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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 17, 1997
among
Aviation Sales Operating Company,
a Delaware corporation
Aerocell Structures, Inc.,
an Arkansas corporation
and
AVS/▇▇▇▇▇-▇▇▇▇▇ Machine Company,
a Delaware corporation
as Borrowers
Aviation Sales Company,
a Delaware corporation
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
CITICORP USA, INC.
as Agent
and
CITICORP SECURITIES, INC.
as Arranger
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ARTICLE I
DEFINITIONS
1.01. Certain Defined............................................................................................2
1.02. Computation of Time Periods...............................................................................39
1.03. Accounting Terms..........................................................................................39
1.04. Financial Covenant Calculations...........................................................................39
1.05. Other Terms...............................................................................................39
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. Term Loans................................................................................................40
2.02. Revolving Credit Facility.................................................................................40
2.03. Loans Under Acquisition Subfacility. ...................................................................44
2.04. Authorized Officers and Agents............................................................................46
2.05. Use of Proceeds of Loans..................................................................................46
ARTICLE III
LETTERS OF CREDIT
3.01. Letters of Credit.........................................................................................47
3.02 Obligations Several.......................................................................................54
3.03 Transitional Provisions...................................................................................54
ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.01. Prepayments; Reductions in Revolving Credit
Commitments.............................................................................................55
4.02. Payments. ................................................................................................58
4.03. Promise to Repay; Evidence of Indebtedness................................................................62
4.04. Proceeds of Collateral; Concentration Account
Arrangements............................................................................................63
4.05. Cash Collateral Account...................................................................................64
ARTICLE V
INTEREST AND FEES
5.01. Interest on the Loans and other Obligations...............................................................66
5.02. Fees......................................................................................................68
5.03. Special Provisions Governing Eurodollar Rate
Loans...................................................................................................70
5.04. Determination of Applicable Base Rate Margin and
Eurodollar Rate Margin..................................................................................72
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ARTICLE VI
CONDITIONS TO LOANS AND LETTERS OF CREDIT;
LEASING AFFILIATE LIABILITIES
6.01. Conditions Precedent to the Effectiveness of
Agreement...............................................................................................73
6.02. Conditions Precedent to All Subsequent Loans and
Letters of Credit.......................................................................................75
6.03. Intentionally omitted.....................................................................................76
6.04. Conditions Precedent to Leasing Affiliate
Liabilities.............................................................................................76
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01. Representations and Warranties of the Borrowers. .........................................................78
ARTICLE VIII
REPORTING COVENANTS
8.01. Financial Statements......................................................................................90
8.02. Off-Site Inventory Reports................................................................................94
8.03. Borrowing Base Certificate; Appraisals....................................................................94
8.04. Events of Default.........................................................................................95
8.05. Lawsuits..................................................................................................95
8.06. Insurance.................................................................................................96
8.07. ERISA Notices.............................................................................................96
8.08. Environmental Notices. ...................................................................................98
8.09. Labor Matters.............................................................................................99
8.10. SEC Reporting.............................................................................................99
8.11. Hedge Agreements..........................................................................................99
8.12. Other Reports.............................................................................................99
8.13. Other Information........................................................................................100
ARTICLE IX
AFFIRMATIVE COVENANTS
9.01. Existence, Etc. .........................................................................................101
9.02. Corporate Powers; Conduct of Business....................................................................101
9.03. Compliance with Laws, Etc................................................................................101
9.04. Payment of Taxes and Claims..............................................................................101
9.05. Insurance................................................................................................102
9.06. Inspection of Property; Books and Records;
Discussions............................................................................................102
9.07. Required Hedge Agreements................................................................................103
9.08. Insurance and Condemnation Proceeds......................................................................103
9.09. ERISA Compliance.........................................................................................104
9.10. Deposit Accounts; Collection Account Agreements..........................................................105
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9.11. Maintenance of Property..................................................................................105
9.12. Condemnation.............................................................................................105
9.13. Future Liens on Real Property............................................................................105
9.14. Consignee/Bailee Letters; Landlord Waivers;
Filings................................................................................................105
9.15. Intentionally omitted....................................................................................106
9.16. Future Pledges of Equity Securities; Other
Collateral Documents...................................................................................106
9.17. Fiscal Year of Aerocell and ▇▇▇▇▇-▇▇▇▇▇..................................................................106
ARTICLE X
NEGATIVE COVENANTS
10.01. Indebtedness............................................................................................107
10.02. Sales of Assets.........................................................................................109
10.03. Liens...................................................................................................110
10.04. Investments. ..........................................................................................111
10.05. Accommodation Obligations...............................................................................112
10.06. Restricted Junior Payments..............................................................................113
10.07. Conduct of Business.....................................................................................113
10.08. Transactions with Affiliates............................................................................113
10.09. Restriction on Fundamental Changes......................................................................114
10.10. Sales and Leasebacks....................................................................................114
10.11. Margin Regulations; Securities Laws.....................................................................114
10.12. ERISA...................................................................................................115
10.13. Issuance of Equity Securities...........................................................................115
10.14. Organizational Documents; Finance Affiliate
Indebtedness. .......................................................................................116
10.15. Bank Accounts...........................................................................................116
10.16. Fiscal Year.............................................................................................116
ARTICLE XI
FINANCIAL COVENANTS
11.01. Interest Coverage Ratio.................................................................................117
11.02. Fixed Charge Coverage Ratio.............................................................................117
11.03. Working Capital.........................................................................................117
11.04. Capital Expenditures....................................................................................117
11.05. Excess Borrowing Availability...........................................................................118
11.06. Leverage Ratio..........................................................................................118
11.07. Minimum Tangible Net Worth..............................................................................118
ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.01. Events of Default.......................................................................................119
12.02. Rights and Remedies.....................................................................................124
12.03. Post-Default Withdrawals from the Concentration
Account and Cash Collateral Account...................................................................126
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ARTICLE XIII
THE AGENT
13.01. Appointment.............................................................................................128
13.02. Nature of Duties........................................................................................128
13.03. Rights, Exculpation, Etc. .............................................................................129
13.04. Reliance................................................................................................130
13.05. Indemnification.........................................................................................130
13.06. Agent Individually......................................................................................130
13.07. Successor Agents........................................................................................131
13.08. Relations Among Lenders.................................................................................131
13.09. Concerning the Collateral and the Loan Documents........................................................131
ARTICLE XIV
YIELD PROTECTION
14.01. Taxes...................................................................................................135
14.02. Increased Capital.......................................................................................137
14.03. Changes; Legal Restrictions.............................................................................138
14.04. Limitation on Additional Amounts Payable by the
Borrowers.............................................................................................139
14.05. Change in Lending Office................................................................................139
14.06. Illegality..............................................................................................139
14.07. Compensation............................................................................................140
ARTICLE XV
MISCELLANEOUS
15.01. Assignments and Participations..........................................................................141
15.02. Expenses................................................................................................143
15.03. Indemnity...............................................................................................145
15.04. Change in Accounting Principles.........................................................................146
15.05. Setoff..................................................................................................146
15.06. Ratable Sharing.........................................................................................147
15.07. Amendments and Waivers..................................................................................148
15.08. Notices.................................................................................................150
15.09. Survival of Warranties and Agreements...................................................................150
15.10. Failure or Indulgence Not Waiver; Remedies Cumulative...................................................150
15.11. Marshalling; Payments Set Aside.........................................................................151
15.12. Severability............................................................................................151
15.13. Headings................................................................................................151
15.14. Governing Law. ........................................................................................151
15.15. Limitation of Liability.................................................................................151
15.16. Successors and Assigns..................................................................................151
15.17. Certain Consents and Waivers of the Borrowers...........................................................152
15.18. Counterparts; Effectiveness; Inconsistencies............................................................153
15.19. Limitation on Agreements................................................................................153
15.20. Confidentiality.........................................................................................153
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15.21. Entire Agreement........................................................................................154
15.22. Advice of Counsel.......................................................................................154
15.23. Amendment and Restatement of Predecessor
Agreement; No Novation................................................................................154
15.24. Obligations of Borrowers Joint and Several..............................................................154
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Third Amended and Restated Credit Agreement dated as of
October 17, 1997 (as amended, supplemented or modified from time to time, the
"Agreement") is entered into among Aviation Sales Operating Company, a Delaware
corporation ("ASOC"), Aerocell Structures, Inc., an Arkansas corporation
("Aerocell"), AVS/▇▇▇▇▇-▇▇▇▇▇ Machine Company, a Delaware corporation ("▇▇▇▇▇-
▇▇▇▇▇") (ASOC, Aerocell, and ▇▇▇▇▇-▇▇▇▇▇ being collectively referred to as the
"Borrowers" and each, individually, a "Borrower"), Aviation Sales Company, a
Delaware corporation (the "Parent"), the institutions from time to time a party
hereto as Lenders, whether by execution of this Agreement or an Assignment and
Acceptance, the institutions from time to time a party hereto as Issuing Banks,
whether by execution of this Agreement or an Assignment and Acceptance, Citicorp
Securities, Inc., a Delaware corporation, in its capacity as arranger, and
Citicorp USA, Inc., a Delaware corporation, in its capacity as agent for the
Lenders and the Issuing Banks hereunder (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, ASOC entered into that certain Second Amended and
Restated Credit Agreement dated as of August 22, 1997 with Citicorp USA, Inc.,
as agent, Citicorp USA, Inc., National City Commercial Finance, Inc., Congress
Financial Corporation, The Sumitomo Bank, Limited, ▇▇▇▇▇▇ Financial, Inc., and
First Union Commercial Corporation, 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 ASOC;
WHEREAS, the Parent has acquired the Capital Stock of Aerocell
and contributed the same to Parent's wholly-owned Subsidiary, Aviation Sales
Manufacturing & Repair Company, a Delaware corporation ("M&R"), whereupon
Aerocell became an Affiliate of ASOC and proceeds of loans made to ASOC under
the Predecessor Agreement were made available to Aerocell to repay certain of
its Indebtedness for borrowed money and Aerocell will require working capital
financing from and after the date of this Agreement;
WHEREAS, M&R has formed ▇▇▇▇▇-▇▇▇▇▇ as a Wholly-Owned
Subsidiary of M&R for the purpose of acquiring substantially all of the assets
of ▇▇▇▇▇-▇▇▇▇▇ Machine Company, a Kentucky corporation, and ▇▇▇▇▇-▇▇▇▇▇ requires
certain financing to consummate such acquisition and for its working capital
purposes from and after such acquisition; and
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WHEREAS, in view of the foregoing, the Parent and ASOC have
requested that the Predecessor Agreement be amended and restated and the Agent,
Lenders and Issuing Bank have agreed thereto and Aerocell and ▇▇▇▇▇-▇▇▇▇▇ have
agreed to become a party to this Agreement, as borrowers jointly and severally
liable for the Obligations with ASOC;
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 busi ness), notes
co-made or discounted, recourse agreements, take-or-pay agreements, keep-well
agreements, agreements to purchase or repurchase such Indebtedness, obligation
or liability or any security therefor or to provide funds for the payment or dis
charge thereof, agreements to maintain solvency, assets, level of income, or
other financial condition, and agreements to make payment other than for value
received. The amount of any Accom modation Obligation shall be equal to the
amount of the Indebtedness, obligation or liability so guaranteed or otherwise
supported; PROVIDED, that (i) if the liability of the Person extending such
guaranty or support is limited with respect thereto to an amount less than the
Indebtedness, obligation or liability guaranteed or supported, or is limited to
recourse against a particular asset or assets of such Person, the amount of the
corresponding Accommodation Obligation shall be limited (in the case of a
guaranty or other support limited by amount) to such lesser amount or (in the
case of a guaranty or other support limited by recourse to a particular asset or
assets) to the
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higher of the Fair Market Value of such asset or assets at the date for
determination of the amount of the Accommodation Obliga tion or the value at
which such asset or assets would, in con formity with GAAP, be reflected on or
valued for the purposes of preparing a consolidated balance sheet of such Person
as at such determination date; and (ii) if any obligation or liability is
guaranteed or otherwise supported jointly and severally by a Person and others,
then the amount of the obligation or liability of such Person with respect to
such guaranty or other support to be included in the amount of such Person's
Accommodation Obligation shall be the whole principal amount so guaranteed or
otherwise supported.
"ACQUISITION LOAN NOTES" means promissory notes executed by
Borrowers and delivered to the Revolving Lenders evidencing the Loan made under
the Acquisition Subfacility, as the same may be amended, supplemented, modified
or restated from time to time, and any promissory note issued in substitution
therefor, substantially in the form attached hereto as EXHIBIT E-1; and
"ACQUISITION LOAN NOTE" means any one of the Acquisition Loan Notes.
"ACQUISITION SUBFACILITY" means a subfacility of the Revolving
Credit Commitments in an aggregate amount of $40,000,000 available for Loans to
be made in connection with the ▇▇▇▇▇-▇▇▇▇▇ Acquisition.
"AEROCELL" is defined in the preamble of this Agreement.
"AEROCELL ACQUISITION" means the acquisition of Aerocell
Structures, Inc. pursuant to that certain Merger Agreement dated as of September
30, 1997 among the Parent, AVS/ASI Merger Corp., an Arkansas corporation and
wholly-owned direct Subsidiary of the Parent, Aerocell, and the shareholders of
Aerocell.
"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.
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"AGENT" means Citicorp and each successor agent appointed
pursuant to the terms of ARTICLE XIII of this Agreement.
"AGENT ADVANCE" is defined in SECTION 2.02(C)(I)(B).
"AGREEMENT" is defined in the preamble hereto.
"AIRCRAFT PARTS LEASE AGREEMENT" means an agreement between
ASOC, as lessor, and a Person which is not an Affiliate of ASOC, as lessee,
pursuant to which Inventory of ASOC is leased to such Person and includes, as of
the Effective Date, those agreements identified on SCHEDULE 1.01.1 attached
hereto.
"APPRAISALS" means those certain appraisals of Inventory and
Equipment of ASOC prepared by MB Valuation, Inc. for the Agent and the Lenders
dated July 2, 1997 and those certain appraisals of Inventory and Equipment of
▇▇▇▇▇-▇▇▇▇▇ prepared by MB Valuation, Inc. dated September 30, 1997.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
in substantially the form of EXHIBIT A attached hereto and made a part hereof
(with blanks appropriately completed) delivered to the Agent in connection with
an assignment of a Lender's interest under this Agreement in accordance with the
provisions of SECTION 15.01.
"BANKRUPTCY CODE" means Title 11 of the United States
Code (11 U.S.C. Section 101 ET SEQ.), as amended from time to time,
and any successor statute.
"BASE EURODOLLAR RATE" means, with respect to any Eurodollar
Interest Period applicable to a Borrowing of Eurodollar Rate Loans, the rate per
annum at which deposits in Dollars are offered by the principal office of
Citibank in London, England to major banks in the London interbank market at
approximately 11:00 a.m. (London time) on the Eurodollar Interest Rate
Determination Date for such Eurodollar Interest Period for a period equal to
such Eurodollar Interest Period in an amount substantially equal to the amount
of the Eurodollar Rate Loan to be outstanding to Citicorp for such Eurodollar
Interest Period.
"BASE RATE" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
(i) the rate of interest announced publicly by Citibank in New
York, New York from time to time, as Citibank's base rate; and
(ii) the sum (adjusted to the nearest one-quarter of one
percent (0.25%) or, if there is no nearest one-quarter
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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 determin ing the then
current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring Dollar deposits
of Citibank in the United States; and
(iii) the sum of (A) one-half of one percent (0.50%) per annum
PLUS (B) the Federal Funds Rate in effect from time to time during such
period.
"BASE RATE LOANS" means all Loans which bear interest at a
rate determined by reference to the Base Rate and Base Rate Margin as provided
in SECTION 5.01(A).
"BASE RATE MARGIN" means, as of any date of determination, a
per annum rate equal to the rate set forth below opposite the then applicable
Performance Level set forth below:
PERFORMANCE LEVEL BASE RATE MARGIN
----------------- ----------------
1 0.00%
2 0.25%
3 0.50%
4 0.75%
5 1.00%
6 1.25%
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"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.
"BORROWER" and "BORROWERS" are defined in the preamble of this
Agreement.
"BORROWER GROUP" means, collectively or on a consolidated
basis, as applicable in the context used, the Borrowers and their Subsidiaries.
"BORROWING" means a borrowing consisting of Loans of the same
type made, continued or converted on the same day.
"BORROWING BASE" means, as of any date of determina tion, an
amount equal to the sum of (i) seventy-five percent (75%) of the face amount of
Eligible Receivables (net of maximum discounts, allowances, retainage and any
other amounts deferred with respect thereto), PLUS (ii) the lesser of (a) up to
the respective percentages of the value of Eligible Inventory included in
Inventory Asset Group A, Inventory Asset Group B, and Inventory Asset Group C,
in each case as set forth on the Borrowing Base Certificate or (b) seventy
percent (70%) of the appraised value of Eligible Inventory included in Inventory
Asset Group A, Inventory Asset Group B, and Inventory Asset Group C, in each
case as set forth in appraisals prepared in form and substance and by appraisers
satisfactory to the Requisite Lenders on an orderly liquidation basis consistent
with that methodology used in preparation of the Appraisals. For purposes of
this definition, Eligible Receivables and Eligible Inventory, in each case and
as of any date of determination, shall be determined after deduction of all
Eligibility Reserves then effective with respect to such items and the value
referenced in CLAUSE (II)(A) shall be determined on the bases described in the
Borrowing Base Certificate as reflected on the books and records of the
Borrowers or Distribution, as applicable. In each instance, the amounts
described hereinabove shall be designated as such on the Borrowing Base
Certificate dated as of such date of determination.
"BORROWING BASE CERTIFICATE" means a certificate, in
substantially the form of EXHIBIT B attached hereto and made a part hereof,
setting forth Eligible Receivables, Eligible Inventory (including
classifications, quantities, valuations and condition of the Eligible Inventory
and the respective advance percentages with respect thereto), and the
calculation of the resultant Borrowing Base, in each instance, as of the date of
such certificate.
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"BUSINESS ACTIVITY REPORT" means (A) a Notice of Business
Activities Report from the State of New Jersey Division of Taxation or (B) a
Minnesota Business Activity Report from the Minnesota Department of Revenue.
"BUSINESS DAY" means a day, in the applicable local time,
which is not a Saturday or Sunday or a legal holiday and on which banks are not
required or permitted by law or other govern mental action to close (i) in New
York, New York and (ii) in the case of Letter of Credit transactions for a
particular Issuing Bank, in the place where its office for issuance or
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, (A)
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 and (B) expenditures for
leased Inventory.
"CAPITAL LEASE" means any lease of any property (whether real,
personal or mixed) by a Person as lessee which, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that Person.
"CAPITAL STOCK" means, with respect to any Person, any capital
stock of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls
or claims of any character with respect thereto.
"CASH COLLATERAL" means cash or Cash Equivalents held by the
Agent, any of the Issuing Banks or any of the Lenders as security for the
Obligations.
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"CASH COLLATERAL ACCOUNT" means an interest bearing account at
Citibank's offices in New York, New York designated by the Agent into which Cash
Collateral shall be deposited. The Cash Collateral Account shall be under the
sole dominion and control of the Agent, PROVIDED THAT all amounts deposited
therein shall be held by the Agent for the benefit of the Holders and shall be
subject to the terms of SECTION 12.03.
"CASH EQUIVALENTS" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States government and backed
by the full faith and credit of the United States government; and (ii) domestic
and Eurodollar certificates of deposit and time deposits, bankers' acceptances,
commercial paper, and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Rating Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc., or P-1 (or better) by ▇▇▇▇▇'▇ 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. Section 9601 ET SEQ., any
amendments thereto, any successor statutes, and any regulations promulgated
thereunder.
"CHANGE OF CONTROL" means (i) with respect to the Parent, the
occurrence of a change in more than fifty percent (50%) of those members of the
Board of Directors of the Parent who are members of such Board of Directors on
the Effective Date, (ii) with respect to ASOC, the occurrence of a change in
more than fifty percent (50%) of those members of the Board of Directors of ASOC
who are members of such Board of Directors on the Effective Date (iii) 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, and (iv) with respect to Leasing Affiliate, the Parent
8
ceasing to own and retain voting control of all issued and outstanding Capital
Stock of Leasing Affiliate, in the case of any of (i), (ii), (iii) or (iv),
without the prior written consent of the Lenders, which consent shall not be
unreasonably withheld.
"CITIBANK" means Citibank, N.A., a national banking
association.
"CITICORP" means Citicorp USA, Inc., a Delaware corporation.
"CLAIM" means any claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and Costs, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute, Permit, ordinance or regulation, common law or otherwise.
"COLLATERAL" means all Property and interests in Prop erty now
owned or hereafter acquired by 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
Affiliate 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 Affiliate in the ordinary course of its business.
"COMMISSION" means the Securities and Exchange Commission and
any Person succeeding to the functions thereof.
"COMPLIANCE CERTIFICATE" is defined in SECTION 8.01(D).
"CONCENTRATION ACCOUNT" means the depository account
maintained at Citibank in New York, New York, or such other financial
institution designated for such purpose by the Agent
9
into which collections of Receivables, other proceeds of Collateral and other
amounts are transferred pursuant to the terms of the Collection Account
Agreements or otherwise as described in SECTION 4.04.
"CONTAMINANT" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, radioactive materials, asbestos (in any form or condition),
polychlorinated biphenyls (PCBs), or any constituent of any such substance or
waste, and includes, but is not limited to, these terms as defined in federal,
state or local laws or regulations.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person is a party or by which
it or any of its properties is bound, or to which it or any of its properties is
subject.
"CURE LOANS" is defined in SECTION 4.02(B)(V)(C).
"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
10
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 $500,000; and
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of Real Property which do not interfere with
the ordinary conduct of the business of a Borrower or any of its
Subsidiaries.
"DESIGNATED PREPAYMENT" means each mandatory prepayment
required by CLAUSES (I) and (III) of SECTION 4.01(B).
"DISTRIBUTION" means Aviation Sales Bearings Company, a
Delaware corporation and wholly-owned Subsidiary of ASOC.
"DOL" means the United States Department of Labor and any
Person succeeding to the functions thereof.
"DOLLARS" and "$" 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) other non-cash expenses of such Person and its
Subsidiaries identified to the Agent, PLUS (iv) Cash Interest Expense of such
Person, PLUS (v) federal, state, and local income taxes deducted from Net Income
of such Person in accordance with GAAP, PLUS (vi) extraordinary losses (and any
unusual losses arising in or outside of the ordinary course of business of such
Person and its Subsidiaries not included in extraordinary losses determined in
accordance with GAAP) which have been included in the determination of Net
Income of such Person MINUS extraordinary gains of such Person and its
Subsidiaries, including, without limitation, any unusual gains arising in or
outside of the ordinary course of business of such Person and its Subsidiaries
not included in extraordinary gains determined in accordance with
11
GAAP which have been included in the determination of Net Income of such Person.
"EFFECTIVE DATE" is defined in SECTION 6.01.
"ELIGIBILITY RESERVES" means, as of three (3) Business Days
after the date of written notice of any determination thereof to the Borrowers
by the Agent, or to the Borrowers and the Agent by the Requisite Revolving
Lenders, such amounts as the Agent, or the Requisite Revolving Lenders, as the
case may be, in the exercise of its or their reasonable credit judgment, may
from time to time establish against the gross amounts of Eligible Inventory to
reflect material changes in risks or contingencies arising after the Effective
Date which may affect such items.
"ELIGIBLE ASSIGNEE" means (i) a Lender or any Affiliate
thereof; (ii) a commercial bank having total assets in excess of $2,500,000,000;
(iii) the central bank of any country which is a member of the Organization for
Economic Cooperation and Development; or (iv) a finance company, insurance
company, other financial institution or fund, acceptable to the Agent, which is
regularly engaged in making, purchasing or investing in loans and having total
assets in excess of $300,000,000, and (v) in the cases of Persons described in
CLAUSES (II) through (IV) above, are consented to by ASOC, 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 and Distribution consisting of
commercial aircraft spare parts which, when scheduled to the Agent on a
Borrowing Base Certificate and at all times thereafter, is included in Inventory
Asset Group A, Inventory Asset Group B, or Inventory Asset Group C, is in the
required quantity and in the required condition as set forth on such Borrowing
Base Certificate, and is (i) not Leased Inventory and is located at a Borrower's
or Distribution's owned or leased warehouses in the United States or is (ii)
Leased Inventory and:
(a) is stored and maintained in an identifiable, segregated
area disclosed to the Agent in the United States or in a location with
respect to which ASOC has obtained a Hedge Agreement with respect to
the sovereign risk associated with such location on terms satisfactory
to the Agent;
(b) is subject to a first priority perfected Lien in favor of
the Agent for the benefit of the Holders and no other Liens; and
(c) with respect to which the Agent has obtained a landlord
waiver satisfactory to the Agent or consignee/bailee agreement as
described in SECTION 9.14, if
12
stored and maintained on leased premises or under a consignment or
bailment agreement.
In any event, Eligible Inventory shall not consist of:
(1) goods in transit; or
(2) goods held on consignment or any similar arrangement,
including, without limitation, goods held by a Borrower or Distribution
but owned by a customer of a Borrower or Distribution, as applicable;
or
(3) goods (A) with respect to which the Agent does not have a
perfected security interest senior in priority to any other or (B)
which are subject to a Lien in favor of a landlord or bailee; or
(4) goods located on premises with respect to which the Agent
has not received a landlord's waiver, bailee agreement, or consignee
agreement in form and substance satisfactory to the Agent (and
substantially in the applicable form attached as part of EXHIBIT D)
within the time required by the terms of this Agreement.
"ELIGIBLE RECEIVABLES" means each Receivable of the Borrowers
and Distribution which, when scheduled to the Agent and at all times thereafter,
is not of any of the following types:
(i) it is due or unpaid more than ninety (90) days after the
date of the original invoice issued by the applicable Borrower or
Distribution with respect to the sale giving rise thereto; or
(ii) it arises out of (a) a sale not made in the ordinary
course of the applicable Borrower's or Distribution'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 Distribution; or
(iv) the account debtor (a) is also the applicable Borrower's
or Distribution's supplier or creditor and the Receivable is or may
become subject to any right of setoff by the account debtor, and such
account debtor has not entered into an agreement with the Agent with
respect to the waiver of rights of setoff which is in form and
substance satisfactory to the Agent, or (b) has disputed liability with
respect
13
to such Receivable, or made any claim with respect to any other
Receivable due from such account debtor to such Borrower or
Distribution, in which cases the Receivable shall be ineligible to the
extent of (I) such setoff with respect to which an agreement as
described in CLAUSE (A) above is not in effect, (II) such dispute or
(III) such claim; or
(v) the account debtor has filed a petition for bankruptcy or
any other petition for relief under the Bankruptcy Code or any similar
statute (unless the account debtor is a debtor-in-possession in a
Chapter 11 case and has available debtor-in-possession financing from
sources and under terms reasonably acceptable to the Agent and the
Receivable is entitled to priority under Section 507 of the Bankruptcy
Code as an administrative expense allowed under Section 503(b) of the
Bankruptcy Code), made an assignment for the benefit of creditors, or
if any petition or other application for relief under the Bankruptcy
Code or any similar statute has been filed against the account debtor,
or if the account debtor has failed, suspended its business operations,
become insolvent, suffered a receiver or a trustee to be appointed for
any of its assets or affairs; or
(vi) the sale is to an account debtor outside the United
States, unless (a) the account debtor's obligations (or that portion of
such obligations which is acceptable to the Agent) with respect to such
sale is secured by a letter of credit, guaranty or eligible bankers'
acceptance having terms, and from such issuers and confirmation banks,
as are acceptable to the Agent or (b) such account debtor is identified
on SCHEDULE 1.01.2 or otherwise acceptable to the Agent as confirmed to
ASOC in writing or (c) such account debtor is located in a foreign
jurisdiction identified on SCHEDULE 1.01.2 or otherwise acceptable to
the Agent as confirmed to ASOC in writing; or
(vii) the sale is on a ▇▇▇▇-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, or any other repurchase
or return basis; or
(viii) the Agent believes, in the exercise of its reasonable
credit judgment, or the Requisite Revolving Lenders believe, in the
exercise of their reasonable credit judgment, that collection of such
Receivable is insecure or that such Receivable may not be paid by
reason of the account debtor's financial inability to pay; or
14
(ix) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable
Borrower or Distribution, as applicable, assigns its right to payment
of such Receivable to the Agent pursuant to the Assignment of Claims
Act of 1940, as amended, (31 U.S.C. Section 3727); or
(x) the Inventory of the applicable Borrower or Distribution,
the sale of which has given rise to such Receivable, has not been
shipped and delivered to the account debtor by such Borrower or
Distribution, as applicable, and accepted by the account debtor or the
services, the performance of which has given rise to such Receivable,
have not been performed by such Borrower or Distribution, as
applicable, and accepted by the account debtor; or
(xi) the Receivable(s) of the respective account debtor
exceed(s) a credit limit determined by the Agent, in the exercise of
its reasonable credit judgment, or determined by the Requisite
Revolving Lenders, in the exercise of their reasonable credit judgment,
or determined by the Requisite Revolving Lenders, in the exercise of
their reasonable credit judgment, at any time or times hereafter, in
which case such Receivable(s) shall be ineligible to the extent such
Receivable(s) exceed(s) such limit; or
(xii) the Agent does not have a senior, perfected security
interest in such Receivable or such Receivable is subject to a Lien
which is not permitted under SECTION 10.03; or
(xiii) the account debtor is located in the state of New
Jersey or Minnesota and the applicable Borrower or Distribution, as
applicable, has not filed and maintained effective (unless exempt from
the requirements for filing) a current Business Activity Report with
the appropriate Governmental Authority in the states of Minnesota
and/or New Jersey, as applicable; or
(xiv) it is owing by an account debtor for which fifty percent
(50%) or more of the Receivables owing by such account debtor to the
applicable Borrower are due or unpaid more than ninety (90) days after
the date of the original invoices issued by such Borrower or
Distribution with respect to the sales giving rise thereto.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means
all Requirements of Law derived from or relating to any federal, state or local
law, ordinance, rule, regulation, Permit,
15
license or other binding determination of any Governmental Authority relating
to, imposing liability or standards concerning, or otherwise addressing, the
environment, health and/or safety, including, but not limited to the Clean Air
Act, the Clean Water Act, CERCLA, RCRA, any so-called "Superfund" or "Superlien"
law, the Toxic Substances Control Act, OSHA, and applicable public health codes,
each as from time to time in effect.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental, Health or Safety
Requirement of Law, or (ii) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACTS" means any applicable
Requirement of Law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the transfer, sale, lease or closure of
any Property or deed or title for any Property for environmental reasons,
including, but not limited to, any so-called "Industrial Site Recovery Acts" or
"Responsible Property Transfer Acts".
"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. Section 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.
16
"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 ASOC and the
Agent.
"EURODOLLAR INTEREST PAYMENT DATE" means (i) with respect to
any Eurodollar Rate Loan, the last day of each Eurodollar Interest Period
applicable to such Loan and (ii) with respect to any Eurodollar Interest Period
in excess of three (3) calendar months, the last day of each three (3) calendar
month interval during such Eurodollar Interest Period.
"EURODOLLAR INTEREST PERIOD" is defined in SECTION 5.03 (B).
"EURODOLLAR INTEREST RATE DETERMINATION DATE" is defined in
SECTION 5.03(C).
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office or offices of such Lender (if any) set forth below such Lender's name
under the heading "Eurodollar Lending 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
ASOC and the Agent.
"EURODOLLAR RATE" means, with respect to any Eurodollar
Interest Period applicable to a Eurodollar Rate Loan, an interest rate per annum
obtained by dividing (i) the Base Eurodollar Rate applicable to that Eurodollar
Interest Period by (ii) a percentage equal to 100% MINUS the Eurodollar Reserve
Percentage in effect on the relevant Eurodollar Interest Rate Determination
Date.
"EURODOLLAR RATE LOANS" means those Loans which bear interest
at a rate determined by reference to the Eurodollar Rate and the Eurodollar Rate
Margin as provided in SECTION 5.01(A).
"EURODOLLAR RATE MARGIN" means, as of any date of
determination, a per annum rate equal to the rate set forth below opposite the
then applicable Performance Level set forth below:
PERFORMANCE LEVEL EURODOLLAR RATE MARGIN
----------------- ----------------------
1 1.50%
2 1.75%
3 2.00%
4 2.25%
5 2.50%
6 2.75%
17
"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 fluctu ating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day in New York, New York, for the next
preceding Business Day) in New York, New York by the Federal Reserve Bank of New
York, or if such rate is not so published for any day which is a Business Day in
New York, New York, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of recog
nized standing selected by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the
Federal Reserve System or any Governmental Authority succeed ing to its
functions.
"FEE LETTER" means, collectively, that certain fee letter
addressed to Citicorp Securities, Inc. from ASOC dated
18
August 22, 1997 and that certain fee letter addressed to Citicorp USA, Inc. from
ASOC dated October 10, 1997.
"FINANCE AFFILIATE" means Aviation Sales Finance Company, a
Delaware corporation and wholly-owned Subsidiary of the Parent.
"FINANCE AFFILIATE INDEBTEDNESS" means Indebtedness of ASOC
owing to Finance Affiliate under that certain promissory note dated June 26,
1996 in the principal amount of $48,592,500 and that certain promissory note
dated July 26, 1996 in the principal amount of $7,288,875.
"FINANCIAL STATEMENTS" means (i) statements of income and
retained earnings, statements of cash flow, and balance sheets, (ii) such other
financial statements as the Parent and/or and its Subsidiaries shall routinely
and regularly prepare and (iii) such other financial statements as the Agent or
the Requisite Lenders may from time to time reasonably specify.
"FISCAL YEAR" means the fiscal year of the Parent and its
Subsidiaries for accounting and tax purposes, which shall be the 52-week period
ending on 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) all taxes paid in cash during such period by such Person and its
Subsidiaries MINUS (iii) the aggregate amount of Capital Expenditures made in
cash during such period by such Person and its Subsidiaries to (b) the sum of
(i) the aggregate amount of interest paid in cash on Indebtedness of such Person
and its Subsidiaries during such period (net of amounts under Hedge Agreements
and interest income, in each case actually received, without duplication) PLUS
(ii) the aggregate amount of scheduled payments of principal of Funded Debt of
such Person during such period.
"FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit
plan as defined in Section 3(3) of ERISA which is 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 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.
19
"FUNDING DATE" means, with respect to any Loan, the date of
funding of such Loan.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the American Institute of Certified
Public Accountants' Accounting Principles Board and Financial Accounting
Standards Board or in such other statements by such other entity as may be in
general use by significant segments of the accounting profession as in effect on
the date hereof (unless otherwise specified herein as in effect on another date
or dates).
"GENERAL INTANGIBLES" means, with respect to any Person, all
of such Person's present and future (i) general intangibles, (ii) rights,
interests, choses in action, causes of action, claims and other intangible
property of every kind and nature (other than Receivables), (iii) corporate and
other business records, (iv) loans, royalties, and other obligations receivable,
(v) trademarks, registered trademarks, trademark applications, service marks,
registered service marks, service ▇▇▇▇ 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.
20
"GUARANTOR" means any of the Parent, Finance Affiliate,
Leasing Affiliate, M&R, and each Subsidiary of a Borrower, M&R, or Parent 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.
"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, (vi) which
are Accommodation Obligations or (vii) under warranties and indemnities; (b) all
indebtedness, obligations or other liabilities of such Person or others secured
by a Lien on any property of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by such Person, all as of such time; (c)
all indebtedness, obligations or other liabilities of such Person in respect of
Hedge Agreements, net of liabilities owed to such Person by the counterparties
thereon; (d) all preferred stock subject (upon the occurrence of any contingency
or otherwise) to mandatory redemp tion; (e) all ERISA obligations currently due
and payable; and (f) all contingent Contractual Obligations with respect to any
of the foregoing.
"INDEMNIFIED MATTERS" is defined in SECTION 15.03.
"INDEMNITEES" is defined in SECTION 15.03.
"INTEREST COVERAGE RATIO" means, for any period, the ratio of
(i) the EBITDA of the Borrower Group to (ii) the Cash Interest Expense of the
Borrower Group.
21
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, any
successor statute and any regulations or guidance promulgated thereunder.
"INVENTORY" means, with respect to any Person, all of such
Person's present and future (i) inventory, (ii) goods, merchandise and other
personal property furnished or to be furnished under any contract of service or
intended for sale or lease, and all consigned goods and all other items which
have previously constituted Equipment of such Person but are then currently
being held for sale or lease in the ordinary course of such Person's business,
(iii) raw materials, work-in-process and finished goods, (iv) materials and
supplies of any kind, nature or description used or consumed in such Person's
business or in connection with the manufacture, production, packing, shipping,
advertising, finishing or sale of any of the property described in CLAUSES (I)
through (III) above, (v) goods in which such Person has a joint or other
interest or right of any kind (including, without limitation, goods in which
such Person has an interest or right as consignee), and (vi) goods which are
returned to or repossessed by such Person; in each case whether in the
possession of such Person, a bailee, a consignee, or any other Person for sale,
storage, transit, processing, use or otherwise, and any and all documents for or
relating to any of the foregoing.
"INVENTORY ASSET GROUP A" means a classification of Borrowers'
and Distribution's Inventory including those aircraft spare parts (identified by
full and complete part number) of which there has been a sale of at least a
quantity of one (1) in the two, three, four or more year period immediately
preceding the date of designation of such Inventory as such on a given Borrowing
Base Certificate and of which there remains a quantity of at least one (1) in
Borrowers' and Distribution's Inventory.
"INVENTORY ASSET GROUP B" means a classification of Borrowers'
and Distribution's Inventory including aircraft spare parts for use on a Stage 3
Aircraft or engine but which are not part of Inventory Asset Group A.
"INVENTORY ASSET GROUP C" means a classification of Borrowers'
and Distribution's Inventory including those aircraft spare parts which have
either a quoted sales value greater than $25,000 per unit or no quoted activity
but a catalog value greater than $50,000 per unit and which are not part of
Inventory Asset Group A or Inventory Asset Group B.
"INVESTMENT" means, with respect to any Person, (i) any
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, issued by any other Person, (ii) any purchase by that
Person of all or substantially all of the assets of a business conducted by
another Person, and (iii)
22
any loan, advance (other than deposits with financial institu tions available
for withdrawal on demand, prepaid expenses, accounts receivable, advances to
employees and similar items made or incurred in the ordinary course of business)
or capital contribution by that Person to any other Person, including all
Indebtedness to such Person arising from a sale of property by such Person other
than in the ordinary course of its business. The amount of any Investment shall
be the original cost of such Investment, plus the cost of all additions thereto
less the amount of any return of capital or principal to the extent such return
is in cash with respect to such Investment without any adjustments for increases
or decreases in value or write-ups, write-downs or write-offs with respect to
such Investment.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"ISSUING BANKS" means Citibank and each Lender designated as
an "Issuing Bank" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became a Lender and each other Lender
approved by the Agent and ASOC who has agreed to become an Issuing Bank for the
purpose of issuing Letters of Credit pursuant to SECTION 3.01.
"▇▇▇▇▇-▇▇▇▇▇" is defined in the preamble of this Agreement.
"▇▇▇▇▇-▇▇▇▇▇ ACQUISITION" means the acquisition of the assets
of ▇▇▇▇▇-▇▇▇▇▇ Machine Company, a Kentucky corporation, by ▇▇▇▇▇-▇▇▇▇▇ pursuant
to that certain Asset Purchase Agreement dated as of September 30, 1997 between
▇▇▇▇▇-▇▇▇▇▇ Machine Company, as seller, and the Parent and the agreements,
instruments and documents executed and delivered in connection therewith.
"LEASED INVENTORY" means Inventory of ASOC which is subject to
an Aircraft Parts Lease Agreement.
"LEASING AFFILIATE" means Aviation Sales Leasing Company, a
Delaware corporation and a wholly-owned Subsidiary of the Parent.
"LEASING AFFILIATE GUARANTY" means that certain Second Amended
and Restated Guaranty dated as of the Effective Date executed and delivered by
Leasing Affiliate, as a Guarantor.
"LEASING AFFILIATE LIABILITIES" means, as of the date of
determination thereof, an amount equal to the sum of (i) the principal amount of
intercompany loans and advances made by the Borrowers to Leasing Affiliate and
outstanding as of such date of determination PLUS (ii) the amount of Letter of
Credit Obligations as of such date of determination attributable to Letters of
Credit issued or requested for the account of Leasing
23
Affiliate PLUS (iii) the amount of Accommodation Obligations of the Borrowers as
of such date of determination with respect to Indebtedness of Leasing Affiliate
PLUS (iv) the unpaid sale price of Inventory of the Borrowers sold or otherwise
transferred to Leasing Affiliate or a Subsidiary of Leasing Affiliate determined
at the value attributed to such Inventory after application of the advance rates
applicable thereto on the then most recent Borrowing Base Certificate.
"LEASING TRANSFER" means the distribution of 100% of the
issued and outstanding Capital Stock of Leasing Affiliate by Borrower to Parent
on August 22, 1997.
"LENDER" means, as of the Effective Date, each financial
institution which is a signatory hereto as a Lender and, at any other given
time, each financial institution which is a party hereto as a Lender, whether as
a signatory hereto or pursuant to an Assignment and Acceptance.
"LENDER AFFILIATE" means any financial institution that
directly or indirectly controls or is controlled by or is under common control
with a Lender.
"LETTER OF CREDIT" means any Commercial Letter of Credit or
Standby Letter of Credit.
"LETTER OF CREDIT FEE" is defined in SECTION 5.02(A).
"LETTER OF CREDIT OBLIGATIONS" means, at any particular time,
the sum of (i) all outstanding Reimbursement Obligations, PLUS (ii) the
aggregate undrawn face amount of all outstanding Letters of Credit, PLUS (iii)
the aggregate face amount of all Letters of Credit requested by the 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,
24
treble damages, intentional, willful or wanton injury, damage or threat to the
environment, natural resources or public health or welfare, costs and expenses
(including, without limitation, attorney, expert and consulting fees and costs
and fees and costs associated with any investigation, feasibility or Remedial
Action studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future.
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale or other title retention agreement,
deposit arrangement, security interest, encumbrance (including, without
limitation, easements, rights-of-way, zoning restrictions and the like), lien
(statutory or other and including, without limitation, any Environmental Lien),
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever in respect of any property of a Person, whether
granted voluntarily or imposed by law, and includes the interest of a lessor
under a Capital Lease or under any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement or similar notice (other than a financing statement filed by a "true"
lessor pursuant to Section 9-408 of the Uniform Commercial Code), naming the
owner of such property as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
"LOAN ACCOUNT" is defined in SECTION 4.03(B).
"LOAN DOCUMENTS" means this Agreement, the Notes, Hedge
Agreements to which any Lender or any Affiliate of a Lender is a party, and all
other instruments, agreements and written Contractual Obligations between any
Guarantor, 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.
"LOANS" means all Term Loans, Revolving Loans, and Loans made
under the Acquisition Subfacility.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation U and Regulation G.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon
(i) the financial condition, operations, assets or prospects of the 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.
25
"MAXIMUM REVOLVING CREDIT AMOUNT" means, at any particular
time, the amount equal to the lesser of (i) the sum of (a) the Revolving Credit
Commitments at such time PLUS (b) the outstanding principal balance of the Term
Loans at such time, MINUS the sum of (c) the Term Loan Reserve at such time PLUS
(d) the Texas Tax Reserve at such time, if such Texas Tax Reserve exceeds
$200,000, and (ii) the Borrowing Base at such time MINUS the sum of (a) the Term
Loan Reserve at such time PLUS (b) the Texas Tax Reserve at such time, if such
Texas Tax Reserve exceeds $200,000; PROVIDED, HOWEVER, that during the period
commencing on the Effective Date and ending on April 15, 1998, the "Maximum
Revolving Credit Amount" shall be equal to the lesser of (A) the amount
calculated under CLAUSE (I) above and (B) $20,000,000 (the "Overadvance Amount")
PLUS the amount calculated under CLAUSE (II) above.
"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 OR
INDEBTEDNESS" means net cash proceeds (including cash, equivalents readily
convertible into cash, and such proceeds of any notes received as consideration
or any other non-cash consideration) received by the Parent, any Borrower, or
any Subsidiary of the Parent (other than Leasing Affiliate and its Subsidiaries)
or a Borrower at any time after the Effective Date on account of the issuance of
(i) equity Securities of the Parent, (ii) equity Securities of a Borrower or
Subsidiary of the Parent (other than Leasing Affiliate) to any Person other than
the Parent, (iii) equity Securities of any Subsidiary of a Borrower to any
Person other than such Borrower, (iv) Indebtedness (other than Indebtedness
permitted under SECTION 10.01) of any Borrower or any Subsidiary of a Borrower,
or (v) Indebtedness (other than Indebtedness described on SCHEDULE 1.01.3
attached hereto and made a part hereof) of the Parent, in each case net of all
transaction costs and underwriters' discounts with respect thereto.
Notwithstanding the foregoing, such net cash proceeds received by the Parent on
account of the issuance of equity Securities of the Parent and the issuance of
Indebtedness of the Parent which are used by the Parent to make a capital
contribution to either Leasing Affiliate or a Borrower within one hundred eighty
(180) days after Parent's receipt of such net cash
26
proceeds shall not be included in the definition of "Net Cash Proceeds of
Issuance of Equity Securities or Indebtedness".
"NET CASH PROCEEDS OF SALE" means (i) proceeds received by any
Borrower, any Subsidiary of any Borrower, or any Subsidiary of Parent (other
than Leasing Affiliate) in cash (including cash, equivalents readily convertible
into cash, and such proceeds of any notes received as consideration or any other
non-cash consideration) from the sale, assignment or other disposition of (but
not the lease or license of) any Property, other than sales permitted under
CLAUSES (B), (C)(II)(A), and (D) of SECTION 10.02, net of (A) the costs of sale,
assignment or other disposition, (B) any income, franchise, transfer or other
tax liability arising from such transaction and (C) amounts applied to the
repayment of Indebtedness (other than the Obligations) secured by a Lien
permitted by SECTION 10.03 on the asset disposed of, if such net proceeds arise
from any individual sale, assignment or other disposition or from any group of
related sales, assignments or other dispositions; and (ii) to the extent
provided in SECTION 9.08, proceeds of insurance on account of the loss of or
damage to any such Property or Properties, and payments of compensation for any
such Property or Properties taken by condemnation or eminent domain.
"NET INCOME" means, for any Person for any period, the net
earnings (or loss) after taxes of such Person and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP.
"1996 CREDIT AGREEMENT" means that certain Amended and
Restated Credit Agreement dated as of June 26, 1996 among ASOC, Citicorp USA,
Inc., as agent, Citibank, N.A., as issuing bank, and certain financial
institutions a party thereto as lenders, as amended.
"NON PRO RATA LOAN" is defined in SECTION 4.02(B)(V).
"NOTE" means a promissory note in the form attached hereto as
EXHIBIT E payable to a Lender, evidencing certain of the Obligations of the
Borrowers to such Lender and executed by the Borrowers 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.
27
"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 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.
"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. Section 651 ET SEQ., any amendments thereto, any successor statutes
and any regulations or guidance promulgated thereunder.
"OVERADVANCE AMOUNT" is defined in CLAUSE (B) of the
definition of "Maximum Revolving Credit Amount".
"PARENT" means Aviation Sales Company, a Delaware corporation,
and owner of all outstanding Capital Stock of ASOC, Finance Affiliate, Leasing
Affiliate and M&R.
28
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"PERFORMANCE LEVEL 1" means that level of financial
performance of the Borrower Group, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of the
Borrower Group to EBITDA of the Borrower Group for the then most recently ended
four (4) fiscal quarter period of ASOC is less than or equal to 1.75 : 1.0.
"PERFORMANCE LEVEL 2" means that level of financial
performance of the Borrower Group, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of the
Borrower Group to EBITDA of the Borrower Group for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 1.75 : 1.0 and less than
or equal to 2.50 : 1.0.
"PERFORMANCE LEVEL 3" means that level of financial
performance of the Borrower Group, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of the
Borrower Group to EBITDA of the Borrower Group for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 2.50 : 1.0 and less than
or equal to 3.0 : 1.0.
"PERFORMANCE LEVEL 4" means that level of financial
performance of the Borrower Group, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of the
Borrower Group to EBITDA of the Borrower Group for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 3.0 : 1.0 and less than
or equal to 4.0 to 1.0.
"PERFORMANCE LEVEL 5" means that level of financial
performance of the Borrower Group, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of the
Borrower Group to EBITDA of the Borrower Group for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 4.0 to 1.0 and less than
or equal to 5.0 to 1.0.
"PERFORMANCE LEVEL 6" means that level of financial
performance of the Borrower Group, on a consolidated basis, measured as of the
end of a fiscal quarter of ASOC, at which the ratio of Funded Debt of the
Borrower Group to EBITDA of the Borrower Group for the then most recently ended
four (4) fiscal quarter period of ASOC is greater than 5.0 to 1.0.
"PERMITS" means any permit, approval, authorization license,
variance, or permission required from a Governmental Authority or other Person
under an applicable Requirement of Law.
29
"PERMITTED EQUITY SECURITIES OPTIONS" means the subscriptions,
options, warrants, rights, convertible securities and other agreements or
commitments relating to the issuance of equity Securities of the Parent
identified as such on SCHEDULE 1.01.4.
"PERMITTED EXISTING ACCOMMODATION OBLIGATIONS" means those
Accommodation Obligations of the Borrowers identified as such on SCHEDULE
1.01.5.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebted ness of
the Borrowers and their Subsidiaries identified as such on SCHEDULE 1.01.6.
"PERMITTED EXISTING INVESTMENTS" means those Invest ments of
the Borrowers identified as such on SCHEDULE 1.01.7.
"PERMITTED EXISTING LIENS" means the Liens on assets of the
Borrowers and their Subsidiaries identified as such on SCHEDULE 1.01.8.
"PERSON" means any natural person, corporation, limited
liability company, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, any
other non-governmental entity, and any Governmental Authority.
"PLAN" means an employee benefit plan defined in Section 3(3)
of ERISA (other than a Foreign Employee Benefit Plan) in respect of which 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 consti tute an Event of
Default.
"PREDECESSOR CREDIT AGREEMENT" is defined in the preamble of
this Agreement.
"PROCESS AGENT" is defined in SECTION 15.17(A).
"PRO FORMA" means, collectively, the unaudited pro forma
opening consolidated and consolidating balance sheets of the Parent and its
Subsidiaries attached hereto as EXHIBIT H, prepared in accordance with GAAP,
dated the Effective Date, and giving effect to the extensions of credit
contemplated hereby, the Aerocell Acquisition and the ▇▇▇▇▇-▇▇▇▇▇ Acquisition.
30
"PROJECTIONS" means the respective consolidated and
consolidating financial projections (including, without limitation, capital
expenditure budget) of (i) the Parent and its Subsidiaries and (ii) the
Borrowers and their Subsidiaries, in each instance, together with related
assumptions, prepared by ASOC and dated as of the Effective Date.
"PROPERTY" means any Real Property or personal prop erty,
plant, building, facility, structure, underground storage tank or unit,
Equipment, Inventory, General Intangible, Receivable, or other asset owned,
leased or operated by a Borrower or any Guarantor, as applicable, (including any
surface water thereon, and soil and groundwater thereunder).
"PRO RATA SHARE" means, with respect to any Lender, the
percentage obtained by dividing (i) the sum of the outstanding principal balance
of such Lender's Term Loan and such Lender's Revolving Credit Commitment (in
each case, as adjusted from time to time in accordance with the provisions of
this Agreement or any Assignment and Acceptance to which such Lender is a party)
by (ii) the aggregate outstanding principal amount of all of the Term Loans and
the Revolving Credit Commitments (notwithstanding the termination of any
Revolving Credit Commitments).
"PROTECTIVE ADVANCE" is defined in SECTION 13.09(A).
"RCRA" means the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Section 6901 ET SEQ., any amendments thereto, any successor
statutes, and any regulations promulgated thereunder.
"REAL PROPERTY" means, with respect to any Person, all of such
Person's present and future right, title and interest (including, without
limitation, any leasehold estate) in (i) any plots, pieces or parcels of land,
(ii) any improvements, buildings, structures and fixtures now or hereafter
located or erected thereon or attached thereto of every nature whatsoever (the
rights and interests described in CLAUSES (I) and (II) above being the
"Premises"), (iii) all easements, rights of way, gores of land or any lands
occupied by streets, ways, alleys, passages, sewer rights, water courses, water
rights and powers, and public places adjoining such land, and any other
interests in property constituting appurtenances to the Premises, or which
hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all
hereditaments, gas, oil, minerals (with the right to extract, sever and remove
such gas, oil and minerals), and easements, of every nature whatsoever, located
in or on the Premises and (v) all other rights and privileges thereunto
belonging or appertaining and all extensions, additions, improvements,
betterments, renewals, substitutions and replace ments to or of any of the
rights and interests described in CLAUSES (III) and (IV) above.
31
"RECEIVABLES" means, with respect to any Person, all of such
Person's present and future (i) accounts, (ii) contract rights, chattel paper,
instruments, documents, deposit accounts, and other rights to payment of any
kind, whether or not arising out of or in connection with the sale or lease of
goods or the rendering of services, and whether or not earned by performance,
(iii) any of the foregoing which are not evidenced by instruments or chattel
paper, (iv) intercompany receivables, and any security documents executed in
connection therewith, (v) proceeds of any letters of credit or insurance
policies on which such Person is named as beneficiary, (vi) claims against third
parties for advances and other financial accommodations and any other
obligations whatsoever owing to such Person, (vii) rights in and to all security
agreements, leases, guarantees, instruments, securities, documents of title and
other contracts securing, evidencing, supporting or otherwise relating to any of
the foregoing, together with all rights in any goods, merchandise or Inventory
which any of the foregoing may represent, and (viii) rights in returned and
repossessed goods, merchandise and Inventory which any of the same may
represent, including, without limitation, any right of stoppage in transit.
"REGISTER" is defined in SECTION 15.01(C).
"REGULATION A" means Regulation A of the Federal Reserve Board
as in effect from time to time.
"REGULATION G" means Regulation G of the Federal Reserve Board
as in effect from time to time.
"REGULATION T" means Regulation T of the Federal Reserve Board
as in effect from time to time.
"REGULATION U" means Regulation U of the Federal Reserve Board
as in effect from time to time.
"REGULATION X" means Regulation X of the Federal Reserve Board
as in effect from time to time.
"REIMBURSEMENT DATE" is defined in SECTION 3.01(D)(I)(A).
"REIMBURSEMENT OBLIGATIONS" means the aggregate non-
contingent reimbursement or repayment obligations of the 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.
32
"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) ASOC shall have delivered written notice to the Agent
that it, the other applicable Borrower, or its applicable Subsidiary intends to
so replace, rebuild or restore such Property and (b) the applicable Borrower or
such applicable Subsidiary of ASOC replaces or commences the restoration or
rebuilding of such Property within 180 days after the Agent's receipt of the
proceeds of such insurance payment or condemnation award and (ii) insurance paid
on account of a business interruption occurrence to the extent actually used in
the restoration or conduct of the business interrupted.
"REPORTABLE EVENT" means any of the events described in
Section 4043(b) of ERISA and the regulations promulgated thereunder as in effect
from time to time other than an event for which the thirty (30) day notice
requirement has been waived by the PBGC.
"REQUIREMENTS OF LAW" means, as to any Person, the charter and
by-laws or other organizational or governing docu ments of such Person, and any
law, rule or regulation, or 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 G, T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or Permit or any Environmental, Health or
Safety Requirement of Law.
"REQUISITE LENDERS" means Lenders whose Pro Rata Shares, in
the aggregate, are greater than fifty percent (50%); PROVIDED, HOWEVER, that, in
the event any of the Revolving Lenders shall have failed to fund its Revolving
Loan Pro Rata Share of any Revolving Loan requested by or on behalf of a
Borrower which Revolving Lenders are obligated to fund under the terms of this
Agreement and any such failure has not been cured, then for so long as such
failure continues, "REQUISITE LENDERS" means Lenders (excluding all Revolving
Lenders whose failure to
33
fund their respective Revolving Loan Pro Rata Shares of such Revolving Loans
have not been so cured) whose Pro Rata Shares represent more than fifty percent
(50%) of the aggregate Pro Rata Shares of such Lenders; PROVIDED, FURTHER,
HOWEVER, that, in the event that the Revolving Credit Commitments have been
terminated pursuant to the terms of this Agreement, "REQUISITE LENDERS" means
Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans are greater than
fifty percent (50%).
"REQUISITE REVOLVING LENDERS" means Revolving Lenders whose
Revolving Loan Pro Rata Shares, in the aggregate, are greater than fifty percent
(50%); PROVIDED, HOWEVER, that, in the event any of the Revolving Lenders shall
have failed to fund its Revolving Loan Pro Rata Share of any Revolving Loan
requested by or on behalf of a Borrower which Revolving Lenders are obligated to
fund under the terms of this Agreement and any such failure has not been cured,
then for so long as such failure continues, "REQUISITE REVOLVING LENDERS" means
Revolving Lenders (excluding all Revolving Lenders whose failure to fund their
respective Revolving Loan Pro Rata Shares of such Revolving Loans have not been
so cured) whose Revolving Loans represent more than fifty percent (50%) of the
aggregate Revolving Loan Pro Rata Shares of such Revolving Lenders; PROVIDED,
FURTHER, HOWEVER, that, in the event that the Revolving Credit Commitments have
been terminated pursuant to the terms of this Agreement, "REQUISITE REVOLVING
LENDERS" means Revolving Lenders (without regard to such Revolving Lenders'
performance of their respective obligations hereunder) whose aggregate ratable
shares (stated as a percentage) of the aggregate outstanding principal balance
of all Revolving Loans are greater than fifty percent (50%).
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any equity Securities of a
Borrower or any of its Subsidiaries now or hereafter outstanding, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Securities of a Borrower or
any of its Subsidiaries now or hereafter outstanding, (iii) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to,
the Finance Affiliate Indebtedness or any other Indebtedness owing at any time
to any Affiliate of 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 of its
Subsidiaries now or hereafter outstanding, and (v) any fees or other
remuneration paid to Parent, Finance Affiliate, M&R, or any Subsidiary of a
Borrower by a Borrower or any Guarantor.
34
"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 PLUS (iii) the
outstanding balance, at such time, of Loans made under the Acquisition
Subfacility.
"REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Lender, the obligation of such Lender to make Revolving Loans and
Loans under the Acquisition Subfacility and to participate in Letters of Credit
pursuant to the terms and conditions of this Agreement, in an aggregate amount
at any time outstanding which shall not exceed the principal amount set forth on
SCHEDULE 1.01.9 attached hereto and made a part hereof under the heading
"Revolving Credit Commitment" thereon or on the signature page of the Assignment
and Acceptance by which it became a Lender, as modified from time to time
pursuant to the terms of this Agreement, or to give effect to any applicable
Assignment and Acceptance, and "REVOLVING CREDIT COMMITMENTS" means the
aggregate principal amount of the Revolving Credit Commitments of all the
Revolving Lenders, the maximum amount of which shall be $131,428,571.40, as
reduced from time to time pursuant to SECTION 2.03(D) and SECTION 4.01.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time,
the sum of (i) the outstanding principal amount of the Revolving Loans at such
time, PLUS (ii) the Letter of Credit Obligations at such time.
"REVOLVING CREDIT TERMINATION DATE" means the earlier to occur
of (i) July 31, 2002 (or, if not a Business Day, the next preceding Business
Day) and (ii) the date of termination of the Revolving Credit Commitments
pursuant to the terms of this Agreement.
"REVOLVING LENDERS" means those Lenders having a Revolving
Credit Commitment; and "REVOLVING LENDER" means one of the Revolving Lenders,
individually.
"REVOLVING LOAN" is defined in SECTION 2.02(A)(II).
"REVOLVING LOAN PRO RATA SHARE" means, with respect to any
Revolving Lender, the percentage obtained by dividing (i) the amount of such
Revolving Lender's Revolving Credit Commitment (as adjusted from time to time in
accordance with the provisions of this Agreement or any Assignment and
Acceptance to which such Revolving Lender is a party) by (ii) the aggregate
amount of the Revolving Credit Commitments (notwithstanding the termination of
such Revolving Credit Commitments).
"REVOLVING NOTES" means promissory notes executed by
Borrowers and delivered to the Revolving Lenders evidencing the
35
Revolving Loans, as the same may be amended, supplemented, modified or restated
from time to time, and any promissory note issued in substitution therefor,
substantially in the form attached hereto as EXHIBIT E-2; and "REVOLVING NOTE"
means any one of the Revolving Notes.
"SECURITIES" means any stock, shares, voting trust
certificates, limited partnership certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities",
including, without limitation, any "security" as such term is defined in Section
8-102 of the Uniform Commercial Code, or any certificates of interest, shares,
or participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include the Notes or any other evidence of the
Obligations.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"SOLVENT", when used with respect to any Person, means that at
the time of determination:
(i) the Fair Market Value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"SPECIAL PURPOSE SUBSIDIARY" means a Subsidiary of Leasing
Affiliate formed for the sole purpose of leasing Inventory of such Subsidiary
and which conforms to all of the criteria set forth on SCHEDULE 1.01.10.
"STAGE 3 AIRCRAFT" means aircraft which is in compliance with
the Stage 3 noise levels prescribed in Section C36.5(a)(3) of Appendix C of Part
36 of Title 14 of the Code of Federal Regulations.
36
"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 Affiliate 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.
"SUBSIDIARY" of a Person means any corporation, limited
liability company, general or limited partnership, trust, or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions with respect to such entity are at the time directly or indirectly
owned or controlled by such Person, one or more of the other subsidiaries of
such Person or any combination thereof, or in the case of an entity which is a
partnership, of which such Person is a general partner.
"TANGIBLE NET WORTH" means the amount calculated as (i) the
consolidated net worth of the Borrower Group MINUS (ii) the consolidated
intangibles of Borrower Group including, without limitation, goodwill,
trademarks, tradenames, copyrights, patents, patent applications, licenses and
rights in any thereof and other items treated as intangibles in accordance with
GAAP.
"TAXES" is defined in SECTION 14.01(A).
"TERM LENDER" means each Lender which is the holder of a Term
Note; "TERM LENDERS" means, collectively, all holders of Term Notes.
"TERM LOAN PRO RATA SHARE" means, (i) with respect to any Term
Lender, the percentage obtained by dividing (a) the principal amount of such
Term Lender's Term Loan (as adjusted from time to time in accordance with the
provisions of this Agreement or any Assignment and Acceptance to which such Term
Lender is a party) by (b) the aggregate principal amount of all of the Term
Loans.
"TERM LOAN RESERVE" means, at any time, a reserve in an amount
equal to the sum of (i) the then outstanding balance of the Term Loans and
interest accrued and unpaid thereon PLUS (ii) the then outstanding balance of
Loans made under the Acquisition Subfacility and interest accrued and unpaid
thereon.
"TERM LOAN TERMINATION DATE" means the earlier of (i) July 31,
2002 and (ii) the date of acceleration of the Obligations pursuant to SECTION
12.02.
"TERM LOANS" means the term loans outstanding under the
Predecessor Agreement which continue outstanding under this Agreement as more
particularly described in SECTION 2.01(A), the aggregate principal amount of
which equals $18,571,428.60 on the
37
Effective Date, as reduced from time to time thereafter pursuant to SECTIONS
2.01(D) or 4.01; and "TERM LOAN" means any one of the Term Loans.
"TERM NOTES" means the promissory notes executed by the
Borrowers and delivered to the Term Lenders evidencing the Term Loans, as the
same may be amended, supplemented, modified or restated from time to time, and
any promissory note issued in substitution therefor, substantially in the form
attached hereto as EXHIBIT E-1; and "TERM NOTE" means any one of the Term Notes.
"TERMINATION EVENT" means (i) a Reportable Event with respect
to any Benefit Plan; (ii) the withdrawal of 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 cessa tion 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 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 Borrower Group under the statutes of the State
of Texas with respect to which a tax lien attaches to Property of the Borrower
Group located in the State of Texas pursuant to Section 32.01 of the Texas Tax
Code, which amount shall be determined by ASOC as of the date of each Borrowing
Base Certificate and, if in excess of $200,000, disclosed by ASOC thereon.
"TRANSACTION COSTS" means the 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 consummation of the ▇▇▇▇▇-▇▇▇▇▇
Acquisition.
"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).
"WORKING CAPITAL" means, as at any date of determination, the
excess, if any, of (i) the Borrower Group's
38
consolidated current assets, except cash and Cash Equivalents, over (ii) the
Borrower Group's consolidated current liabilities, except current maturities of
long-term debt, current maturities of the Revolving Credit Obligations, and
current maturities of the Obligations with respect to Loans made under the
Acquisition Subfacility as of such date.
1.02. COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, PROVIDED that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03. ACCOUNTING TERMS. Subject to SECTION 15.04, for purposes
of this Agreement, all accounting terms not otherwise defined herein shall have
the meanings assigned to them in conformity with GAAP.
1.04. FINANCIAL COVENANT CALCULATIONS. Notwithstanding any
requirements under GAAP, calculations made with respect to (a) the definitions
of "EBITDA", "Net Income", "Fixed Charge Coverage Ratio", and "Interest Coverage
Ratio" and (b) determination of compliance with the financial covenants set
forth in ARTICLE XI, unless otherwise agreed as described in SECTION 15.04, each
shall be made without regard to changes in requirements under GAAP which become
effective after the Effective Date.
1.05. OTHER TERMS. All other terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings assigned to
such terms by the Uniform Commercial Code to the extent the same are defined
therein.
39
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. TERM LOANS. (a) AMOUNT OF TERM LOANS. The principal
balance of the "Term Loans" (as defined in the Predecessor Agreement)
outstanding on the Effective Date is $18,571,428.60, which "Term Loans" shall
continue as Term Loans hereunder and, in each case, shall be subject to and
governed by the terms and provisions of this Agreement and are re-evidenced by
the Term Notes and re-allocated among the Term Lenders as reflected in the Term
Notes and on SCHEDULE 1.01.9.
(b) Intentionally omitted.
(c) Intentionally omitted.
(d) REPAYMENT OF THE TERM LOANS. (i) The Term Loans shall be
repayable in twenty (20) consecutive quarterly installments, the first nineteen
(19) of which shall be in the amount of $928,569.00 each and shall be due on the
last day of each consecutive three calendar month period commencing on October
30, 1997 with a final installment in the amount of $928,617.58 due on July 31,
2002, unless the Term Loan Termination Date earlier occurs.
(ii) In addition to the scheduled payments on the Term Loans,
the Borrowers may make voluntary prepayments as and when described in SECTION
4.01(A)(I) and shall make the mandatory prepayments required in SECTION 4.01(B),
for credit against such scheduled payments on the Term Loans pursuant to the
provisions of SECTION 4.01(A)(II) or SECTION 4.01(B)(VII), as applicable.
2.02. REVOLVING CREDIT FACILITY. (a) OUTSTANDING BALANCE ON
THE EFFECTIVE DATE; AVAILABILITY. (i) The principal balance of the "Revolving
Loans" made under the Predecessor Agreement and outstanding on the Effective
Date is $71,811,946.26 and shall continue as Revolving Loans hereunder and shall
be subject to and governed by the terms and provisions of this Agreement and are
re-evidenced by the Revolving Notes.
(ii) Subject to the terms and conditions set forth in this
Agreement, each Revolving Lender hereby severally and not jointly agrees to make
revolving loans, in Dollars (each individually, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the 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 Revolving
Lender's Revolving Loan Pro Rata Share of the Revolving Credit Availability at
such time. All Revolving Loans comprising the same Borrowing under this
Agreement shall be made by the Revolving Lenders simultaneously and
proportionately to their then respective Revolving Loan Pro Rata Shares, it
being
40
understood that no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make a Revolving Loan hereunder nor shall
the Revolving Credit Commitment of any Revolving Lender be increased or
decreased as a result of any such failure. Subject to the provisions of this
Agreement, the 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 2.02(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 Revolving Loans to
an amount less than or equal to the difference between the then Maximum
Revolving Credit Amount and the Letter of Credit Obligations as of such time.
Each requested Borrowing of Revolving Loans funded on any Funding Date for
Revolving Loans shall be in a principal amount of at least $1,000,000 and in
integral multiples of $100,000 in excess of that amount.
(b) NOTICE OF BORROWING. When the Borrowers desire to borrow
under this SECTION 2.02, ASOC, on behalf of the Borrowers, shall deliver to the
Agent a Notice of Borrowing, signed by ASOC, (i) no later than 11:00 a.m. (New
York time) on the proposed Funding Date, in the case of a Borrowing of Base Rate
Loans, and (ii) no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed Funding Date therefor, in the case of a
Borrowing of Eurodollar Rate Loans. Such Notice of Borrowing shall specify (i)
the proposed Funding Date (which shall be a Business Day), (ii) the amount of
the proposed Borrowing, (iii) the Revolving Credit Availability as of the date
of such Notice of Borrowing, and (iv) instructions for the disbursement of the
proceeds of the proposed Borrowing, and shall be accompanied by the then most
recently delivered Borrowing Base Certificate duly completed and signed by
ASOC's chief financial officer, chief executive officer or controller in
compliance with SECTION 8.03. In lieu of delivering such a Notice of Borrowing
(except with respect to a Borrowing of Revolving Loans on the Effective Date),
ASOC may give the Agent telephonic notice of any proposed Borrowing by the time
required under this SECTION 2.02(B), if ASOC confirms such notice by delivery of
the required Notice of Borrowing to the Agent by facsimile transmission
promptly, but in no event later than 5:00 p.m. (New York time) on the same day,
the original of which facsimile copy shall be delivered to the Agent within
three (3) days after the date of such transmission. Any Notice of Borrowing (or
telephonic notice in lieu thereof) given pursuant to this SECTION 2.02(B) shall
be irrevocable.
(c) MAKING OF REVOLVING LOANS. (i) Promptly after receipt of a
Notice of Borrowing under SECTION 2.02(B) (or
41
telephonic notice in lieu thereof), the Agent, at its option and in its sole
discretion, shall do either of the following:
(A) The Agent shall notify each Revolving Lender by telecopy,
or other similar form of transmission, of the proposed Borrowing. Each
Revolving Lender shall deposit an amount equal to its Revolving Loan
Pro Rata Share of the amount requested by ASOC to be made as Revolving
Loans with the Agent at its office in New York, New York, in
immediately available funds, (A) on the Effective Date with respect to
the Borrowing of Revolving Loans on such date specified in the initial
Notice of Borrowing and (B) not later than 1:00 p.m. (New York time) on
any other Funding Date for Revolving Loans. Subject to the fulfillment
of the conditions precedent set forth in SECTION 6.01 or SECTION 6.02,
as applicable, the Agent shall make the proceeds of such amounts
received by it available to the 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 Revolving Lender to deposit the amount
described above with the Agent on the applicable Funding Date shall not
relieve any other Revolving Lender of its obligations hereunder to make
its Revolving Loan on such Funding Date. In the event the conditions
precedent set forth in SECTION 6.01 or 6.02, as applicable, are not
fulfilled as of the proposed Funding Date for any Borrowing, the Agent
shall promptly return, by wire transfer of immediately available funds,
the amount deposited by each Revolving Lender to such Revolving Lender.
or
(B) Subject to the fulfillment of the conditions precedent set
forth in SECTION 6.01 or SECTION 6.02, as applicable, the Agent shall,
PROVIDED THAT the requested Borrowing is of an amount which is less
than the amount of Citicorp's unused Commitment (after taking into
account all other then outstanding Agent Advances) as of the Funding
Date for such Borrowing, advance the amount of the proposed Borrowing
(an "Agent Advance") to the 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 Revolving Loan Pro Rata Share thereof. Each Lender shall make
available the amount required from it as aforesaid to the Agent in
Dollars and in immediately available funds not later than 1:00 p.m.
(New York time) on the day such notice is given by the Agent. In the
event of the making of any such Agent Advance, each Lender's share of
42
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 Revolving Loans
pursuant to SECTION 2.02(C)(I)(A), unless the Agent shall have been notified by
any Revolving Lender on the Business Day immediately preceding the applicable
Funding Date in respect of any Borrowing of Revolving Loans that such Revolving
Lender does not intend to fund its Revolving Loan requested to be made on such
Funding Date, the Agent may assume that such Revolving Lender has funded its
Revolving Loan and is depositing the proceeds thereof with the Agent on the
Funding Date therefor, and 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 Revolving 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 Revolving Lender on or prior to the applicable Funding
Date or a Lender's Revolving Loan Pro Rata Share of an Agent Advance is not
remitted to the Agent as and when required pursuant to SECTION 2.02(C)(I)(B),
the Revolving Lender not making such deposit or remitting such amount agrees to
pay, and in addition the Borrowers agree to repay, to the Agent forthwith on
demand such corresponding amount, together with interest thereon, for each day
from the date such amount is disbursed to or for the benefit of the 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 Revolving Lender, at the Federal Funds Rate for the first three (3)
Business Days, and thereafter at the interest rate applicable to such Borrowing.
If such Revolving Lender shall pay to the Agent the corresponding amount, the
amount so paid shall constitute such Revolving Lender's Revolving Loan, and if
both such Revolving Lender and the Borrowers shall pay and repay such
corresponding amount, the Agent shall promptly pay to the Borrowers such
corresponding amount. This SECTION 2.02(C)(II) does not relieve any Revolving
Lender of its obligation to make its Revolving Loan on any applicable Funding
Date as and when required under SECTION 2.02(C)(I)(A) or to remit its Revolving
Loan Pro Rata Share of any Agent Advance as and when required under SECTION
2.02(C)(I)(B).
(d) REVOLVING CREDIT TERMINATION DATE. Unless earlier
terminated in accordance with the provisions of SECTION 4.01, the Revolving
Credit Commitments shall terminate on the Revolving Credit Termination Date.
Each Revolving Lender's obligation to make Revolving Loans shall terminate on
the Business Day next
43
preceding the Revolving Credit Termination Date. All outstanding Revolving
Credit Obligations shall be paid in full (or, in the case of unmatured Letter of
Credit Obligations, provision for payment in cash shall be made to the
satisfaction of the Issuing Banks and the Requisite Revolving Lenders) (i) if
the Revolving Credit Commitments are terminated pursuant to SECTION 4.01, on the
Revolving Credit Termination Date, and (ii) otherwise, on the earlier to occur
of (A) July 31, 2002 or, if not a Business Day, the next preceding Business Day,
and (B) the date of acceleration of the Obligations pursuant to SECTION 12.02.
(e) MAXIMUM REVOLVING CREDIT FACILITY. Notwithstanding
anything in this Agreement to the contrary, in no event shall the aggregate
principal Revolving Credit Obligations exceed the lesser of (i) the Maximum
Revolving Credit Amount and (ii) $131,428,571.40, such amount in CLAUSE (II)
being reduced by the amount of each permanent reduction of the Revolving Credit
Commitments made pursuant to SECTION 2.03(D), SECTION 4.01(A) and SECTION
4.01(B).
(f) Intentionally omitted.
2.03. LOANS UNDER ACQUISITION SUBFACILITY. (a) AMOUNT. Subject
to the terms and conditions set forth in this Agreement, each Revolving Lender
hereby severally and not jointly agrees to make Loans, in Dollars, to the
Borrowers on the Effective Date in an amount not to exceed such Revolving
Lender's Revolving Loan Pro Rata Share of $40,000,000.
(b) NOTICE OF BORROWING. On the Effective Date, ASOC shall
deliver to the Agent a Notice of Borrowing with respect to the Loans to be made
under this SECTION 2.03, signed by it, which Notice of Borrowing shall specify
(i) the Effective Date as the proposed Funding Date, (ii) $40,000,000 as the
amount of the proposed Borrowing, and (iii) instructions for disbursement of the
proceeds of such proposed Borrowing to effect the consummation of the
▇▇▇▇▇-▇▇▇▇▇ Acquisition. Any Notice of Borrowing given pursuant to this SECTION
2.03(B) shall be irrevocable.
(c) MAKING OF LOANS UNDER ACQUISITION SUBFACILITY. (i)
Promptly after receipt of a Notice of Borrowing under SECTION 2.03(B) (or
telephonic notice in lieu thereof), the Agent shall notify each Revolving Lender
by telephone, telecopy, or other similar form of transmission, of the proposed
Borrowing. Each Revolving Lender shall deposit an amount equal to its Revolving
Loan Pro Rata Share of $40,000,000 with the Agent at its office in New York, New
York, in immediately available funds not later than 11:00 a.m. (New York time)
on the Funding Date therefor. Subject to the fulfillment of the conditions
precedent set forth in SECTION 6.02 and SECTION 6.03, the Agent shall make the
proceeds of such amounts received by it available to the Borrowers at the
Agent's office in New York, New York and shall
44
disburse such proceeds in accordance with ASOC's disbursement instructions set
forth in the Notice of Borrowing pertaining thereto. The failure of any
Revolving Lender to deposit the amount described above with the Agent on the
applicable Funding Date shall not relieve any other Revolving Lender of its
obligations hereunder to make its Loan under the Acquisition Subfacility on such
Funding Date. In the event the conditions precedent set forth in SECTION 6.02 or
SECTION 6.03 are not fulfilled as of the proposed Funding Date for any such
Borrowing, the Agent shall promptly return, by wire transfer of immediately
available funds, the amount deposited by each Revolving Lender to such Revolving
Lender.
(ii) Unless the Agent shall have been notified by any
Revolving Lender before 11:00 a.m. (New York time) on the Effective Date that
such Revolving Lender does not intend to fund its Loan under the Acquisition
Subfacility requested to be made on the Effective Date, the Agent may assume
that such Revolving Lender has funded such Loan and is depositing the proceeds
thereof with the Agent on the Effective Date, and the Agent in its sole
discretion may, but shall not be required to, disburse a corresponding amount to
the Borrowers on the Effective 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 Revolving Lender on the Effective Date, such Revolving
Lender agrees to pay, and in addition the Borrowers agree to repay, to the Agent
forthwith on demand such corresponding amount, together with interest thereon,
for each day from the date such amount is disbursed to or for the benefit of the
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 Revolving Lender, at the Federal Funds Rate for the first
three (3) Business Days, and thereafter at the interest rate applicable to such
Borrowing. If such Revolving Lender shall pay to the Agent the corresponding
amount, the amount so paid shall constitute such Revolving Lenders' Loan under
the Acquisition Subfacility, and if both such Revolving Lender and the Borrowers
shall pay and repay such corresponding amount, the Agent shall promptly pay to
the Borrowers such corresponding amount. This SECTION 2.03(C)(II) does not
relieve any Revolving Lender of its obligation to make its Loan under the
Acquisition Subfacility on the Effective Date.
(d) ACQUISITION LOAN NOTES; REPAYMENT OF LOANS UNDER
ACQUISITION SUBFACILITY. (i) On the Effective Date, the Borrower shall execute,
and deliver to the Agent, Acquisition Loan Notes payable to the respective
Revolving Lenders in a principal amount equal to the respective Revolving
Lender's Revolving Loan Pro Rata Share of $40,000,000, which Notes the Agent
shall promptly deliver to the respective Revolving Lenders. On the Effective
Date, the Revolving Credit Commitments shall be permanently reduced by
$40,000,000.
45
(ii) The Loans made under the Acquisition Subfacility shall be
repayable in twenty (20) consecutive equal quarterly installments in the amount
of $2,000,000 each, due on the same dates as the Term Loan installments are due
commencing on October 30, 1997 with a final payment on July 31, 2002, unless the
Revolving Loan Termination Date earlier occurs.
2.04. AUTHORIZED OFFICERS AND AGENTS. On the Effective Date,
ASOC shall deliver, and from time to time thereafter ASOC may deliver, to the
Agent an Officer's Certificate setting forth the names of ASOC's officers,
employees and agents authorized to request Loans and Letters of Credit on behalf
of the Borrowers, in each instance containing a specimen signature of each such
officer, employee or agent. The president of ASOC 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 officer's, employee's or agent's authority to request such
Loan or Letter of Credit until the Agent, Lenders and Issuing Banks receive
written notice to the contrary. None of the Agent, the Lenders, or the Issuing
Banks shall have any duty to verify the authenticity of the signature appearing
on any such Officer's Certificate, written Notice of Borrowing or any other
document, and, with respect to an oral request for such a Loan or Letter of
Credit, the Agent shall have no duty to verify the identity of any person
representing himself or herself as one of ASOC'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.
2.05. USE OF PROCEEDS OF LOANS. The proceeds of the Loans
shall be used to pay the Transaction Costs, for working capital in the ordinary
course of business of the Borrowers and their Subsidiaries, to pay the
consideration for the ▇▇▇▇▇-▇▇▇▇▇ Acquisition, and for other lawful general
corporate purposes of the Borrowers and their Subsidiaries not prohibited by the
terms of this Agreement, including, without limitation, the making of advances
to Leasing Affiliate to the extent permitted in SECTION 10.04.
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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 or Leasing Affiliate, 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 $15,000,000, or (II) the
Revolving Credit Obligations at such time would exceed the Maximum
Revolving Credit Amount at such time, or (B) one or more of the
conditions precedent contained in SECTIONS 6.01 or 6.02, as applicable,
would not on such date be satisfied, unless such conditions are
thereafter satisfied and written notice of such satisfaction is given
to the Issuing Bank by the Agent (it being understood that an Issuing
Bank shall not otherwise be required to determine that, or take notice
whether, the conditions precedent set forth in SECTIONS 6.01 or 6.02,
as applicable, have been satisfied), or (III) with respect to a Letter
of Credit to be issued for the account of Leasing Affiliate, the
Leasing Affiliate Liabilities would exceed $20,000,000;
(iii) if the expiration date therefor is later than the
earlier of (A) the date one (1) year after the date of issuance
(without regard to any automatic renewal provisions thereof) or (B) the
Business Day next preceding the scheduled Revolving Credit Termination
Date; or
47
(iv) if the requested Letter of Credit is in a currency other
than Dollars and Borrower has not obtained a Hedge Agreement with
respect thereto satisfactory to the Agent.
(b) CONDITIONS. In addition to being subject to the
satisfaction of the conditions precedent contained in SECTIONS 6.01 and 6.02, as
applicable, the obligation of an Issuing Bank to issue, amend or extend any
Letter of Credit is subject to the satisfaction in full of the following
conditions:
(i) if the Issuing Bank so requests, the Borrowers or, in the
case of Letters of Credit issued for the account of any Subsidiary of a
Borrower or Leasing Affiliate, the Borrowers and such Subsidiary of a
Borrower or Leasing Affiliate, as applicable, shall have executed and
delivered to such Issuing Bank and the Agent a Letter of Credit
Reimbursement Agreement and such other documents and materials as may
be required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion.
(c) ISSUANCE OF LETTERS OF CREDIT. (i) ASOC, 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, that such Letter of
Credit is for the account of the Borrowers and Leasing Affiliate, 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
48
of a written notice from ASOC 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 or Leasing Affiliate, 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 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 ASOC 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 or
Leasing Affiliate, as applicable, on account of a Reimbursement Obligation.
(iii) No action taken or omitted in good faith by an Issuing
Bank under or in connection with any Letter of Credit issued under this
Agreement shall put such Issuing Bank under any resulting liability to any
Lender, any Borrower, any Subsidiary of a Borrower, or Leasing Affiliate, or, so
long as it is not issued in violation of SECTION 3.01(A), relieve any Revolving
Lender of its obligations hereunder to such Issuing Bank. Solely as between the
Issuing Banks and the Lenders, in determining whether to pay under any such
Letter of Credit, the respective Issuing Bank shall have no obligation to the
Lenders other than
49
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 Revolving Lender shall be deemed to have irrevocably
and unconditionally purchased and received from that Issuing Bank, without
recourse or warranty, an undivided interest and participation in such Letter of
Credit and the related Letter of Credit Reimbursement Agreement to the extent of
such Revolving Lender's Revolving Loan Pro Rata Share, including, without
limitation, all rights of the Issuing Bank with respect to obligations of the
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, the Subsidiary of a
Borrower for whose account such Letter of Credit was issued, or Leasing
Affiliate, as applicable, does not repay such amount to the Issuing Bank on the
Reimbursement Date, the Issuing Bank shall promptly notify the Agent, which
shall promptly notify each Revolving Lender, and each Revolving Lender shall
promptly and unconditionally pay to the Agent for the account of such Issuing
Bank, in immediately available funds, the amount of such Revolving Lender's
Revolving Loan Pro Rata Share of such payment (net of that portion of such
payment, if any, made by such Revolving Lender in its capacity as an Issuing
Bank), and the Agent shall promptly pay to the Issuing Bank such amounts
received by it, and any other amounts received by the Agent for the Issuing
Bank's account, pursuant to this SECTION 3.01(E). If a Revolving Lender does not
make its Revolving Loan Pro Rata Share of the amount of such payment available
to the Agent, such Revolving Lender agrees to pay to the Agent for the account
of the Issuing Bank, forthwith on demand, such amount together with interest
thereon, for the first three (3) Business Days after the date such payment was
first due at the Federal Funds Rate, and thereafter at the interest rate then
applicable in accordance with SECTION 5.01(A). The failure of any Revolving
Lender to make available to the Agent for the account of an Issuing Bank its
Revolving Loan Pro Rata Share of any such payment shall neither relieve any
other Revolving Lender of its obligation hereunder to make available to the
Agent for the account of such Issuing Bank such other Revolving Lender's
Revolving Loan Pro Rata Share of any payment on the date such payment is to be
made nor increase the obligation of any other Revolving Lender to make such
payment to the Agent.
(iii) Whenever an Issuing Bank receives a payment on account
of a Reimbursement Obligation, including any interest
50
thereon, as to which the Agent has previously received payments from any
Revolving 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 Revolving Lender an amount equal to such Revolving Lender's
Revolving Loan Pro Rata Share thereof. Each such payment shall be made by such
Issuing Bank or the Agent, as the case may be, on the Business Day on which such
Person receives the funds paid to such Person pursuant to the preceding
sentence, if received prior to 11:00 a.m. (New York time) on such Business Day,
and otherwise on the next succeeding Business Day.
(iv) Upon the request of any Lender, an Issuing Bank shall
furnish such Lender copies of any Letter of Credit or Letter of Credit
Reimbursement Agreement to which such Issuing Bank is party and such other
documentation as reasonably may be requested by such Lender.
(v) The obligations of a Revolving Lender to make payments to
the Agent for the account of any Issuing Bank with respect to a Letter of Credit
issued under this Agreement shall be irrevocable, shall not be subject to any
qualification or exception whatsoever except willful misconduct or gross
negligence of such Issuing Bank, and shall be honored in accordance with this
ARTICLE III (irrespective of the satisfaction of the conditions described in
SECTIONS 6.01 and 6.02, as applicable) under all circumstances, including,
without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Letter of Credit or any transferee of a beneficiary named in a Letter
of Credit (or any Person for whom any such transferee may be acting),
the Agent, the Issuing Bank, any Lender, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the account party and
beneficiary named in any Letter of Credit);
(C) any draft, certificate or any other document presented
under the Letter of Credit having been determined to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
51
(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 Leasing Affiliate
or 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, Leasing Affiliate, 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, Leasing Affiliate,
or such Subsidiary received by an Issuing Bank with respect to a Letter of
Credit and distributed by the Agent to the Revolving Lenders on account of their
participations is thereafter set aside, avoided or recovered from such Issuing
Bank in connection with any receivership, liquidation or bankruptcy proceeding,
each Revolving Lender which received such distribution shall, upon demand by
such Issuing Bank, contribute such Revolving Lender's Revolving Loan Pro Rata
Share of the amount set aside, avoided or recovered together with interest at
the rate required, if any, to be paid by such Issuing Bank upon the amount
required to be repaid by it.
(g) ISSUING BANK CHARGES. The Borrowers shall pay, or cause
Leasing Affiliate, or 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, Leasing Affiliate's, or such Subsidiary's account, as
applicable, as may be agreed upon by ASOC 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, ASOC, and each Revolving Lender
separate schedules for Commercial Letters of Credit and Standby Letters of
Credit issued as Letters of Credit, in form and substance reasonably
satisfactory to the
52
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.
(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, Leasing Affiliate, and any
Subsidiary of of any of the Borrower's 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 bene ficiary 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
53
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 Revolving Lender under this ARTICLE III are several and not joint, and
no Issuing Bank or Revolving Lender shall be responsible for the obligation to
issue Letters of Credit or participation obligation hereunder, respectively, of
any other Issuing Bank or Revolving Lender.
3.03 TRANSITIONAL PROVISIONS. SCHEDULE 3.03 contains a
schedule of certain "Letters of Credit" 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
converted to Letters of Credit and be deemed issued pursuant to this SECTION
3.03 and subject to the provisions of this Agreement other than the provisions
of SECTION 5.02(A) pertaining to the payment of a Fronting Fee upon issuance;
the undrawn face amount of such Letters of Credit shall be included in the
calculation of Letter of Credit Obligations; and all liabilities with respect
thereto shall constitute Obligations.
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ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.01. PREPAYMENTS; REDUCTIONS IN REVOLVING CREDIT COMMITMENTS.
(a) VOLUNTARY PREPAYMENTS/REDUCTIONS. (i) NOTICE. The
Borrowers may, upon at least three (3) Business Days' prior written notice to
the Agent (which the Agent shall promptly transmit to each Lender), at any time
and from time to time, prepay the Term Loans or Loans made under the Acquisition
Subfacility, in whole or in part. Any notice of prepayment given to the Agent
under this SECTION 4.01(A)(I) shall specify the date (which shall be a Business
Day) of prepayment and the aggregate principal amount of the prepayment. When
notice of prepayment is delivered as provided herein, the principal amount of
the Term Loans or Loans made under the Acquisition Subfacility specified in the
notice shall become due and payable on the prepayment date specified in such
notice. The Borrowers may repay Revolving Loans, without prior written notice to
the Agent or any Lender, at any time and from time to time.
(ii) AMOUNT; APPLICATION. Unless the aggregate outstanding
principal balance of the Term Loans or the outstanding principal balance of
Loans made under the Acquisition Subfacility and evidenced by Acquisition Loan
Notes of an even date is to be prepaid in full, voluntary prepayments of the
Term Loans or such Loans made under the Acquisition Subfacility shall be in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 in
excess of that amount. Each voluntary prepayment of the Term Loans shall be
allocated ratably to the Term Loans based on the then outstanding principal
balance thereof and then applied ratably to the unpaid installments of such Term
Loans in the inverse order of maturity until paid in full. Each voluntary
prepayment of such Loans made under the Acquisition Subfacility shall be
allocated ratably to such Loans based on the then outstanding principal balance
thereof and then applied ratably to the unpaid installments of such Loans in the
inverse order of maturity until paid in full.
(iii) VOLUNTARY REVOLVING CREDIT COMMITMENT REDUCTIONS. The
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 Revolving
55
Lender proportionately in accordance with its Revolving Loan Pro Rata Share. Any
notice of termination or reduction given to the Agent under this SECTION
4.01(A)(III) shall specify the date (which shall be a Business Day) of such
termination or reduction and, with respect to a partial reduction, the aggregate
principal amount thereof. When notice of termination or reduction is delivered
as provided herein, the principal amount of the Revolving Loans specified in the
notice shall become due and payable on the date specified in such notice.
(b) MANDATORY PREPAYMENTS/REDUCTIONS.
(i) NET CASH PROCEEDS OF SALE. Immediately upon the receipt by
the Borrowers or any 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.
(ii) Intentionally omitted.
(iii) NET CASH PROCEEDS OF ISSUANCE OF EQUITY SECURITIES OR
INDEBTEDNESS. Immediately upon the receipt by the Parent, the Borrowers or any
Guarantor of any Net Cash Proceeds of Issuance of Equity Securities or
Indebtedness, the Borrowers shall make or cause to be made a mandatory
prepayment in an amount equal to one hundred percent (100%) of such Net Cash
Proceeds of Issuance of Equity Securities or Indebtedness. Notwithstanding the
foregoing, (A) in the event the subject issuance of equity Securities does not
result in a failure by the Borrowers to comply with the provisions of ARTICLE XI
and the proceeds of such issuance are used by the Borrowers to purchase
Inventory, that portion of the Net Cash Proceeds of Issuance of Equity
Securities used by the Borrowers to purchase Inventory within ten (10) Business
Days after a Borrower's or a Borrower's Subsidiary's receipt of such proceeds
shall not be subject to the requirement for a mandatory prepayment under this
CLAUSE (III); and (B) with respect to issuance of Indebtedness, PROVIDED THAT
all Lenders have consented to the subject issuance of Indebtedness, and the
terms and conditions pertaining thereto, the Net Cash Proceeds of Issuance of
Indebtedness, or such portion thereof to which the Lenders consent, shall not be
subject to the requirement for a mandatory prepayment under this CLAUSE (III).
(iv) INSUFFICIENT COLLATERAL. The Borrowers shall, immediately
and without notice or demand of any kind, make such repayments of the Loans to
the extent necessary to reduce the amount equal to the sum of (A) the
outstanding principal amount of the Revolving Credit Obligations PLUS (B) the
outstanding principal amount of the Term Loans PLUS (C) the outstanding
principal amount of the Loans made under the Acquisition Subfacility to an
amount not to exceed the Borrowing Base.
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(v) NO WAIVER OR CONSENT. Nothing in this SECTION 4.01(B)
shall be construed to constitute the Lenders' consent to any transaction
referenced in CLAUSES (I) and (III) above which is not expressly permitted by
ARTICLE X or the consent of all Lenders referenced in CLAUSE (III)(B), as
applicable.
(vi) NOTICE. ASOC shall give the Agent prior written notice or
telephonic notice promptly confirmed in writing (each of which the Agent shall
promptly transmit to each Lender), when a Designated Prepayment will be made
(which date of prepayment shall be no later than the date on which such
Designated Prepayment becomes due and payable pursuant to this SECTION 4.01(B)).
(vii) APPLICATION OF PREPAYMENTS. (A) Designated Prepayments
shall be allocated and applied to the Obligations as follows:
(I) the amount of each Designated Prepayment shall be applied
ratably to the unpaid installments of the Term Loans in the inverse
order of maturity until paid in full;
(II) following the payment in full of the Term Loans, the
remaining balance of each Designated Prepayment shall be applied
ratably to the Loans made under the Acquisition Subfacility and applied
to the unpaid installments thereof in the inverse order of maturity
until paid in full;
(III) following the payment in full of the Loans made under
the Acquisition Subfacility, the remaining balance of each Designated
Prepayment shall be applied to the outstanding Revolving Loans and, if
such Designated Prepayment is made from either Net Cash Proceeds of
Sale or Net Cash Proceeds of Issuance of Equity Securities or
Indebtedness, shall permanently reduce the Revolving Credit Commitment
of each Revolving Lender proportionately in accordance with its
Revolving Loan Pro Rata Share of such Designated Prepayment; and
(IV) following the payment in full of the Revolving Loans, the
remaining balance of each Designated Prepayment shall be applied to the
Letter of Credit Obligations (or, to the extent such Letter of Credit
Obligations are contingent, deposited in the Cash Collateral Account to
provide Cash Collateral in respect of such Letter of Credit
Obligations).
(B) Prepayments required by SECTION 4.01(B)(IV) shall be
allocated and applied FIRST to the Revolving Loans ratably based on the then
outstanding principal balance thereof until
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paid in full, SECOND ratably to the unpaid installments of the Term Loans in the
inverse order of maturity until paid in full, and LASTLY ratably to the unpaid
installments of the Loans made under the Acquisition Subfacility until paid in
full.
4.02. PAYMENTS. (a) MANNER AND TIME OF PAYMENT. All payments
of principal of and interest on the Loans and 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 without
condition or reservation of right, and, with respect to payments made other than
from application of deposits in the Concentration Account, in immediately
available funds, delivered to the Agent (or, in the case of Reimbursement
Obligations, to the pertinent Issuing Bank) not later than 1:00 p.m. (New York
time) on the date and at the place due, to such account of the Agent (or such
Issuing Bank) as it may designate, for the account of the Agent, the Lenders or
such Issuing Bank, as the case may be; and funds received by the Agent,
including, without limitation, funds in respect of any Revolving Loans to be
made on that date, not later than 1:00 p.m. (New York time) on any given
Business Day shall be credited against payment to be made that day and funds
received by the Agent after that time shall be deemed to have been paid on the
next succeeding Business Day. Payments actually received by the Agent for the
account of the Lenders or the Issuing Banks, or any of them, shall be paid to
them by the Agent promptly after receipt thereof.
(b) APPORTIONMENT OF PAYMENTS. (i) Subject to the provisions
of SECTION 4.01 and SECTION 4.02(B)(V), all payments of principal and interest
in respect of outstanding Loans, all payments in respect of Reimbursement
Obligations, all payments of fees and all other payments in respect of any other
Obligations, shall be allocated among such of the Lenders and Issuing Banks as
are entitled thereto, in proportion to their respective Pro Rata Shares, Term
Loan Pro Rata Shares, Revolving Loan Pro Rata Shares, or otherwise as provided
herein. Except as provided in SECTION 4.02(B)(II) with respect to payments and
proceeds of Collateral received after the occurrence of an Event of Default, all
such payments and any other amounts received by the Agent from or for the
benefit of the 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
Revolving Lender other than Citicorp for which the Agent has not then
been reimbursed by such Revolving Lender or the Borrowers,
(B) SECOND, to pay principal of and interest on any Protective
Advance for which the Agent or Revolving Lenders have not then been
reimbursed by the Borrowers,
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(C) THIRD, to pay the principal of the Term Loans, Loans made
under the Acquisition Subfacility, and Revolving Loans then due and
payable in the order described hereinbelow and interest on such Loans
then due and payable, ratably, based on the then outstanding balances
of such Loans,
(D) FOURTH, to pay all other Obligations then due and payable,
ratably, and
(E) FIFTH, as ASOC, on behalf of the Borrowers, so designates.
All payments of principal and interest in respect of Loans pursuant to CLAUSE
(C) shall be applied FIRST, to the Term Loans (to installments and accrued
interest thereon then due and payable, ratably, in accordance with the Term
Lenders' respective Term Loan Pro Rata Shares), SECOND, to the Loans made under
the Acquisition Subfacility (to installments and accrued interest thereon then
due and payable, ratably, in accordance with the Revolving Lenders' respective
Revolving Loan Pro Rata Shares), and THIRD, Revolving Loans and accrued interest
thereon ratably, in accordance with the Revolving Lenders' respective Revolving
Loan Pro Rata Shares.
(ii) After the occurrence of an Event of Default and while the same
is continuing, the Agent shall apply all payments in respect of any Obligations
and all proceeds of Collateral in the following order:
(A) FIRST, to pay principal of and interest on any portion of
the Revolving Loans which the Agent may have advanced on behalf of any
Revolving Lender other than Citicorp for which the Agent has not then
been reimbursed by such Revolving Lender or the Borrowers;
(B) SECOND, to pay principal of and interest on any Protective
Advance for which the Agent or Revolving Lenders have not then been
reimbursed by the 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;
(D) FOURTH, to pay principal of and interest on Letter of
Credit Obligations (or, to the extent such Obligations are contingent,
deposited in the Cash Collateral Account to provide Cash Collateral in
respect of such Obligations);
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(E) FIFTH, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(F) SIXTH, to pay interest due in respect of the Loans,
ratably, in accordance with the Lenders' respective Pro Rata Shares;
(G) SEVENTH, to the ratable payment or prepayment of principal
outstanding on all Loans with application to installments on the Term
Loans and Loans made under the Acquisition Subfacility in the inverse
order of maturity;
(H) EIGHTH, to the ratable payment of Hedge Agreements to
which any of the Lenders or any Affiliate of any of the Lenders is a
party; and
(I) NINTH, to the ratable payment of all other Obligations.
The order of priority set forth in this SECTION 4.02(B) and the related
provisions of this Agreement are set forth solely to determine the rights and
priorities of the Agent, the Lenders, the Issuing Banks and other Holders as
among themselves.
(iii) The Agent, in its sole discretion subject only to the
terms of this SECTION 4.02(B)(III), may pay from the proceeds of Revolving Loans
made to the Borrowers hereunder, whether made following a request by ASOC
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 Revolving Lenders to make Revolving
Loans, in each case, upon notice from the Agent as described in the following
sentence for the purpose of paying principal, interest, Reimbursement
Obligations and fees due from the 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 Revolving Loans
so made shall be deemed to have been requested by ASOC on behalf of the
Borrowers pursuant to SECTION 2.02 as of the date of the aforementioned notice.
The Agent shall request Revolving Loans on behalf of the Borrowers as described
in the preceding sentence by notifying the Revolving Lenders by telecopy,
telegram or other similar form of transmission (which notice the Agent shall
thereafter promptly transmit to ASOC), 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
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Revolving Loan, the Revolving Lenders shall make the requested Revolving
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 Holder may request in writing,
such funds as such Person may be entitled to receive hereunder; PROVIDED THAT
the Agent shall under no circumstances be bound to inquire into or determine the
validity, scope or priority of any interest or entitlement of any Holder and may
suspend all payments or seek appropriate relief (including, without limitation,
instructions from the Requisite Lenders or an action in the nature of
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby.
(v) In the event that any Revolving Lender fails to fund its
Revolving Loan Pro Rata Share of any Revolving Loan or Loan under the
Acquisition Subfacility requested by ASOC on behalf of the Borrowers which such
Revolving Lender is obligated to fund under the terms of this Agreement (the
funded portion of such Loan being hereinafter referred to as a "Non Pro Rata
Loan"), until the earlier of such Revolving Lender's cure of such failure and
the termination of the Revolving Credit Commitments, the proceeds of all amounts
thereafter repaid to the Agent by the Borrowers and otherwise required to be
applied to such Revolving Lender's share of all other Obligations pursuant to
the terms of this Agreement shall be advanced to the Borrowers by the Agent on
behalf of such Revolving Lender to cure, in full or in part, such failure by
such Revolving Lender, but shall nevertheless be deemed to have been paid to
such Revolving Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:
(A) the foregoing provisions of this SECTION 4.02(B)(V) shall
apply only with respect to the proceeds of payments of Obligations;
(B) a Revolving Lender shall be deemed to have cured its
failure to fund its Revolving Loan Pro Rata Share of any Revolving Loan
or Loan under the Acquisition Subfacility at such time as an amount
equal to such Revolving Lender's original Revolving Loan Pro Rata Share
of the requested principal portion of such Loan is fully funded to the
Borrowers, whether made by such Revolving Lender itself or by operation
of the terms of this SECTION 4.02(B)(V), and whether or not the Non Pro
Rata Loan with respect thereto has been repaid;
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(C) amounts advanced to the Borrowers to cure, in full or in
part, any such Revolving Lender's failure to fund its Revolving Loan
Pro Rata Share of any Revolving Loan or Loan under the Acquisition
Subfacility ("Cure Loans") shall bear interest at the rate in effect
from time to time pursuant to the terms of SECTION 5.01; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions of ASOC
as to its desired application, all repayments of principal which, in
accordance with the other terms of this SECTION 4.02, would be applied
to the outstanding Revolving Loans and Loans made under the Acquisition
Subfacility shall be applied FIRST, ratably to all such Loans
constituting Non Pro Rata Loans, SECOND, ratably to such Loans other
than those constituting Non Pro Rata Loans or Cure Loans and, THIRD,
ratably to such Loans constituting Cure Loans.
(c) PAYMENTS ON NON-BUSINESS DAYS. Whenever any pay ment to be
made by the 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 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. The Borrowers shall
execute and deliver to each Lender on the Effective Date one or more promissory
notes, in form and substance acceptable to the Agent and such Lender, evidencing
the Loans made by such Lender and thereafter shall execute and deliver such
other promissory notes as are necessary to evidence Loans owing to the Lenders
after giving effect to any assignment thereof pursuant to SECTION 15.01, all in
form and substance acceptable to the Agent and in substantially the form
attached hereto as EXHIBIT E, as applicable. On the Effective Date, the "Term
Notes" and "Revolving Notes" executed and delivered under the terms of the
Predecessor Agreement shall be returned to ASOC and the Term Notes and Revolving
Notes executed and delivered by the Borrowers hereunder substituted therefor.
(b) LOAN ACCOUNT. Each Lender shall maintain in accordance
with its usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of the Borrowers to such Lender resulting from each Loan owing to
such Lender from time to time, including the amount of principal and interest
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payable and paid to such Lender from time to time hereunder and under the Notes.
(c) CONTROL ACCOUNT. The Register maintained by the Agent
pursuant to SECTION 15.01(C) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the type of Loan
comprising such Borrowing, (ii) the effective date and amount of each Assignment
and Acceptance delivered to and accepted by it and the parties thereto, (iii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder or under the Notes, and (iv)
the amount of any sum received by the Agent from the 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 shall establish and maintain
depository accounts and shall cause their Subsidiaries to establish and maintain
depository accounts subject to Collection Account Agreements into which all
collections of Receivables shall be deposited and promptly transferred directly
to the Concentration Account. The Borrowers shall cause all proceeds of
Collateral to be deposited in the Concentration Account or pursuant to other
similar arrangements for the collection of such amounts established by the
Borrowers and the Agent. All collections of Receivables and proceeds of
Collateral which are received directly by any Borrower or any Subsidiary of a
Borrower shall be deemed to have been received by such Borrower or such
Subsidiary of a Borrower as the Agent's trustee and, upon such Borrower's or
such Subsidiary's receipt thereof, such Borrower shall immediately transfer or
cause to be transferred, all such amounts into the Concentration Account in
their original form. All collections of Receivables and proceeds of other
Collateral deposited in the Concentration Account as described above shall be
deemed to have been received by the Agent and will be held by the Agent, for the
benefit of the Holders, as Cash Collateral for the Obligations, subject to the
rights of the Borrower set forth in SECTION 4.04(B) and the rights of the Agent
set forth in SECTION 12.03.
(b) PRE-DEFAULT WITHDRAWALS FROM CONCENTRATION ACCOUNT. The
Agent shall, so long as no Event of Default shall have occurred and be
continuing or unwaived, from time to time, (i) apply funds in the Concentration
Account (A) promptly after
63
deposit therein to payment of the outstanding Revolving Loans, (B) to payment of
other Obligations as they become due and payable, (ii) invest funds on deposit
in the Concentration Account and accrued interest thereon, after giving effect
to the aforesaid payments, reinvest proceeds of any such investments which may
mature or be sold, and invest interest or other income received from such
investments, in such Cash Equivalents as ASOC may select, and (iii) upon ASOC'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 its Subsidiaries' designated accounts. Such funds,
interest, proceeds, or income which are not so disbursed, invested or reinvested
shall be deposited and held in the Concentration Account for the benefit of the
Holders as provided in SECTION 4.04(A). None of the Agent, any Lender or any
Issuing Bank shall be liable to any Borrower or any Subsidiary of a Borrower
for, or with respect to, any decline in value of amounts on deposit in the
Concentration Account which shall have been invested pursuant to this SECTION
4.04(B). Cash Equivalents from time to time purchased and held pursuant to this
SECTION 4.04(B) shall constitute Cash Collateral and shall, for purposes of this
Agreement, be deemed to be part of the funds held in the Concentration Account
in amounts equal to their respective outstanding principal amounts.
(c) REASONABLE CARE. The Agent shall exercise reasonable care
in the custody and preservation of any funds held in the Concentration Account
and shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which the Agent accords its own like
property, it being understood that the Agent shall not have any responsibility
for taking any steps necessary to preserve rights against any parties with
respect to any such funds but may do so at its option. In the event the Agent
takes any such steps, it shall provide ASOC 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 ASOC, the Agent shall, so long as no Event of Default shall have occurred and
be continuing, from time to time invest funds on deposit in the Cash Collateral
Account and accrued interest thereon, reinvest proceeds of any such investments
which may mature or be sold, and invest interest or other income received from
any such Investments, in each case in such Cash Equivalents as ASOC 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
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Cash Collateral Account which shall have been invested pursuant to this SECTION
4.05(A) at the direction of ASOC. 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 ASOC 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; and
(ii) If a Eurodollar Rate Loan, at a rate per annum equal to
the sum of (A) the Eurodollar Rate determined for the applicable
Eurodollar Interest Period PLUS (B) the applicable Eurodollar Rate
Margin and
the Overadvance Amount shall bear interest on the unpaid principal amount
thereof at a rate which is one-quarter of one percent (0.25%) per annum in
excess of the rate of interest specified above.
The applicable basis for determining the rate of interest on the Loans shall be
selected by ASOC at the time a Notice of Borrowing or a Notice of
Conversion/Continuation is delivered by ASOC to the Agent; PROVIDED, HOWEVER,
that ASOC may not select the Eurodollar Rate as the applicable basis for
determining the rate of interest on such Loan if at the time of such selection
an Event of Default or a Potential Event of Default would occur or has occurred
and is continuing. If on any day any Loan is outstanding with respect to which
notice has not been timely delivered to the Agent in accordance with the terms
of this Agreement specifying the basis for determining the rate of interest on
that day, then for that day interest on that Loan shall be determined by
reference to the Base Rate.
(b) INTEREST PAYMENTS. (i) Interest accrued on each Base Rate
Loan shall be payable in arrears (A) on the first day of each calendar month
(for the immediately preceding calendar month), commencing on the first such day
following the making of such Loan, (B) upon conversion thereof to a Eurodollar
Rate Loan, and (C) if not theretofore paid in full, at maturity (whether by
acceleration or otherwise) of such Loan.
(ii) Interest accrued on each Eurodollar Rate Loan shall be
payable in arrears (A) on each Eurodollar Interest Payment Date applicable to
such Loan and (B) if not theretofore
66
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).
(c) DEFAULT INTEREST. Notwithstanding the rates of interest
specified in SECTION 5.01(A), effective immediately upon the occurrence of an
Event of Default, and for as long thereafter as such Event of Default shall be
continuing unwaived, the principal balance of all Loans and of all other
Obligations, shall bear interest at a rate which is two percent (2.0%) per annum
in excess of the rate of interest specified in SECTION 5.01(A)(I).
(d) COMPUTATION OF INTEREST. Interest on all Obliga tions
shall be computed on the basis of the actual number of days elapsed in the
period during which interest accrues and a year of 360 days. In computing
interest on any Loan, the date of the making of the Loan shall be included and
the date of payment shall be excluded; PROVIDED, HOWEVER, if a Loan is repaid on
the same day on which it is made, one (1) day's interest shall be paid on such
Loan.
(e) CONVERSION OR CONTINUATION. (i) The 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 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),
ASOC shall deliver a Notice of Conversion/Continuation to the Agent no later
than 11:00 a.m.
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(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 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, ASOC
may give the Agent telephonic notice of any proposed conversion/continuation by
the time required under this SECTION 5.01(E)(II), and such notice shall be
confirmed in writing delivered to the Agent by facsimile transmission promptly
(but in no event later than 5:00 p.m. (New York time) on the same day), the
original of which facsimile copy shall be delivered to the Agent within three
(3) days after the date of such transmission. Promptly after receipt of a Notice
of Conversion/Continuation under this SECTION 5.01(E)(II) (or telephonic notice
in lieu thereof), the Agent shall notify each Lender by telecopy, or other
similar form of transmission, of the proposed conversion/continuation. Any
Notice of Conversion/Continuation for conversion to, or continuation of, a Loan
(or telephonic notice in lieu thereof) shall be irrevocable, and the 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 Revolving Lenders based
on their respective Revolving Loan Pro Rata Shares, a fee (the "Letter of Credit
Fee") accruing at a rate equal to the Eurodollar Rate Margin applicable from
time to time on the undrawn face amount of each outstanding Letter of Credit,
payable quarterly, in arrears, on the first day of each calendar quarter (for
the immediately preceding calendar quarter); PROVIDED, HOWEVER, upon the
occurrence of an Event of Default, and for so long thereafter as such Event of
Default shall be continuing, the rate at which the (A) Fronting Fee shall accrue
and be payable shall be equal to two and one-quarter percent (2.25%) per annum
and (B) Letter of Credit Fee shall accrue and be payable shall be equal to four
and three-quarters percent (4.75%) per annum.
(b) UNUSED COMMITMENT FEE. (i) The Borrowers shall pay to the
Agent, for the account of the Revolving Lenders in accordance with their
respective Revolving Loan Pro Rata Shares, a fee (the "Unused Commitment Fee"),
accruing at the rate of one-half of one percent (0.50%) per annum on the average
daily amount by which the Revolving Credit Commitments exceed the sum of (A)
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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
Revolving Lender fails to fund its Revolving Loan Pro Rata Share of any
Revolving Loan requested by the Borrowers which such Revolving Lender is
obligated to fund under the terms of this Agreement, (A) such Revolving Lender
shall not be entitled to any Unused Commitment Fees with respect to its
Revolving Credit Commitment until such failure has been cured in accordance with
SECTION 4.02(B)(V)(B) and (B) until such time, the Unused Commitment Fee shall
accrue in favor of the Revolving Lenders which have funded their respective
Revolving Loan Pro Rata Shares of such requested Revolving Loan, shall be
allocated among such performing Revolving Lenders ratably based upon their
relative Revolving Credit Commitments, and shall be calculated based upon the
average amount by which the aggregate Revolving Credit Commitments of such
performing Revolving Lenders exceeds the sum of (1) the outstanding principal
amount of the Revolving Loans owing to such performing Revolving Lenders, PLUS
(2) the outstanding Reimbursement Obligations owing to such performing Revolving
Lenders, PLUS (3) the aggregate participation interests of such performing
Revolving Lenders arising pursuant to SECTION 3.01(E) with respect to undrawn
and outstanding Letters of Credit.
(c) OTHER FEES. The Borrower shall pay (i) to the Agent in
addition to any other fee referenced in this Agreement those certain fees
described in the Fee Letter and (ii) to the Agent, for the account of the
Lenders, on the Effective Date, an amendment fee in the amount equal to
one-eighth of one percent (0.125%) of $150,000,000, which amendment fee shall be
allocable to the Lenders based upon their respective Pro Rata Shares.
(d) 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 nonrefund able 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
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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 2.02(B) or SECTION 2.03(B) (with respect to a
Borrowing of Eurodollar Rate Loans) or SECTION 5.01(E) (with respect to a
conversion into or continuation of Eurodollar Rate Loans), the 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 Loans
described in such notice, subject to the following provisions:
(i) The 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 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 Revolving Loan or Loan made under the Acquisition Subfacility
if such Eurodollar Interest Period terminates later than the scheduled
Revolving Credit Termination Date;
(v) The Borrowers may not select a Eurodollar Interest Period
as to any Term Loan if such Eurodollar Interest Period terminates later
than the scheduled Term Loan Termination Date;
(vi) The Borrowers may not select a Eurodollar Interest Period
with respect to any portion of principal of
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a Loan which extends beyond a date on which the Borrowers are required
to make a scheduled payment of such portion of principal; and
(vii) There shall be no more than eight (8) Eurodollar
Interest Periods in effect at any one time.
(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 ASOC 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 ASOC, whereupon (until the
Agent notifies ASOC 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.
5.04. DETERMINATION OF APPLICABLE BASE RATE MARGIN AND
EURODOLLAR RATE MARGIN. The Base Rate Margin and Eurodollar Rate Margin
applicable for the period commencing on the Effective Date and ending on March
31, 1998 shall be determined based on Performance Level 2. The Base Rate Margin
and Eurodollar Rate Margin applicable for the period commencing on April 1, 1998
and ending on July 31, 1998 shall be determined based on Borrowers' compliance
with Performance Levels 1 through 6, PROVIDED, HOWEVER, in no event shall the
Base Rate Margin and Eurodollar Rate Margin for such period exceed those
determined based on Performance Level 3. The Base Rate Margin and Eurodollar
Rate Margin applicable from time to time after August 31, 1998 shall be
determined on the date the Financial Statements for each fiscal quarter of the
Borrowers are due pursuant to SECTION 8.01(B), commencing with the Financial
Statements for the fiscal quarter ending June 30, 1998, by reference to
Borrowers' compliance with Performance Levels 1 through 6 as of the end of each
fiscal quarter and be effective during the period commencing on the first day of
the month in which such Financial Statements for the preceding fiscal quarter
are due and ending on the last day of the first month of the next fiscal quarter
for which such determination is made.
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ARTICLE VI
CONDITIONS TO LOANS AND LETTERS OF CREDIT;
LEASING AFFILIATE LIABILITIES
6.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF AGREEMENT.
This Agreement shall become effective upon and be subject to the satisfaction by
11:00 a.m. (New York time) on October 17, 1997 (the "Effective Date") of all of
the following conditions precedent:
(a) DOCUMENTS. The Agent shall have received on or before the
Effective Date all of the following:
(i) this Agreement, the Notes and all other agreements,
documents and instruments relating to the loan and other credit
transactions contemplated by this Agreement and described in the List
of Closing Documents attached hereto as EXHIBIT I and made a part
hereof, each duly executed where appropriate and in form and substance
satisfactory to the Agent; without limiting the foregoing, the
Borrowers hereby direct their counsel, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, their
special New York counsel, Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, their
special Arkansas counsel, Hill ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, and their
special Ohio and Kentucky counsel, ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇ to
prepare and deliver to the Agent, the Lenders and the Issuing Banks,
the opinions referred to in such List of Closing Documents;
(ii) the Pro Forma and Projections, together with a business
plan for (A) the Parent and its Subsidiaries and (B) the Borrowers and
their Subsidiaries, in each instance, for the period commencing on the
Effective Date and ending on the fourth anniversary thereof, each in
form and substance satisfactory to the Agent;
(iii) an Officer's Certificate executed and delivered on
behalf of ASOC on behalf of the Borrowers certifying that all
conditions precedent have been met and no Potential Event of Default or
Event of Default has occurred or is continuing;
(iv) a Borrowing Base Certificate dated October 17, 1997
adequately supporting the Loans outstanding as of, and requested to be
made on, the Effective Date;
(v) the Appraisals; and
(vi) such additional documentation as the Agent may reasonably
request.
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(b) THE ACQUISITIONS. The Lenders shall be satisfied in all
material respects (i) with the terms, form and substance of the ▇▇▇▇▇-▇▇▇▇▇
Acquisition and the documentation related thereto and (ii) that the Aerocell
Acquisition and the ▇▇▇▇▇- ▇▇▇▇▇ Acquisition were made in compliance with all
applicable laws and regulatory approval requirements and all contractual
approval and consent requirements related thereto.
(c) NO LEGAL IMPEDIMENTS. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and the Agent shall not have
received any notice that litigation is pending or threatened which is likely to,
(i) enjoin, prohibit or restrain (A) this Agreement becoming effective as of the
Effective Date or the making of the Loans and/or the issuance of Letters of
Credit requested to be made or issued, as applicable, on the Effective Date or
(B) the consummation of the ▇▇▇▇▇-▇▇▇▇▇ Acquisition, or (ii) result in a
Material Adverse Effect.
(d) FINANCIAL STATEMENTS. The Lenders shall be satisfied with
the audited Financial Statements of the Parent for its fiscal year ending
December 31, 1996 and related reports and management letters of the Parent's
independent certified public accountants, the interim Financial Statements of
the Parent for the first two fiscal quarters of 1997, the financial information
relating to the Parent, ASOC, and ASOC's Subsidiaries provided to the Agent and
Lenders under the Predecessor Agreement, and the financial information relating
to Aerocell and ▇▇▇▇▇-▇▇▇▇▇ provided to the Agent and Lenders.
(e) NO CHANGE IN CONDITION. No material adverse change shall
have occurred (as certified to the Agent and the Lenders by the respective chief
financial officers) in the business, assets, management, operations, financial
condition or prospects of Parent, any Borrower or Leasing Affiliate since
December 31, 1996. The Lenders shall be satisfied that no such material adverse
change shall result from the consummation of the Aerocell Acquisition or the
▇▇▇▇▇-▇▇▇▇▇ Acquisition.
(f) INTERIM LIABILITIES AND EQUITY. Since December 31, 1996,
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 Aerocell Acquisition, the ▇▇▇▇▇-▇▇▇▇▇ Acquisition, the
Leasing Transfer, and other transactions contemplated hereby, (ii) declared or
paid any distribution or dividend other than the distribution effecting the
Leasing Transfer, (iii) established or assumed any obligations with respect to
compensation or employee benefit plans other than plans with respect to the
Permitted Equity Securities Options, or (iv) redeemed, repurchased, or issued
any
74
equity Securities, except with respect to the formation of M&R and ▇▇▇▇▇-▇▇▇▇▇
and with respect to the Aerocell Acquisition.
(g) NO LOSS OF MATERIAL AGREEMENTS AND LICENSES. Since
December 31, 1996, no Permit, agreement, lease, or license which, in the
judgment of the Agent, is material to the business, operations or employee
relations of any Borrower or any Guarantor shall have been terminated, modified,
revoked, breached, or declared to be in default.
(h) NO DEFAULT. No Event of Default or Potential Event of
Default shall have occurred and be continuing unwaived under the Predecessor
Agreement.
(i) NO LITIGATION. Agent shall have reviewed all litigation
pending or threatened against any Borrower and/or any Guarantor and determined
to its satisfaction that no Material Adverse Effect will, or is reasonably
likely to, result from the existence thereof.
(j) CAPITAL STRUCTURE, OFFICERS AND SENIOR MANAGEMENT OF
PARENT AND ITS SUBSIDIARIES. The corporate and capital structure of the Parent
and its Subsidiaries shall be satisfactory to the Lenders and the composition of
such Persons' Boards of Directors and corporate officers/senior management shall
not have changed since March 31, 1997, except with respect to changes made in
the Boards of Directors and corporate officers/senior management in connection
with the Aerocell Acquisition and the ▇▇▇▇▇-▇▇▇▇▇ Acquisition.
(k) REPRESENTATIONS AND WARRANTIES. All of the repre
sentations and warranties contained in SECTION 7.01 and in any of the other Loan
Documents shall be true and correct in all material respects on and as of the
Effective Date.
(l) FEES AND EXPENSES PAID. There shall have been paid to the
Agent, for the accounts of (i) the lenders and issuing bank under the
Predecessor Agreement, as applicable, all 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.
6.02. CONDITIONS PRECEDENT TO ALL SUBSEQUENT LOANS AND LETTERS
OF CREDIT. The obligation of each Lender to make any Loan requested to be made
by it on any Funding Date and the agreement of each Issuing Bank to issue any
Letter of Credit on any date is subject to the following conditions precedent as
of each such date, both before and after giving effect to the Loans to be made
and/or the Letter of Credit to be issued on such date:
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(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 Loan
or participation in the requested Letter of Credit or (ii) such Issuing Bank's
issuance of the requested Letter of Credit.
(d) NO MATERIAL ADVERSE EFFECT. No event shall have occurred
since the date of this Agreement which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.
(e) LEASING AFFILIATE. The conditions set forth in SECTION
6.04 shall have been satisfied or waived in accordance with SECTION 15.07, if
the proceeds of the Loans requested will be used to make loans or advances to
Leasing Affiliate or if the Letter of Credit requested is to be issued for the
account of Leasing Affiliate.
Each submission by ASOC 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 ASOC 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.
6.03. Intentionally omitted.
6.04. CONDITIONS PRECEDENT TO LEASING AFFILIATE LIABILITIES.
No Borrower shall make any loans or other advances to Leasing Affiliate, incur
any Accommodation Obligations with respect to Indebtedness of Leasing Affiliate,
or enter into any transactions with Leasing Affiliate otherwise permissible
under SECTION 10.08, and the Issuing Bank shall have no obligation to
76
issue or continue any Letter of Credit for the account of Leasing Affiliate
unless, as of the date of the making of such loan or other advance, incurrence
of such Accommodation Obligation, consummation of such transaction, or proposed
issuance or continuation of such Letter of Credit, and after giving effect
thereto, all of the following conditions contained in this SECTION 6.04 have
been satisfied or waived in accordance with SECTION 15.07:
(a) MINIMUM NET WORTH. The net worth of the Parent and its
Subsidiaries shall be equal to at least $50,000,000.
(b) AGREEMENTS AND INSTRUMENTS. All loans and advances made by
the Borrowers to Leasing Affiliate shall be evidenced by one or more promissory
notes in the form attached hereto as EXHIBIT J and made a part hereof; no
obligation of Leasing Affiliate to the Borrowers arising out of (i) any
Accommodation Obligations of the Borrowers with respect to Indebtedness of
Leasing Affiliate, (ii) any Letter of Credit issued for the account of Leasing
Affiliate, or (iii) any transaction described in SECTION 10.08 shall be
subordinated in right of payment or otherwise to any claim of any Person against
Leasing Affiliate or its property other than claims in favor of the Holders and
Agent for the benefit of the Holders.
(c) MAXIMUM LEASING AFFILIATE LIABILITIES. The Leasing
Affiliate Liabilities shall not exceed $20,000,000 at any time outstanding.
(d) NOTICE TO AGENT. ASOC shall have delivered a written
notice, in the form attached hereto as EXHIBIT K and made a part hereof, to the
Agent by no later than the day on which, as applicable, each loan or advance is
made by any Borrower to Leasing Affiliate, each Letter of Credit is requested to
be issued for the account of Leasing Affiliate, and each Accommodation
Obligation is incurred by a Borrower with respect to Indebtedness of Leasing
Affiliate.
(e) NO DEFAULT. No Event of Default or Potential Event of
Default shall have occurred or be continuing unwaived.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.01. REPRESENTATIONS AND WARRANTIES OF THE 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, 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 ASOC and ▇▇▇▇▇-▇▇▇▇▇ and
each Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Aerocell is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Arkansas. ASOC is duly qualified to do business and is in good standing under
the laws of the states of Texas, Florida, California, Oklahoma, and Washington,
and of each other jurisdiction in which failure to be so qualified and in good
standing will result, or is reasonably likely to result, in a Material Adverse
Effect. Aerocell is duly qualified to do business and is 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. ▇▇▇▇▇-▇▇▇▇▇ is duly qualified to
do business and is in good standing under the laws of the states of Kentucky and
Ohio and of each other jurisdiction in which failure to be so qualified and in
good standing will result, or is reasonably likely to result, in a Material
Adverse Effect. Leasing Affiliate is duly qualified to do business and is in
good standing under the laws of the state of Florida and of each other
jurisdiction in which failure to be so qualified and in good standing will
result, or is reasonably likely to result, in a Material Adverse Effect. Parent
is duly qualified to do business and is in good standing under the laws of the
state of Florida and of each other jurisdiction in which failure to be so
qualified and in good standing will result, or is reasonably likely to result,
in a Material Adverse Effect. Distribution is duly qualified to do business and
is in good standing under the laws of the states of Florida and Georgia and of
each other jurisdiction in which failure to be so qualified and in good standing
will result, or is reasonably likely to result, in a Material Adverse Effect.
Finance Affiliate and each Guarantor not specifically referenced hereinabove is
duly qualified to do business and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing will
result, or is reasonably likely to result, in a Material Adverse Effect. Each
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
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and New Jersey, (B) is a corporation for federal income tax purposes, and (C)
has all requisite corporate power and authority to own, operate and encumber its
Property and to conduct its business as presently conducted and as proposed to
be conducted in connection with and following the consummation of the
transactions contemplated by this Agreement. Distribution is the sole Subsidiary
of ASOC; neither of Aerocell or ▇▇▇▇▇-▇▇▇▇▇ has any Subsidiaries; and Aerocell
and ▇▇▇▇▇-▇▇▇▇▇ are the sole Subsidiaries of M&R.
(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 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 the Aerocell Acquisition or ▇▇▇▇▇-▇▇▇▇▇
Acquisition, or which have been executed, filed or recorded by or on behalf of
the Borrowers or Guarantors 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
79
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.
(c) CORPORATE AFFILIATES; OWNERSHIP OF EQUITY SECURITIES.
SCHEDULE 7.01-C attached hereto (i) contains a diagram indicating the corporate
structure of the Parent and each Person in which the Parent holds a direct or
indirect partnership, joint venture, or other equity interest and indicates the
nature of such interest with respect to each Person included in such diagram;
and (ii) accurately sets forth (A) the correct legal name of such Person, the
jurisdiction of its incorporation or organization and the jurisdictions in which
it is qualified to transact business as a foreign corporation or otherwise, and
(B) the authorized, issued and outstanding shares or interests of each class of
equity Securities of the Parent and each such Person, and, with respect to
Subsidiaries of the Parent, the owners of such shares or interests. None of such
issued and outstanding Securities is subject to any vesting, redemption, or
repurchase agreement, and there are no warrants or options (other than Permitted
Equity Securities Options) outstanding with respect to such Securities. The
outstanding Capital Stock of each Borrower and each Guarantor is duly
authorized, validly issued, fully paid and nonassessable and is not Margin
Stock, are free and clear of all Liens, except for Liens granted pursuant to the
Loan Documents, are not subject to any option or purchase rights, conversion or
exchange rights, call, commitment or claim of any right, title or interest
therein or thereto, and have been issued in compliance with all applicable
Requirements of Law.
(d) NO CONFLICT. The execution, delivery and 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
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or constitute (with or without notice or lapse of time or both) a default under
any Requirement of Law or Contractual Obligation 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 contemplated by the Loan Documents, or (iv) require any
approval of the shareholders of such Person.
(e) GOVERNMENTAL CONSENTS. Except as set forth on SCHEDULE
7.01-E attached hereto, the execution, delivery and performance of each of the
Loan Documents and agreements and documents relating to the ▇▇▇▇▇-▇▇▇▇▇
Acquisition 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 their respective dates of incorporation 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 which would
constitute a Restricted Junior Payment under this Agreement, or agreed to do so,
except the distribution effecting the Leasing Transfer.
(h) FINANCIAL POSITION. Complete and accurate copies of the
following Financial Statements, materials and other information have been
delivered to the Agent: (i) the Pro Forma and Projections, (ii) the audited
financial statements of the Parent for the Fiscal Year ended on December 31,
1996, (iii) the agreements and documents pertaining to the Aerocell Acquisition
and ▇▇▇▇▇-▇▇▇▇▇ Acquisition, including, without limitation, the audited
financial statements of Aerocell for the fiscal year ended on April 30, 1997 and
the audited financial statements of ▇▇▇▇▇-▇▇▇▇▇ Machine Company for the fiscal
year ended on October 31, 1996, (iv) the interim unaudited financial statements
of Aerocell for its fiscal quarter ending July 31, 1997 and of
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▇▇▇▇▇-▇▇▇▇▇ Machine Company for its three fiscal quarters ending July 31, 1997,
and (v) all financial reporting required during the period August 22, 1997
through the Effective Date under the Predecessor Agreement. All financial
statements included in such materials were prepared in all material respects in
conformity with GAAP, except as otherwise noted therein, and fairly present in
all material respects the respective financial positions, and the results of
operations and cash flows for each of the periods covered thereby of the
applicable Person as at the respective dates thereof. 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) PRO FORMA FINANCIALS. The Pro Forma fairly presents on a
PRO FORMA basis the consolidated and consolidating financial condition of the
Parent and its Subsidiaries and each Borrower and its Subsidiaries as of the
Effective Date and reflects on a PRO FORMA basis those liabilities reflected in
the notes thereto and resulting from consummation of the transactions
contemplated hereby and the payment or accrual of all Transaction Costs. The
Projections and the assumptions expressed in the Pro Forma are reasonable based
on the information available to ASOC 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 the Aerocell
Acquisition, the ▇▇▇▇▇-▇▇▇▇▇ Acquisition, the Leasing Transfer or the Loan
Documents, (ii) which will, or is reasonably likely to, result in any Material
Adverse Effect, or (iii) under the Racketeering Influenced and Corrupt
Organizations Act or any similar federal or state statute or law under any
jurisdiction outside of the United States where such Person is a defendant in a
criminal indictment that provides for the forfeiture of assets to any
Governmental Authority as a criminal penalty. There is no material loss
contingency within the meaning of GAAP which has not been reflected in the
Financial Statements of the Parent and its Subsidiaries. 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
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regulation of any court or Governmental Authority which will, or is reasonably
likely to, result in a Material Adverse Effect.
(l) Intentionally omitted.
(m) NO MATERIAL ADVERSE EFFECT. Since December 31, 1996, there
has occurred no event with respect to any Borrower or any Guarantor which has
resulted, or is reasonably likely to result, in a Material Adverse Effect.
(n) PAYMENT OF TAXES. Except as disclosed on SCHEDULE 7.01-N
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. No
Borrower 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.
(o) 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.
(p) DISCLOSURE. The representations and warranties of each
Borrower contained in the Loan Documents, and all certificates and other
documents delivered to the Agent pursuant to the terms thereof, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading. No Borrower has
intentionally withheld any fact from the Agent, the Issuing Banks or the Lenders
in regard to any matter which will, or is reasonably likely to, result in a
Material Adverse Effect.
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(q) REQUIREMENTS OF LAW. Each of the Borrowers and respective
Guarantors is in compliance with all Requirements of Law applicable to it and
its respective business, in each case where the failure to so comply
individually or in the aggregate will, or is reasonably likely to, result in a
Material Adverse Effect.
(r) ENVIRONMENTAL MATTERS. (i) Except as disclosed on
SCHEDULE 7.01-R attached hereto:
(A) the operations of 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 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 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.
(s) 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-S attached hereto. Each Plan which is intended to
be qualified under Section 401(a) of the Internal Revenue Code as currently in
effect either (i) has received a favorable determination letter from the IRS
that
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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-S, 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 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-S, no Borrower or Guarantor, by
reason of the transactions contemplated hereby (including, without limitation,
the Aerocell Acquisition and ▇▇▇▇▇-▇▇▇▇▇ Acquisition), 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
86
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; and as to each
employee welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees of a Borrower or any Guarantor after termination
of employment other than as required by Section 601 of ERISA, the most recent
summary plan description for such plan and the aggregate amount of the most
recent annual payments made to terminated employees under each such plan.
(t) LABOR MATTERS. No Borrower or Guarantor is a party to any
collective bargaining agreement.
(u) SECURITIES ACTIVITIES. No Borrower or Guarantor is engaged
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(v) SOLVENCY. After giving effect to this Agreement, the
Aerocell Acquisition, and the ▇▇▇▇▇-▇▇▇▇▇ Acquisition and related transactions
and transfers, the Loans to be made and the Letters of Credit to be issued on
the Effective Date or such other date as Loans requested hereunder are made or
Letters of Credit requested hereunder are issued, and the disbursement of the
proceeds of such Loans pursuant to ASOC's instructions, each Borrower and each
Guarantor is Solvent.
(w) 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.
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(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.
(x) 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.
(y) INSURANCE. SCHEDULE 7.01-Y attached hereto accurately sets
forth as of the Effective Date all insurance policies and programs currently in
effect with respect to the respective Property and assets and business of 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 (vii) a list of claims and awards made
thereunder during the immediately preceding three (3) calendar years. ASOC 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.
(z) THE ▇▇▇▇▇-▇▇▇▇▇ ACQUISITION. All conditions precedent to,
and all consents necessary to permit, the consummation of the ▇▇▇▇▇-▇▇▇▇▇
Acquisition pursuant to the
88
agreements and documents relating thereto have been satisfied or delivered, or
waived with the prior written consent of the Agent, and no material breach of
any term or provision of any such agreement or document has occurred and no
action has been taken by any competent authority which restrains, prevents or
imposes material adverse conditions upon, or seeks to restrain, prevent or
impose material adverse conditions upon, the consummation of the ▇▇▇▇▇-▇▇▇▇▇
Acquisition, or the funding of any Loans and issuance of any Letters of Credit
hereunder. As of the Effective Date, the ▇▇▇▇▇-▇▇▇▇▇ Acquisition has been
consummated.
(aa) PLEDGE OF SECURITIES. The grant and perfection of the
security interest in the equity Securities of Borrowers, each Borrower's
Subsidiaries, Leasing Affiliate, Finance Affiliate, and M&R as contemplated by
the Loan Documents is not made in violation of any Requirement of Law.
89
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. The Borrowers
shall deliver or cause to be delivered to the Agent and the Lenders:
(a) MONTHLY REPORTS. From and after any written request
therefor by the Agent to ASOC, as soon as practicable, and in any event within
thirty (30) days after the end of each calendar month, (i) the consolidated and
consolidating balance sheets of (A) the Parent and its Subsidiaries as at the
end of such period, and (B) to the extent the same are routinely and regularly
prepared, Leasing Affiliate and its Subsidiaries and each Borrower and its
respective Subsidiaries as at the end of such period and (ii) the related
consolidated and consolidating statements of income, shareholders' equity and
cash flow of (A) the Parent and its Subsidiaries for such calendar month and (B)
to the extent the same are routinely and regularly prepared, Leasing Affiliate
and its Subsidiaries and each Borrower and its respective Subsidiaries for such
calendar month, setting forth in each case in comparative form the corresponding
figures for the corresponding calendar month of the previous Fiscal Year
certified by the chief financial officer of ASOC as fairly presenting the
consolidated and consolidating financial position, as applicable, of the Parent
and its Subsidiaries, Leasing Affiliate and its Subsidiaries, and each Borrower
and its respective Subsidiaries as at the dates indicated and the results of
their operations and cash flow for the calendar months indicated in accordance
with GAAP, subject to normal year end adjustments.
(b) QUARTERLY REPORTS. As soon as practicable, and in any
event within forty-five (45) days after the end of each fiscal quarter in each
Fiscal Year, the consolidated and consolidating balance sheets of (i) the Parent
and its Subsidiaries as at the end of such period and the related consolidated
and consolidating statements of income, shareholders' equity and cash flow of
the Parent and its
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Subsidiaries and (ii) to the extent the same are routinely and regularly
prepared, Leasing Affiliate and its Subsidiaries and each Borrower and its
respective Subsidiaries as at the end of such period and the related respective
consolidated and consolidating statements of income, shareholders' equity and
cash flow of Leasing Affiliate and its Subsidiaries and each Borrower and its
respective Subsidiaries for such fiscal quarter for the period from the
beginning of the then current Fiscal Year to the end of such fiscal quarter,
setting forth in each case in comparative form the corresponding figures for
the corresponding periods of the previous Fiscal Year and the corresponding
figures from the financial forecast for the current Fiscal Year delivered on the
Effective Date or pursuant to SECTION 8.01(F), as applicable, certified by the
chief financial officer of ASOC as fairly presenting the respective consolidated
and consolidating financial positions, as applicable, of the Parent and its
Subsidiaries, Leasing Affiliate and its Subsidiaries, and the respective
Borrowers and their Subsidiaries as at the dates indicated and the results of
their operations and cash flow for the periods indicated in accordance with
GAAP, subject to normal year end adjustments. For purposes of SECTIONS 8.01(A),
8.01(B), and 8.01(C), comparisons required to be made during the period
commencing on the Effective Date and ending on December 31, 1997 shall be made
to the corresponding figures for the corresponding periods set forth in the
consolidating balance sheets of the Parent delivered to the Agent and the
Lenders under the 1996 Credit Agreement as restated to the extent required under
GAAP. Notwithstanding the foregoing, in the event (i) the filing of the Parent's
Form 10-Q with the Commission with respect to any fiscal quarter is delayed for
any reason and Borrower has provided Agent with written notice of such delay by
the due date for the reports required for such quarter under this CLAUSE (B) and
(ii) 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 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, Leasing Affiliate and its Subsidiaries and 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 Affiliate and its Subsidiaries and
91
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 Financial Statements of the Parent and its
Subsidiaries of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified public
accountants acceptable to the Agent, which report shall be unqualified and shall
state that such Financial Statements fairly present the consolidated and
consolidating financial position of the Parent and its Subsidiaries and, to the
extent included in the Parent's annual Financial Statements, Leasing Affiliate
and its Subsidiaries and 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 ASOC 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 (100) days after the end of each 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
respect to such Fiscal Year PROVIDED THAT the 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 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 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
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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 ASOC's chief
financial officer, setting forth calculations (with such specificity as the
Agent may reasonably request) for the period then ended which demonstrate
compliance, when applicable, with the provisions of ARTICLE XI and SECTION
12.01(O)(II)(G)-(K).
(e) ACCOUNTANT'S STATEMENT AND PRIVITY LETTER. Together with
each delivery of the Financial Statements referred to in SECTION 8.01(C), a
written statement, in form and substance satisfactory to the Agent, of the firm
of independent certified public accountants giving the report thereon (i)
stating that their audit examination has included a review of the terms of this
Agreement as it relates to accounting matters, (ii) stating whether, in
connection with their audit examination, any condition or event which
constitutes an Event of Default or Potential Event of Default has come to their
attention, and if such condition or event has come to their attention,
specifying the nature and period of existence thereof; PROVIDED THAT such
accountants shall not be liable by reason of any failure to obtain knowledge of
any such condition or event that would not be disclosed in the course of their
audit examination, and (iii) stating that based on their audit examination
nothing has come to their attention which causes them to believe that the
information contained in either or both of the certificates delivered therewith
pursuant to SECTION 8.01(D) (as the information contained in such certificates
relates to the covenants set forth in ARTICLE XI and Events of Default set forth
in SECTION 12.01(O)(II)(G)-(K)) is not correct or that the matters set forth in
the Compliance Certificate delivered therewith pursuant to SECTION 8.01(D)(II)
for the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement. The statement referred to above shall be accompanied by (x) a
copy of the management letter or any similar report delivered to any Borrower or
Guarantor or to any officer or employee thereof by such accountants in
connection with such Financial Statements and (y) a letter in substantially the
form of EXHIBIT M attached hereto and made a part hereof from the Parent to such
accountants informing such accountants that the Lenders are relying upon the
Financial Statements audited by such accountants and delivered to the Agent and
the Lenders pursuant to SECTION 8.01(C) and that a primary intent of the Parent
in having such Financial Statements audited is to induce the Lenders to continue
to make Loans to the Borrowers under this Agreement. The Agent and each Lender
may, with the written consent of ASOC (which consent shall not be unreasonably
withheld or delayed), communicate directly with such accountants.
(f) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
practicable and in any event not later than thirty (30) days prior to the
commencement of each Fiscal Year for each
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of the Fiscal Years ending in 1997 and thereafter, (i) a quarterly budget for
each Borrower and its Subsidiaries for such Fiscal Year; (ii) 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 (iii) a plan and financial forecast, prepared in accordance with the
Parent's and ASOC's normal accounting procedures applied on a consistent basis,
for each succeeding Fiscal Year until the scheduled Revolving Credit Termination
Date, including, without limitation, (A) forecasted consolidated and
consolidating balance sheets and statements of cash flow of the Parent and its
Subsidiaries, Leasing Affiliate and its Subsidiaries, and each Borrower and its
Subsidiaries for each Fiscal Year, (B) forecasted consolidated and consolidating
balance sheets, statements of earnings and retained earnings, and cash flow of
the Parent and its Subsidiaries, Leasing Affiliate and its Subsidiaries, and
each Borrower and its Subsidiaries for and as of the end of each fiscal quarter
of the immediately succeeding Fiscal Year and for and as of the end of each such
Fiscal Year thereafter, (C) the amount of forecasted Capital Expenditures for
such Fiscal Year, and (D) forecasted compliance with the provisions of ARTICLE
XI and SECTION 12.01(O)(II)(G)-(K).
8.02. OFF-SITE INVENTORY REPORTS. On the Effective Date, ASOC
shall deliver to the Agent and the Lenders a report detailing information
regarding bailed, consigned and field warehoused Inventory of each Borrower and
its respective Subsidiaries in the form of EXHIBIT N attached hereto and made a
part hereof, and, promptly after the addition or termination of any bailment,
consignment or field warehousing arrantements, ASOC shall deliver to the Agent
and the Lenders an update of such report.
8.03. BORROWING BASE CERTIFICATE; APPRAISALS. (a) BORROWING
BASE CERTIFICATE. ASOC shall provide the Agent and the Revolving Lenders (i) on
the Effective Date (dated October 17, 1997), and (ii) on the Monday closest to
the first and fifteenth day of each calendar month or, if such Monday is not a
Business Day, the immediately succeeding Business Day (and, with respect to
CLAUSE (II), more often if requested by the Agent or the Requisite Revolving
Lenders), with a Borrowing Base Certificate, together with a calculation of the
Texas Tax Reserve as of the date thereof if such Texas Tax Reserve exceeds
$200,000 and such supporting documents as the Agent deems desirable, all
certified as being true and correct by the chief financial officer, chief
executive officer, or controller of ASOC. All Borrowing Base Certificates shall
set forth information regarding Receivables of the Borrowers and Distribution on
a semi-monthly basis and information regarding Inventory of the Borrowers and
Distribution on a monthly basis.
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(b) APPRAISALS. On each anniversary of the Effective Date (or,
if requested by the Agent, semi-annually), ASOC shall provide the Agent and the
Lenders with an appraisal of each Borrower's and its respective Subsidiaries'
Inventory prepared by an independent appraiser satisfactory to the Agent and on
the same basis as the Appraisal.
8.04. EVENTS OF DEFAULT. Promptly upon any of the chief
executive officer, chief operating officer, chief financial officer, treasurer
or controller of ASOC 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.
8.05. LAWSUITS. (a) INSTITUTION OF PROCEEDINGS. Promptly upon
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 ASOC, ASOC
shall provide a written quarterly report to the Agent and the Lenders covering
the institution of,
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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 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, ASOC, 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 last day of February in each calendar year, ASOC 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 and (b)
evidence that all premiums with respect to such coverage have been paid when
due.
8.07. ERISA NOTICES. ASOC 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
ASOC 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 ASOC describing
such transaction and the action which such Borrower or any ERISA
Affiliate has taken, is taking or proposes to take with respect
thereto;
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(c) within three (3) Business Days after the filing of the
same with the DOL, IRS or PBGC, copies of each annual report (form 5500
series), including Schedule B thereto, filed with respect to each
Benefit Plan;
(d) within three (3) Business Days after receipt by 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;
(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
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Multiemployer Plan has been terminated, (B) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer
Plan, or (C) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multiemployer Plan.
For purposes of this SECTION 8.07, each Borrower and ERISA Affiliate shall be
deemed to know all facts known by the Administrator of any Plan of which such
Borrower or any ERISA Affiliate is the plan sponsor.
8.08. ENVIRONMENTAL NOTICES. (a) ASOC shall notify the Agent
and the Lenders in writing, promptly upon 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;
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(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
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,
ASOC shall submit to the Agent and the Lenders a report summarizing the status
of environmental, health or safety compliance, hazard or liability issues
identified in notices required pursuant to SECTION 8.08(A), disclosed on
SCHEDULE 7.01-S, or identified in any notice or report required herein, which
report shall include, with respect to any Real Property leased or acquired
during the period covered by such report, the results of an annual inspection of
the Property with respect to whether it contains any asbestos-containing
material and, in the event any Property does contain any asbestos-containing
material, what actions will be taken to eliminate or remediate the same.
8.09. LABOR MATTERS. ASOC shall notify the Agent and the
Lenders in writing, promptly upon 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,
ASOC 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. ASOC shall provide to the Agent,
promptly upon the execution by any Borrower, Leasing Affiliate, or any
Subsidiary of a Borrower or Leasing Affiliate, of any Hedge Agreement, written
notice of the notional amount thereof.
8.12. OTHER REPORTS. ASOC shall deliver or cause to be
delivered to the Agent and the Lenders (a) the written notices
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described in Section 6 of that certain Trademark Security Agreement dated as of
December 2, 1994 and executed by ASC Acquisition Partners, L.P. as and when
described therein, (b) the statement of collateral described in Section 2.02(b)
of that certain Aircraft Mortgage and Security Agreement dated as of October 8,
1996 and executed by ASOC and Agent as and when described therein, (c) copies of
all press releases made available generally by the Parent or any of its
Subsidiaries to the public concerning material developments in the business of
such Person(s), and (d) reports, if any, submitted to the Parent or any of its
Subsidiaries or their respective boards of directors by such Person's
independent public accountants, including, without limitation, any management
report prepared in connection with the annual audit.
8.13. OTHER INFORMATION. Promptly upon receiving a request
therefor from the Agent or the Requisite Lenders, the 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.
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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 Subsidiary of a Borrower,
prior to the time when any penalty or fine shall be incurred with respect
thereto; PROVIDED, HOWEVER, that no such taxes, assessments and governmental
charges referred to in CLAUSE (A) above or Claims referred to in CLAUSE (B)
above need be paid if being contested in good faith by appropriate proceedings
diligently instituted
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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-Y or substantially similar policies and programs or other policies and
programs as are acceptable to the Agent. All such policies and programs shall be
maintained with insurers acceptable to the Agent. Each certificate and policy
relating to Property damage, boiler and machinery and/or business interruption
coverage shall contain an endorsement, in form and substance acceptable to the
Agent, showing loss payable to the Agent, for the benefit of the Holders, and,
if required by the Agent, naming the Agent as an additional insured under such
policy. Each certificate and policy relating to coverage other than the
foregoing shall, if required by the Agent, contain an endorsement naming the
Agent as an additional insured under such policy. Such endorsement or an
independent instrument furnished to the Agent shall provide that the insurance
companies will give the Agent at least thirty (30) days' written notice before
any such policy or policies of insurance shall be altered adversely to the
interests of the Holders or cancelled and that no act, whether willful or
negligent, or default of 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),
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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.
9.07. REQUIRED HEDGE AGREEMENTS. ASOC shall maintain the Hedge
Agreement identified on SCHEDULE 9.07 attached hereto in full force and effect
until its expiry on December 2, 1997. Thereafter, in the event three-month LIBOR
exceeds a rate equal to 6.72% per annum for a period of thirty (30) consecutive
Business Days, the Borrowers shall enter into Hedge Agreements within sixty (60)
calendar days after the end of such thirty (30) Business Day period containing
terms by which the Borrowers are protected against three-month LIBOR exceeding a
rate equal to nine percent (9%) per annum for a minimum period of the lesser of
(a) three (3) years and (b) one year less than the then remaining term of this
Agreement as to an aggregate notional amount of not less than the amount equal
to fifty percent (50%) of the then outstanding aggregate principal balance of
the Loans, which Hedge Agreements shall otherwise be reasonably acceptable to
the Agent and purchased from a Lender, an Affiliate of a Lender or such other
Person reasonably acceptable as a credit matter to the Agent. The Borrowers
shall determine to their own satisfaction whether such Hedge Agreements are
sufficient to provide protection and to meet the needs of the 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
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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. The Agent shall, upon receipt of such proceeds, apply all of the proceeds
so received in repayment of the Obligations in the manner set forth in SECTION
4.01(B)(VII)(B). Notwithstanding the foregoing, in the event proceeds of
insurance or condemnation claims or awards received by the Agent under property
damage, boiler and machinery policies or business interruption insurance
policies (i) is less than $500,000, Agent shall, upon receipt of such proceeds
and PROVIDED THAT no Event of Default or Potential Event of Default shall have
occurred and continue unwaived, remit the amount so received to 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 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 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.
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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.
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, ASOC 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
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
105
aggregate) having a minimum value (at the lower of cost or market) of $500,000
and each landlord for premises on which Inventory of the Borrowers and/or
Guarantors (separately or in the aggregate) having a minimum value (at the lower
of cost or market) of $500,000, promptly upon delivery of such Inventory to such
consignee, bailee or premises, and (ii) cause to be executed and delivered to
the Agent concurrently with execution and delivery of such consignee or bailee
letter, UCC financing statements in form and substance satisfactory to the
Agent, naming the Agent as secured party, with respect to such Inventory located
on the premises of such consignee or bailee.
9.15. Intentionally omitted.
9.16. FUTURE PLEDGES OF EQUITY SECURITIES; OTHER COLLATERAL
DOCUMENTS. (a) Each Borrower and Parent shall, and shall cause each of its
respective Subsidiaries (other than Subsidiaries of Leasing Affiliate) to,
execute and deliver to the Agent for the benefit of the Holders, concurrently
with the issuance of any equity Securities to 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 direct Subsidiaries of a Borrower, M&R,
or Parent, in each instance consistent with the Loan Documents executed and
delivered on or before the Effective Date.
(c) Notwithstanding the foregoing, nothing in this SECTION
9.16 shall permit any Borrower or Parent or any Subsidiary of a Borrower to make
any Investment, directly or indirectly, not otherwise permitted by SECTION 10.04
or SECTION 12.01(O)(II).
9.17. FISCAL YEAR OF AEROCELL AND ▇▇▇▇▇-▇▇▇▇▇. By December 31,
1997, each of Aerocell and ▇▇▇▇▇-▇▇▇▇▇ shall change their respective fiscal
years for accounting and tax purposes to the Fiscal Year.
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ARTICLE X
NEGATIVE COVENANTS
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. No Borrower shall, nor shall any Borrower
permit any of its Subsidiaries to, directly or indirectly create, incur, assume
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness for trade payables, wages and other accrued
expenses incurred in the ordinary course of business, whether or not
evidenced by notes;
(c) Intentionally omitted;
(d) Permitted Existing Indebtedness and any extensions,
renewals, refundings or replacements of Permitted Existing Indebtedness
(other than the Finance Affiliate Indebtedness), PROVIDED THAT any such
extension, renewal, refunding or replacement is in an aggregate
principal amount not greater than the principal amount of, and is on
terms no less favorable to 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 $5,000,000 at any time for all
Borrowers and their Subsidiaries, Indebtedness with respect to Capital
Leases and purchase money Indebtedness incurred to finance the
acquisition of fixed assets, and Indebtedness incurred to refinance
such Capital Leases and purchase money Indebtedness; PROVIDED, HOWEVER,
prior to incurring Capital Lease obligations owing to any one lessor or
group of affiliated or related lessors or purchase money Indebtedness
owing to any one holder or group of affiliated or related holders
thereof, which in either case aggregate(s) more than $500,000, the
Borrowers shall obtain from such lessor(s) or holder(s) a duly executed
intercreditor agreement in form and substance satisfactory to the
Agent;
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(f) Indebtedness in respect of taxes, assess ments,
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;
(h) Intentionally omitted;
(i) Indebtedness in respect of profit sharing plans to the
extent permitted under SECTION 10.04;
(j) Indebtedness in respect of the Hedge Agreements (i)
required or permitted under SECTION 9.07 and (ii) in respect of foreign
exchange contracts containing terms reasonably acceptable to the Agent
and purchased from a Lender, an Affiliate of a Lender or such other
Person as is reasonably acceptable as a credit matter to the Agent;
PROVIDED, HOWEVER, that the aggregate notional amount (as advised to
the Agent by the counterparty(ies) to Hedge Agreements and confirmed by
ASOC) of all Hedge Agreements in respect of foreign exchange contracts
at any given time shall not exceed $25,000,000;
(k) Indebtedness with respect to reasonable warranties and
indemnities made under any agreements for asset sales permitted under
SECTION 10.02 and Contractual Obligations of the Borrowers or their
Subsidiaries entered into in the ordinary course of their respective
businesses;
(l) Indebtedness under appeal bonds in connection with
judgments which do not result in an Event of Default or a Potential
Event of Default or any other breach hereunder, PROVIDED that the
aggregate amount of all such Indebtedness does not exceed $2,000,000;
(m) Indebtedness arising from intercompany loans from 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
(n) in addition to the Indebtedness permitted by CLAUSES (A)
through (M) above, other unsecured Indebtedness in an aggregate amount
not to exceed $2,000,000 at any time outstanding.
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10.02. SALES OF ASSETS. No Borrower shall, nor shall any
Borrower permit any of its Subsidiaries to, sell, assign, transfer, lease,
convey or otherwise dispose of any of its Property, whether now owned or
hereafter acquired, or any income or profits therefrom, or enter into any
agreement to do so, except:
(a) the sale of Property outside of the ordinary course of
such Person's business for consideration not less than the Fair Market
Value thereof so long as (i) any non-cash consideration resulting from
such sale shall be pledged or assigned to the Agent, for the benefit of
the Holders, pursuant to an instrument in form and substance acceptable
to the Agent and (ii) 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) the sale of Inventory in the ordinary course of business
of a Borrower or any Subsidiary of a Borrower to Persons who are not
Affiliates of such Persons;
(c) the disposition of Equipment if (i) such Equipment is
obsolete or no longer useful in the ordinary course of business of such
Borrower or the applicable Subsidiary of such Borrower, PROVIDED THAT
the aggregate Fair Market Value of all such Equipment disposed of in
any Fiscal Year by the Borrowers and their Subsidiaries shall not
exceed $500,000, or (ii) within six (6) months after such disposition,
an amount equal to the proceeds therefrom is either (A) used to finance
the purchase of replacement Equipment and the seller thereof delivers
to the Agent evidence of such use and that the replacement Equipment is
free and clear of all Liens except those created under the Loan
Documents or (B) delivered to the Agent for application to the
repayment of the Obligations pursuant to the mandatory prepayment
provisions set forth in SECTION 4.01(B);
(d) the sale of Investments in Cash Equivalents permitted
pursuant to SECTION 10.04(A); and
(e) the sale or other transfer of Inventory in the ordinary
course of such Borrower's business, prior to the occurrence of an Event
of Default, to Leasing Affiliate or any of its Subsidiaries which
Inventory either (i) is purchased after the Effective Date by such
Borrower acting as a purchasing agent for Leasing Affiliate or one of
its Subsidiaries or (ii) was Inventory of ASOC as of August 22, 1997
and, after giving effect to the sale or transfer
109
thereof to Leasing Affiliate or one of its Subsidiaries, the aggregate
amount of Leasing Affiliate Liabilities does not exceed $20,000,000.
Notwithstanding anything in this Agreement to the contrary, no Property of any
Borrower shall be sold, assigned, transferred, leased, or conveyed, directly or
indirectly, to any Subsidiary of a Borrower without the prior written consent of
all Lenders and delivery to the Agent of a Borrowing Base Certificate reflecting
any adjustment to the Borrowing Base occasioned by such transfer, assignment,
transfer, lease, or conveyance.
10.03. LIENS. No Borrower shall, nor shall any Borrower permit
any of its Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist any Lien on or with respect to any of their respective Property
or assets except:
(a) Liens created pursuant to the Loan Documents;
(b) Permitted Existing Liens;
(c) Customary Permitted Liens;
(d) purchase money Liens (including the interest of a lessor
under a Capital Lease or an Operating Lease having substantially the
same economic effect and Liens to which any Property is subject at the
time of such Borrower's or such Subsidiary's purchase thereof) with
respect to purchases of fixed assets, securing an amount not to exceed
$1,000,000 in the aggregate at any time or from time to time for all
Borrowers and Subsidiaries of Borrowers; 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 granting any such Lien;
(e) Intentionally omitted;
(f) federal tax Liens not resulting in an Event of Default
under SECTION 12.01(J)(II); and
(g) extensions, renewals, refundings and replacements of Liens
referred to in CLAUSES (A), (B), and (e) of this SECTION 10.03;
PROVIDED THAT any such extension, renewal,
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refunding or replacement of a Lien referred to in CLAUSE (B) or (E)
shall be limited to the Property covered by the Lien extended, renewed,
refunded or replaced and that the obligations secured by any such
extension, renewal, refunding or replacement Lien shall be in an amount
not greater than the amount of the obligations then secured by the Lien
extended, renewed, refunded or replaced.
10.04. INVESTMENTS. No Borrower shall, nor shall any Borrower
permit any of its Subsidiaries to, directly or indirectly make or own any
Investment except:
(a) Investments in Cash Equivalents;
(b) Permitted Existing Investments;
(c) Investments in the form of advances to employees in the
ordinary course of business for moving, relocation and travel expenses;
and other loans to employees for any lawful purpose, PROVIDED THAT (i)
each loan permitted under this CLAUSE (C) shall be evidenced by a
promissory note, (ii) the aggregate principal amount of all such
advances and loans at any time outstanding from the Borrowers and their
Subsidiaries shall not exceed $500,000, and (iii) no such advances or
loans outstanding at any time to any one Person shall exceed $100,000;
(d) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(e) Investments pursuant to joint venture agreements to which
a Borrower or any Subsidiary of a Borrower is a party in an aggregate
amount for all such Investments of the Borrowers and their Subsidiaries
not to exceed $250,000 at any time;
(f) Investments by ASOC in the form of intercompany loans to
Leasing Affiliate; PROVIDED THAT the conditions set forth in SECTION
6.04 are satisfied or waived in accordance with the provisions of
SECTION 15.07 and the promissory note evidencing the same is endorsed
and delivered to the Agent as part of the Collateral;
(g) Investments by ASOC in Distribution;
(h) Intentionally omitted
(i) Investments by a Borrower in Foreign Subsidiaries
formed for the sole purpose of distribution of Inventory of
111
such Borrower outside of the United States and which Foreign
Subsidiaries own no Inventory and retain cash and cash equivalents only
to the extent required to pay expenses associated with maintenance of
an office and related personnel engaged to conduct its business in the
jurisdiction in which it is domiciled; and
(j) to the extent they constitute Investments, contributions
to and payments of benefits under any Plan in existence as of the
Effective Date as required 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 Subsidiary of a Borrower to form any Subsidiary except to the extent
Investments therein are permitted hereinabove. No Borrower or Subsidiary of a
Borrower may make any Investment in Leasing Affiliate or any Subsidiary of
Leasing Affiliate, except to the extent permitted in CLAUSE (F) above.
10.05. ACCOMMODATION OBLIGATIONS. No Borrower shall, nor shall
any Borrower permit any of its Subsidiaries to, directly or indirectly create or
become or be liable with respect to any Accommodation Obligation, except:
(a) recourse obligations resulting from endorse ment of
negotiable instruments for collection in the ordinary course of its
business;
(b) Permitted Existing Accommodation Obligations and any
extensions, renewals or replacements thereof, PROVIDED THAT the
aggregate Indebtedness under any such extension, renewal or replacement
is not greater than the Indebtedness under, and shall be on terms no
less favorable to such Borrower than the terms of, the Permitted
Existing Accommodation Obligation so extended, renewed or replaced;
(c) Accommodation Obligations (i) arising under the Loan
Documents or (ii) included in the Indebtedness permitted under SECTION
10.01(A);
(d) Accommodation Obligations of a Borrower with respect to
Indebtedness of Leasing Affiliate; PROVIDED THAT the conditions set
forth in SECTION 6.04 are satisfied or waived in accordance with the
provisions of SECTION 15.07;
(e) in addition to the Accommodation Obligations permitted by
CLAUSES (A) through (D) above, other unsecured Accommodation
Obligations in an aggregate amount not to exceed $1,000,000 at any time
outstanding.
112
No Borrower or Subsidiary of a Borrower shall incur any Accommodation Obligation
with respect to Indebtedness of Leasing Affiliate or any Subsidiary of Leasing
Affiliate except to the extent specifically permitted under CLAUSE (D) above.
10.06. RESTRICTED JUNIOR PAYMENTS. No Borrower shall, nor
shall any Borrower permit any of its Subsidiaries to, declare or make any
Restricted Junior Payment, except:
(a) interest payments made by ASOC in respect of the Finance
Affiliate Indebtedness;
(b) dividends and other distributions by Distribution to ASOC;
(c) payments in respect of loans made by ASOC to Distribution;
(d) Intentionally omitted; and
(e) fees and other remuneration paid to Finance Affiliate by
ASOC, or to Parent or any Subsidiary of ASOC 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 in CLAUSES (A) and
(E) above shall not be permitted after the occurrence and during the continuance
of an Event of Default or a Potential Event of Default or if an Event of Default
or a Potential Event of Default would result therefrom.
10.07. CONDUCT OF BUSINESS. No Borrower shall, nor shall any
Borrower permit any of its Subsidiaries to, engage in any business other than
(a) the businesses engaged in by such Borrower and Distribution on the date
hereof, (b) any business or activities which are substantially similar, related,
incidental or complimentary thereto, including, without limitation, the business
of repair of aircraft spare parts, and (c) the business of new parts
distribution, parts manufacturing, related engineering or inventory management
services.
10.08. TRANSACTIONS WITH AFFILIATES. No Borrower shall, nor
shall any Borrower permit any of its Subsidiaries to, 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 Subsidiary of a Borrower than those that might be obtained
in an arm's length transaction at the time from Persons who are not such an
Affiliate. Nothing contained in this SECTION 10.08 shall prohibit (a) any
transaction expressly permitted by SECTION 10.06; (b) increases in compensation
and
113
benefits for officers and employees of the Borrowers or their Subsidiaries which
are customary in the industry; PROVIDED THAT no Event of Default or Potential
Event of Default has occurred and is continuing; (c) payment of customary
officers' and directors' indemnities or (d) the sale or other transfer of
Inventory of a Borrower to Leasing Affiliate or a Subsidiary of Leasing
Affiliate (i) at cost, if such Inventory is purchased by such Borrower acting as
purchasing agent for Leasing Affiliate or a Subsidiary of Leasing Affiliate
after the Effective Date, or (ii) at the value attributed to such Inventory
after application of the advance rates applicable thereto on the then most
recent Borrowing Base Certificate, if such Inventory was Inventory of ASOC on
August 22, 1997; PROVIDED THAT the sale or other transfer of such Inventory is
otherwise permissible under the terms of SECTION 10.02(E).
10.09. RESTRICTION ON FUNDAMENTAL CHANGES. No Borrower 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 other
Subsidiaries to enter into any merger or consolidation. No Borrower 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.
10.10. SALES AND LEASEBACKS. No Borrower shall, nor shall any
Borrower permit any of its Subsidiaries to, become liable, directly, by
assumption or by Accommodation Obligation, with respect to any lease, whether an
Operating Lease or a Capital Lease, of any Property (whether real or personal or
mixed) which it (a) sold or transferred or is to sell or transfer to any other
Person, or (b) intends to use for substantially the same purposes as any other
Property which has been or is to be sold or transferred by it to any other
Person, in either instance, in connection with such lease.
10.11. MARGIN REGULATIONS; SECURITIES LAWS. No Borrower shall,
nor shall any Borrower 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.
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10.12. ERISA. No Borrower shall:
(a) engage, or permit any of the Guarantors to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of
the Internal Revenue Code for which a statutory or class exemption is
not available or a private exemption has not been 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 or any 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 the Borrower or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal Revenue
Code;
if such event results, either singly or in the aggregate, after taking into
account all other such events and any liabilities associated therewith, in an
aggregate liability of the Borrowers and their Subsidiaries in excess of
$500,000.
10.13. ISSUANCE OF EQUITY SECURITIES. No Borrower shall, nor
shall any Borrower permit any of its Subsidiaries to, issue any equity
Securities.
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10.14. ORGANIZATIONAL DOCUMENTS; FINANCE AFFILIATE
INDEBTEDNESS. No Borrower shall, nor shall any Borrower permit any of its
Subsidiaries to, amend, modify or otherwise change any of the terms or
provisions in any of (a) its Organizational Documents as in effect on the
Effective Date, except amendments to effect a change of name of such Borrower or
a Subsidiary of a Borrower, written notice of which change of name such Borrower
shall have provided the Agent within sixty (60) days prior to the effective date
of any such name change or (b) the agreements and instruments evidencing the
Finance Affiliate Indebtedness as in effect on the Effective Date or (c) the
agreements and instruments evidencing loans and advances comprising part of the
Leasing Affiliate Liabilities or other loans and advances comprising
intercompany loans.
10.15. BANK ACCOUNTS. No Borrower shall, nor shall any
Borrower permit any of the Guarantors to, establish or maintain any deposit
account into which collections of Receivables and proceeds of other Collateral
are deposited other than those identified as existing on the Effective Date and
disclosed on SCHEDULE 10.15 attached hereto, unless ASOC 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. ASOC shall not, and shall not permit any
of its Subsidiaries to, change its fiscal year from the Fiscal Year. From and
after December 31, 1997, neither Aerocell nor ▇▇▇▇▇-▇▇▇▇▇ shall change its
fiscal year from the Fiscal Year.
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ARTICLE XI
FINANCIAL COVENANTS
Each Borrower covenants and agrees that so long as any
Revolving Credit Commitments are outstanding and thereafter until payment in
full of all of the Obligations (other than indemnities not yet due):
11.01. INTEREST COVERAGE RATIO. The Borrower Group shall
maintain an Interest Coverage Ratio, as determined as of the last day of each
fiscal quarter of ASOC (a) commencing with the fiscal quarter ending December
31, 1997 and ending with the fiscal quarter ending March 31, 2000, for the
four-fiscal-quarter period then ending, of at least 3.0 to 1.0 and (b)
commencing with the fiscal quarter ending June 30, 2000 and ending with the
fiscal quarter ending June 30, 2002, for the four-fiscal-quarter period then
ending, of at least 4.0 to 1.0.
11.02. FIXED CHARGE COVERAGE RATIO. The Borrower Group shall
maintain a Fixed Charge Coverage Ratio, as determined as of the last day of each
fiscal quarter of ASOC ending during the period set forth below, for the
four-fiscal-quarter period then ending, of at least the level set forth below
opposite such period.
PERIOD MINIMUM RATIO
------ -------------
December 31, 1997 - September 30, 1999 1.35 to 1.00
December 31, 1999 - June 30, 2002 1.60 to 1.00
11.03. WORKING CAPITAL. Working Capital shall be maintained,
at all times during the term of this Agreement, at a minimum amount of
$100,000,000.
11.04. CAPITAL EXPENDITURES. The Borrower Group shall not (a)
make Capital Expenditures during:
(i) the period commencing on the Effective Date and ending on December
31, 1997 aggregating more than $3,000,000,
(ii) the period commencing on January 1, 1998 and ending on December
31, 1998 aggregating more that $3,000,000, or
(iii) any Fiscal Year ending after 1998 in excess of
$2,000,000 in the aggregate;
(in each instance, the "Maximum Amount"); PROVIDED, HOWEVER, to the extent the
Borrower and its Subsidiaries have not made Capital Expenditures in the amount
permitted above for any given
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period set forth above, Capital Expenditures in an amount equal to 100% of the
Maximum Amount of such Capital Expenditures permitted but not made in such
period may be made in the immediately next succeeding Fiscal Year in addition to
any amounts permitted above for such Fiscal Year; PROVIDED THAT to the extent
amounts carried forward from one period to the next succeeding Fiscal Year are
not expended in such Fiscal Year, such surplus may not be carried forward to any
other succeeding year.
11.05. EXCESS BORROWING AVAILABILITY. The Borrowers shall, at
all times during the term of this Agreement, maintain Revolving Credit
Availability which exceeds the Revolving Credit Obligations by at least
$2,000,000.
11.06. LEVERAGE RATIO. The Borrower Group shall maintain a
ratio of Funded Debt of the Borrower Group to EBITDA of the Borrower Group,
determined as of the end of each fiscal quarter of ASOC ending during the period
September 30,1997 - September 30, 1998, for the four-fiscal-quarter period then
ended, of not more than 4.8 to 1.0 and as of the end of each fiscal quarter of
ASOC ending after September 30, 1998 for the four-fiscal-quarter period then
ended, of not more than 4.0 to 1.0.
11.07. MINIMUM TANGIBLE NET WORTH. The Borrower Group shall
maintain a Tangible Net Worth of at least the amount set forth below for each
fiscal quarter of ASOC ending during the period set forth below opposite such
amount.
PERIOD MINIMUM TANGIBLE NET WORTH
------ --------------------------
December 31, 1997 -
September 30, 1998 $60,000,000
December 31, 1998 -
September 30, 1999 $80,000,000
December 31, 1999 -
September 30, 2000 $90,000,000
December 31, 2000 -
September 30, 2001 $110,000,000
December 31, 2001 -
June 30, 2002 $125,000,000
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ARTICLE XII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
12.01. EVENTS OF DEFAULT. Each of the following occurrences
shall constitute an Event of Default under this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. 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 9.01 - 9.07, 9.10, 9.11, 9.13, and 9.14,
ARTICLE X or ARTICLE XI. Leasing Affiliate shall fail to duly and punctually
perform or observe any agreement, covenant or obligation binding on Leasing
Affiliate under SECTIONS 22(A)-(E) and (H)-(S) of the Leasing Affiliate
Guaranty.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any 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. 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; or Leasing Affiliate shall default in the performance of or
compliance with any term contained in the Leasing Affiliate Guaranty (other than
as identified in CLAUSE (B) of this SECTION 12.01) and such default shall
continue for thirty (30) days after the occurrence thereof.
(e) DEFAULT AS TO OTHER INDEBTEDNESS; OPERATING LEASES. (i)
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,
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singly or in the aggregate equal to or exceeding $250,000; or any breach,
default or event of default shall occur, or any other condition shall exist
under any instrument, agreement or indenture pertaining to any such
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption or other required repurchase of such Indebtedness, or permit the
holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by the obligor thereon (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; or any breach, default or
event of default on the part of 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 affect the rights
of such Borrower or such Guarantor with respect to the Property subject to any
Operating Lease on which the remaining payments exceed $1,000,000.
(ii) Any three (3) Special Purpose Subsidiaries shall have
failed to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) with respect to any Indebtedness
of such Persons; or any breach, default or event of default shall occur, or any
other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof is to cause an
acceleration, mandatory redemption or other required repurchase of such
Indebtedness, or permit the holder(s) of such Indebtedness to accelerate the
maturity of any such Indebtedness or require a redemption or other repurchase of
such Indebtedness; or any such Indebtedness shall be otherwise declared to be
due and payable (by acceleration or otherwise) by the obligors thereon (other
than by a regularly scheduled required prepayment) prior to the stated maturity
thereof.
(iii) Any Special Purpose Subsidiary/ies in which, either
singly or in the aggregate, Leasing Affiliate has made Investments aggregating
at least $5,000,000 shall have failed to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) with
respect to any Indebtedness of such Person(s); or any breach, default or event
of default shall occur, or any other condition shall exist under any instrument,
agreement or indenture pertaining to any such Indebtedness, if the effect
thereof is to cause an acceleration, mandatory redemption or other required
repurchase of such Indebtedness, or permit the holder(s) of such Indebtedness to
accelerate the maturity of any such Indebtedness or require a redemption or
other repurchase of such Indebtedness; or any such Indebtedness shall be
otherwise declared to be due and payable (by acceleration or otherwise) by the
obligor(s)
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thereon (other than by a regularly scheduled required prepayment) prior to the
stated maturity thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against 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,
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be dissolved, or cease to exist except as specifically permitted by this
Agreement.
(i) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect (other than
any Hedge Agreement not required to be maintained by the terms of this
Agreement) or any Borrower or Guarantor seeks to repudiate its obligations
thereunder and the Liens intended to be created thereby against Property having
an aggregate Fair Market Value in excess of $100,000 are, or 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 or the Loan Documents.
(j) JUDGMENTS AND ATTACHMENTS. (i) Any money judgment (other
than a money judgment covered by insurance as to which the insurance company has
acknowledged coverage), writ or warrant of attachment, or similar process
against 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 $5,000,000, the entry thereof
shall immediately constitute an Event of Default hereunder unless fully bonded
in a manner satisfactory to the Agent.
(ii) A federal tax Lien is filed against 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
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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.
(o) CERTAIN EVENTS PERTAINING TO THE PARENT. (i) The Parent
shall fail to (A) maintain its existence as a corporation duly organized and
existing and qualified and in good standing as a corporation authorized to do
business in the states of Delaware and Florida and in each other jurisdiction in
which failure to be so qualified and in good standing will result, or is
reasonably likely to result, in a Material Adverse Effect, (B) comply in all
material respects with all Requirements of Law applicable to it, (C) file all
tax returns and reports required to be filed by it with any Governmental
Authority as and when required to be filed or to pay taxes, assessments, fees or
other governmental charges upon it or its Property, assets, income or franchises
which are shown in such returns or reports to be due and payable as and when due
and payable, except for taxes, assessments, fees and other governmental charges
(I) that are being contested by it in good faith by an appropriate proceeding
diligently pursued, (II) for which adequate reserves have been made on its books
and records, and (III) the amounts the non-payment of which would not
individually, or in the aggregate, result in a Material Adverse Effect, or (D)
within three (3) days after its receipt of any distribution, dividend or payment
from any Subsidiary of Parent, make a capital contribution in the amount thereof
(net of taxes allocable to transfers under Requirements of Law) to ASOC.
(ii) The Parent shall (A) merge or liquidate with or into any
other Person and, as a result thereof and after giving effect thereto, the
Parent is not the surviving Person, (B) repurchase or redeem any of its Capital
Stock other than as required with respect to the Permitted Equity Securities
Options or expressly consented to in writing by the Requisite Lenders, (C)
engage in any business other than that of acting as a holding company for ASOC,
Leasing Affiliate, Finance Affiliate, and M&R, (D) make or maintain any
Investments other than (1) its Investments in Leasing Affiliate existing as of
the Effective Date or from the proceeds of issuance of (a) Indebtedness by
Parent which is unsecured and subordinated to the Parent's obligations as a
Guarantor pursuant to agreements in form and substance satifactory to the Agent
or (b) equity Securities of Parent, (2) Investments in ASOC, M&R, and Finance
Affiliate, or (3) Investments in Cash Equivalents, or (E) incur any Indebtedness
other than that identified on SCHEDULE 1.01.3 or described in CLAUSES (D)(1)(A)
above; (F) grant or suffer to
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exist any Lien against any property or asset of the Parent other than Liens
securing the Obligations; (G) fail to maintain a Fixed Charge Coverage Ratio, as
determined as of the last day of each fiscal quarter of the Parent commencing
with the fiscal quarter ending June 30, 1997 and ending with the fiscal quarter
ending September 30, 2000, for the four-fiscal-quarter period then ending, of at
least 1.10 to 1.00; (H) fail to maintain a Fixed Charge Coverage Ratio, as
determined as of the last day of each fiscal quarter of the Parent commencing
with the fiscal quarter ending December 31, 2000 and ending with the fiscal
quarter ending September 30, 2001, for the four-fiscal-quarter period then
ending, of at least 1.15 to 1.00; (I) fail to maintain a Fixed Charge Coverage
Ratio, as determined as of the last day of each fiscal quarter of the Parent
commencing with the fiscal quarter ending December 31, 2001 and ending with the
fiscal quarter ending June 30, 2002, for the four-fiscal-quarter period then
ending, of at least 1.20 to 1.00; (J) fail to maintain a ratio of Funded Debt of
the Parent to EBITDA of the Parent, determined as of the end of each fiscal
quarter of the Parent, for the four-fiscal-quarter period then ended, of not
more than 6.00 to 1.00; or (K) fail to limit the Capital Expenditures made by
the Parent and its Subsidiaries during (1) the period commencing on the
Effective Date and ending on December 31, 1997 to no more than $3,000,000, (2)
the period commencing on January 1, 1998 and ending on December 31, 1998 to no
more than $3,000,000 or (3) any Fiscal Year ending after 1998 to no more than
$2,000,000, PROVIDED, HOWEVER, to the extent the Parent and its Subsidiaries
have not made Capital Expenditures in the amount permitted in CLAUSES (1), (2),
or (3) above for a given period, Capital Expenditures in an amount equal to 100%
of the amount specified for any such respective period but not made in such
period may be made in the immediately next succeeding Fiscal Year; PROVIDED THAT
to the extent amounts carried forward from one period to the next succeeding
Fiscal Year are not expended in such Fiscal Year, such surplus may not be
carried forward to any other succeeding year.
An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with SECTION 15.07.
12.02. RIGHTS AND REMEDIES.
(a) ACCELERATION AND TERMINATION. Upon the occurrence of any
Event of Default described in SECTIONS 12.01(F) or 12.01(G) or 12.01(H), the
Revolving Lenders' respective obligations to make Revolving Loans under the
Revolving Credit Commitments shall automatically and immediately terminate and
the unpaid principal amount of, and any and all accrued interest on, the
Obligations and all accrued fees shall automatically become 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),
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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 Revolving Lenders'
respective obligations to make Revolving Loans under the Revolving Credit
Commitments are terminated, whereupon such obligation of each Revolving Lender
to make any Revolving Loan hereunder and of each Revolving Lender or Issuing
Bank to issue or participate in any Letter of Credit not then issued shall
immediately terminate, and/or (ii) declare the unpaid principal amount of and
any and all accrued and unpaid interest on the Obligations to be, and the same
shall thereupon be, immediately due and payable, without presentment, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and of acceleration), all of which are hereby expressly waived by
the Borrowers.
(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
Revolving Lenders' obligations to make Revolving 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
Requisite Revolving Lenders and written notice to the Borrowers, the termination
of Revolving Lenders' respective obligations to make Revolving Loans under the
Revolving Credit Commitments and the respective Revolving Lenders' and Issuing
Banks' obligations to participate in or issue Letters of Credit and/or the
aforesaid acceleration and its consequences may be rescinded and annulled; but
such action shall not affect any subsequent Event of Default or Potential Event
of Default or impair any right or remedy consequent thereon. The provisions of
the preceding sentence are intended merely to bind the Revolving Lenders and the
Issuing
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Banks to a decision which may be made at the election of the Requisite Lenders
and Requisite Revolving Lenders; they are not intended to benefit any Borrower
and do not give any Borrower the right to require the Revolving Lenders to
rescind or annul any termination of the aforesaid obligations of the Revolving
Lenders or Issuing Banks or any acceleration hereunder, even if the conditions
set forth herein are met.
(d) ENFORCEMENT. 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 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
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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
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notify each Lender at any time that the Lenders so required hereunder have
instructed the Agent to act or refrain from acting pursuant hereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes or any amount payable under
any provision of ARTICLE IV or ARTICLE V when due) or the other Loan Documents,
the Agent shall not be required to exercise any discretion or take any action.
Notwithstanding the foregoing, the Agent shall be required to act or refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Requisite Lenders (unless the instructions
or consent of certain affected or all of the Lenders or the Requisite Revolving
Lenders is required hereunder or thereunder) and such instructions shall be
binding upon all Lenders, Issuing Banks and Holders of Notes; PROVIDED, HOWEVER,
the Agent shall not be required to take any action which (i) the Agent
reasonably believes will expose it to personal liability unless the Agent
receives an indemnification satisfactory to it from the Lenders with respect to
such action or (ii) is contrary to this Agreement, the other Loan Documents or
applicable law.
13.03. RIGHTS, EXCULPATION, ETC. (a) LIABILITIES;
RESPONSIBILITIES. None of the Agent, any Affiliate of the Agent, or any of their
respective officers, directors, employees or agents shall be liable to any
Holder for any action taken or omitted by them hereunder or under any of the
Loan Documents, or in connection therewith, except that no Person shall be
relieved of any liability imposed by law for gross negligence or willful
misconduct. The Agent shall not be liable for any apportionment or distribution
of payments made by it in good faith pursuant to SECTION 4.02(B), and if any
such apportionment or distribution is subsequently determined to have been made
in error the sole recourse of any Holder to whom payment was due, but not made,
shall be to recover from other Holders any payment in excess of the amount to
which they are determined to have been entitled. The Agent shall not be
responsible to any Holder for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, validity,
legality, 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 the Finance Affiliate Indebtedness, the Leasing
Affiliate Liabilities or 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.
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(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), independent public accountants and other experts selected by it.
13.05. INDEMNIFICATION. To the extent that the Agent is
required to be reimbursed and indemnified by the 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", "Requisite
Lenders", "Requisite Revolving Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity, if applicable, as a
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Lender or one of the Requisite Lenders or Requisite Revolving Lenders. The Agent
and its Affiliates may accept deposits from, lend money to, and generally engage
in any kind of banking, trust or other business with 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 ASOC 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 ASOC (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 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
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or maximize the amount of repayment of the Loans and other Obligations
("Protective Advances"); PROVIDED, HOWEVER, that Agent shall obtain the prior
written consent of the Requisite Revolving Lenders with respect to the making of
any Protective Advance which, when combined with other Protective Advances not
then reimbursed by the Borrowers, would exceed $3,000,000. The Agent shall
notify ASOC and each Revolving Lender in writing of each such Protective
Advance, which notice shall include a description of the purpose of such
Protective Advance. The 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 ASOC receives written demand therefor from the
Agent, the Agent shall promptly notify each Revolving Lender and each Revolving
Lender agrees that it shall thereupon make available to the Agent, in Dollars in
immediately available funds, the amount equal to such Revolving Lender's
Revolving Loan Pro Rata Share of such Protective Advance; PROVIDED, HOWEVER,
that no Revolving Lender shall be required to make any such payment in excess of
its then unfunded Revolving Credit Commitment. If such funds are not made
available to the Agent by any Revolving Lender within one (1) Business Day after
the Agent's demand therefor, the Agent will be entitled to recover any such
amount from such Revolving Lender together with interest thereon at the Federal
Funds Rate for each day during the period commencing on the date of such demand
and ending on the date such amount is received. The failure of any Revolving
Lender to make available to the Agent its Revolving Loan Pro Rata Share of any
such Protective Advance shall neither relieve any other Revolving Lender of its
obligation hereunder to make available to the Agent such other Revolving
Lender's Pro Rata Share of such Protective Advance on the date such payment is
to be made nor increase the obligation of any other Revolving Lender to make
such payment to the Agent. All outstanding principal of, and interest on,
Protective Advances shall constitute Obligations secured by the Collateral until
paid in full by the 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
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and binding upon all of the Lenders and Issuing Banks. Without limiting the
generality of the foregoing, the Agent shall have the sole and exclusive right
and authority to (i) act as the disbursing and collecting agent for the Lenders
and the Issuing Banks with respect to all payments and collections arising in
connection with this Agreement and the Loan Documents relating to the
Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by 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 ASOC in an
Officer's Certificate, or is otherwise consented to by the Requisite
Lenders; and/or
(C) against any part of the Collateral consisting of a
promissory note, upon final and indefeasible payment in full of the
Indebtedness evidenced thereby.
(ii) Each Lender and each Issuing Bank hereby directs the
Agent to execute and deliver or file such termination and partial release
statements and do such other things as are
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necessary to release 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 ASOC
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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.
(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 ASOC and the Agent theretofore, shall
deliver to ASOC and the Agent on the Effective Date or the date on which such
Lender becomes a Lender pursuant to SECTION 15.01 hereof a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender to
the effect that such Lender is eligible to receive payments hereunder and under
the Notes without deduction or withholding of United States federal income tax
(I) under the provisions of an applicable tax treaty concluded by the United
States (in which case the certificate shall be accompanied by two duly completed
copies of IRS Form 1001 (or any successor or substitute form or forms)), (II)
under Sections 1442(c)(1) and 1442(a) of the Internal Revenue Code (in which
case the certificate shall be accompanied by two duly completed copies of IRS
Form 4224 (or any successor or substitute form or forms)), or (III) due to such
Lender's not being a "bank" as such term is used in Section 881(c)(3)(A) of the
Internal Revenue Code (in which case, the certificate shall be accompanied by
two accurate and complete original signed copies of IRS Form W-8 (or any
successor or substitute form or forms)).
(ii) Each Lender further agrees to deliver to ASOC 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 ASOC 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;
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(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
(C) that such Lender is no longer capable of receiving
payments hereunder and under the Notes without deduction or withholding
of United States federal income tax as specified therein and that it is
not capable of recovering the full amount of the same from a source
other than the Borrowers.
Each Lender agrees to deliver to ASOC 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 ASOC 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 ASOC that it is not capable of
receiving payments hereunder and under the Notes without any deduction or
withholding of United States federal income tax.
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
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specified by such Lender or Issuing Bank, additional amounts sufficient to
compensate such Lender or Issuing Bank or such corporation therefor. Such demand
shall be accompanied by a statement as to the amount of such compensation and
include a brief summary of the basis for such demand. Such statement shall be
conclusive and binding for all purposes, absent manifest error.
14.03. CHANGES; LEGAL RESTRICTIONS. If after the date hereof
any Lender or Issuing Bank determines that the adoption or implementation of or
any change in or in the interpretation or administration of any law or
regulation or any guideline or request from any central bank or other
Governmental Authority or quasi-governmental authority exercising jurisdiction,
power or control over any Lender, Issuing Bank or over banks or financial
institutions generally (whether or not having the force of law), compliance with
which:
(a) does or will subject a Lender or an Issuing Bank to
charges (other than taxes) of any kind which such Lender or Issuing
Bank reasonably determines to be applicable to the Revolving Credit
Commitments of the Lenders and/or the Issuing Banks to issue and/or
participate in Letters of Credit or change the basis of taxation of
payments to that Lender or Issuing Bank of fees, interest, or any other
amount payable hereunder with respect to Letters of Credit; or
(b) does or will impose, modify, or hold 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.
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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 or (b) the Lender shall not have furnished ASOC 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 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 ASOC 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.
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(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
ASOC 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 ASOC 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 ASOC concurrently with such demand a written
statement in reasonable detail as to such losses, expenses and liabilities, and
this statement shall be conclusive as to the amount of compensation due to that
Lender, absent manifest error.
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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 Term Loans, the Revolving Loans, and the Letters
of Credit) in accordance with the provisions of this SECTION 15.01.
(b) LIMITATIONS ON ASSIGNMENTS. Each assignment shall be
subject to the following conditions: (i) each such assignment may be on a
non-pro-rata basis, but shall be of a constant, and not a varying, ratable
percentage of all of the assigning Lender's rights and obligations under this
Agreement which are subject to such assignment and, in the case of (A) a partial
assignment, shall be in a minimum principal amount of $5,000,000 or (B) an
assignment of a Lender's Revolving Credit Commitment or outstanding Term Loans,
shall be in a minimum principal amount of the lesser of $5,000,000 or such
Lender's Revolving Credit Commitment or outstanding balance of such Lender's
Term Loans being assigned, (ii) each such assignment shall be to an Eligible
Assignee, and (iii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording in the Register, from and after the effective date specified in each
Assignment and Acceptance and agreed to by the Agent, (A) the assignee
thereunder shall, in addition to any rights and obligations hereunder held by it
immediately prior to such effective date, if any, have the rights and
obligations hereunder that have been assigned to it pursuant to such Assignment
and Acceptance and shall, to the fullest extent permitted by law, have the same
rights and benefits hereunder as if it were an original Lender hereunder, (B)
the assigning Lender shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender's rights and obligations under this Agreement, the
assigning Lender shall cease to be a party hereto), and (C) the Borrowers shall
execute and deliver to the assignee thereunder one or more Notes, as applicable,
evidencing its obligations to such assignee and the adjusted obligations to such
assignor with respect to the Loans in substitution for the Note(s) previously
held by the assignor.
(c) THE REGISTER. The Agent shall maintain at its address
referred to in SECTION 15.08 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register
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(the "Register") for the recordation of the names and addresses of the Lenders
and the Commitment under each Loan of, and principal amount of the Loans under
each facility owing to, each Lender from time to time and whether such Lender is
an original Lender or the assignee of another Lender pursuant to an Assignment
and Acceptance. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrowers and each Guarantor, the
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) FEE. Upon its receipt of an Assignment and Acceptance
executed by the assigning Lender and an Eligible Assignee and a processing and
recordation fee of $2,500 (payable by the assigning Lender or the assignee, as
shall be agreed between them), the Agent shall, if such Assignment and
Acceptance has been completed and is in compliance with this Agreement and in
substantially the form of EXHIBIT A, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to ASOC 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
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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 any
Borrower or its Subsidiaries furnished to such Lender by the Agent or by or on
behalf of such Borrower; PROVIDED that, prior to any such disclosure, such
assignee or participant, or proposed assignee or participant, shall agree to
preserve in accordance with SECTION 15.20 the confidentiality of any
confidential information described therein.
(g) PAYMENT TO PARTICIPANTS. Anything in this Agreement to
the contrary notwithstanding, in the case of any participation, all amounts
payable by the Borrowers under the Loan Documents shall be calculated and made
in the manner and to the parties required hereby as if no such participation had
been sold.
(h) LENDERS' CREATION OF SECURITY INTERESTS. Notwithstanding
any other provision set forth in this Agreement, any Lender may at any time
create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, Obligations owing to it and any Notes
held by it) in favor of any Federal Reserve bank in accordance with Regulation A
of the Federal Reserve Board.
(i) ASSIGNMENTS BY AGENT. If Agent ceases to be a Lender under
this Agreement by virtue of any assignment made pursuant to this SECTION 15.01,
then, as of the effective date of such cessation, Citibank's obligations to
issue Letters of Credit pursuant to SECTION 3.01 shall terminate and Citibank
shall be an Issuing Bank hereunder only with respect to outstanding Letters of
Credit issued prior to such date.
15.02. EXPENSES.
(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 & Austin,
local legal counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisers, and other consultants and agents) incurred by the Agent
in connection with (i) the Agent's review and investigation of each Borrower and
its
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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 Borrower's Subsidiaries, this
Agreement or any of the other Loan Documents; (vii) the response to, and
preparation for, any subpoena or request for document production with which the
Agent is served or deposition or other proceeding in which the Agent is called
to testify, in each case, relating in any way to the Obligations, the Property,
any Borrower, any Guarantor, any Borrower's Subsidiaries, this Agreement or any
of the other Loan Documents; and (viii) any amendments, consents, waivers,
assignments, restatements, or supplements to any of the Loan Documents and the
preparation, negotiation, and execution of the same.
(b) AFTER DEFAULT. The 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 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 Borrower's Subsidiaries and related to or arising out of
the transactions contemplated hereby or by any of the other Loan Documents; and
(iv) in taking any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) described in CLAUSES (I) through (III) above.
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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 Leasing Transfer,
the Aerocell Acquisition, the ▇▇▇▇▇-▇▇▇▇▇ Acquisition, or Finance Affiliate
Indebtedness, the making of the Loans and the issuance of and participation in
Letters of Credit hereunder, the management of such Loans or Letters of Credit,
the use or intended use of the proceeds of the Loans or Letters of Credit
hereunder, or any of the other transactions contemplated by any of the Loan
Documents, or (ii) any Liabilities and Costs relating to any violation by 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
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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 ASOC of the institution or
assertion of any Indemnified Matter, but the parties hereto hereby agree that
the failure to so notify ASOC shall not release any Borrower from its
obligations 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, ARTICLE XI and
SECTION 12.01(O)(II), the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating compliance with such covenants,
standards and terms by the 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 ASOC, 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 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 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
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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 ASOC 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 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.
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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 AFFECTED LENDERS. Any
amendment, modification, termination, waiver or consent with respect to any of
the following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender or Issuing Bank affected thereby as described
below:
(i) waiver of any of the conditions specified in SECTIONS 6.01 and 6.02
(except with respect to a condition based upon another provision of
this Agreement, the waiver of which requires only the concurrence of
the Requisite Lenders),
(ii) increase in the amount of any of the Revolving Credit Commitment
of such Lender,
(iii) reduction of the principal of, rate or amount of interest on the
Loans, the Reimbursement Obligations, or any fees or other amounts
payable to such Lender (other than by the payment or prepayment
thereof),
(iv) postponement of the Revolving Credit Termination Date, the Term
Loan Termination Date, or any date fixed for any payment of principal
of, or interest on, the Loans, the Reimbursement Obligations or any
fees or other amounts payable to such Lender,
(v) the orders of priority set forth in SECTION 4.01, in SECTION
4.02(B)(I), or in CLAUSES (D) through (I) of SECTION 4.02(B)(II), and
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(vi) change in the definitions of Revolving Credit Commitments,
Requisite Revolving Lenders, Acquisition Subfacility, or any of
Performance Levels 1 through 6.
(c) AMENDMENTS, CONSENTS AND WAIVERS BY ALL LENDERS. Any
amendment, modification, termination, waiver or consent with respect to any of
the following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender:
(i) release of any Guarantor or all or a substantial portion of the
Collateral (except as provided in SECTION 13.09(C)),
(ii) change in the definitions of Borrowing Base, Maximum Revolving
Credit Amount, Borrowing Base Certificate, or Requisite Lenders, or
change in any component of the Borrowing Base or Borrowing Base
Certificate, including, without limitation, the definitions of any
terms used in the Borrowing Base Certificate or the definition of
Borrowing Base (other than by inclusion of Eligibility Reserves
established by the Agent or Requisite Revolving Lenders),
(iii) amendment of SECTION 15.01 or this SECTION 15.07,
(iv) assignment of any right or interest in or under this Agreement or
any of the other Loan Documents by any Borrower,
(v) waiver of any Event of Default described in SECTIONS 12.01(A), (F),
(G), (H), and (M), and
(vi) change in any term of this Agreement restricting the Leasing
Affiliate Liabilities to $20,000,000.
(d) AGENT AUTHORITY. The Agent may, but shall have no
obligation to, with the written concurrence of any Lender, 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
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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 or courier service or United States certified mail and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of a facsimile transmission, or four (4) Business Days after deposit in
the United States mail with postage prepaid and properly addressed. Notices to
the Agent pursuant to ARTICLES II, IV or XIII shall not be effective until
received by the Agent. For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this
SECTION 15.08) shall be as set forth below each party's name on the signature
pages hereof or the signature page of any applicable Assignment and Acceptance,
or, as to each party, at such other address as may be designated by such party
in a written notice to all of the other parties to this Agreement.
15.09. SURVIVAL OF WARRANTIES AND AGREEMENTS. All
representations and warranties made herein and all obligations of the 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.
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15.11. MARSHALLING; PAYMENTS SET ASIDE. None of the Agent, any
Lender or any Issuing Bank shall be under any obligation to ▇▇▇▇▇▇▇▇ 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.
15.15. LIMITATION OF LIABILITY. No claim may be made by 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 each Borrower, each Lender, each Issuing
Bank and the Agent hereby waives, releases and agrees not to ▇▇▇ 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
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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 THE BORROWERS.
(a) PERSONAL JURISDICTION. (i) EACH OF THE AGENT, THE LENDERS,
THE ISSUING BANKS 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. EACH BORROWER IRREVOCABLY
DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, INC., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ AS ITS AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO
BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH OF THE AGENT, THE
LENDERS, THE ISSUING BANKS AND THE 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.
EACH BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) EACH BORROWER AGREES THAT THE AGENT SHALL HAVE THE RIGHT
TO PROCEED AGAINST 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. 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. 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. 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
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PROCESS AGENT OR SUCH BORROWER'S NOTICE ADDRESS SPECIFIED BELOW, SUCH SERVICE TO
BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. 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 ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
(C) WAIVER OF JURY TRIAL. EACH OF THE AGENT, THE LENDERS, THE
ISSUING BANKS 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
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
Agreement shall become effective against 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 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,
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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
ASOC 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 any Borrower; PROVIDED, HOWEVER, each
offeree shall be required to agree that if it does not become a transferee or
participant it shall return all materials furnished to it by the Borrowers in
connection with this Agreement. Any and all confidentiality agreements entered
into between the Agent, any Lender or any Issuing Bank and any Borrower shall
survive the execution of this Agreement.
15.21. ENTIRE AGREEMENT. This Agreement, taken together with
all of the other Loan Documents, embodies the entire agreement and understanding
among the parties hereto and supersedes all prior agreements and understandings,
written and oral, relating to the subject matter hereof.
15.22. ADVICE OF COUNSEL. 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 the Borrowers, other Lenders and other
Issuing Banks are advised to obtain their own counsel. 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.
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
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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 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
155
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
156
the obligations of such Borrower hereunder) to (B) the amount by which the
aggregate 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.
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first above written.
BORROWERS: AVIATION SALES OPERATING COMPANY
By_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
AEROCELL STRUCTURES, INC.
By_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
AVS/▇▇▇▇▇-▇▇▇▇▇ MACHINE COMPANY
By_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
157
PARENT: AVIATION SALES COMPANY
By_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
Notice Address (Borrowers & Parent):
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
AGENT: CITICORP USA, INC., as Agent
By_____________________________
Shapleigh ▇. ▇▇▇▇▇
Attorney-in-Fact
Notice Address:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Shapleigh ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Sidley & Austin
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
158
ISSUING BANK: CITIBANK, N.A.
By_____________________________
Shapleigh ▇. ▇▇▇▇▇
Attorney-in-Fact
Notice Address:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Shapleigh ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
LENDERS: CITICORP USA, INC.
By_____________________________
Shapleigh ▇. ▇▇▇▇▇
Attorney-in-Fact
Notice Address, Domestic Lending
Office and Eurodollar Lending
Office or Eurodollar Affiliate:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Shapleigh ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
159
▇▇▇▇▇▇ FINANCIAL, INC.
By____________________________
▇▇▇▇ ▇▇▇▇▇▇▇
Assistant Vice President
Notice Address:
▇▇▇▇▇▇ Financial, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office, Eurodollar
Lending Office or Eurodollar Affiliate:
▇▇▇▇▇▇ Financial, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
160
CONGRESS FINANCIAL CORPORATION
By____________________________
▇▇▇▇▇ ▇▇▇▇▇▇
Assistant Vice President
Notice Address, Domestic Lending Office
Eurodollar Lending Office and
Eurodollar Affiliate:
Congress Financial Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
161
THE SUMITOMO BANK, LIMITED
By____________________________
By____________________________
Notice Address:
The Sumitomo Bank, Limited
One Biscayne Tower, Suite 3300
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office
Eurodollar Lending Office and
Eurodollar Affiliate:
The Sumitomo Bank, Limited
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
162
NATIONAL CITY COMMERCIAL FINANCE, INC.
By_________________________
▇▇▇▇ ▇. ▇▇▇▇
Vice President
Notice Address, Domestic Lending
Office, Eurodollar Lending Office
and Eurodollar Affiliate:
National City Commercial Finance, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
163
FIRST UNION COMMERCIAL CORPORATION
By______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Notice Address:
First Union Commercial Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Domestic Lending Office, Eurodollar
Lending Office:
First Union Commercial Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBITS
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of Collection Account Agreement
Exhibit D -- Forms of Consignee/Bailee Letters and
Landlord Waivers
Exhibit E -- Forms of Notes
E-1 -- Acquisition Loan/Term Loan Notes
E-2 -- Revolving Notes
Exhibit F -- Form of Notice of Borrowing
Exhibit G -- Form of Notice of Conversion/Continuation
Exhibit H -- Pro Forma Balance Sheets
Exhibit I -- List of Closing Documents
Exhibit J -- Form of Intercompany Note
Exhibit K -- Form of Notice Regarding Leasing Affiliate
Liabilities
Exhibit L -- Form of Officer's Certificate to Accompany Reports
Exhibit M -- Form of Letter to Accountants
Exhibit N -- Form of Off-Premises Inventory Report
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SCHEDULES
Schedule 1.01.1 -- Aircraft Parts Lease Agreements
Schedule 1.01.2 -- Certain Account Debtors and Foreign
Jurisdictions
Schedule 1.01.3 -- Permitted Parent Indebtedness
Schedule 1.01.4 -- Permitted Equity Securities Options
Schedule 1.01.5 -- Permitted Existing Accommodation
Obligations
Schedule 1.01.6 -- Permitted Existing Indebtedness
Schedule 1.01.7 -- Permitted Existing Investments
Schedule 1.01.8 -- Permitted Existing Liens
Schedule 1.01.9 -- Revolving Credit Commitments and Term
Loans as of Effective Date
Schedule 1.01.10 -- Special Purpose Subsidiary Requirements
Schedule 3.03 -- Letters of Credit Outstanding on Effective
Date
Schedule 7.01-A -- Organizational Documents
Schedule 7.01-C -- Organizational Structure
Schedule 7.01-E -- Governmental Consents
Schedule 7.01-N -- Tax Exceptions
Schedule 7.01-R -- Environmental Matters
Schedule 7.01-S -- ERISA Matters
Schedule 7.01-Y -- Insurance
Schedule 9.07 -- Hedge Agreement
Schedule 10.15 -- Collection Accounts
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