployer Plan regarding the imposition of
withdrawal liability, copies of each such notice;
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(j) within three (3) Business Days after any Borrower or any ERISA
Affiliate fails to make a required installment or any other required payment
under Section 412 of the Internal Revenue Code on or before the due date for
such installment or payment, a notification of such failure; and
(k) within three (3) Business Days after any Borrower or any ERISA
Affiliate knows (A) a Multiemployer Plan has been terminated, (B) the
administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (C) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan.
For purposes of this Section 8.07, Parent, each Borrower and each ERISA
Affiliate shall be deemed to know all facts known by the administrator of any
Plan of which Parent, such Borrower or any ERISA Affiliate is the plan sponsor.
8.08. Environmental Notices.
(a) Parent and TIMCO shall notify the Agent and the Lenders in
writing, promptly upon Parent's or any Borrower's learning thereof, of any:
(i) notice or claim to the effect that any Borrower or any
Guarantor is or may be liable to any Person as a result of the Release or
threatened Release of any Contaminant into the environment which could
reasonably result in an expenditure by the Borrowers and/or any Guarantor
over $500,000;
(ii) notice that any Borrower or any Guarantor is subject to
investigation by any Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any
Contaminant into the environment which could reasonably result in an
expenditure by the Borrowers and/or any Guarantor over $500,000;
(iii) notice that any Property is subject to an Environmental Lien;
(iv) notice to any Borrower or any Guarantor of any material
violation of any Environmental, Health or Safety Requirement of Law;
(v) condition which might reasonably result in a material violation
of any Environmental, Health or Safety Requirement of Law;
(vi) commencement or threat of any judicial or administrative
proceeding alleging a material violation by any Borrower or any Guarantor
(or any predecessor in interest thereof) of any Environmental, Health or
Safety Requirement of Law;
(vii) new or proposed changes to any existing Environmental, Health
or Safety Requirement of Law that could result in a Material Adverse
Effect;
(viii) any proposed acquisition of stock, assets, real estate, or
leasing of property, or any other action by any Borrower or any Guarantor
that could subject such Borrower or any Guarantor to environmental, health
or safety Liabilities and Costs which could
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reasonably result in an expenditure by the Borrowers and/or any Guarantor
over $500,000; or
(ix) any filing or report made by any Borrower or any Guarantor with
any Governmental Authority with respect to any unpermitted Release or
threatened Release of a Contaminant which could reasonably result in an
expenditure by the Borrowers and/or any Guarantor over $500,000.
(b) Within sixty (60) days after the end of each Fiscal Year, TIMCO
shall submit to the Agent and the Lenders a report summarizing the status of
environmental, health or safety compliance, hazard or liability issues
identified in notices required pursuant to Section 8.08(a), disclosed on
Schedule 7.01-Q, or identified in any notice or report required herein, which
report shall include, with respect to any Real Property leased or acquired
during the period covered by such report, the results of an annual inspection of
the Property with respect to whether it contains any asbestos-containing
material and, in the event any Property does contain any asbestos-containing
material, what actions will be taken to eliminate or remediate the same.
8.09. Labor Matters. Parent and TIMCO shall notify the Agent and the
Lenders in writing, promptly upon Parent's or any Borrower's learning thereof,
of (i) any material labor dispute to which any Borrower or any Guarantor may
become a party, including, without limitation, any strikes, lockouts or other
grievances relating to any Borrower's or any Guarantor's plants and other
facilities and (ii) any liability relating to its employees incurred with
respect to the closing of any plant or other facility of any Borrower or any
Guarantor.
8.10. SEC Reporting. Promptly after the same are available, Parent
and TIMCO shall deliver to the Agent and the Lenders copies of all Financial
Statements, reports and notices, registration statements and proxy statements or
other filings, if any, sent or made available generally by any Borrower, Parent
and/or any other Guarantor to its respective Securities holders or filed with
the Commission or other securities exchange.
8.11. Hedge Agreements. TIMCO shall provide to the Agent, promptly
upon the execution by any Borrower or any Subsidiary of a Borrower of any Hedge
Agreement, written notice of the notional amount thereof.
8.12. Other Reports. TIMCO shall deliver or cause to be delivered to
the Agent and the Lenders (a) all written notices and statements of collateral
described in or required by the terms of any other Loan Document as and when
described therein, (b) copies of all press releases made available generally by
the Parent or any of its Subsidiaries to the public concerning material
developments in the business of such Person(s), and (c) reports, if any,
submitted to the Parent or any of its Subsidiaries or their respective boards of
directors by such Person's independent public accountants, including, without
limitation, any management report prepared in connection with the annual audit.
8.13. Notice of Default; Amendments. Parent shall deliver or cause to
be delivered to the Agent and Lenders written notice of the occurrence of any
breach or default under the terms of the TROL Documents, Subordinated Notes
Documents, BofA Note Documents, or other material Contractual Obligation of any
Borrower or Guarantor promptly upon the occurrence thereof and, in
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any event, concurrent with any notice thereof to the obligees thereunder or
within two (2) Business Day after any Borrower or Guarantor receives notice
thereof. Immediately upon execution thereof, Parent shall deliver to the Agent
and each Lender a copy of (i) the Indenture under which the Junior Subordinated
Notes are issued promptly upon its execution and delivery and (ii) each
amendment to any TROL Document, Subordinated Notes Document, or BofA Note
Document.
8.14. Other Information. Promptly upon receiving a request therefor
from the Agent or the Requisite Lenders, Parent and the Borrowers shall prepare
and deliver to the Agent and the Lenders such other information with respect to
the Borrowers, the Guarantors, or the Collateral, including, without limitation,
schedules identifying and describing the Collateral and any dispositions
thereof, as from time to time may be reasonably requested by the Agent or the
Requisite Lenders.
8.15. Tax Refund Notice. Upon receipt by any Borrower or Guarantor of
any tax refund, Parent and TIMCO shall deliver or cause to be delivered to the
Agent and Lenders written notice of such receipt, by which Person the same was
received, and the amount of such tax refund.
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ARTICLE IX
AFFIRMATIVE COVENANTS
Each Borrower, and to the extent specifically stated hereinbelow the
Parent, covenants and agrees that so long as any Revolving Credit Commitments
are outstanding and thereafter until payment in full of all of the Obligations
(other than indemnities not yet due), unless the Requisite Lenders shall
otherwise give prior written consent:
9.01. Existence, Etc. Each Borrower and the Parent shall at all times
maintain, and cause each of its Subsidiaries to maintain, its corporate
existence and preserve and keep, or cause to be preserved and kept, in full
force and effect their respective rights and franchises material to their
respective businesses.
9.02. Corporate Powers; Conduct of Business. Each Borrower and the
Parent shall, and shall cause each of its Subsidiaries to, qualify and remain
qualified to do business and maintain its good standing in each jurisdiction in
which the nature of its business and the ownership of its Property requires it
to be so qualified and in good standing.
9.03. Compliance with Laws, Etc. Each Borrower and the Parent shall,
and shall cause each of its Subsidiaries to, (a) comply with all Requirements of
Law and all restrictive covenants affecting it or its business, Property, assets
or operations, and (b) obtain as needed all Permits necessary for its operations
and maintain such Permits in good standing, except in the case where
noncompliance with either clause (a) or (b) above is not reasonably likely to
result in a Material Adverse Effect.
9.04. Payment of Taxes and Claims. Each Borrower and the Parent
shall, and shall cause each of its Subsidiaries to, file all tax returns and
reports as and when required by the related Governmental Authority and pay (a)
all taxes, assessments and other governmental charges imposed upon it or on any
of its Property or assets or in respect of any of its franchises, business,
income or Property before any penalty or interest accrues thereon and (b) all
Claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 10.03) upon any of the
Property or assets of the Parent, any Borrower or any other Subsidiary of
Parent, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided, however, that no such taxes, assessments and
governmental charges referred to in clause (a) above or Claims referred to in
clause (b) above need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
9.05. Insurance. Each Borrower or Parent shall maintain in full force
and effect the insurance policies and programs listed on Schedule 7.01-X or
substantially similar policies and programs or other policies and programs as
are acceptable to the Agent. All such policies and programs shall be maintained
with insurers acceptable to the Agent. Each certificate and policy relating to
Property damage, boiler and machinery and/or business interruption coverage
shall contain an endorsement, in form and substance acceptable to the Agent,
showing loss payable to the Agent, for the benefit of the Holders, and, if
required by the Agent, naming the Agent as an additional insured under such
policy. Each certificate and policy relating to coverage other than the
foregoing
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shall, if required by the Agent, contain an endorsement naming the Agent as an
additional insured under such policy. Such endorsement or an independent
instrument furnished to the Agent shall provide that the insurance companies
will give the Agent at least thirty (30) days' written notice before any such
policy or policies of insurance shall be altered adversely to the interests of
the Holders or cancelled and that no act, whether willful or negligent, or
default of any Borrower or any other Person shall affect the right of the Agent
to recover under such policy or policies of insurance in case of loss or damage.
In the event any Borrower or Parent at any time or times hereafter shall fail to
obtain or maintain any of the policies or insurance required herein or to pay
any premium in whole or in part relating thereto, then the Agent, without
waiving or releasing any obligations or resulting Event of Default hereunder,
may at any time or times thereafter (but shall be under no obligation to do so)
obtain and maintain such policies of insurance and pay such premiums and take
any other action with respect thereto which the Agent deems advisable. All sums
so disbursed by the Agent shall constitute Protective Advances hereunder and be
part of the Obligations, payable as provided in this Agreement.
9.06. Inspection of Property; Books and Records; Discussions. Each
Borrower and Parent shall permit, and shall cause each of their respective
Subsidiaries to permit, any authorized representative(s) designated by either
the Agent or any Lender to visit and inspect, whether by access to any
Borrower's, the Parent's or their respective Subsidiaries' MIS or otherwise, any
of the Property, to examine, audit, check and make copies of any Borrower's, the
Parent's and their respective Subsidiaries' financial and accounting records,
books, journals, orders, receipts and any correspondence (other than privileged
correspondence with legal counsel) and other data relating to their respective
businesses or the transactions contemplated hereby or referenced herein
(including, without limitation, in connection with environmental compliance,
hazard or liability, and quarterly (or more often) examinations of the
Collateral and compliance with Borrowing Base requirements by such
representatives designated by the Agent), and to discuss their affairs, finances
and accounts with their management personnel and independent certified public
accountants, all upon reasonable written notice and at such reasonable times
during normal business hours, as often as may be reasonably requested. Each such
visitation and inspection (i) by or on behalf of any Lender shall be at such
Lender's expense and (ii) by or on behalf of the Agent shall be at the
Borrowers' expense. Each Borrower and the Parent shall keep and maintain, and
cause each of their respective Subsidiaries to keep and maintain, in all
material respects on its MIS and otherwise proper books of record and account in
which entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its respective businesses and activities, including,
without limitation, transactions and other dealings with respect to the
Collateral. If an Event of Default has occurred and is continuing and the
Obligations have been accelerated pursuant to Section 12.02(a), the Borrowers
and Parent, upon the Agent's request in connection with efforts to enforce the
rights and remedies of the Agent, the Lenders and the Issuing Banks under the
Loan Documents, shall turn over, and cause each of their respective Subsidiaries
to turn over, any such records requested by the Agent to the Agent or its
representatives; provided, however, that the Borrowers and Parent may, in their
discretion, retain copies of such records. Without limiting the foregoing,
Parent and the Borrowers acknowledge and agree that the Agent and Lenders will
engage an independent consultant to act as their representative to undertake
certain of the aforesaid actions on behalf of the Agent and Lenders and covenant
that Parent and the Borrowers will, and will cause their Subsidiaries to,
cooperate fully with such consultant in the conduct of its activities and make
available such personnel, information, data and documents as are requested by
such consultant in the conduct of such activities, all at the expense of the
Borrowers.
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9.07. Hedge Agreements. To the extent the Parent or any Borrower
shall enter into any Hedge Agreement, such Hedge Agreements shall be reasonably
acceptable to the Agent and purchased from a Lender, an Affiliate of a Lender or
such other Person reasonably acceptable as a credit matter to the Agent. The
Parent and Borrowers shall determine to their own satisfaction whether such
Hedge Agreements are sufficient to provide protection and to meet the needs of
the Parent and Borrowers and such other obligors and none of the Agent, the
Issuing Banks or the Lenders shall have any obligation or accountability with
respect thereto or any obligation to propose, quote or enter into any Hedge
Agreement.
9.08. Insurance and Condemnation Proceeds. The Borrowers or the
Parent, as applicable, having directed, or having caused Subsidiaries of the
Parent whose property or interests in property comprise part of the Collateral,
if applicable, to direct all insurers under policies of Property damage, boiler
and machinery and business interruption insurance and payors of any condemnation
claim or award relating to the Property to pay all proceeds payable under such
policies or with respect to such claim or award directly to the Agent, for the
benefit of the Holders, the Borrowers and Parent hereby agree that, in no case
shall such proceeds be payable to any Borrower(s) and the Agent or to any
Guarantor and the Agent. Parent and the Borrowers shall maintain or cause the
maintenance of the directions to its insurers to make such payments of insurance
proceeds to the Agent as aforesaid until the Obligations are paid in full, in
cash, and shall cause such insurers to issue loss payable endorsements in the
form delivered as required by Section 6.01(a) or such other form as the Agent
shall determine to be acceptable from time to time. The Agent shall, upon
receipt of such proceeds, apply all of the proceeds so received in repayment of
the Obligations in the manner set forth in Section 4.01(b)(vi)(A).
Notwithstanding the foregoing, in the event proceeds of insurance or
condemnation claims or awards received by the Agent under property damage,
boiler and machinery policies or business interruption insurance policies (i) is
less than $500,000, Agent shall, upon receipt of such proceeds and provided that
no Event of Default or Potential Event of Default shall have occurred and
continue unwaived, remit the amount so received to a Borrower or a Guarantor, as
applicable or (ii) constitutes Replacement Proceeds, Agent shall, upon receipt
of such proceeds and provided that no Event of Default or Potential Event of
Default shall have occurred and continue unwaived, hold the amount so received
as Cash Collateral for the Obligations, subject to a Borrower's or a
Guarantor's, as applicable, right to withdraw amounts from such Cash Collateral
upon its request therefor to restore, rebuild or replace the Property subject to
such insurance payment or condemnation award. Notwithstanding the foregoing, in
the case of an insurance payment or condemnation award in an amount greater than
$1,000,000, if (i) the Agent receives notice from a Borrower that it or a
Guarantor, as applicable, does not intend to restore, rebuild or replace the
Property subject to such insurance payment or condemnation award, (ii) the
applicable Borrower or Guarantor fails to replace or commence the restoration or
rebuilding of such Property within six (6) months after the Agent's receipt of
the proceeds of such insurance payment or condemnation award, or (iii) upon
completion of the restoration, rebuilding or replacement of such Property, the
unused proceeds from such insurance payment or condemnation award exceed
$500,000, then (x) upon the occurrence of either of the events described in
clauses (i) or (ii) above, all such proceeds, and (y) upon the occurrence of
either of the events described in clause (iii) above, such excess, shall
constitute Net Cash Proceeds of Sale received by a Borrower or a Guarantor and
shall be applied to the Obligations pursuant to the terms of Section 4.01(b).
9.09. ERISA Compliance. The Borrowers shall, and shall cause each of
the Guarantors and its/their ERISA Affiliates to, establish, maintain and
operate all Plans to comply in all
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material respects with the provisions of ERISA, the Internal Revenue Code, all
other applicable laws, and the regulations and interpretations thereunder and
the respective requirements of the governing documents for such Plans.
9.10. Deposit Accounts; Collection Account Agreements. The Borrowers
shall, and shall cause each of the Guarantors to, maintain in full force and
effect Collection Account Agreements with respect to each of their respective
depository accounts into which collections of Receivables and other proceeds of
Collateral are deposited. In no event shall amounts on deposit in Bank of
America, N.A. Account No. 003661094818 at any time exceed $75,000.
9.11. Maintenance of Property. The Borrowers shall, and shall cause
each of the Guarantors to, maintain in all material respects all of its owned
and leased Property in good, safe and insurable condition and repair, and not
permit, commit or suffer any waste or abandonment of any such Property and from
time to time shall make or cause to be made all material repairs, renewal and
replacements thereof, including, without limitation, any capital improvements
which may be required; provided, however, that such Property may be altered or
renovated in the ordinary course of a Borrower's or a Guarantor's business.
9.12. Condemnation. Immediately upon any Borrower's learning of the
institution of any proceeding for the condemnation or other taking of any of the
owned or leased Real Property of any Borrower or Guarantor, TIMCO shall notify
the Agent of the pendency of such proceeding, and permit the Agent to
participate in any such proceeding, and from time to time will deliver to the
Agent all instruments reasonably requested by the Agent to permit such
participation.
9.13. Future Liens on Real Property. Upon the request of the Agent or
Requisite Lenders, the Borrowers and Parent shall, and shall cause the other
Guarantors to, execute and deliver to the Agent, for the benefit of the Holders,
immediately upon the acquisition or leasing by a Borrower, Parent or any other
Guarantor of any Real Property on which any Inventory of a Borrower or any
Guarantor is located, a mortgage, deed of trust, assignment or other appropriate
instrument evidencing a Lien upon such Real Property, lease or interest,
together with such title insurance policies (mortgagee's form), certified
surveys, appraisals, and local counsel opinions with respect thereto and such
other agreements, documents and instruments which the Agent deems reasonably
necessary or desirable, the same to be in form and substance acceptable to the
Agent and to be subject only to (a) Liens permitted under Section 10.03 and (b)
such other Liens as the Agent and Lenders may reasonably approve, it being
understood that the granting of such additional security for the Obligations is
a material inducement to the execution and delivery of this Agreement by each
Lender and the Issuing Bank.
9.14. Consignee/Bailee Letters; Landlord Waivers; Filings. The
Borrowers and Parent shall, and shall cause each of the other Guarantors to,
obtain consignee or bailee letters or landlord waivers (as applicable)
substantially in the form attached hereto as Exhibit D from each consignee or
bailee of Inventory of a Borrower and/or a Guarantor (separately or in the
aggregate) having a minimum value (at the lower of cost or market) of $250,000
and each landlord for premises on which Inventory of the Borrowers and/or
Guarantors (separately or in the aggregate) having a minimum value (at the lower
of cost or market) of $250,000, promptly upon delivery of such Inventory to such
consignee, bailee or premises, and cause to be executed and delivered to the
Agent concurrently with execution and delivery of such consignee or bailee
letter, UCC financing
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statements in form and substance satisfactory to the Agent, naming the Agent as
secured party, with respect to such Inventory located on the premises of such
consignee or bailee.
9.15. Future Pledges of Equity Securities; Other Collateral
Documents.
(a) Each Borrower and Parent shall, and shall cause each of its
respective Subsidiaries (other than Subsidiaries of Leasing) to, execute and
deliver to the Agent for the benefit of the Holders, concurrently with the
issuance of any equity Securities to any Borrower, the Parent, or such
Subsidiary of any Borrower or Parent in connection with any Investment made by
such Person, or formation or acquisition of a Subsidiary, a pledge of (i) all of
the equity Securities issued to or acquired by such Person, if the Person
formed, acquired or in which an Investment is made is not a Foreign Subsidiary,
and (ii) 65% of the equity Securities of any Foreign Subsidiary.
(b) Each Borrower and Parent shall, and shall cause its respective
Subsidiaries to, execute and deliver to the Agent, for the benefit of the
Holders, an aircraft mortgage and security agreement, naming the Agent as
secured party, concurrently with such Borrower's, Parent's, or such
Subsidiaries', as applicable, acquisition of any aircraft or aircraft engines
registered with the Federal Aviation Administration; and each Borrower and
Parent shall cause all direct Subsidiaries of a Borrower or Parent, as
applicable, to execute and deliver to the Agent guarantees, security agreements
and other Loan Documents related to Collateral owned by such Subsidiaries
concurrently with such Persons' becoming Subsidiaries of a Borrower,
Manufacturing, or Parent, in each instance consistent with the Loan Documents
executed and delivered on or before the Effective Date.
(c) Notwithstanding the foregoing, nothing in this Section 9.15
shall permit any Borrower or Parent or any Subsidiary of a Borrower to make any
Investment, directly or indirectly, not otherwise permitted by Section (A) 10.04
or Section (B) 10.17.
9.16. Additional Parent Covenant. The Parent shall within three (3)
days after its receipt of any distribution, dividend or payment from any
Subsidiary of Parent, make a capital contribution in the amount thereof (net of
taxes allocable to transfers under Requirements of Law and amounts used to
discharge its obligations as permitted under Section 10.06) to TIMCO.
9.17. Joint Venture. TIMCO shall cause Xxxxxxxx/XXXXX Cargo
Conversions, LLC, a North Carolina limited liability company in which TIMCO owns
a fifty percent (50%) equity interest, to distribute fifty percent (50%) of its
net income to TIMCO at least quarterly and confirm its receipt of such
distribution to the Agent concurrently with delivery by Parent of the financial
reporting required by Section 8.01(b).
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ARTICLE X
NEGATIVE COVENANTS
Parent and each Borrower covenants and agrees that it shall comply
with the following covenants so long as any Revolving Credit Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than indemnities not yet due), unless the Requisite Lenders shall
otherwise give prior written consent:
10.01. Indebtedness. Neither the Parent nor any Borrower shall, nor
shall the Parent permit any of its Subsidiaries to, directly or indirectly
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness, except:
(a) the Obligations, whether directly or by Accommodation
Obligation;
(b) Indebtedness for trade payables, wages and other accrued
expenses incurred in the ordinary course of business, whether or not evidenced
by notes;
(c) Indebtedness under the Xxxxxxx Note, the Junior Subordinated
Notes, in payment of non-cash interest under the PIK Subordinated Debt, and with
respect to Shareholder Subrogation Claims, whether directly or by Accommodation
Obligation;
(d) Permitted Existing Indebtedness and any extensions, renewals,
refundings or replacements of Permitted Existing Indebtedness, provided that any
such extension, renewal, refunding or replacement is in an aggregate principal
amount not greater than the principal amount of, and is on terms no less
favorable to Parent, such Borrower or the applicable Subsidiary than the terms
of, the Permitted Existing Indebtedness so extended, renewed, refunded or
replaced;
(e) to the extent permitted by Article XI and in any event in an
aggregate amount not to exceed $6,000,000 at any time for all Borrowers and
other Subsidiaries of Parent, Indebtedness of the Borrowers and its Subsidiaries
with respect to Capital Leases (other than the TROL Lease to the extent the same
is a Capital Lease pursuant to GAAP) and purchase money Indebtedness incurred to
finance the acquisition of fixed assets, and Indebtedness incurred to refinance
such Capital Leases and purchase money Indebtedness; provided, however, prior to
incurring Capital Lease obligations owing to any one lessor or group of
affiliated or related lessors or purchase money Indebtedness owing to any one
holder or group of affiliated or related holders thereof, which in either case
aggregate(s) more than $500,000, the applicable Borrower or other Subsidiary of
Parent shall obtain from such lessor(s) or holder(s) a duly executed
intercreditor agreement in form and substance satisfactory to the Agent;
(f) Indebtedness in respect of taxes, assessments, governmental
charges and Claims for labor, materials or supplies, to the extent that payment
thereof is not required pursuant to Section 9.04;
(g) Indebtedness constituting Accommodation Obligations permitted
by Section 10.05;
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(h) Indebtedness in respect of profit sharing plans to the extent
permitted under Section 10.04;
(i) Indebtedness in respect of the Hedge Agreements up to an
aggregate notional amount (as advised to the Agent by the counterparty(ies) to
Hedge Agreements and confirmed by Parent) not to exceed $2,000,000;
(j) Indebtedness with respect to reasonable warranties and
indemnities made under any agreements for asset sales permitted under Section
10.02 and Contractual Obligations of the Borrowers or their Subsidiaries entered
into in the ordinary course of their respective businesses;
(k) Indebtedness under appeal bonds in connection with judgments
which do not result in an Event of Default or a Potential Event of Default or
any other breach hereunder, provided that the aggregate amount of all such
Indebtedness does not exceed $2,000,000;
(l) Indebtedness arising from intercompany loans from a Borrower to
any Subsidiary of such Borrower which is a Guarantor or from a Borrower to any
other Borrower provided that such Indebtedness is subordinated to the
Obligations on terms and subject to agreements satisfactory to the Agent; and
(m) in addition to the Indebtedness permitted by clauses (a)
through (l) above, other unsecured Indebtedness incurred by the Borrowers and
other Subsidiaries of Parent in an aggregate amount not to exceed $2,000,000 at
any time outstanding.
10.02. Sales of Assets. No Borrower or Guarantor shall sell, assign,
transfer, lease, convey or otherwise dispose of any of its Property, whether now
owned or hereafter acquired, or any income or profits therefrom, or enter into
any agreement to do so, except:
(a) the sale of Property (other than Property subject to clause (b)
or (e) below) outside of the ordinary course of such Person's business for
consideration not less than the Fair Market Value thereof so long as (i) the
Fair Market Value thereof does not exceed $500,000 in the aggregate, (ii) any
non-cash consideration resulting from such sale shall be pledged or assigned to
the Agent, for the benefit of the Holders, pursuant to an instrument in form and
substance acceptable to the Agent, and (iii) such Borrower complies with the
mandatory prepayment provisions set forth in Section 4.01(b) and the conditions
to the release of Collateral described in Section 13.09(c);
(b) Property identified on Schedule 10.10 permitted to be sold
under Section 10.10;
(c) the sale or lease of Inventory in the ordinary course of
business of a Borrower or such Guarantors to Persons who are not Affiliates of
such Persons;
(d) the disposition of Equipment if (i) such disposition is
permitted under clause (g) below, (ii) such Equipment is obsolete or no longer
useful in the ordinary course of business of such Borrower or the applicable
Guarantor, provided that the aggregate Fair Market Value of all such Equipment
disposed of in any Fiscal Year by the Borrowers and Guarantors shall not
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exceed $100,000, or (iii) within six (6) months after such disposition, an
amount equal to the proceeds therefrom is either (A) used to finance the
purchase of replacement Equipment and the seller thereof delivers to the Agent
evidence of such use and that the replacement Equipment is free and clear of all
Liens except those created under the Loan Documents or (B) delivered to the
Agent for application to the repayment of the Obligations pursuant to the
mandatory prepayment provisions set forth in Section 4.01(b);
(e) the sale of certain assets identified on Schedule 10.02-E
attached hereto and made a part hereof; provided that no Event of Default or
Potential Event of Default shall then have occurred and be continuing and the
terms of such sale are those identified on Schedule 10.02-E or more favorable to
Parent than such terms;
(f) the sale of Investments in Cash Equivalents permitted pursuant
to Section 10.04(a);
(g) the transfer of the Equipment identified in the Order entered
by the United States Bankruptcy Court District of Delaware in Chapter 11 Case
No. 02-10536 (MWF) on June 10, 2002 (the "Xxxxxxxxx Order"), with respect to the
transactions described in that certain Motion Xxxxxxxxx Industries, Inc., et al,
Debtors for Entry of an Order Approving the Post-Closing Resolution Agreement
with Aviation Sales Company [Docket No. 190] filed with the United States
Bankruptcy Court District of Delaware in Chapter 11 Case No. 02-10536 (MFW) on
June 6, 2002 pursuant to the transactions which are the subject of the Xxxxxxxxx
Order and pertain to Parent and its Subsidiaries in accordance with the terms of
the Xxxxxxxxx Order and the Post-Closing Resolution Agreement attached as an
exhibit to the Motion with respect to which the Xxxxxxxxx Order was entered,
provided that (i) such transfer is completed by no later than August 15, 2002,
and (ii) the Xxxxxxxxx Order shall have become final and no longer subject to
appeal on or before the date of such transfer;
(h) the transfers of the Property identified on Schedule 10.02-H
attached hereto and made a part hereof in connection with the satisfaction of
certain obligations and liabilities of the Borrowers and Guarantors identified
on Schedule 10.02-H; provided that such transfers are consummated on the
Effective Date.
Notwithstanding the foregoing, Parent, Borrowers and Guarantors may enter into
agreements for the sale of Property outside of the ordinary course of its
business; provided that (i) written notice of such Person's intention to enter
into such agreement is delivered to the Agent no less than ten (10) Business
Days prior to entering into such agreement and (ii) the agreement expressly
provides that such sale is subject to the approval of Requisite Lenders to the
extent not otherwise permitted by the terms of this Section 10.02.
10.03. Liens. No Borrower or Guarantor shall directly or indirectly
create, incur, assume or permit to exist any Lien on or with respect to any of
their respective Property or assets except:
(a) Liens created pursuant to the Loan Documents;
(b) Permitted Existing Liens;
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(c) Customary Permitted Liens;
(d) purchase money Liens (including the interest of a lessor under
a Capital Lease and Liens to which any Property is subject at the time of such
Person's purchase thereof) with respect to purchases of fixed assets, securing
an amount not to exceed $1,000,000 in the aggregate at any time or from time to
time for all Borrowers and Guarantors which are Subsidiaries of Parent; provided
that (A) such Liens shall not apply to any Property other than that purchased or
subject to such Capital Lease and (B) with respect to Liens securing Capital
Lease obligations owing to any one lessor or group of affiliated or related
lessors or purchase money Indebtedness owing to any one holder or group of
affiliated or related holders thereof, which in either case aggregate(s) more
than $500,000, the Borrowers shall obtain from such lessor or holder a duly
executed intercreditor agreement in form and substance satisfactory to the Agent
prior to the granting any such Lien;
(e) Liens created (i) pursuant to the Shareholder Security
Agreement on the Effective Date and (ii) within thirty (30) days after the
Effective Date against Real Property and interests in Real Property which
constitutes part of the Collateral, pursuant to mortgages in form and substance
satisfactory to the Agent and subject to the Shareholder Intercreditor
Agreement;
(f) federal tax Liens not resulting in an Event of Default under
Section 12.01(j)(ii); and
(g) extensions, renewals, refundings and replacements of Liens
referred to in clauses (a), (b), and (e) of this Section 10.03; provided that
any such extension, renewal, refunding or replacement of a Lien referred to in
clause (b) shall be limited to the Property covered by the Lien extended,
renewed, refunded or replaced and that the obligations secured by any such
extension, renewal, refunding or replacement Lien shall be in an amount not
greater than the amount of the obligations then secured by the Lien extended,
renewed, refunded or replaced.
10.04. Investments. No Borrower or Guarantor shall directly or
indirectly make or own any Investment except:
(a) Investments in Cash Equivalents;
(b) Permitted Existing Investments;
(c) Investments in the form of advances by a Borrower to employees
in the ordinary course of business for moving, relocation and travel expenses;
and other loans to employees for any lawful purpose, provided that (i) each loan
permitted under this clause (c) shall be evidenced by a promissory note, (ii)
the aggregate principal amount of all such advances and loans at any time
outstanding from the Borrowers shall not exceed $500,000, and (iii) no such
advances or loans outstanding at any time to any one Person shall exceed
$100,000;
(d) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
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(e) intentionally omitted; and
(f) to the extent they constitute Investments, contributions to and
payments of benefits under any Plan in existence as of the Effective Date as
required by the benefit commitments in such Plan as of the Effective Date.
No Borrower shall form any direct Subsidiary after the Effective Date or permit
any of its Subsidiaries or Guarantor to form any Subsidiary except to the extent
Investments therein are permitted hereinabove. No Borrower or Guarantor which is
a Subsidiary of Parent may make any Investment in any Subsidiary of Leasing
which is not a Guarantor.
10.05. Accommodation Obligations. No Borrower or Guarantor shall
directly or indirectly create or become or be liable with respect to any
Accommodation Obligation, except:
(a) recourse obligations resulting from endorsement of negotiable
instruments for collection in the ordinary course of its business;
(b) Permitted Existing Accommodation Obligations and any
extensions, renewals or replacements thereof, provided that the aggregate
Indebtedness under any such extension, renewal or replacement is not greater
than the Indebtedness under, and shall be on terms no less favorable to such
Borrower or Guarantor than the terms of, the Permitted Existing Accommodation
Obligation so extended, renewed or replaced;
(c) Accommodation Obligations arising under the Loan Documents;
(d) Accommodation Obligations evidenced by the Junior Subordinated
Notes Guaranties;
(e) unsecured Accommodation Obligations incurred by Parent with
respect to Indebtedness of the Borrowers and Parent's other Subsidiaries
permitted under the provisions of Section 10.01 (i) for borrowed money, (ii)
under Capital Leases or (iii) under Operating Leases; and
(f) in addition to the Accommodation Obligations permitted by
clauses (a) through (e) above, other unsecured Accommodation Obligations of the
Borrowers and Guarantors which are Subsidiaries of Parent in an aggregate amount
not to exceed $500,000 at any time outstanding.
10.06. Restricted Junior Payments. No Borrower shall, nor shall any
Borrower permit any of the Guarantors which is a Subsidiary of Parent to,
declare or make any Restricted Junior Payment, except:
(a) dividends or other distributions (directly or indirectly) from
Subsidiaries of the Parent to the Parent in such amounts and at such times as
are required to enable the Parent to meet (i) its obligations under the Senior
Subordinated Notes issued as 8-1/8% Senior Subordinated Notes due 2008, (ii) its
scheduled pre-default obligations for "Basic Rent" and "Supplemental Rent" (each
as defined in the TROL Documents), exclusive of the "Purchase
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Option Price" (as defined in the TROL Documents), (iii) its obligations under
the Supplemental Term Loan Warrant, and (iv) its obligations for taxes as and
when payable; and
(b) fees and other remuneration paid to Parent by a Borrower or any
Guarantor in the ordinary course of such Borrower's or such Guarantor's business
and otherwise permitted under this Agreement;
provided, however, the Restricted Junior Payments described above shall not be
permitted after the occurrence and during the continuance of an Event of Default
or a Potential Event of Default or if an Event of Default or a Potential Event
of Default would result therefrom.
10.07. Conduct of Business. No Borrower or any Guarantor shall engage
in any business other than (a) the businesses engaged in by such Person on the
Effective Date and (b) any business or activities which are substantially
similar, related, incidental or complimentary thereto.
10.08. Transactions with Affiliates. No Borrower or Guarantor shall
directly or indirectly enter into or permit to exist any transaction (including,
without limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of a Borrower, on terms that are
less favorable to such Borrower or such Guarantor than those that might be
obtained in an arm's length transaction at the time from Persons who are not
such an Affiliate. Nothing contained in this Section 10.08 shall prohibit (a)
any transaction expressly permitted by Section 10.06; (b) increases in
compensation and benefits for officers and employees of the Parent or its
Subsidiaries which are customary in the industry; provided that no Event of
Default or Potential Event of Default has occurred and is continuing; or (c)
payment of customary officers' and directors' indemnities.
10.09. Restriction on Fundamental Changes. No Borrower or Guarantor
which is aSubsidiary of Parent shall (a) enter into any merger or consolidation,
(b) permit any Foreign Subsidiary to enter into any merger or consolidation, or
(c) permit any of its Subsidiaries to enter into any merger or consolidation. No
Borrower or Guarantor which is a Subsidiary of Parent shall liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or substantially all of its business or Property, whether now
or hereafter acquired, except in connection with transactions permitted under
Section 10.02 or permit any of its Subsidiaries to (a) liquidate, wind-up or
dissolve (or suffer any liquidation or dissolution) or (b) convey, lease, sell,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or substantially all of their respective businesses or
Property, whether now or hereafter acquired, except in connection with
transactions permitted under Section 10.02. Notwithstanding the foregoing,
Leasing may be dissolved following the expiration of the lease agreement
identified on Schedule 10.09 attached hereto and made a part hereof; provided
that no Event of Default or Potential Event of Default shall then have occurred
and be continuing and such dissolution is effected promptly following filing of
the tax returns identified on Schedule 10.09.
10.10. Sales and Leasebacks. Except with respect to Property
identified on Schedule 10.10 attached hereto and made a part hereof, no Borrower
or Guarantor shall become liable, directly, by assumption or by Accommodation
Obligation, with respect to any lease, whether an Operating Lease or a Capital
Lease, of any Property (whether real or personal or mixed) which it (a) sold or
transferred or is to sell or transfer to any other Person, or (b) intends to use
for substantially the same
96
purposes as any other Property which has been or is to be sold or transferred by
it to any other Person, in either instance, in connection with such lease.
10.11. Margin Regulations; Securities Laws. No Borrower or Guarantor
shall, nor shall any Borrower or Guarantor permit any of its Subsidiaries to,
use all or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.
10.12. ERISA. No Borrower or Guarantor shall:
(a) engage in any prohibited transaction described in Sections 406 of
ERISA or 4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been previously
obtained from the DOL;
(b) permit to exist any accumulated funding deficiency (as defined in
Sections 302 of ERISA and 412 of the Internal Revenue Code), with respect to any
Benefit Plan, whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely required
contributions or annual installments due with respect to any waived funding
deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any Benefit
Plan which would result in any liability of any Borrower or any ERISA Affiliate
under Title IV of ERISA;
(e) fail to make any contribution or payment to any Multiemployer Plan
which any Borrower, Guarantor or ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;
(f) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other payment; or
(g) amend, or permit any ERISA Affiliate to amend, a Benefit Plan
resulting in an increase in current liability for the plan year such that any
Borrower, Guarantor or ERISA Affiliate is required to provide security to such
Plan under Section 401(a)(29) of the Internal Revenue Code;
if such event results, either singly or in the aggregate, after taking into
account all other such events and any liabilities associated therewith, in an
aggregate liability of Parent and its Subsidiaries in excess of $500,000.
10.13. Issuance of Equity Securities. No Borrower or Guarantor which is
a Subsidiary of Parent shall, nor shall any Borrower or Guarantor permit any of
its Subsidiaries to, issue any equity Securities.
10.14. Organizational Documents. No Borrower or Guarantor shall, nor
shall any Borrower or Guarantor permit any of its Subsidiaries to, amend, modify
or otherwise change any of
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the terms or provisions in any of (a) its Organizational Documents as in effect
on the Effective Date, except amendments (i) to effect a change of name of such
Person, written notice of which change of name such Person shall have provided
the Agent within sixty (60) days prior to the effective date of any such name
change or (ii) otherwise consented to by the Agent in writing, (b) the
agreements and instruments evidencing loans and advances comprising intercompany
loans without the prior written consent of the Agent, or (c) the TROL Documents,
except as described in Section 7.01(b)(iv), the BofA Documents, except as
described in Section 7.01(b)(iv), or the Subordinated Notes Documents.
10.15. Bank Accounts. No Borrower or Guarantor shall establish or
maintain any deposit account into which collections of Receivables and proceeds
of other Collateral are deposited other than those identified as existing on the
Effective Date and disclosed on Schedule 10.15 attached hereto, unless TIMCO
gives the Agent prior written notice of such establishment and delivers to the
Agent an executed Collection Account Agreement concurrently with such deposit
account being established.
10.16. Fiscal Year. Parent shall not, and shall not permit any of its
Subsidiaries to, change its fiscal year from the Fiscal Year.
10.17. Parent Covenants. The Parent shall not:
(a) merge or liquidate with or into any other Person and, if as a
result thereof and after giving effect thereto, the Parent is not the surviving
Person;
(b) repurchase or redeem any of its Capital Stock other than as
required with respect to the Permitted Equity Securities Options; or
(c) engage in any business other than that of acting as a holding
company for Distribution, Leasing, Manufacturing, Property Management, TIMCO,
Aerocell, Design, Engine Center, Caribe, and Whitehall.
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ARTICLE XI
FINANCIAL COVENANTS
The Parent covenants and agrees that in the event the Revolving Credit
Availability is less than the amount equal to (a) $8,000,000 minus (b) the
amount of each Borrowing Base reserve then in effect pursuant to clause (xii)
and clause (xiii) of the definition of "Borrowing Base" at any time during a
Fiscal Quarter, compliance with the following covenants shall be required for
such Fiscal Quarter:
11.01. Minimum EBITDA. The Parent shall maintain EBITDA of at least the
amount set forth below, determined as of the last day of each Fiscal Quarter
identified below, for the period identified below.
Determination Date Applicable Period Minimum Amount
------------------ ----------------- --------------
June 30, 2002 Two Fiscal Quarter period then ending $ 7,227,000
September 30, 2002 Three Fiscal Quarter period then ending $ 9,613,000
December 31, 2002 Four Fiscal Quarter period then ending $11,858,000
March 31, 2003 Four Fiscal Quarter period then ending $ 9,818,000
June 30, 2003 Four Fiscal Quarter period then ending $ 9,994,000
September 30, 2003 Four Fiscal Quarter period then ending $10,183,000
December 31, 2003 Four Fiscal Quarter period then ending $10,121,000
11.02. Capital Expenditures. The Parent and its Subsidiaries shall not
make Capital Expenditures in the aggregate during any period set forth below in
excess of the amount set forth below opposite such period; (in each instance,
the "Maximum Amount"):
Determination Date Applicable Period Maximum Amount
------------------ ----------------- --------------
December 31, 2002 Four Fiscal Quarter period then ending $2,330,000
December 31, 2003 Four Fiscal Quarter period then ending $3,500,000
provided, however, to the extent the Parent and its Subsidiaries have not made
Capital Expenditures in the amount permitted above for any given period set
forth above, Capital Expenditures in an amount equal to 100% of the Maximum
Amount of such Capital Expenditures permitted but not made in such period may be
made in the immediately next succeeding period in addition to any amounts
permitted above for such succeeding period; provided that to the extent amounts
carried forward from one period to the next succeeding period are not expended
in such period, such surplus may not be carried forward to any other succeeding
period.
11.03. Fixed Charge Coverage Ratio. The Parent and its Subsidiaries
shall maintain, as determined on the determination date set forth below, a Fixed
Charge Coverage Ratio for the applicable period set forth below of no less than
that set forth below opposite such determination date:
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Determination Date Applicable Period Minimum Ratio
------------------ ----------------- -------------
June 30, 2002 Two Fiscal Quarter period then ending 1.1 to 1.0
September 30, 2002 Three Fiscal Quarter period then ending 1.1 to 1.0
December 31, 2002 Four Fiscal Quarter period then ending 1.1 to 1.0
March 31, 2003 Four Fiscal Quarter period then ending 1.1 to 1.0
June 30, 2003 Four Fiscal Quarter period then ending 1.1 to 1.0
September 30, 2003 Four Fiscal Quarter period then ending 1.1 to 1.0
December 31, 2003 Four Fiscal Quarter period then ending 1.1 to 1.0
11.04. Minimum Tangible Net Worth. The Parent and its Subsidiaries
shall maintain, as determined on the determination date set forth below,
Tangible Net Worth for the applicable period set forth below of no less than
that set forth below opposite such determination date:
Determination Date Applicable Period Minimum Amount
------------------ ----------------- --------------
June 30, 2002 Fiscal Quarter then ending $2,250,000
September 30, 2002 Fiscal Quarter then ending $1,994,000
December 31, 2002 Fiscal Quarter then ending $1,656,000
March 31, 2003 Fiscal Quarter then ending $1,345,000
June 30, 2003 Fiscal Quarter then ending $1,016,000
September 30, 2003 Fiscal Quarter then ending $ 660,000
December 31, 2003 Fiscal Quarter then ending $ 13,000
11.05. Parent and Subsidiaries. For purposes of the covenants set forth
in this Article XI, references to Parent and its Subsidiaries shall be deemed to
mean Parent and its Subsidiaries on a consolidated basis.
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ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.01. Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. Any Borrower shall fail to pay
(i) when due any principal on any Loan or any Reimbursement Obligation or (ii)
any interest on any Loan, fees due under the terms of this Agreement or the Fee
Letter or other Obligations outstanding within two (2) Business Days after the
same become due in accordance with the terms of this Agreement or the Fee
Letter.
(b) Breach of Certain Covenants. Any Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrowers under Sections 8.04, 9.01 - 9.07, 9.10, 9.11, and 9.13-9.15,
Article X or Article XI. Parent shall fail duly and punctually to perform or
observe any agreement, covenant or obligation binding on the Parent under
Section 8.04, 9.16 Article X or Article XI.
(c) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by any Borrower or any Guarantor to the Agent, any
Lender or any Issuing Bank herein or by any Person in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made (or deemed made).
(d) Other Defaults. Parent or any Borrower shall default in the
performance of or compliance with any term contained in this Agreement (other
than as identified in clauses (a), (b) or (c) of this Section 12.01) or any
default or event of default shall occur under any of the other Loan Documents
(other than as identified in clauses (b) or (c) of this Section 12.01), and such
default or event of default shall continue for thirty (30) days after the
occurrence thereof.
(e) Default as to Other Indebtedness; Operating Leases.
(i) Any Borrower or Guarantor shall fail to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise) with respect to any Indebtedness (other than an Obligation)
of such Persons, singly or in the aggregate equal to or exceeding $250,000;
or any breach, default or event of default shall occur, or any other
condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof is to cause an
acceleration, mandatory redemption or other required repurchase of such
Indebtedness, or permit the holder(s) of such Indebtedness to accelerate
the maturity of any such Indebtedness or require a redemption or other
repurchase of such Indebtedness; or any such Indebtedness shall be
otherwise declared to be due and payable (by acceleration or otherwise) or
required to be prepaid, redeemed or otherwise repurchased by the obligor
thereon (other than by a regularly scheduled required prepayment) prior to
the stated maturity thereof; or any breach, default or event of default on
the part of a Borrower or any Guarantor shall occur under any Operating
Lease to which such Borrower or such Guarantor is a party which breach,
default or event of default shall materially adversely
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affect the rights of such Borrower or such Guarantor with respect to the
Property subject to any Operating Lease on which, either individually or
when aggregated with other Operating Leases, the remaining payments exceed
$1,000,000.
(ii) Any "Event of Default" as defined in the Indenture or any TROL
Document shall occur and be continuing.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against any Borrower or
any Guarantor and the petition shall not be dismissed, stayed, bonded or
discharged within thirty (30) days after commencement of the case; or a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of any Borrower or any Guarantor in an involuntary case,
under any applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted under
any applicable federal, state, local or foreign law;
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Borrower or any
Guarantor or over all or a substantial part of the Property shall be
entered; or an interim receiver, trustee or other custodian of any Borrower
or any Guarantor or of all or a substantial part of the Property shall be
appointed or a warrant of attachment, execution or similar process against
any substantial part of the Property shall be issued and any such event
shall not be stayed, dismissed, bonded or discharged within thirty (30)
days after entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. Any Borrower
or Guarantor shall have an order for relief entered with respect to it or
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its Property; or any Borrower or Guarantor
shall make any assignment for the benefit of creditors or shall be unable or
fail, or admit in writing its inability, to pay its debts as such debts become
due; or the shareholders or board of directors (or equivalent) of any Borrower
or any Guarantor (or any committee thereof) adopts any resolution or otherwise
authorizes any action to approve any of the foregoing.
(h) Dissolution. Any order, judgment or decree shall be entered
against any Borrower or any Guarantor decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of thirty (30) days; or any Borrower or any Guarantor shall otherwise
dissolve, be dissolved, or cease to exist except as specifically permitted by
this Agreement.
(i) Loan Documents; Failure of Security. At any time, for any reason,
(i) any Loan Document ceases to be in full force and effect (other than any
Hedge Agreement not required to be maintained by the terms of this Agreement) or
any Borrower or Guarantor seeks to
102
repudiate its obligations thereunder and the Liens intended to be created
thereby against Property having an aggregate Fair Market Value in excess of
$100,000 are, or any Borrower or any Guarantor seeks to render such Liens,
invalid or unperfected, or (ii) Liens in favor of the Agent for the benefit of
the Holders contemplated by the Loan Documents against Property having an
aggregate Fair Market Value in excess of $100,000 shall, at any time, for any
reason, be invalidated or otherwise cease to be in full force and effect, or
such Liens shall be subordinated or shall not have the priority contemplated by
this Agreement, the Loan Documents, or the BofA Intercreditor Agreement, or
(iii) the holder of the BofA Note, any guarantor thereof, or any Person
subrogated to the rights of the holder of the BofA Note shall initiate any
action contrary to the terms of the BofA Intercreditor Agreement or raise any
defense to any of the terms thereof.
(j) Judgments and Attachments.
(i) Any money judgment (other than a money judgment covered by
insurance as to which the insurance company has acknowledged coverage),
writ or warrant of attachment, or similar process against any Borrower or
any Guarantor or any of their respective assets involving in any case an
amount in excess of $250,000 is entered and shall remain undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days or in any
event later than five (5) days prior to the date of any proposed sale
thereunder; provided, however, if any such judgment, writ or warrant of
attachment or similar process is in excess of $1,000,000, the entry thereof
shall immediately constitute an Event of Default hereunder unless fully
bonded in a manner satisfactory to the Agent.
(ii) A federal tax Lien is filed against any Borrower or any
Guarantor or any of the Property which is not discharged of record, bonded
over or otherwise secured to the satisfaction of the Agent within
forty-five (45) days after the filing thereof or the date upon which the
Agent receives actual knowledge of the filing thereof for an amount which
equals or exceeds, when combined with such amounts claimed to be owing by
other Borrowers and Guarantors, $1,000,000.
(iii) An Environmental Lien is filed against any of the Property with
respect to Claims in an amount which equals or exceeds $500,000.
(k) Termination Event. Any Termination Event occurs which could
reasonably be expected to subject the Borrowers or any ERISA Affiliate to
liability in excess of $500,000.
(l) Waiver Application. The plan administrator of any Benefit Plan
applies under Section 412(d) of the Code for a waiver of the minimum funding
standards of Section 412(a) of the Internal Revenue Code and the Agent believes
that the substantial business hardship upon which the application for the waiver
is based could subject either the Borrowers or any ERISA Affiliate to liability
in excess of $1,000,000.
(m) Change in Control. A Change of Control shall occur.
(n) Material Adverse Effect. An event shall occur which results in a
Material Adverse Effect.
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(o) Liquidity. As of the day immediately preceding the day on which
any cash payment of the Parent's obligations under the Subordinated Note
Documents is to be made (whether then due or not due), after giving effect to
the Obligations outstanding as of the close of business of the Agent on such
preceding day, the Revolving Credit Availability is not at least equal to the
amount equal to at least $3,000,000 (exclusive of the Borrowing Base reserve
then in effect pursuant to clause (xii) of the definition of "Borrowing Base".
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with Section 15.07.
Notwithstanding anything to the contrary set forth in clause (e)(i)
above, (A) no Event of Default shall be deemed to have occurred due to the
occurrence of any breach, default or event of default, or any other condition
under any TROL Document, unless the effect thereof is to cause an acceleration,
mandatory redemption or other required repurchase of any Indebtedness arising
under the TROL Documents, or the holder(s) of such Indebtedness shall not have
waived the subject default or event of default under the TROL Documents and (B)
no Event of Default shall be deemed to have occurred due to the non-payment of
the BofA 2002 Note on the stated maturity thereof if, and only if, (1) the
letter of credit naming Bank of America, N.A. as beneficiary issued in support
of the BofA 2002 Note is drawn and the proceeds thereof applied in payment of
the BofA 2002 Note, and (2) no holder of the BofA 2002 Note, no guarantor
thereof, and no Person subrogated to the rights of the holder of the BofA 2002
Note shall initiate any action contrary to the terms of the BofA Intercreditor
Agreement or Shareholder Intercreditor Agreement, or raise any defense to any of
the terms thereof.
12.02. Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any Event of
Default described in Sections 12.01(f) or 12.01(g) or 12.01(h), the Lenders'
respective obligations to make Loans under the Revolving Credit Commitments
shall automatically and immediately terminate and the unpaid principal amount
of, and any and all accrued interest on, the Obligations and all accrued fees
shall automatically become immediately due and payable, without presentment,
demand, or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of intent
to demand or accelerate and of acceleration), all of which are hereby expressly
waived by the Borrowers; and upon the occurrence and during the continuance of
any other Event of Default, the Agent shall at the request, or may with the
consent, of the Requisite Lenders, by written notice to the Borrowers, (i)
declare that the Lenders' respective obligations to make Loans under the
Revolving Credit Commitments are terminated, whereupon such obligation of each
Lender to make any Loan hereunder and of each Lender or Issuing Bank to issue or
participate in any Letter of Credit not then issued shall immediately terminate,
and/or (ii) declare the unpaid principal amount of and any and all accrued and
unpaid interest on the Obligations to be, and the same shall thereupon be,
immediately due and payable, without presentment, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by the Borrowers.
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(b) Deposit for Letters of Credit. In addition, after the occurrence
and during the continuance of an Event of Default, the Borrowers shall, promptly
upon demand by the Agent, deliver to the Agent, Cash Collateral in such form as
requested by the Agent for deposit in the Cash Collateral Account, together with
such endorsements, and execution and delivery of such documents and instruments
as the Agent may request in order to perfect or protect the Agent's Lien with
respect thereto, in an aggregate principal amount equal to the then outstanding
Letter of Credit Obligations.
(c) Rescission. If at any time after termination of the Lenders'
obligations to make Loans under the Revolving Credit Commitments and/or
acceleration of the maturity of the Loans, the Borrowers shall pay all arrears
of interest and all payments on account of principal of the Loans and
Reimbursement Obligations which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than nonpayment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 15.07, then upon
the written consent of the Requisite Lenders and written notice to the
Borrowers, the termination of Lenders' respective obligations to make Loans
under the Revolving Credit Commitments and the respective Lenders' and Issuing
Banks' obligations to participate in or issue Letters of Credit and/or the
aforesaid acceleration and its consequences may be rescinded and annulled; but
such action shall not affect any subsequent Event of Default or Potential Event
of Default or impair any right or remedy consequent thereon. The provisions of
the preceding sentence are intended merely to bind the Lenders and the Issuing
Banks to a decision which may be made at the election of the Requisite Lenders;
they are not intended to benefit any Borrower and do not give any Borrower the
right to require the Lenders to rescind or annul any termination of the
aforesaid obligations of the Lenders or Issuing Banks or any acceleration
hereunder, even if the conditions set forth herein are met.
(d) Enforcement. Each Borrower acknowledges that in the event the
Borrower or any Guarantor fails to perform, observe or discharge any of their
respective obligations or liabilities under this Agreement or any other Loan
Document, any remedy of law may prove to be inadequate relief to the Agent, the
Issuing Banks and the Lenders; therefore, each Borrower agrees that the Agent,
the Issuing Banks and the Lenders shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
12.03. Post-Default Withdrawals from the Concentration Account and
Cash Collateral Account. Notwithstanding any other provision of this Agreement,
from and after acceleration of the Obligations as described in Section 12.02(a),
no Borrower or other Person or entity claiming on behalf of or through a
Borrower shall have any right to withdraw any of the funds held in the
Concentration Account until the Obligations have been paid in full in cash. The
Agent may, at any such time, sell or cause to be sold any Cash Equivalents being
held by the Agent in the Concentration Account or as Cash Collateral at any
broker's board or at public or private sale, in one or more sales or lots, at
such price as the Agent may deem best, without assumption of any credit risk,
and the purchaser of any or all such Cash Equivalents so sold shall thereafter
own the same, absolutely free from any claim, encumbrance or right of any kind
whatsoever. The Agent or any Holder may, in its own name or in the name of a
designee or nominee, buy such Cash Equivalents at any public sale and, if
permitted by applicable law, buy such Cash Equivalents at any private sale. The
Agent shall
105
apply the proceeds of any such sale, net of any reasonable expenses incurred in
connection therewith, and any other funds deposited in the Concentration Account
or Cash Collateral Account to the payment of the Obligations in accordance with
Section 4.02(b)(ii), other than amounts which are being held as Cash Collateral
for Reimbursement Obligations, which shall be applied to such Reimbursement
Obligations without regard to Section 4.02(b)(ii). Each Borrower agrees that any
sale of Cash Equivalents conducted in conformity with reasonable commercial
practices of banks, commercial finance companies, insurance companies or other
financial institutions disposing of property similar to such Cash Equivalents
shall be deemed to be commercially reasonable and any requirements of reasonable
notice shall be met if such notice is given by the Agent within a commercially
reasonable time prior to such disposition, the time of delivery of which notice
the parties hereto agree shall in no event be required to be greater than five
(5) Business Days before the date of the intended sale or disposition. Any other
requirement of notice, demand or advertisement for sale is waived to the extent
permitted by law. The Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
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ARTICLE XIII
THE AGENT
13.01. Appointment.
(a) Each Lender and each Issuing Bank hereby designates and
appoints Citicorp as the Agent of such Lender or such Issuing Bank under this
Agreement, and each Lender and each Issuing Bank hereby irrevocably authorizes
the Agent to take such action on its behalf under the provisions of this
Agreement and the Loan Documents and to exercise such powers as are set forth
herein or therein together with such other powers as are reasonably incidental
thereto. The Agent agrees to act as such on the express conditions contained in
this Article XIII.
(b) The provisions of this Article XIII are solely for the benefit
of the Agent, the Lenders and Issuing Banks, and no Borrower or any Affiliate of
any Borrower shall have any right to rely on or enforce any of the provisions
hereof (other than as expressly set forth in Section 13.07). In performing its
functions and duties under this Agreement, the Agent shall act solely as agent
of the Lenders and the Issuing Banks and does not assume and shall not be deemed
to have assumed any obligation or relationship of agency, trustee or fiduciary
with or for any Borrower or any Affiliate of a Borrower and the agency, trust
and fiduciary relationship of the Agent hereunder with the Lenders and Issuing
Banks shall be strictly limited in scope to the specific provisions of this
Agreement. The Agent may perform any of its duties hereunder, or under the other
Loan Documents, by or through its agents or employees.
13.02. Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Holder. Nothing in this Agreement or any of the
other Loan Documents, expressed or implied, is intended to or shall be construed
to impose upon the Agent any obligations in respect of this Agreement or any of
the Loan Documents except as expressly set forth herein or therein. Each Lender
and each Issuing Bank shall make its own independent investigation of the
financial condition and affairs of the Borrowers and their Affiliates in
connection with the making and the continuance of the Loans hereunder and with
the issuance of the Letters of Credit and shall make its own appraisal of the
creditworthiness of each Borrower, each Guarantor and each of their Affiliates
initially and on a continuing basis, and the Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Holder
with any credit or other information with respect thereto (except for reports
required to be delivered by the Agent under the terms of this Agreement). If the
Agent seeks the consent or approval of the Lenders to the taking or refraining
from taking of any action hereunder, the Agent shall send notice thereof to each
Lender. The Agent shall promptly notify each Lender at any time that the Lenders
so required hereunder have instructed the Agent to act or refrain from acting
pursuant hereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes or any
amount payable under any provision of Article IV or Article V when due) or the
other Loan Documents, the Agent shall not be required to exercise any discretion
or take any action. Notwithstanding the foregoing, the Agent shall be required
to act or refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders, or,
where required by the express terms of this Agreement, a different or greater
proportion of the Lenders, and such instructions shall be binding upon all
Lenders, Issuing Banks and
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Holders of Notes; provided, however, the Agent shall not be required to take any
action which (i) the Agent reasonably believes will expose it to personal
liability unless the Agent receives an indemnification satisfactory to it from
the Lenders with respect to such action or (ii) is contrary to this Agreement,
the other Loan Documents or applicable law.
13.03. Rights, Exculpation, Etc.
(a) Liabilities; Responsibilities. None of the Agent, any Affiliate
of the Agent, or any of their respective officers, directors, employees or
agents shall be liable to any Holder for any action taken or omitted by them
hereunder or under any of the Loan Documents, or in connection therewith, except
that no Person shall be relieved of any liability imposed by law for gross
negligence or willful misconduct. The Agent shall not be liable for any
apportionment or distribution of payments made by it in good faith pursuant to
Section 4.02(b), and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Holder to whom
payment was due, but not made, shall be to recover from other Holders any
payment in excess of the amount to which they are determined to have been
entitled. The Agent shall not be responsible to any Holder for any recitals,
statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, legality, enforceability, collectibility,
or sufficiency of this Agreement or any of the other Loan Documents or the
transactions contemplated thereby, or for the financial condition of any
Borrower or any Affiliate of a Borrower. The Agent shall not be required to make
any inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Loan Documents, the
agreements and instruments executed and delivered in connection with any
intercompany Indebtedness, or the financial condition of any Borrower or any
Affiliate of any Borrower, or the existence or possible existence of any
Potential Event of Default or Event of Default.
(b) Right to Request Instructions. The Agent may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of any of the Loan Documents the Agent is permitted or
required to take or to grant, and the Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from those Lenders from whom the Agent is required to
obtain such instructions for the pertinent matter in accordance with the Loan
Documents. Without limiting the generality of the foregoing, no Holder shall
have any right of action whatsoever against the Agent as a result of the Agent
acting or refraining from acting under the Loan Documents in accordance with the
instructions of the Requisite Lenders or, where required by the express terms of
this Agreement, a different or greater proportion of the Lenders.
13.04. Reliance. The Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for the
Borrowers and Guarantors), independent public accountants and other experts
selected by it.
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13.05. Indemnification. To the extent that the Agent is required to be
reimbursed and indemnified by the Borrowers but is not reimbursed and
indemnified by the Borrowers and the Borrowers are not otherwise relieved or
excused from such obligation, the Lenders will reimburse and indemnify the Agent
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against it in any way relating to or arising out of the Loan Documents or any
action taken or omitted by the Agent under the Loan Documents, in proportion to
each Lender's Pro Rata Share. The obligations of the Lenders under this Section
13.05 shall survive the payment in full of the Loans, the Reimbursement
Obligations and all other Obligations and the termination of this Agreement.
13.06. Agent Individually. With respect to its Pro Rata Share of the
Revolving Credit Commitments hereunder, if any, and the Loans made by it, if
any, the Agent shall have and may exercise the same rights and powers hereunder
and is subject to the same obligations and liabilities as and to the extent set
forth herein for any other Lender. The terms "Lenders" and "Requisite Lenders"
or any similar terms shall, unless the context clearly otherwise indicates,
include the Agent in its individual capacity, if applicable, as a Lender or one
of the Requisite Lenders. The Agent and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with any Borrower or any Affiliate of a Borrower as if it were not
acting as the Agent pursuant hereto.
13.07. Successor Agents.
(a) Resignation. The Agent may resign from the performance of all
its functions and duties hereunder at any time by giving at least thirty (30)
Business Days' prior written notice to TIMCO and the Lenders. Such resignation
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to this Section 13.07.
(b) Appointment by Agent. Upon any such notice of resignation, the
Agent shall have the right to appoint a successor Agent selected from among the
Lenders, which appointment shall be subject to (i) the prior written approval of
TIMCO (which may not be unreasonably withheld or delayed, and shall not be
required upon the occurrence and during the continuance of an Event of Default)
and the Requisite Lenders and (ii) the concurrence of the Lender proposed for
such appointment.
(c) Rights of the Successor and Retiring Agents. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article XIII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Agent under this
Agreement.
13.08. Relations Among Lenders. Each Lender and each Issuing Bank
agrees (except as provided in Section 15.05) that it will not take any legal
action, nor institute any actions or proceedings, against any Borrower,
Guarantor, or any other obligor hereunder or with respect to any Collateral,
without the prior written consent of the Requisite Lenders. Without limiting the
generality
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of the foregoing, no Lender may accelerate or otherwise enforce its portion of
the Obligations, or unilaterally terminate its Revolving Credit Commitments,
except in accordance with Section 12.02(a).
13.09. Concerning the Collateral and the Loan Documents.
(a) Protective Advances. The Agent may from time to time, (i)
before or after the occurrence of an Event of Default, make such disbursements
and advances pursuant to the Loan Documents which the Agent, in its sole
discretion, deems necessary or desirable to preserve or protect the Collateral
or any portion thereof and (ii) after the occurrence of an Event of Default
which is continuing unwaived, to enhance the likelihood or maximize the amount
of repayment of the Loans and other Obligations ("Protective Advances");
provided, however, that Agent shall obtain the prior written consent of the
Requisite Lenders with respect to the making of any Protective Advance which,
when combined with other Protective Advances not then reimbursed by the
Borrowers, would exceed $3,000,000. The Agent shall notify TIMCO and each Lender
in writing of each such Protective Advance, which notice shall include a
description of the purpose of such Protective Advance. The Borrowers jointly and
severally agree to pay the Agent, upon demand, the principal amount of all
outstanding Protective Advances, together with interest thereon at the rate from
time to time applicable to Base Rate Loans pursuant to Section 5.01 from the
date of such Protective Advance until the outstanding principal balance thereof
is paid in full. If the Borrowers fail to make payment in respect of any
Protective Advance within one (1) Business Day after the date TIMCO receives
written demand therefor from the Agent, the Agent shall promptly notify each
Lender and each Lender agrees that it shall thereupon make available to the
Agent, in Dollars in immediately available funds, the amount equal to such
Lender's Pro Rata Share of such Protective Advance; provided, however, that no
Lender shall be required to make any such payment in excess of its then unfunded
Revolving Credit Commitment. If such funds are not made available to the Agent
by any Lender within one (1) Business Day after the Agent's demand therefor, the
Agent will be entitled to recover any such amount from such Lender together with
interest thereon at the Federal Funds Rate for each day during the period
commencing on the date of such demand and ending on the date such amount is
received. The failure of any Lender to make available to the Agent its Pro Rata
Share of any such Protective Advance shall neither relieve any other Lender of
its obligation hereunder to make available to the Agent such other Lender's Pro
Rata Share of such Protective Advance on the date such payment is to be made nor
increase the obligation of any other Lender to make such payment to the Agent.
All outstanding principal of, and interest on, Protective Advances shall
constitute Obligations secured by the Collateral until paid in full by the
Borrowers.
(b) Authority. Each Lender and each Issuing Bank authorizes and
directs the Agent to enter into the Loan Documents relating to the Collateral
for the benefit of the Lenders and the Issuing Banks. Each Lender and each
Issuing Bank agrees that any action taken by the Agent or the Requisite Lenders
(or, where required by the express terms of this Agreement, a different or
greater proportion of the Lenders) in accordance with the provisions of this
Agreement or the other Loan Documents, and the exercise by the Agent or the
Requisite Lenders (or, where so required, such greater or different proportion
of the Lenders) of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders and Issuing Banks. Without limiting the
generality of the foregoing, the Agent shall have the sole and exclusive right
and authority to (i)
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act as the disbursing and collecting agent for the Lenders and the Issuing Banks
with respect to all payments and collections arising in connection with this
Agreement and the Loan Documents relating to the Collateral; (ii) execute and
deliver each Loan Document relating to the Collateral and accept delivery of
each such agreement delivered by any Borrower or Guarantor a party thereto;
(iii) act as collateral agent for the Lenders and the Issuing Banks for purposes
of the perfection of all security interests and Liens created by such agreements
and all other purposes stated therein; provided, however, the Agent hereby
appoints, authorizes and directs the Lenders and the Issuing Banks to act as
collateral sub-agent for the Agent, the Lenders and the Issuing Banks for
purposes of the perfection of all security interests and Liens with respect to
the Property at any time in the possession of such Lender or such Issuing Bank,
including, without limitation, deposit accounts maintained with, and cash and
Cash Equivalents held by, such Lender or such Issuing Bank; (iv) manage,
supervise and otherwise deal with the Collateral; (v) take such action as is
necessary or desirable to maintain the perfection and priority of the security
interests and liens created or purported to be created by the Loan Documents;
and (vi) except as may be otherwise specifically restricted by the terms of this
Agreement or any other Loan Document, exercise all remedies given to the Agent,
the Lenders or the Issuing Banks with respect to the Collateral under the Loan
Documents relating thereto, applicable law or otherwise.
(c) Release of Collateral.
(i) Each Lender and each Issuing Bank hereby directs, in accordance
with the terms of this Agreement, the Agent to release any Lien held by the
Agent for the benefit of the Holders:
(A) against all of the Collateral, upon final and indefeasible
payment in full of the Obligations and termination of this Agreement;
(B) against any part of the Collateral sold or disposed of by a
Borrower or any of its Subsidiaries, if such sale or disposition is
permitted by Section 10.02, as certified to the Agent by TIMCO in an
Officer's Certificate, or is otherwise consented to by the Requisite
Lenders; and/or
(C) against any part of the Collateral consisting of a promissory
note, upon final and indefeasible payment in full of the Indebtedness
evidenced thereby.
(ii) Each Lender and each Issuing Bank hereby authorizes the Agent,
on behalf of such Lender and Issuing Bank, to release any Borrower or
Guarantor from its obligations as a Borrower or Guarantor and the Liens
granted by such Borrower or Guarantor to secure the Obligations and its
guaranty obligations upon such Borrower's or Guarantor's ceasing to be a
Subsidiary of Parent as a result of a sale or transfer permitted by Section
10.02(b).
(iii) Each Lender and each Issuing Bank hereby directs the Agent to
execute and deliver or file such termination and partial release statements
and do such other things as are necessary to release Guarantors and/or
Liens to be released pursuant to this Section 13.09(c) promptly upon the
effectiveness of any such release.
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ARTICLE XIV
YIELD PROTECTION
14.01. Taxes.
(a) Payment of Taxes. Any and all payments by the Borrowers, or any of
them, hereunder or under any Note or other document evidencing any Obligations
shall be made, in accordance with Section 4.02, free and clear of and without
reduction for any and all present or future taxes, levies, imposts, deductions,
charges, withholdings, and all stamp or documentary taxes, excise taxes, ad
valorem taxes and other taxes imposed on the value of the Property, charges or
levies which arise from the execution, delivery or registration, or from payment
or performance under, or otherwise with respect to, any of the Loan Documents or
the Revolving Credit Commitments and all other liabilities with respect thereto
excluding, in the case of each Lender, each Issuing Bank and the Agent, taxes
imposed on or measured by net income or overall gross receipts and capital and
franchise taxes imposed on it by (i) the United States, (ii) the Governmental
Authority of the jurisdiction in which such Lender's Domestic Lending Office is
located or any political subdivision thereof or (iii) the Governmental Authority
in which such Person is organized, managed and controlled or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges and withholdings being hereinafter referred to as "Taxes"). If any
Borrower shall be required by law to withhold or deduct any Taxes from or in
respect of any sum payable hereunder or under any such Note or document to any
Lender, any Issuing Bank or the Agent, (x) the sum payable to such Lender,
Issuing Bank, or the Agent shall be increased as may be necessary so that after
making all required withholding or deductions (including withholding or
deductions applicable to additional sums payable under this Section 14.01) such
Lender, such Issuing Bank or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such withholding or deductions
been made, (y) such Borrower shall make such withholding or deductions, and (z)
such Borrower shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) Indemnification. The Borrowers will, jointly and severally,
indemnify each Lender, each Issuing Bank and the Agent against, and reimburse
each on demand for, the full amount of all Taxes (including, without limitation,
any Taxes imposed by any Governmental Authority on amounts payable under this
Section 14.01 and any additional income or franchise taxes resulting therefrom)
incurred or paid by such Lender, such Issuing Bank or the Agent (as the case may
be) or any of their respective Affiliates and any liability (including
penalties, interest, and out-of-pocket expenses paid to third parties) arising
therefrom or with respect thereto, whether or not such Taxes were lawfully
payable. A certificate as to any additional amount payable to any Person under
this Section 14.01 submitted by it to TIMCO shall, absent manifest error, be
final, conclusive and binding upon all parties hereto. Each Lender and each
Issuing Bank agrees, within a reasonable time after receiving a written request
from a Borrower, to provide such Borrower and the Agent with such certificates
as are reasonably required, and take such other actions as are reasonably
necessary to claim such exemptions as such Lender or such Issuing Bank may be
entitled to claim in respect of all or a portion of any Taxes which are
otherwise required to be paid or deducted or withheld pursuant to this Section
14.01 in respect of any payments under this Agreement or under the Notes.
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(c) Receipts. Within thirty (30) days after the date of any payment of
Taxes by any Borrower, it will furnish to the Agent, at its address referred to
in Section 15.08, the original or a certified copy of a receipt evidencing
payment thereof.
(d) Foreign Bank Certifications.
(i) Each Lender that is not created or organized under the laws of the
United States or a political subdivision thereof, if not delivered to TIMCO
and the Agent theretofore, shall deliver to TIMCO and the Agent on the
Effective Date or the date on which such Lender becomes a Lender pursuant
to Section 15.01 hereof a true and accurate certificate executed in
duplicate by a duly authorized officer of such Lender or such other
documentation (including applicable IRS forms) evidencing that such Lender
is eligible to receive payments hereunder and under the Notes without
deduction or withholding of United States federal income tax (A) under the
provisions of an applicable tax treaty concluded by the United States (in
which case the certificate shall be accompanied by two duly completed and
executed copies of IRS Form W-8BEN (or any successor or substitute form or
forms)), (B) under Section 1442 of the Internal Revenue Code (in which case
the certificate shall be accompanied by two duly completed copies of IRS
Form W-8ECI (or any successor or substitute form or forms)), (C) under
Section 871(h) or 881(c) of the Internal Revenue Code in the case of any
Lender that is claiming an exemption from the withholding of United States
federal income tax with respect to "portfolio interest" (in which case, the
certificate shall be accompanied by two accurate and complete original
signed copies of IRS Form W-8BEN (or any successor or substitute form or
forms)) and such certificate shall include representations that the Lender
is not (1) a "bank" for purposes of Section 881(c) of the Internal Revenue
Code, (2) a ten percent shareholder of any Borrower, within the meaning of
Section 871(h)(3) of the Internal Revenue Code or (3) a controlled foreign
corporation related to any Borrower within the meaning of Section 864(d)(4)
of the Internal Revenue Code, or (D) that such Lender is otherwise exempt
from withholding and/or backup withholding as evidenced by the provision of
the applicable IRS forms, including, without limitation, IRS Forms W-8IMY
and/or W-9.
(ii) Each Lender further agrees to deliver to TIMCO and the Agent, from
time to time, a true and accurate certificate executed in duplicate by a
duly authorized officer of such Lender before or promptly upon the
occurrence of any event requiring a change in the most recent certificate
previously delivered by it to TIMCO and the Agent pursuant to this Section
14.01(d). Each certificate required to be delivered pursuant to this
Section 4.01(d)(ii) shall certify as to one of the following:
(A) that such Lender can continue to receive payments hereunder and
under the Notes without deduction or withholding of United States federal
income tax;
(B) that such Lender cannot continue to receive payments hereunder and
under the Notes without deduction or withholding of United States federal
income tax as specified therein but does not require additional payments
pursuant to Section 14.01(a) because it is entitled to recover the full
amount of any such deduction or withholding from a source other than the
Borrowers; or
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(C) that such Lender is no longer capable of receiving payments of
interest hereunder and under the Notes without deduction or withholding of
United States federal income tax as specified therein and that it is not
capable of recovering the full amount of the same from a source other than
the Borrowers.
Each Lender agrees to deliver to TIMCO and the Agent further duly completed
copies of the above-mentioned IRS forms on or before the earlier of (x) the date
that any such form expires or becomes obsolete or otherwise is required to be
resubmitted as a condition to obtaining an exemption from withholding from
United States federal income tax and (y) fifteen (15) days after the occurrence
of any event requiring a change in the most recent form previously delivered by
such Lender to TIMCO and Agent, unless any change in treaty, law, regulation, or
official interpretation thereof which would render such form inapplicable or
which would prevent the Lender from duly completing and delivering such form has
occurred prior to the date on which any such delivery would otherwise be
required and the Lender promptly advises TIMCO that it is not capable of
receiving payments hereunder and under the Notes without any deduction or
withholding of United States federal income tax. Each Lender further agrees to
promptly furnish to TIMCO and the agent such additional documents as may be
reasonably required by the Borrowers or Agent to establish any exemption from or
reduction of any Taxes required to be deducted or withheld and which may be
obtained without undue expense to such Lender. Notwithstanding anything else
contained herein, no Lender shall be required to deliver any IRS form that it is
no longer entitled to deliver because of a change in treaty, law, regulations or
official interpretations thereof (a "Tax Law Change") and such Lender shall
continue to be entitled to the benefits of clauses (a), (b), and (c) of this
Section 14.01 notwithstanding its inability to deliver such IRS forms because of
a Tax Law Change after the date it first became a Lender hereunder.
14.02. Increased Capital. If after the date hereof any Lender or
Issuing Bank determines that (i) the adoption or implementation of or any change
in or in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or banks or financial institutions generally (whether or
not having the force of law), compliance with which affects or would affect the
amount of capital required or expected to be maintained by such Lender or
Issuing Bank or any corporation controlling such Lender or Issuing Bank and (ii)
the amount of such capital is increased by or based upon (A) the making or
maintenance by any Lender of its participation in or obligation to participate
in Letters of Credit or (B) the issuance or maintenance by any Issuing Bank of,
or the existence of any Issuing Bank's obligation to issue, Letters of Credit,
then, in any such case, upon written demand by such Lender or Issuing Bank (with
a copy of such demand to the Agent), the Borrowers shall immediately pay to the
Agent for the account of such Lender or Issuing Bank, from time to time as
specified by such Lender or Issuing Bank, additional amounts sufficient to
compensate such Lender or Issuing Bank or such corporation therefor. Such demand
shall be accompanied by a statement as to the amount of such compensation and
include a brief summary of the basis for such demand. Such statement shall be
conclusive and binding for all purposes, absent manifest error.
14.03. Changes; Legal Restrictions. If after the date hereof any Lender
or Issuing Bank determines that the adoption or implementation of or any change
in or in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other
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Governmental Authority or quasi-governmental authority exercising jurisdiction,
power or control over any Lender, Issuing Bank or over banks or financial
institutions generally (whether or not having the force of law), compliance with
which:
(a) does or will subject a Lender or an Issuing Bank to charges (other
than taxes) of any kind which such Lender or Issuing Bank reasonably determines
to be applicable to the Revolving Credit Commitments of the Lenders and/or the
Issuing Banks to issue and/or participate in Letters of Credit or change the
basis of taxation of payments to that Lender or Issuing Bank of fees, interest,
or any other amount payable hereunder with respect to Letters of Credit; or
(b) does or will impose, modify, or hold applicable, in the
determination of a Lender or an Issuing Bank, any reserve, special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities (including those pertaining to Letters of
Credit) in or for the account of, advances or loans by, commitments made, or
other credit extended by, or any other acquisition of funds by, a Lender or an
Issuing Bank;
and the result of any of the foregoing is to increase the cost to that Lender or
Issuing Bank of making, renewing or maintaining its Revolving Credit Commitments
with respect to, or issuing or participating in, the Letters of Credit or to
reduce any amount receivable thereunder; then, in any such case, upon written
demand by such Lender or Issuing Bank (with a copy of such demand to the Agent),
the Borrowers shall immediately pay to the Agent for the account of such Lender
or Issuing Bank, from time to time as specified by such Lender or Issuing Bank,
such amount or amounts as may be necessary to compensate such Lender or Issuing
Bank for any such additional cost incurred or reduced amount received. Such
demand shall be accompanied by a statement as to the amount of such compensation
and include a brief summary of the basis for such demand. Such statement shall
be conclusive and binding for all purposes, absent manifest error.
14.04. Limitation on Additional Amounts Payable by the Borrowers.
Notwithstanding the provisions of Section 14.01(a), the Borrowers shall not be
required to pay any additional amounts thereunder to a Lender if (a) the
obligation to pay such additional amounts would not have arisen but for a
failure by the Lender to comply with the requirements described in Section 14.01
(other than as a result of a Tax Law Change) or (b) the Lender shall not have
furnished TIMCO with such forms or shall not have taken such other action as
reasonably may be available to it under applicable tax laws and any applicable
tax treaty to obtain an exemption from, or reduction (to the lowest applicable
rate) of withholding of such United States federal income tax; provided,
however, the Borrowers' obligation to pay such additional amounts shall be
reinstated upon receipt of such forms or evidence that action with respect to
obtaining such exemption or reduction has been taken.
14.05. Change in Lending Office. Any Lender claiming any additional
amounts payable pursuant to Section 14.01 shall use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the Domestic Lending Office designated by it for purposes of this
Agreement to a Domestic Lending Office in another jurisdiction, if the making of
such a change would avoid the need for, or reduce the amount of, any such
additional amounts which
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may thereafter accrue and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.
14.06. Illegality.
(a) If at any time any Lender determines (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties)
that the making or continuation of any Eurodollar Rate Loan has become unlawful
or impermissible by compliance by that Lender with any law, governmental rule,
regulation or order of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful or
would result in costs or penalties), then, and in any such event, such Lender
may give notice of that determination, in writing, to TIMCO and the Agent, and
the Agent shall promptly transmit the notice to each other Lender.
(b) When notice is given by a Lender under Section 14.06(a), (i) the
Borrowers' right to request from such Lender and such Lender's obligation, if
any, to make Eurodollar Rate Loans shall be immediately suspended, and such
Lender shall make a Base Rate Loan as part of any requested Borrowing of
Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loan or Loans are
then outstanding, the Borrowers shall immediately, or if permitted by applicable
law, no later than the date permitted thereby, upon at least one (1) Business
Day's prior written notice to the Agent and the affected Lender, convert each
such Loan into a Base Rate Loan.
(c) If at any time after a Lender gives notice under Section 14.06(a)
such Lender determines that it may lawfully make Eurodollar Rate Loans, such
Lender shall promptly give notice of that determination, in writing, to TIMCO
and the Agent, and the Agent shall promptly transmit the notice to each other
Lender. The Borrowers' right to request, and such Lender's obligation, if any,
to make, Eurodollar Rate Loans shall thereupon be restored.
14.07. Compensation. In addition to all amounts required to be paid by
the Borrowers pursuant to Section 5.01, the Borrowers shall compensate each
Lender, upon demand, for all losses, expenses and liabilities (including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurodollar Rate Loans to the Borrower but excluding any
loss of the then applicable Eurodollar Rate Margin on the relevant Loans) which
that Lender may sustain (a) if for any reason a Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion/Continuation given
by TIMCO or in a telephonic request by it for borrowing or
conversion/continuation or a successive Eurodollar Interest Period does not
commence after notice therefor is given pursuant to Section 5.01(e), including,
without limitation, pursuant to Section 5.03(d), (b) if for any reason any
Eurodollar Rate Loan is prepaid or converted (including, without limitation,
mandatorily pursuant to Section 4.01 or Section 14.06(b)) on a date which is not
the last day of the applicable Eurodollar Interest Period, (c) as a consequence
of a required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a
result of any of the events indicated in Section 5.03(d) or Section 14.06(b), or
(d) as a consequence of any failure by the Borrowers to repay Eurodollar Rate
Loans when required by the terms of this Agreement. The Lender making demand for
such compensation shall deliver to TIMCO concurrently with such demand a written
statement in reasonable detail as to such losses, expenses and liabilities, and
this statement shall be conclusive as to the amount of compensation due to that
Lender, absent
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manifest error.
ARTICLE XV
MISCELLANEOUS
15.01. Assignments and Participations.
(a) Assignments. No assignments or participations of any Lender's
rights or obligations under this Agreement shall be made except in accordance
with this Section 15.01. Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all of its rights and obligations with respect to the Loans and the
Letters of Credit) in accordance with the provisions of this Section 15.01.
(b) Limitations on Assignments. Each assignment shall be subject to
the following conditions: (i) each such assignment may be on a non-pro-rata
basis, but shall be of a constant, and not a varying, ratable percentage of all
of the assigning Lender's rights and obligations under this Agreement which are
subject to such assignment and, in the case of a partial assignment other than
an assignment on the Effective Date, shall be in a minimum principal amount of
$4,000,000, (ii) each such assignment shall be to an Eligible Assignee, and
(iii) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance. Upon such execution, delivery, acceptance and recording in the
Register, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder shall, in addition to any rights and
obligations hereunder held by it immediately prior to such effective date, if
any, have the rights and obligations hereunder that have been assigned to it
pursuant to such Assignment and Acceptance and shall, to the fullest extent
permitted by law, have the same rights and benefits hereunder as if it were an
original Lender hereunder, (B) the assigning Lender shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of such assigning Lender's
rights and obligations under this Agreement, the assigning Lender shall cease to
be a party hereto), and (C) upon the written request of the assignee thereunder,
the Borrowers shall execute and deliver to such assignee a Note evidencing its
obligations to such assignee and the adjusted obligations to such assignor with
respect to the assigned Loans.
(c) The Register. The Agent shall maintain, on behalf of the
Borrowers, at its address referred to in Section 15.08 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and the Commitment
under each Loan of, and principal amount of, and interest on, the Loans under
each facility owing to, each Lender from time to time and whether such Lender is
an original Lender or the assignee of another Lender pursuant to an Assignment
and Acceptance. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrowers and each Guarantor, the
Agent and the Lenders shall treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
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(d) Fee. Upon its receipt of an Assignment and Acceptance executed by
the assigning Lender and an Eligible Assignee and a processing and recordation
fee of $3,500 (payable by the assigning Lender or the assignee, as shall be
agreed between them), the Agent shall, if such Assignment and Acceptance has
been completed and is in compliance with this Agreement and in substantially the
form of Exhibit A, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to TIMCO and the other Lenders.
(e) Participations. Each Lender may sell participations to one or more
other financial institutions in or to all or a portion of its rights and
obligations under and in respect of any and all facilities under this Agreement
(including, without limitation, all or a portion of any or all of its Revolving
Credit Commitments hereunder and the Loans owing to it and its undivided
interest in the Letters of Credit); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Revolving
Credit Commitments hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the Borrowers, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and (iv) such participant's
rights to agree or to restrict such Lender's ability to agree to the
modification, waiver or release of any of the terms of the Loan Documents or to
the release of any Collateral covered by the Loan Documents, to consent to any
action or failure to act by any party to any of the Loan Documents or any of
their respective Affiliates, or to exercise or refrain from exercising any
powers or rights which any Lender may have under or in respect of the Loan
Documents or any Collateral, shall be limited to the right to consent to (A)
increase in the Commitment of the Lender from whom such participant purchased a
participation, (B) reduction of the principal of, or rate or amount of interest
on the Loans(s) subject to such participation (other than by the payment or
prepayment thereof), (C) postponement of any date fixed for any payment of
principal of, or interest on, the Loan(s) subject to such participation and (D)
release of any Guarantor or all or a substantial portion of the Collateral
except as provided in Section 13.09(c).
(f) Information Regarding the Borrowers. Any Lender may, in connection
with any assignment or participation or proposed assignment or participation
pursuant to this Section 15.01, disclose to the assignee or participant or
proposed assignee or participant, any information relating to Parent, any
Borrower, or any other Subsidiaries of Parent furnished to such Lender by the
Agent or by or on behalf of such Person(s); provided that, prior to any such
disclosure, such assignee or participant, or proposed assignee or participant,
shall agree to preserve in accordance with Section 15.20 the confidentiality of
any confidential information described therein.
(g) Payment to Participants. Anything in this Agreement to the
contrary notwithstanding, in the case of any participation, all amounts payable
by the Borrowers or Guarantors under the Loan Documents shall be calculated and
made in the manner and to the parties required hereby as if no such
participation had been sold.
(h) Lenders' Creation of Security Interests. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, Obligations
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owing to it and any Notes held by it), including, without limitation, a security
interest in favor of any Federal Reserve bank in accordance with Regulation A of
the Federal Reserve Board.
(i) Assignments by Agent. If Agent ceases to be a Lender under this
Agreement by virtue of any assignment made pursuant to this Section 15.01, then,
as of the effective date of such cessation, Citibank's obligations to issue
Letters of Credit pursuant to Section 3.01 shall terminate and Citibank shall be
an Issuing Bank hereunder only with respect to outstanding Letters of Credit
issued prior to such date.
15.02. Expenses.
(a) Generally. The Borrowers, jointly and severally, agree upon demand
to pay, or reimburse the Agent for, all of the Agent's reasonable internal and
external audit, legal, appraisal, valuation, filing, document duplication and
reproduction and investigation expenses and for all other out-of-pocket costs
and expenses of every type and nature (including, without limitation, the
reasonable fees, expenses and disbursements of Sidley Xxxxxx Xxxxx & Xxxx, local
legal counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisers, and other consultants and agents) incurred by the Agent
in connection with (i) the Agent's review and investigation of each Borrower and
its Affiliates and the Collateral in connection with the preparation,
negotiation, and execution of the Loan Documents and the Agent's periodic
reviews and audits of the Borrowers and Guarantors; (ii) the preparation,
negotiation, execution and interpretation of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article VI) and the other Loan Documents and the making of the
Loans hereunder; (iii) the creation, perfection or protection of the Liens under
the Loan Documents (including, without limitation, any reasonable fees and
expenses for local counsel in various jurisdictions); (iv) the ongoing
administration of this Agreement, the other Loan Documents and the Loans,
including consultation with attorneys in connection therewith and with respect
to the Agent's rights and responsibilities under this Agreement and the other
Loan Documents; (v) the protection, collection or enforcement of any of the
Obligations or the enforcement of any of the Loan Documents; (vi) the
commencement, defense or intervention in any court proceeding relating in any
way to the Obligations, the Property, any Borrower, any Guarantor, any of
Parent's other Subsidiaries, this Agreement, any of the other Loan Documents or
other Contractual Obligations of such Persons; (vii) the response to, and
preparation for, any subpoena or request for document production with which the
Agent is served or deposition or other proceeding in which the Agent is called
to testify, in each case, relating in any way to the Obligations, the Property,
any Borrower, any Guarantor, any of Parent's other Subsidiaries, this Agreement,
any of the other Loan Documents or other Contractual Obligations of such
Persons; and (viii) any amendments, consents, waivers, assignments,
restatements, or supplements to any of the Loan Documents and the preparation,
negotiation, and execution of the same.
(b) After Default. The Borrowers, jointly and severally, further agree
to pay or reimburse the Agent, the Issuing Banks and the Lenders upon demand for
all out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys' fees (including allocated costs of internal counsel and costs of
settlement) incurred by the Agent, any Issuing Bank or any Lender after the
occurrence of an Event of Default (i) in enforcing any Loan Document or
Obligation or any security therefor or exercising or enforcing any other right
or remedy available
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by reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or in any insolvency or bankruptcy proceeding; (iii) in
commencing, defending or intervening in any litigation or in filing a petition,
complaint, answer, motion or other pleadings in any legal proceeding relating to
the Obligations, the Property, any Borrower, any Guarantor, or any of Parent's
other Subsidiaries and related to or arising out of the transactions
contemplated hereby or by any of the other Loan Documents; and (iv) in taking
any other action in or with respect to any suit or proceeding (bankruptcy or
otherwise) described in clauses (i) through (iii) above.
15.03. Indemnity. The Borrowers, jointly and severally, further agree
(a) to indemnify and hold harmless the Agent and each and all of the Lenders and
Issuing Banks and each of their respective officers, directors, employees,
attorneys and agents (including, without limitation, those retained in
connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article VI) (collectively, the "Indemnitees") from and
against any and all liabilities, obligations, losses (other than loss of
profits), damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (excluding any taxes (other
than specifically provided for in Article XIV) and including, without
limitation, the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of (i) this Agreement or the other Loan Documents, or any act,
event or transaction related or attendant thereto or to the making of the Loans
and the issuance of and participation in Letters of Credit hereunder, the
management of such Loans or Letters of Credit, the use or intended use of the
proceeds of the Loans or Letters of Credit hereunder, or any of the other
transactions contemplated in or by any of the Loan Documents, or (ii) any
Liabilities and Costs relating to any violation by any Borrower or Guarantor, or
their respective predecessors-in-interest, of any Environmental, Health or
Safety Requirements of Law, the past, present or future operations of any
Borrower or Guarantor, or any of their respective predecessors-in-interest, or,
the past, present or future environmental, health or safety condition of any
respective past, present or future Property, the presence of asbestos-containing
materials at any respective past, present or future Property, or the Release or
threatened Release of any Contaminant into the environment by any Borrower or
Guarantor, or their respective predecessors-in-interest, or the Release or
threatened Release of any Contaminant into the environment from or at any
facility to which any Borrower or Guarantor, or their respective
predecessors-in-interest, sent or directly arranged the transport of any
Contaminant (collectively, the "Indemnified Matters"); provided, however, the
Borrowers shall have no obligation to an Indemnitee hereunder with respect to
Indemnified Matters caused by or resulting from the willful misconduct or gross
negligence of such Indemnitee, as determined by a final, non-appealable order of
a court of competent jurisdiction and (b) not to assert any claim against any of
the Indemnified Parties on any theory of liability for special, indirect,
consequential or punitive damages arising out of, or in any way in connection
with, the Revolving Credit Commitments, the Obligations or any other matters
governed by this Agreement and/or the other Loan Documents. To the extent that
the undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, each Borrower shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees. The Agent, Lenders and the
Issuing Banks agree to notify TIMCO of the institution or assertion of any
Indemnified Matter, but the parties hereto hereby agree that the failure to so
notify TIMCO shall not release any Borrower from its obligations
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hereunder, except to the extent of any material increase in the liabilities of
such Borrower under this Section 15.03 directly resulting from such failure to
receive notice from such Indemnitees.
15.04. Change in Accounting Principles. If any change in the
accounting principles used in the preparation of the most recent Financial
Statements referred to in Section 8.01 are hereafter required or permitted by
the rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Borrowers with the agreement of their independent certified public accountants
and such changes result in a change in the method of calculation of any of the
covenants, standards or terms found in Article IX, Article X, and Article XI,
the parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such changes with the desired result that
the criteria for evaluating compliance with such covenants, standards and terms
by the Borrowers shall be the same after such changes as if such changes had not
been made; provided, however, no change in GAAP that would affect the method of
calculation of any of the covenants, standards or terms shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory to
the Requisite Lenders and TIMCO, to so reflect such change in accounting
principles.
15.05. Setoff. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each Lender, each
Issuing Bank and any Lender Affiliate is hereby authorized by Parent and each
Borrower at any time or from time to time, without notice to any Person (any
such notice being hereby expressly waived) to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured
(but not including trust accounts)) and any other Indebtedness at any time held
or owing by such Lender, Issuing Bank or any Lender Affiliate to or for the
credit or the account of Parent or such Borrower against and on account of the
Obligations of the Borrowers to such Lender, Issuing Bank or any Lender
Affiliate, including, but not limited to, all Loans and Letters of Credit and
all claims of any nature or description arising out of or in connection with
this Agreement, irrespective of whether or not (i) such Lender or Issuing Bank
shall have made any demand hereunder or (ii) the Agent, at the request or with
the consent of the Requisite Lenders, shall have declared the principal of and
interest on the Loans and other amounts due hereunder to be due and payable as
permitted by Article XII and even though such Obligations may be contingent or
unmatured. Each Lender and each Issuing Bank agrees that it shall not, without
the express consent of the Requisite Lenders, and that it shall, to the extent
it is lawfully entitled to do so, upon the request of the Requisite Lenders,
exercise its setoff rights hereunder against any accounts of any Borrower or
Guarantor now or hereafter maintained with such Lender, Issuing Bank or any
Lender Affiliate or either of them. Any Lender whose Lender Affiliate has
exercised any such right of set-off agrees to provide the Agent and TIMCO with
written notice thereof promptly after the occurrence thereof.
15.06. Ratable Sharing. The Lenders agree among themselves that (i)
with respect to all amounts received by them which are applicable to the payment
of the Obligations (excluding the fees described in Sections 3.01(g), 5.02 and
Article XIV), equitable adjustment will be made so that, in effect, all such
amounts will be shared among them ratably in accordance with their Pro Rata
Shares, whether received by voluntary payment, by the exercise of the right of
setoff or banker's lien, by counterclaim or cross-action or by the enforcement
of any or all of the Obligations (excluding the
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fees described in Sections 3.01(g), 5.02 and Article XIV) or the Collateral,
(ii) if any of them shall by voluntary payment or by the exercise of any right
of counterclaim, setoff, banker's lien or otherwise, receive payment of a
proportion of the aggregate amount of the Obligations held by it, which is
greater than the amount which such Lender is entitled to receive hereunder, the
Lender receiving such excess payment shall purchase, without recourse or
warranty, an undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in such Obligations
owed to the others so that all such recoveries with respect to such Obligations
shall be applied ratably in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 15.06 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 15.05, the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation.
15.07. Amendments and Waivers.
(a) General Provisions. Unless otherwise provided for or required
in this Agreement, no amendment or modification of any provision of this
Agreement or any of the other Loan Documents shall be effective without the
written agreement of the Requisite Lenders (which the Requisite Lenders shall
have the right to grant or withhold in their sole discretion) and the Borrower
or Guarantor parties thereto, as applicable. No termination or waiver of any
provision of this Agreement or any of the other Loan Documents, or consent to
any departure by any Borrower or Guarantor therefrom, shall be effective without
the written concurrence of the Requisite Lenders, which the Requisite Lenders
shall have the right to grant or withhold in their sole discretion. All
amendments, modifications, waivers and consents not specifically reserved to
Lenders, Issuing Banks, and the Agent in Section 15.07(b), Section 15.07(c) and
in other provisions of this Agreement or the other Loan Documents shall require
only the approval of the Requisite Lenders. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on any Borrower in any case shall entitle
such Borrower or any other Borrower to any other or further notice or demand in
similar or other circumstances.
(b) Amendments, Consents and Waivers by All Lenders. Any amendment,
modification, termination, waiver or consent with respect to any of the
following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender:
(i) release of any Borrower or Guarantor (except as provided in
Section 13.09(c)(ii)) or all or a substantial portion of the Collateral
(except as provided in Section 13.09(c)),
(ii) change in the definitions of Maximum Revolving Credit Amount,
Requisite Lenders, or Revolving Credit Availability,
(iii) amendment of Section 15.01 or this Section 15.07,
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(iv) assignment of any right or interest in or under this Agreement
or any of the other Loan Documents by any Borrower,
(v) waiver of any Event of Default described in Sections 12.01(a),
(f), (g), (h), and (m),
(vi) waiver of any conditions specified in Sections 6.01 or 6.02
(except with respect to a condition based upon another provision of this
Agreement, the waiver of which requires only the concurrence of the
Requisite Lenders),
(vii) increase in the amount of the Revolving Credit Commitments or
Term Loan,
(viii) reduction of the principal amount of, rate or amount of
interest on the Loans, the Reimbursement Obligations, or any fees or other
amounts payable to Lenders (other than by the payment or prepayment
thereof), and
(ix) postponement of the Revolving Credit Termination Date or any
date fixed for any payment of principal of, or interest on, the Loans, the
Reimbursement Obligations or any fees or other amounts payable to Lenders.
(c) Agent Authority. The Agent may, but shall have no obligation
to, with the written concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Notwithstanding
anything to the contrary contained in this Section 15.07, no amendment,
modification, waiver or consent shall affect the rights or duties of the Agent
under this Agreement or the other Loan Documents, unless made in writing and
signed by the Agent in addition to the Lenders required above to take such
action; and the order of priority set forth in clauses (A) through (C) of
Section 4.02(b)(ii) may be changed only with the prior written consent of the
Agent. Notwithstanding anything herein to the contrary, in the event that any
Borrower shall have requested, in a writing delivered to the Agent and the
Lenders, that any Lender agree to an amendment, modification, waiver or consent
with respect to any particular provision or provisions of this Agreement or the
other Loan Documents, and such Lender shall have failed to state, in writing,
that it either agrees or disagrees (in full or in part) with all such requests
(in the case of its statement of agreement, subject to satisfactory
documentation and such other conditions it may specify) within thirty (30) days
after such request, then such Lender hereby irrevocably authorizes the Agent to
agree or disagree, in full or in part, and in the Agent's sole discretion, to
such requests on behalf of such Lender as such Lender's attorney-in-fact and to
execute and deliver any writing approved by the Agent which evidences such
agreement as such Lender's duly authorized agent for such purposes.
15.08. Notices. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, sent by facsimile transmission, e-mail
transmission, courier service, or United States certified mail and shall be
deemed to have been given when delivered in person or by courier service, when
sent by e-mail transmission, upon receipt of a facsimile transmission, or four
(4) Business Days after deposit in the United States mail with postage prepaid
and properly addressed. Notices to the Agent pursuant to Articles II, IV or XIII
shall not be effective until received by the Agent. For the purposes hereof, the
addresses of the parties hereto (until notice of a change thereof is delivered
as provided in
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this Section 15.08) shall be as set forth below each party's name on the
signature pages hereof or the signature page of any applicable Assignment and
Acceptance, or, as to each party, at such other address as may be designated by
such party in a written notice to all of the other parties to this Agreement.
15.09. Survival of Warranties and Agreements. All representations and
warranties made herein and all obligations of the Borrowers in respect of taxes,
indemnification and expense reimbursement shall survive the execution and
delivery of this Agreement and the other Loan Documents, the making and
repayment of the Loans, the issuance and discharge of Letters of Credit
hereunder and the termination of this Agreement and shall not be limited in any
way by the passage of time or occurrence of any event and shall expressly cover
time periods when the Agent, any of the Issuing Banks or any of the Lenders may
have come into possession or control of any of the Property.
15.10. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of the Agent, any Lender or any Issuing Bank in the
exercise of any power, right or privilege under any of the Loan Documents shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. All rights and remedies existing under the
Loan Documents are cumulative with and not exclusive of any rights or remedies
otherwise available.
15.11. Marshalling; Payments Set Aside. None of the Agent, any Lender
or any Issuing Bank shall be under any obligation to xxxxxxxx any assets in
favor of any Borrower or any other Person or against or in payment of any or all
of the Obligations. To the extent that any Borrower makes a payment or payments
to the Agent, the Lenders or the Issuing Banks or any of such Persons receives
payment from the proceeds of the Collateral or exercises its rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
15.12. Severability. In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
15.13. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement or be given any substantive effect.
15.14. Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
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15.15. Limitation of Liability. No claim may be made by Parent, any
Borrower, any Lender, any Issuing Bank, the Agent or any other Person against
the Agent, any other Issuing Bank or any other Lender or the Affiliates,
directors, officers, employees, attorneys or agents of any of them for any
special, consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and Parent, each Borrower, each Lender, each
Issuing Bank and the Agent hereby waives, releases and agrees not to xxx upon
any such claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
15.16. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Lenders and the Issuing Banks. The
rights hereunder of the Borrowers, or any interest therein, may not be assigned
without the written consent of all Lenders as provided in Section 15.07(c)(iv).
15.17. Certain Consents and Waivers of Parent and the Borrowers.
(a) Personal Jurisdiction.
(i) EACH OF THE AGENT, THE LENDERS, THE ISSUING BANKS, PARENT AND
THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING
JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR
PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
PARENT AND EACH BORROWER IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION
SYSTEM, INC., 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000 AS ITS AGENT (THE
"PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. EACH OF THE AGENT, THE LENDERS, THE
ISSUING BANKS, PARENT AND THE BORROWERS AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. PARENT AND EACH BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
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(ii) PARENT AND EACH BORROWER AGREES THAT THE AGENT SHALL HAVE THE
RIGHT TO PROCEED AGAINST PARENT AND SUCH BORROWER OR ITS PROPERTY IN A
COURT IN ANY LOCATION TO ENABLE THE AGENT, THE ISSUING BANKS AND THE
LENDERS TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR
OF THE AGENT, ANY ISSUING BANK OR ANY LENDER. PARENT AND EACH BORROWER
AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY
PROCEEDING BROUGHT BY THE AGENT, ANY LENDER OR ANY ISSUING BANK TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE
A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT, ANY LENDER OR ANY
ISSUING BANK. PARENT AND EACH BORROWER WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT, ANY ISSUING BANK OR
ANY LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. PARENT AND EACH BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE PROCESS AGENT OR PARENT'S OR SUCH
BORROWER'S NOTICE ADDRESS SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE
(5) DAYS AFTER SUCH MAILING. PARENT AND EACH BORROWER IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT TO BRING PROCEEDINGS
AGAINST PARENT OR ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
(c) Waiver of Jury Trial. EACH OF THE AGENT, THE LENDERS, THE
ISSUING BANKS, PARENT AND THE BORROWERS IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
ANY OF PARENT, THE BORROWERS, THE AGENT, LENDERS, OR ISSUING BANKS MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
15.18. Counterparts; Effectiveness; Inconsistencies. This Agreement
and any amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. Subject to the provisions of Section 6.01, this
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Agreement shall become effective against Parent, the Borrowers, each Lender,
each Issuing Bank and the Agent on the Effective Date. This Agreement and each
of the other Loan Documents shall be construed to the extent reasonable to be
consistent one with the other, but to the extent that the terms and conditions
of this Agreement are actually inconsistent with the terms and conditions of any
other Loan Document, this Agreement shall govern.
15.19. Limitation on Agreements. All agreements between Parent, the
Borrowers, the Agent, each Lender and each Issuing Bank in the Loan Documents
are hereby expressly limited so that in no event shall any of the Loans or other
amounts payable by the Borrowers under any of the Loan Documents be directly or
indirectly secured (within the meaning of Regulation U) by Margin Stock.
15.20. Confidentiality. Subject to Section 15.01(f), the Agent,
the Lenders and the Issuing Banks shall hold all nonpublic information obtained
pursuant to the requirements of this Agreement in accordance with the Agent's,
such Lender's or such Issuing Bank's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure (a) reasonably required
by a bona fide offeree, transferee or participant in connection with the
contemplated transfer or participation and shall require any such offeree,
transferee or participant to agree (and require any of its offerees, transferees
or participants to agree) in writing to comply with this Section 15.20 or (b) as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process and, unless prohibited by any Requirement of Law, use
its best efforts to inform TIMCO of such request or legal process prior to its
compliance therewith. In no event shall the Agent, any Lender or any Issuing
Bank be obligated or required to return any materials furnished by Parent, any
Borrower, or any other Subsidiary of Parent; provided, however, each offeree
shall be required to agree that if it does not become a transferee or
participant it shall return all materials furnished to it by such Persons in
connection with this Agreement. Any and all confidentiality agreements entered
into between the Agent, any Lender or any Issuing Bank and Parent or any
Borrower shall survive the execution of this Agreement. The Parent and each
Borrower acknowledges that each of the Agent, Issuing Bank and Lenders and their
respective Affiliates (collectively, the "Bank Parties") may be providing debt
financing, equity capital or other services, including, without limitation,
advisory services, to other companies in respect of which the Parent and
Borrowers may have conflicting interests regarding transactions described herein
and otherwise. Each of the Bank Parties hereby agrees that it will not use
confidential information obtained from the Parent and/or Borrowers or other
Subsidiaries of Parent by virtue of the transactions contemplated by this
Agreement or its other relationships with the Parent and/or Borrowers in
connection with the performance by such Bank Party of services for other
companies nor will it furnish any such information to such other companies. The
Parent and Borrowers each hereby acknowledge that no Bank Party has any
obligation to use confidential information obtained from other companies in
connection with the transactions contemplated by this Agreement or to furnish
the same to the Parent or any Borrower.
15.21. Entire Agreement. This Agreement, taken together with all of
the other Loan Documents, embodies the entire agreement and understanding among
the parties hereto and supersedes all prior agreements and understandings,
written and oral, relating to the subject matter hereof.
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15.22. Advice of Counsel. Each Borrower and each Lender and Issuing
Bank understand that the Agent's counsel represents only the Agent's and its
Affiliates' interests and that Parent, the Borrowers, other Lenders and other
Issuing Banks are advised to obtain their own counsel. Parent, and each Borrower
represents and warrants to the Agent and the other Holders that it has discussed
this Agreement with its counsel.
15.23. Amendment and Restatement of Predecessor Agreement; No
Novation. Upon this Agreement becoming effective, the terms and provisions of
the Predecessor Agreement shall be and hereby are amended, superseded and
restated in their entirety by the terms and provisions of this Agreement. This
Agreement shall not constitute a novation with respect to the Predecessor
Agreement.
15.24. Obligations of Borrowers Joint and Several. Each of the
Borrowers agrees that it shall be jointly and severally liable for all of the
Obligations. Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by the
Lenders and Issuing Banks under this Agreement, for the mutual benefit, directly
and indirectly, of each of the Borrowers and in consideration of the
undertakings of each of the Borrowers to accept joint and several liability for
the obligations of each of them. Each of the Borrowers jointly and severally
hereby irrevocably and unconditionally accepts, not merely as a surety but also
as a co-debtor, joint and several liability with the other Borrowers with
respect to the payment and performance of all of the Obligations, it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each of the Borrowers without preferences or distinction
among them. If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in accordance with the terms thereof, then in each such
event, the other Borrowers will make such payment with respect to, or perform,
such Obligation. The obligations of each Borrower under the provisions of this
Section 15.24 constitute full recourse obligations of such Borrower, enforceable
against it to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other
circumstances whatsoever. Except as otherwise expressly provided herein, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of any Loan made, or Letter of Credit issued, under this Agreement,
notice of occurrence of any Event of Default, or of any demand for any payment
under this Agreement, notice of any action at any time taken or omitted by any
Lender or Issuing Bank under or in respect of any of the Obligations, any
requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with this Agreement. Each Borrower
hereby assents to, and waives notice of, any extension or postponement of the
time for the payment of any of the Obligations, the acceptance of any partial
payment thereon, any waiver, consent or other action or acquiescence by any
Lender or Issuing Bank at any time or times in respect of any default by any
Borrower in the performance or satisfaction of any term, covenant, condition or
provision of this Agreement, any and all other indulgences whatsoever by any
Lender in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of the Obligations or in part, at any time or times, of any
security for any of the Obligations or the addition, substitution or release, in
whole or in part, of any Borrower. Without limiting the generality of the
foregoing, each Borrower assents to any other action or delay in acting or
failure to act on the part of any Lender, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any remedy or to
comply fully with the applicable laws or regulations thereunder which might, but
for the provisions of this Section 15.24, afford grounds for
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terminating, discharging or relieving such Borrower, in whole or in part, from
any of its obligations under this Section 15.24, it being the intention of each
Borrower that, so long as any of the Obligations remain unsatisfied, the
obligations of such Borrower under this Section 15.24 shall not be discharged
except by performance and then only to the extent of such performance. The
Obligations of each Borrower under this Section 15.24 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any Borrower
or any Lender. The joint and several liability of the Borrowers hereunder shall
continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, membership,
constitution or place of formation of any Borrower or any Lender or Issuing
Bank. The provisions of this Section 15.24 are made for the benefit of the
Holders and their respective successors and assigns, and may be enforced by any
such Person from time to time against any of the Borrowers as often as occasion
therefor may arise and without requirement on the part of any Holder first to
marshal any of its claims or to exercise any of its rights against any of the
other Borrowers or to exhaust any remedies available to it against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations or to elect any other remedy. The provisions of this
Section 15.24 shall remain in effect until all the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Holder upon the insolvency, bankruptcy
or reorganization of any of the Borrowers, or otherwise, the provisions of this
Section 15.24 will forthwith be reinstated in effect, as though such payment had
not been made. Notwithstanding any provision to the contrary contained herein or
in any other of the Loan Documents, to the extent the joint obligations of a
Borrower shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of each
Borrower hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the federal Bankruptcy Code). The Borrowers hereby agree, as among
themselves, that if any Borrower shall become an Excess Funding Borrower (as
defined below), each other Borrower shall, on demand of such Excess Funding
Borrower (but subject to the next sentence hereof and to subsection (B) below),
pay to such Excess Funding Borrower an amount equal to such Borrower's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the properties, assets, liabilities and debts of such Excess Funding Borrower)
of such Excess Payment (as defined below). The payment obligation of any
Borrower to any Excess Funding Borrower under this Section 15.24 shall be
subordinate and subject in right of payment to the prior payment in full of the
Obligations of such Borrower under the other provisions of this Agreement, and
such Excess Funding Borrower shall not exercise any right or remedy with respect
to such excess until payment and satisfaction in full of all of such
obligations. For purposes hereof, (i) "Excess Funding Borrower" shall mean, in
respect of any Obligations arising under the other provisions of this Agreement
(hereafter, the "Joint Obligations"), a Borrower that has paid an amount in
excess of its Pro Rata Share of the Joint Obligations; (ii) "Excess Payment"
shall mean, in respect of any Joint Obligations, the amount paid by an Excess
Funding Borrower in excess of its Pro Rata Share of such Joint Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 15.24, shall mean, for
any Borrower, the ratio (expressed as a percentage) of (A) the amount by which
the aggregate present fair saleable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Borrower (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Borrower hereunder) to (B) the amount by which the
aggregate
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present fair saleable value of all assets and other properties of such Borrower
and all of the other Borrowers exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Borrower and the other
Borrowers hereunder) of such Borrower and all of the other Borrowers, all as of
the Effective Date.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.
BORROWERS:
AEROCELL STRUCTURES, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx
Treasurer
TRIAD INTERNATIONAL MAINTENANCE COMPANY
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx
Treasurer
AIRCRAFT INTERIOR DESIGN, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx
Treasurer
TIMCO ENGINE CENTER, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx
Treasurer
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PARENT:
TIMCO AVIATION SERVICES, INC.
By /s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx
Treasurer
Notice Address (Borrowers & Parent):
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chief Financial Officer
Telecopier No. (000) 000-0000
e-mail: xxxxxxxxx@xxxxxxxx.xxx
with a copy to:
Akerman, Senterfitt & Xxxxxx, P.A.
Xxx Xxxxxxxxx Xxxxx Xxxxxx
00/xx/ Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxx
Telecopier No. (000) 000-0000
e-mail: Xxxxxxxxx@xxxxxxx.xxx
132
AGENT:
CITICORP USA, INC., as Agent
By /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
Vice President
Notice Address:
Citicorp USA, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx
Telecopier No. (000) 000-0000
e-mail: xxxxx.x.xxxxxxx@xxxx.xxx
with a copy to:
Sidley Xxxxxx Xxxxx & Xxxx
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
e-mail: xxxxxxx@xxxxxx.xxx
133
ISSUING BANK:
CITIBANK, N.A.
By /s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx
Vice President
Notice Address:
Citibank, N.A.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx
Telecopier No. (000) 000-0000
e-mail: xxxxx.x.xxxxxxx@xxxx.xxx
134
LENDERS:
CITICORP USA, INC.
By /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx
Vice President
Notice Address, Domestic Lending
Office and Eurodollar Lending
Office or Eurodollar Affiliate:
Citicorp USA, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx
Telecopier No. (000) 000-0000
e-mail: xxxxx.x.xxxxxxx@xxxx.xxx
135
SALOMON BROTHERS HOLDING COMPANY INC
By /s/
---------------------------------
Name:
Title:
Notice Address, Domestic Lending
Office and Eurodollar Lending
Office or Eurodollar Affiliate:
333 West 00/xx/ Xxxxxx
0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxx
Telecopier No. (000) 000-0000
e-mail: xxxxx.xxxxxx@xxxx.xxx
136
UPS CAPITAL CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
Notice Address, Domestic Lending Office,
Eurodollar Lending Office or Eurodollar
Affiliate:
00 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
e-mail: xxxxxxx@xxx.xxx
137
ARK CLO 2000-1, LIMITED
By: Patriarch Partners, LLC, its
Collateral Manager
By /s/
------------------------------------
Name:
Title:
Notice Address, Domestic Lending
Office, Eurodollar Lending Office
and Eurodollar Affiliate:
ARK CLO 2000-1, Limited
c/o Patriarch Partners, LLC
00 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Telecopier No.: (000) 000-0000
e-mail: xxxx.xxxxxx@xxxxxxxxx.xxx
with a copy to:
c/o Patriarch Partners, LLC
00 Xxxxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
e-mail: xxxxxx.xxxxxxx@xxxxxxxxx.xxx
138
EXHIBITS
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of Collection Account Agreement
Exhibit D -- Forms of Consignee/Bailee Letters and
Landlord Waivers
Exhibit E -- Form of Notes
Exhibit F -- Form of Notice of Borrowing
Exhibit G -- Form of Notice of Conversion/Continuation
Exhibit H -- TROL Guaranty
Exhibit I -- TROL Lease
Exhibit J -- TROL Participation Agreement
Exhibit K -- List of Closing Documents
Exhibit L -- Form of Officer's Certificate to Accompany Reports
Exhibit M -- Form of Letter to Accountants
Exhibit N -- Form of Off-Premises Inventory Report
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SCHEDULES
Schedule 1.01.1 -- BofA Note; Xxxxxxx Note
Schedule 1.01.2 -- Board of Directors of Parent as of Effective Date
Schedule 1.01.3 -- Permitted Equity Securities Options
Schedule 1.01.4 -- Permitted Existing Accommodation Obligations
Schedule 1.01.5 -- Permitted Existing Indebtedness
Schedule 1.01.6 -- Permitted Existing Investments
Schedule 1.01.7 -- Permitted Existing Liens
Schedule 1.01.8 -- Revolving Credit Commitments as of Effective Date
Schedule 2.01-A -- Term Loan Allocations as of Effective Date
Schedule 3.03 -- Letters of Credit Outstanding on Effective Date
Schedule 6.01-D Class Action Litigation Settlement Terms
Schedule 7.01-A -- Organizational Documents
Schedule 7.01-C -- Organizational Structure
Schedule 7.01-K -- Pending Litigation
Schedule 7.01-L -- Predecessor Agreement Events of Default
Schedule 7.01-M -- Tax Exceptions
Schedule 7.01-Q -- Environmental Matters
Schedule 7.01-R -- ERISA Matters
Schedule 7.01-X -- Insurance
Schedule 10.02-E -- Asset Sale Terms
Schedule 10.02-H -- Texas Transactions
Schedule 10.09 -- Leasing Lease and Tax Return Filings
Schedule 10.10 -- Property Permitted To Be The Subject of
Sale/Leaseback
Schedule 10.15 -- Collection Accounts
140
