EXHIBIT 4(5)
U.S. $35,000,000
AMENDED AND RESTATED FINANCING AGREEMENT,
dated as of September 25, 1997,
among
THE LENDERS FROM TIME TO TIME PARTIES TO THIS AGREEMENT
as Lenders
and
STAR BANK, NATIONAL ASSOCIATION
as Agent
and
SABRELINER CORPORATION
and its subsidiaries:
MIDCOAST AVIATION, INC., MIDCOAST-LITTLE ROCK, INC.,
SABRETECH, INC., DIMENSION AVIATION, INC. and TURBOTECH REPAIRS,
INC.
as Borrowers
TABLE OF CONTENTS
1. DEFINITIONS 2
1.1 Defined Terms 2
1.2 Environmental Definitions 17
1.3 Other Definitional Provisions; Construction 18
2. LOANS AND OTHER FINANCIAL ACCOMMODATIONS 19
2.1 Total Facility 19
2.2 Revolving Loans 19
2.3 Letters of Credit 20
2.4 No Deficiency 22
2.5 Procedures for Advancing and Funding Revolving Loans 22
2.6 No Limitation on Liens 24
2.7 Discretionary Nature of Facility 24
2.8 General Conditions 25
2.9 One General Obligation; Cross-Collateralized 25
3. INTEREST CHARGES; MINIMUM LOAN CHARGE; FEES 26
3.1 Interest on Loans 26
3.2 Increased Costs 26
3.3 Closing Fee 27
3.4 Unused Commitment 27
3.5 Letter of Credit Fees 27
3.6 Interest Rate Protection 28
3.7 Calculation of Certain Charges 28
3.8 Payments; Charging Loan Account 28
3.9 Maximum Rate 28
3.10 Monthly Loan Activity Accountings 29
4. APPORTIONMENTS OF PAYMENTS; SETTLEMENTS AMONG LENDERS;
PARTICIPATIONS IN LETTERS OF CREDIT. 29
4.1 Apportionment of Payments; Pro Rata Treatment 29
4.2 Settlements 30
4.3 Letter of Credit Participations by Lenders 31
4.4 Allocation of Payments Following Acceleration 32
4.5 No Third Party Beneficiary 33
5. NATURE OF BORROWERS' OBLIGATIONS; GUARANTY 33
5.1 Joint, Several and Primary Obligations 33
5.2. Consolidated Borrowings 33
5.3. Guaranties 34
6. SECURITY 34
7. RECEIVABLES; INVENTORY; COLLECTION OF RECEIVABLES; DISPUTED
RECEIVABLES; PROCEEDS OF INVENTORY 34
7.1 Agreements Regarding Receivables 34
7.2 Agreements Regarding Inventory 34
7.3 Locked Boxes 34
7.4 Special Account and Blocked Account 35
7.5 Crediting of Remittances 36
7.6 Cost of Collection 36
8. EXAMINATION OF LOAN COLLATERAL; REPORTING 37
8.1 Maintenance of Books and Records 37
8.2 Access and Inspection 37
8.3 Reporting Regarding Receivables 37
8.4 Reporting Regarding Inventory 37
8.5 Monthly Financial Statements; Payable Information 38
8.6 Annual Projections 38
8.7 Audited Annual Financial Statements 38
8.8 Management Reports 39
8.9 Comparisons to Financials; Certificates 39
8.10 Tax Returns; Consolidated Information; Additional
Information 39
9. WARRANTIES, REPRESENTATIONS AND COVENANTS 39
9.1 Corporate Status 39
9.2 Due Authorization; Validity 39
9.3 No Violation 40
9.4 Use of Loan Proceeds 40
9.5 Management; Ownership of Assets; Licenses; Patents 40
9.6 Indebtedness 40
9.7 Title to Property; No Liens 40
9.8 Restrictions; Labor Disputes; Labor Contracts 41
9.9 No Violation of Law 41
9.10 Hazardous Substances 41
9.11 Absence of Default 42
9.12 Accuracy of Financials; No Material Changes 42
9.13 Pension Plans 42
9.14 Taxes and Other Charges 42
9.15 No Litigation 43
9.16 No Brokerage Fee 43
9.17 Affiliates 43
9.18 Capitalization; Warrants 43
9.19 Noncompetition Agreements 43
9.20 Deposit and Other Accounts 43
9.21 Solvency 43
9.22 Full Disclosure 43
9.23 Casualties 44
9.24 Leases 44
9.25 Insurance Policies 44
9.26 Consents 44
9.27 Updating Representations and Warranties 44
10. COVENANTS 45
10.1 Payment of Certain Expenses 45
10.2 Notice of Litigation 45
10.3 Notice of ERISA Events 45
10.4 Notice of Labor Disputes 45
10.5 Compliance with Laws 45
10.6 Notice of Violations of Law, Tax Assessments 45
10.7 Notice of Certain Matters Under Applicable
Agreements 46
10.8 Notice of Customer Defaults 46
10.9 Taxes and Charges 46
10.10 Indebtedness; Guaranties 46
10.11 Restrictions 49
10.12 Pension Plans 49
10.13 Solvency 49
10.14 Property Insurance 49
10.15 Liability Insurance 49
10.16 Changes to Senior Notes Documents 50
10.17 Merger 50
10.18 Investments 50
10.19 Distributions; Loans; Fees 51
10.20 Stock Rights 51
10.21 Capital Structure; Fiscal Year 51
10.22 Affiliate Transactions; Management Fees 51
10.23 Operating Account 52
10.24 Compensating Balance 52
10.25 Sale of Assets 52
10.26 Intervention by Governmental Authority 52
10.27 Levy Against Loan Collateral 52
10.28 Judgments 52
10.29 Financial Covenants 53
10.30 No Prepayment of Senior Notes 53
11. TERMINATION 53
11.1 Termination Date 53
11.2 Renewal by Lenders 53
11.3 Voluntary Termination by Borrowers 53
11.4 Acceleration upon Termination 53
11.5 Borrowers Remain Liable 53
12. AGENT 54
12.1 Appointment 54
12.2 Delegation of Duties 54
12.3 Exculpatory Provisions 54
12.4 Reliance by Agent 55
12.5 Notice of Default 55
12.6 Non-Reliance on Agent and Other Lenders 55
12.7 Indemnification 56
12.8 Agent in Its Individual Capacity 56
12.9 Loan Collateral Matters 57
12.10 No Third Party Beneficiary 58
13. EVENTS OF DEFAULT 58
13.1 Events of Default 58
13.2 Cure Periods 61
14. LENDERS' RIGHTS AND REMEDIES 61
14.1 Acceleration 61
14.2 Fees and Expenses 62
14.3 Actions in Respect of the Letters of Credit 62
15. AMENDMENTS; WAIVERS; ASSIGNMENTS; PARTICIPATIONS 63
15.1 Amendments and Waivers 63
15.2 Assignment 65
15.3 Participations 65
15.4 Law Requirements 66
16. GENERAL 66
16.1 Severability 66
16.2 Governing Law 66
16.3 WAIVER OF JURISDICTION 67
16.4 Survival and Continuation of Representations and
Warranties 67
16.5 Additional Rights Regarding Loan Collateral 67
16.6 Application of Payments; Revival of Obligations 67
16.7 Fees and Expenses 68
16.8 Notices 69
16.9 Indemnification 69
16.10 Additional Waivers by Borrowers 70
16.11 Equitable Relief 70
16.12 Entire Agreement; Consents; Counterparts 70
16.13 Headings 71
16.14 Cumulative Remedies 71
16.15 Further Assurances 71
16.16 WAIVER OF JURY TRIAL 71
EXHIBITS
Exhibit 2.5 Form of Request for Advance of Revolving Loan
Exhibit 5.3 Form of Guaranty
Exhibit 7.3 Locked Boxes
Exhibit 7.4 Account Information
Exhibit 8.3 Borrowing Base Certificate
Exhibit 8.9 Officer's Certificate
Exhibit 9.1 Foreign Jurisdiction Qualifications
Exhibit 9.5 Licenses; Trademarks; Patents; Copyrights
Exhibit 9.8 Labor Matters
Exhibit 9.9 Compliance With Laws
Exhibit 9.10 Environmental Matters
Exhibit 9.11 Defaults under Applicable Agreements
Exhibit 9.13 Pension Matters
Exhibit 9.14 Tax Liens
Exhibit 9.15 Litigation
Exhibit 9.17 Affiliates
Exhibit 9.18 Capital Stock; Shareholders
Exhibit 9.20 Bank Accounts
Exhibit 9.23 Casualties
Exhibit 9.24 Leases
Exhibit 9.25 Insurance Policies
Exhibit 10.10 Permitted Indebtedness
Exhibit 10.18 Investments
Exhibit 10.29 Financial Covenants
SCHEDULES
Schedule 1 Lenders' Commitments
Schedule 2 Financial Statements
Schedule 3 Permitted Liens
Schedule 4 Borrower's Facilities
AMENDED AND RESTATED FINANCING AGREEMENT
THIS AMENDED AND RESTATED FINANCING AGREEMENT (this
"Agreement") among Lenders (as defined below), STAR BANK,
NATIONAL ASSOCIATION, a national banking association ("Star
Bank"), as Agent for Lenders (in that capacity, "Agent"), the
Lenders from time to time party to this Agreement, and SABRELINER
CORPORATION, a Delaware corporation ("Sabreliner"), MIDCOAST
AVIATION, INC., a Missouri corporation ("Midcoast"), MIDCOAST-
LITTLE ROCK, INC., a Missouri corporation ("Little Rock"),
SABRETECH, INC., a Delaware corporation ("SabreTech"), DIMENSION
AVIATION, INC., a Delaware corporation ("Dimension"), and
TURBOTECH REPAIRS, INC., a California corporation ("Turbotech"),
is as follows:
Recitals
A. Star Bank, Sabreliner, Midcoast, Little Rock,
SabreTech, Dimension and Turbotech are parties to a Financing
Agreement dated as of February 13, 1995, as amended by a First
Amendment to Financing Agreement dated as of November 10, 1995, a
Second Amendment to Financing Agreement dated as of January 26,
1996, a letter agreement dated as of November 12, 1996, and a
Third Amendment to Financing Agreement dated as of February 14,
1997 (as amended, the "Existing Financing Agreement").
B. Star Bank, Sabreliner, Midcoast, Little Rock,
SabreTech, Dimension and Turbotech desire to amend and restate
the Existing Financing Agreement to make certain changes to the
Existing Financing Agreement, to add Congress Financial
Corporation (Central), an Illinois corporation, as a Lender and
to establish Star Bank as Agent for Lenders, on and subject to
the terms and conditions of this Agreement.
Amendment and Restatement
The Existing Financing Agreement is hereby amended and
restated in its entirety by this Agreement. This Agreement, the
Exhibits and Schedules attached hereto, and the other Loan
Documents govern the present relationship among Agent, Lenders
and Borrowers. This Agreement, however, is in no way intended,
nor shall it be construed, to affect, replace, impair or
extinguish the creation, attachment, perfection or priority of
the security interests in, and other Liens on, the Loan
Collateral granted to, or held by, Star Bank, which security
interests and other Liens Star Bank shall hold as Agent for
Lenders, and which security interests and other Liens Borrowers,
by this Agreement, acknowledge, reaffirm and confirm to Agent.
In addition, all obligations, liabilities and indebtedness
created or existing under, pursuant to, or as a result of, the
Existing Financing Agreement shall continue in existence within
the definition of "Obligations" under this Agreement, which
obligations, liabilities and indebtedness Borrowers, by this
Agreement, acknowledge, reaffirm and confirm. The existing Loan
Documents, except as amended by this Agreement or by a separate
agreement, shall remain in full force and effect and are hereby
ratified and confirmed. References in any of the Loan Documents
to the Existing Financing Agreement shall be deemed to be
references to this Agreement.
1. DEFINITIONS.
1.1 Defined Terms In addition to the other terms defined
in this Agreement, whenever the following capitalized terms
(whether or not underscored) are used, they shall be defined as
follows:
"Additional Borrower" means a Subsidiary, other than
Midcoast, Little Rock, SabreTech, Dimension and Turbotech, which
becomes an Additional Borrower hereunder on terms acceptable to
Required Lenders.
"Additional Guarantor" means a Subsidiary, other than
Midcoast, Little Rock, SabreTech, Dimension and Turbotech, which
executes a Guaranty in the form of Exhibit 5.3.
"Affiliate" means, as to any Person (the "Subject Person"),
any other Person which, directly or indirectly, is in control of,
is controlled by, or is under common control with, the Subject
Person. For purposes of this definition, "control" of a Person
means the power, direct or indirect, (i) to vote 10% or more of
the securities having voting power for the election of directors
of the Person or (ii) otherwise to direct or cause the direction
of the management and policies of the Person, whether by contract
or otherwise. For purposes of this definition, all of each
Borrower's officers, shareholders, directors, parent
corporations, subsidiary corporations, joint venturers and
partners shall be deemed to be Borrowers' Affiliates for purposes
of this Agreement; provided that the shareholders of Sabreliner
which are not, directly or indirectly, in control of, controlled
by or under common control with Sabreliner will not, solely by
reason of their status as shareholders of Sabreliner, be
considered to be Affiliates of Sabreliner from and after the
date, if any, that the shares of Sabreliner are publicly
registered.
"Applicable Agreement" means any agreement, commitment,
arrangement or instrument to which, as of any date, any Borrower
is a party or by which a Borrower or any of its properties is
bound (including any note, indenture, loan agreement, mortgage,
lease, or deed), the performance or non-performance of which
could have a Material Adverse Effect, including the Senior Notes
Indenture and the Senior Notes.
"Attorneys' Fees" means the reasonable fees (determined at
an hourly rate without premium), costs and expenses of all
attorneys (and all paralegals and other staff employed by such
attorneys) retained by Agent or Star Bank (and solely with
respect to the negotiation and documentation of this Agreement
(and not any amendments thereto), the costs and expenses of all
attorneys (and all paralegals and other staff employed by such
attorneys) retained by Congress Financial Corporation (Central),
up to the amount of $10,000 for the initial review of this
Agreement and the documents to be executed in connection
therewith), from time to time in connection with any matter
whatsoever related to, or arising out of, the transactions
contemplated hereunder or the other Loan Documents.
"Availability Deficiency" means the occurrence, as at any
time, of a condition in which (i) the sum of (a) the then
aggregate outstanding principal amount of the Revolving Loans
plus (b) the then aggregate Letter of Credit Exposure exceeds
(ii) $35,000,000.
"Borrower" means each of Sabreliner, Midcoast, Little Rock,
SabreTech, Dimension, Turbotech and each Additional Borrower, and
"Borrowers" means, collectively, Sabreliner, Midcoast, Little
Rock, SabreTech, Dimension, Turbotech and each Additional
Borrower. To the extent a term or provision of this Agreement or
the other Loan Documents is applicable to a "Borrower", it is
applicable to each and every Borrower unless the context
expressly indicates otherwise.
"Borrower's Facility" means each facility listed in Schedule
4.
"Borrowing Base" means, as of any date of determination, an
amount equal to:
(i) an amount up to 85% of the amount of net Eligible
Receivables (i.e., less maximum discounts, credits and allowances
which may be taken by or granted to account debtors in connection
therewith) then outstanding;
plus (ii) the lesser of (a) $20,000,000 or (b) an
amount equal to the sum of (1) an amount up to 55% of the then
Eligible Inventory (determined exclusive of Pre-Owned Aircraft
and Work in Process), (2) an amount up to 30% of the then
Eligible Inventory of Sabreliner which is Work in Process
consisting of work on aircraft engines, (3) an amount up to 20%
of the then Eligible Inventory of Sabreliner which is Work in
Process other than work on aircraft engines, and (4) an amount up
to 80% of those items of the then Eligible Inventory which are
Pre-Owned Aircraft; and
less (iii) the then Reserve Amount.
"Borrowing Base Deficiency" means any failure of the
Revolving Loan Availability to be greater than or equal to zero
Dollars.
"Borrowing Date" means any Business Day (i) specified in a
notice pursuant to Sections 2.5.1 or 2.5.2 as a date on which
Borrowers request Lenders to make Loans under this Agreement and
(ii) on which Agent makes advances of Revolving Loans to
Borrowers.
"Business Day" means any day which is not a Saturday, Sunday
or a legal holiday on which a Lender is authorized or required to
be closed. Periods of days referred to in this Agreement will be
counted in calendar days unless Business Days are expressly
prescribed.
"Closing Date" means September 25, 1997, or such later date
as is mutually agreeable to Borrowers, Lenders and Agent.
"Code" means the Uniform Commercial Code, as enacted in the
State of Ohio, Section 1301.01 et seq. of the Ohio Revised Code,
as amended from time to time.
"Collateral", "General Intangibles", "Inventory", and
"Receivables" have the meanings ascribed thereto in the Security
Agreement (as defined in this Section 1.1).
"Commitment" means, when used with reference to a particular
Lender, its obligation to make Revolving Loans to Borrowers and
to participate in Letters of Credit, all in the aggregate amount
set forth opposite that Lender's name on Schedule 1.
"Commitments" means, collectively, the aggregate amount of all
Commitments of Lenders.
"Controlled Disbursement Accounts" means the operating
accounts of Borrowers at Agent identified in Exhibit 2.6, which
will be structured and utilized as controlled disbursement
accounts in accordance with Agent's controlled disbursement
account policies and procedures.
"Controlled Group" means all members of a controlled group
of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with a
Borrower, are treated as a single employer under Section 414(b)
or 414(c) of the Internal Revenue Code or Section 4001(a)(14) of
ERISA (as defined in Section 9.13).
"Deficiency" means (collectively and individually) an
Availability Deficiency, a Borrowing Base Deficiency, and a
Letter of Credit Deficiency.
"Dollars" and "$" means dollars in lawful currency of the
United States of America unless otherwise indicated.
"Eligible Inventory" means each Borrower's Inventory which
meets the criteria in clause (i) below of this definition and is
not ineligible pursuant to clause (ii) below. Eligible Inventory
will be valued, for purposes of determining the Borrowing Base,
at the lower of cost or market value, determined on the basis of
average cost.
(i) Except as otherwise provided in clause (ii) below,
Inventory is eligible if it is (a) (1) finished goods owned and
held by a Borrower at a Borrower's Facility for sale in the
ordinary course of a Borrower's business as presently conducted
by it ("Finished Goods"), (2) used aircraft (comprised of an
airframe, applicable configured engines, and associated
equipment) owned and held by a Borrower for sale in the ordinary
course of a Borrower's business as presently conducted by it
("Pre-Owned Aircraft"), (3) work in process owned and held by a
Borrower at a Borrower's Facility that is being converted or
fabricated into Finished Goods or whereby a Borrower is
performing services to complete purchase orders or where a
Borrower has received signed work authorizations, both in the
ordinary course of a Borrower's business as presently conducted
by it ("Work in Process"), or (4) raw materials owned and held by
a Borrower at a Borrower's Facility that will be converted or
fabricated into, or are components of, Finished Goods or are held
separately for sale in the ordinary course of a Borrower's
business as presently conducted by each of them ("Raw
Materials"); and (b) subject to a valid and prior, fully
perfected security interest of Agent, for the benefit of Lenders,
free of all Liens of any Person (except to the extent, if any, of
the Permitted Liens).
(ii) Without limiting Agent's discretion as to other
Inventory, the following Inventory will not, in any event,
constitute Eligible Inventory:
(a) Finished Goods which are (1) not in good
condition, (2) not of merchantable quality, (3) not readily
saleable in the ordinary course of a Borrower's business, (4)
considered slow-moving by Agent, in its discretion exercised in
good faith, or (5) subject to defects which would affect their
market value (including all Finished Goods for which reserves for
obsolescence have been provided for in a Borrower's financial
statements or for which obsolescence reserves are anticipated);
(b) Pre-Owned Aircraft which are (1) not in
airworthy condition in accordance with all applicable rules,
regulations, orders and laws of each applicable Governmental
Authority, unless such Pre-Owned Aircraft are not in airworthy
condition in accordance with all applicable rules, regulations,
orders and laws of each applicable Governmental Authority solely
because of short-term modifications or repairs, including
painting, interior work, avionics or engine work, then being
performed by a Borrower, (2) not of United States registry, (3)
not of merchantable quality, (4) not readily saleable in the
ordinary course of a Borrower's business, (5) considered slow-
moving by Agent, in its discretion exercised in good faith, or
(6) subject to defects which would affect their market value
(including all Pre-Owned Aircraft for which reserves for
obsolescence have been provided for in a Borrower's financial
statements or for which obsolescence reserves are anticipated);
(c) Work in Process which is (1) not in good
condition or not usable in a Borrower's business or, to the
extent that the Work in Process consists of services performed by
a Borrower, such services are not performed in a good and
workmanlike manner, (2) considered slow-moving by Agent, in its
discretion exercised in good faith, or (3) subject to defects
which would affect its market value (including, without
limitation, such Work in Process for which reserves for
obsolescence have been provided for in a Borrower's financial
statements or for which obsolescence reserves are anticipated);
(d) Raw Materials which are (1) not in good
condition or not usable in a Borrower's business, (2) considered
slow-moving by Agent, in its discretion exercised in good faith,
or (3) subject to defects which would affect their market value
(including, without limitation, such Raw Materials for which
reserves for obsolescence have been provided for in a Borrower's
financial statements or for which obsolescence reserves are
anticipated);
(e) supplies and packaging materials;
(f) Inventory which Agent, in its discretion
exercised in good faith, determines to be ineligible because of
type, category or quantity;
(g) Inventory that is located outside of the
United States;
(h) Inventory which has been consigned to a
Borrower or has been sold to a Borrower in any sale on approval
or sale and return transaction;
(i) Inventory that is located on any premises not
owned by a Borrower or is in the possession of any Person other
than a Borrower except (subject to any additional requirements
imposed by Agent, in its discretion exercised in good faith, to
protect a Borrower's title thereto or Agent's Lien thereon): (1)
Eligible Inventory in the possession of a warehouseman or other
bailee (including an inventory processor) if Agent has received a
bailee waiver letter acceptable to Agent from such warehouseman
or bailee and such warehousemen or bailee has not issued a
negotiable document of title as to any of the Eligible Inventory
and (2) Eligible Inventory located on premises leased by a
Borrower if Agent has received a landlord's waiver acceptable to
Agent with respect to such premises;
(j) Inventory that is subject to any trademark,
trade name, patent or licensing arrangement, any contractual
arrangement, or any law, rule or regulation that could, in any
instance in Agent's judgment, limit or impair the ability of
Agent to promptly exercise any of its rights with respect
thereto;
(k) Inventory with respect to which insurance
proceeds, if any, are not payable to Agent as mortgagee or loss
payee in accordance with the Loan Documents;
(l) Inventory that is in transit to or from any
Borrower's Facility; or
(m) Inventory as to which Agent, in its
discretion exercised in good faith, deems to be ineligible based
on any other credit or collateral considerations as Agent deems
appropriate from time to time.
"Eligible Progress ▇▇▇▇ Receivables" means, up to $4,000,000
of otherwise Eligible Receivables: (A) which arise out of a
progress billing pursuant to the MD-10/11 Contracts and (B) which
are to be paid within 30 days from the date of the invoice
applicable thereto.
"Eligible Receivables" means such of the Receivables owing
to each Borrower that meet the criteria in clause (i) below of
this definition and are not ineligible pursuant to clause (ii)
below.
(i) Except as provided in clause (ii) below,
Receivables meeting all of the following criteria are Eligible
Receivables:
(a) Receivables which consist of ordinary trade
accounts receivable owned solely by a Borrower, payable in cash
in Dollars and which arise out of an outright, bona fide, lawful
and final sale of Finished Goods or Pre-Owned Aircraft or the
provision of services in the ordinary course of a Borrower's
business as presently conducted by it to a Person who is not an
Affiliate of any Borrower (or who otherwise is controlled by a
Borrower or by an Affiliate of any Borrower);
(b) Receivables which are due and payable
absolutely and unconditionally within (1) a Borrower's standard
terms which, in any event, are not longer than 30 days from the
date of the invoice applicable thereto, or (2) such extended
terms that Agent, in its discretion exercised in good faith,
approves after prior notice from a Borrower;
(c) Receivables with respect to which (1) the
services covered thereby have been rendered or (2) the Finished
Goods or Pre-Owned Aircraft covered thereby have been delivered
to the account debtor or its designee; and
(d) Receivables with respect to which not more
than 90 days have elapsed since the date of the original invoice
applicable thereto.
(ii) Without limiting Agent's discretion as to other
Receivables, the following Receivables will not, in any event,
constitute Eligible Receivables:
(a) Receivables with respect to which the account
debtor or any Affiliate of the account debtor has filed or had
filed against it a petition in bankruptcy or for reorganization,
made an assignment for the benefit of creditors, or failed,
suspended business operations, become insolvent or in respect of
which a receiver, custodian, or a trustee was appointed for a
significant portion of its assets or affairs;
(b) Receivables with respect to which the account
debtor is also a supplier to, or creditor of, a Borrower, unless
the aggregate amount owed to a Borrower by such account debtor
exceeds the aggregate amount owed to such account debtor by a
Borrower, in which case a Receivable, if otherwise eligible, will
be an Eligible Receivable only to the extent of such excess;
(c) Receivables with respect to which the account
debtor (1) is a Person not domiciled in or organized under the
laws of the United States of America or Canada or a political
subdivision of either of them, is not qualified to do business in
one or more States of the United States of America or Canada, and
the Finished Goods or Pre-Owned Aircraft in respect of the
Receivable are delivered by a Borrower to a location outside of
the United States of America or Canada or (2) has its principal
place of business or chief executive office outside of the United
States of America or Canada unless, in either case, the
Receivable is supported by an irrevocable, clean letter of credit
or acceptance issued (A) by a financial institution satisfactory
to Agent and (B) on terms acceptable to Agent, and, if so
requested by Agent, delivered to Agent in pledge for negotiation
and presentment;
(d) Receivables with respect to which 25% or more
of the Receivables from the same account debtor either alone or
together with its Affiliates are ineligible for any reason;
(e) Except Receivables owing from the United
States of America, Receivables owing from any single account
debtor to the extent, as of any date, that the total amount of
such account debtor's indebtedness to any Borrower (whether
evidenced by such Receivables or otherwise) exceeds an amount
which is greater than 15% of the face amount (less maximum
discounts, credits and allowances which may be taken by, or
granted to, a Borrower's account debtor in connection therewith)
of the then outstanding Eligible Receivables of the applicable
Borrower;
(f) Receivables with respect to which the account
debtor is a Governmental Authority, unless with respect to such
Receivables the Assignment of Claims Act of 1940, as amended (31
U.S.C. 3727 and 41 U.S.C. 15) or comparable state statute or
regulation ("Assignment of Claims Law") has been complied with to
Agent's reasonable satisfaction;
(g) Receivables which (1) consist (or to the
extent consisting) of deposits, (2) consist of vendor warranty
claims, (3) consist (or to the extent consisting) of finance
charges, service charges, or interest on delinquent accounts, (4)
are proceeds of consigned Inventory, (5) are employee, officer or
director Receivables, or (6) are debit memoranda;
(h) Receivables with respect to which the terms
or conditions prohibit or restrict assignment or collection
rights;
(i) Receivables (1) which are subject to set-off,
credit, allowance or adjustment by the account debtor (except
discounts allowed for prompt payment), or (2) with respect to
which the account debtor has returned any of the Inventory from
the sale from which the Receivables arose, provided that in
either or both of such events (1) or (2), the net amount owed by
such account debtor to a Borrower in respect of such Receivable,
as determined by Agent in its discretion exercised in good faith,
may be an Eligible Receivable;
(j) Receivables which are evidenced by a
promissory note, chattel paper or other instrument;
(k) Receivables which are generated by a sale on
approval, a ▇▇▇▇ and hold sale, a sale on consignment, or other
type of conditional sale;
(l) Receivables which are not subject to the
first priority security interest of Agent and Lenders or are
subject to any Lien of any Person (except to the extent, if any,
of the Permitted Liens);
(m) Receivables with respect to which the account
debtor is located in New Jersey (1) to the extent that the
Receivables owing from such account debtor exceed 5% of the face
amount of the then outstanding Eligible Receivables and (2) if
all Receivables owing from all account debtors located in New
Jersey exceed 25% of the face amount of the then outstanding
Eligible Receivables, unless the applicable Borrower has properly
qualified to do business in New Jersey or has filed a Notice of
Business Activities Report with the New Jersey Division of
Taxation for the then current year;
(n) Receivables with respect to which the account
debtor is located in Minnesota (1) to the extent that the
Receivables owing from such account debtor exceed 5% of the face
amount of the then outstanding Eligible Receivables and (2) if
all Receivables owing from all account debtors located in
Minnesota exceed 25% of the face amount of the then outstanding
Eligible Receivables, unless the applicable Borrower has properly
qualified to do business in Minnesota or has filed a Notice of
Business Activities Report with the Minnesota Division of
Taxation for the then current year;
(o) Receivables with respect to which the account
debtor is located in West Virginia (1) to the extent that the
Receivables owing from such account debtor exceed 5% of the face
amount of the then outstanding Eligible Receivables and (2) if
all Receivables owing from all account debtors located in West
Virginia exceed 25% of the face amount of the then outstanding
Eligible Receivables, unless the applicable Borrower has filed,
or is exempt from filing, a Business Activity Report with the Tax
Commissioner of the State of West Virginia for the then current
year;
(p) Receivables which are subject to progress
billing, to the extent of any excess over the progress payments
then due and payable, (1) except for Eligible Progress ▇▇▇▇
Receivables or (2) unless a Borrower has obtained Agent's prior
consent with respect to the particular Receivable or Receivables;
(q) Receivables with respect to which the account
debtor has sold or is selling substantially all of its assets and
has not established adequate reserves or made provisions for the
payment of all amounts owed to such account debtor's trade
creditors, as determined by Agent in its discretion exercised in
good faith;
(r) Receivables with respect to which Agent has
received a check for payment of such Receivable which has been
returned uncollected;
(s) Receivables with respect to which Agent, in
its discretion exercised in good faith, believes that the
collection of such Receivable is in doubt or impaired or that
such Receivable may not be paid by reason of the account debtor's
financial inability to pay; or
(t) Receivables with respect to which Agent, in
its discretion exercised in good faith, has notified a Borrower
that such Receivables are or Receivable is ineligible based on
such other credit and collateral considerations as Agent deems
appropriate from time to time.
"Event of Default" shall have the meaning ascribed thereto
in Section 13.1, whether any requirement for the giving of
notice, the lapse of time, the satisfaction of any other
condition, or all of them, have been satisfied.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if such day is not a
Business Day, the Federal Funds Rate for such day will be such
rate on such transactions on the immediately preceding Business
Day as so published on the next succeeding Business Day, and (ii)
if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average
rate quoted to Agent on such day on such transactions as is
determined by Agent.
"Financials" means those financial statements of Borrowers
attached as Schedule 2.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, government or any
agency or instrumentality thereof.
"Guaranty" means a guaranty in the form of Exhibit 5.3,
executed and delivered to Agent, for the benefit of Lenders, by a
Borrower or an Additional Guarantor, and "Guaranties" means,
collectively, every Guaranty.
"Indebtedness" means all of each Borrower's obligations,
indebtedness and liabilities to any Person, including all debts,
claims and indebtedness, contingent, fixed or otherwise,
heretofore, now and from time to time hereafter owing, due or
payable, however evidenced, created, incurred, acquired or owing
and however arising, whether under written or oral agreement,
operation of law or otherwise. Indebtedness includes, without
limiting the foregoing, (i) the Obligations, (ii) obligations or
liabilities of any Person secured by a Lien on property owned by
Borrower, even though a Borrower has not assumed or become liable
for the payment therefor, and (iii) obligations or liabilities
created or arising under any lease of real or personal property,
any conditional sales contract or other title retention agreement
with respect to property used or acquired by a Borrower, even
though the rights and remedies of the lessor, seller, or lender
thereunder are limited to repossession of such property.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended or superseded from time to time. Any reference
to a specific provision of the Internal Revenue Code will be
construed to include any comparable provision of the Internal
Revenue Code as amended or superseded after the date of this
Agreement.
"Issuing Lender" means Star Bank, in its capacity as Lender
which is the issuer of a Letter of Credit.
"Lenders" means, collectively, the financial institutions
indicated as such on the signature pages of this Agreement and
any financial institutions which, pursuant to the terms of this
Agreement, become a party to this Agreement from time to time
after the date of this Agreement. "Lender" means, individually,
any of Lenders.
"Letter of Credit" means a standby letter of credit issued
by Issuing Lender pursuant to Section 2.3.
"Letter of Credit Availability" means, at any time, an
amount equal to the lesser of (i) an amount equal to (a)
$10,000,000 less (b) the then Letter of Credit Exposure or (ii)
the then Revolving Loan Availability.
"Letter of Credit Collateral Account" has the meaning
specified in Section 14.3.
"Letter of Credit Deficiency" means any failure of the
Letter of Credit Availability to be greater than or equal to zero
Dollars.
"Letter of Credit Documents" means, with respect to each and
every Letter of Credit, (i) a standby letter of credit
application and reimbursement agreement on Issuing Lender's then
customary form (the "Letter of Credit Application") and (ii) any
other agreements, certificates, documents and information as
Issuing Lender may request relating to a Letter of Credit.
"Letter of Credit Exposure" means, as of any date, the sum
of (i) the Letter of Credit Face Amount of all outstanding
Letters of Credit and (ii) all unreimbursed drawings under any
Letters of Credit (whether or not outstanding).
"Letter of Credit Face Amount" of any Letter of Credit
means, at any time, the face amount of the Letter of Credit,
after giving effect to all drawings paid thereunder and other
reductions of the face amount and to all reinstatements of the
face amount effected, pursuant to the terms of the Letter of
Credit, prior to such time.
"Letter of Credit Obligations" shall mean, at any time, the
sum of (i) the aggregate Letter of Credit Face Amount for all
Letters of Credit, plus (ii) the aggregate amount of each
Borrower's unpaid obligations in respect of all Letters of Credit
(whether or not outstanding) under this Agreement and the Letter
of Credit Documents, including any indebtedness, liability or
obligation of any sort whatsoever, however arising, whether
present or future, related or unrelated, fixed or contingent, or
paid, incurred, or arising in connection with any Letters of
Credit (including any drafts or acceptances thereunder, all
amounts charged or chargeable to a Borrower or by Issuing Lender
(or by any correspondent bank which opens, issues or is involved
with such Letter of Credit), including any and all of Issuing
Lender's charges, expenses, fees and commissions, and all duties
and taxes and costs of insurance which may pertain either
directly or indirectly to such Letters of Credit).
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, charge, security
interest, encumbrance, lien (statutory or other), or any
preference, priority or other security agreement of any kind or
nature whatsoever (including any conditional sale or other title
retention agreement, any lease deemed under the UCC to be
intended for security, and the authorized filing by or against a
Person of any financing statement as debtor under the UCC or
comparable law of any jurisdiction).
"Loan" means any advance or extension of credit made by
Lenders to, or for the benefit of, a Borrower pursuant to Section
2 (exclusive of the Letter of Credit Exposure), and the total of
all such advances and extensions of credit (exclusive of the
Letter of Credit Exposure) outstanding at any time may be
referred to as "Loans".
"Loan Collateral" means (i) the Collateral (as defined in
the Security Agreement) and (ii) any other security or collateral
provided from time to time by, or on behalf of, a Borrower for
the Obligations.
"Loan Documents" means this Agreement, the Security
Agreement, the Letter of Credit Documents, each Blocked Account
Agreement (as defined in Section 7.4) and all other agreements,
instruments and documents, including mortgages, deeds of trust,
subordination agreements, intercreditor agreements, pledges,
powers of attorney, consents, collateral assignments, locked box
agreements, letter agreements, contracts, notices, leases,
financing statements and letters of credit and applications
therefor and all other writings, all of which must be in form and
substance reasonably satisfactory to Agent, which have been, are
as of the date of this Agreement, or will in the future be signed
by, or on behalf of, a Borrower and delivered to Agent.
"Material Adverse Effect" means a material adverse effect,
as determined by Agent in good faith, on (i) Borrowers' (a)
business, property, assets, operations or condition, financial or
otherwise or (b) ability to perform any of their payment or other
Obligations under this Agreement or any of the other Loan
Documents, in each case considered as a whole, or (ii) the value
of the Loan Collateral or the rights or interests of Agent or a
Lender therein.
"▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOC" means the Irrevocable Standby Letter
of Credit issued by Star Bank, No. S49567, for the benefit of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation, with an expiration date of March
9, 2000.
"MD-10/11 Contracts" means (i) the Modification Services
Agreement between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation and Dimension,
No. MSA-FRI-SF-97-001 and (ii) the Modification Services
Agreement between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation and Dimension,
No. MSA-FRI-SF-97-003.
"Obligations" means the Loans, the Letter of Credit
Obligations, and all other loans, advances, debts, liabilities,
obligations, covenants and duties owing by a Borrower to any of
Agent or Lenders under or in connection with this Agreement and
the other Loan Documents of any kind, present or future,
howsoever created, arising, acquired, or evidenced, whether
direct or indirect (including acquired by assignment), related or
unrelated, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest,
charges, expenses, fees and any other sums chargeable to
Borrowers in connection with any of the foregoing, and all
Attorneys' Fees.
"Original Closing Date" means February 13, 1995.
"Pension Plan" means a "pension plan", as such term is
defined in section 3(2) of ERISA, as to which a Borrower or any
corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group may have any liability, including
any liability by reason of having been a substantial employer
within the meaning of section 4063 of ERISA at any time during
any preceding six year period, or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.
"Percentage Share" means, when used with reference to a
particular Lender, a fraction (expressed as a percentage), the
numerator of which is the amount of the applicable Lender's
Commitment and the denominator of which is the sum of all of
Lenders' Commitments. On and after the termination of this
Agreement pursuant to Section 11, "Percentage Share" means, when
used with reference to a particular Lender, a fraction (expressed
as a percentage), the numerator of which is (i) the sum of (a)
the aggregate principal amount of each Lender's then outstanding
Revolving Loans plus (b) that Lender's participation in the then
aggregate Letter of Credit Exposure, and the denominator of which
is (ii) the sum of (a) the aggregate principal amount of
Revolving Loans of all Lenders then outstanding plus (b) the
aggregate Letter of Credit Exposure then outstanding.
"Permitted Acquisition" means and refers to a negotiated
transaction to acquire (by purchase or other acquisition of all
of the capital stock, securities of or all or substantially all
of the assets of) a Person ("Target Company") (i) engaged in a
line or lines of business which are complementary to the lines of
business of Borrowers and (ii) for which the acquisition price
(including assumed debt and debt of the Target Company which
remains in place) does not exceed five and one-half (5.5) times
the pro forma trailing twelve month EBITDA (as defined in Exhibit
10.29) of the Target Company, provided that, simultaneously with
the acquisition, the Target Company becomes an Additional
Guarantor and offers to Lenders to become an Additional Borrower
on terms not less favorable to Lenders than the terms set forth
in this Agreement (it being understood that Lenders shall not be
obligated to accept the Target Company as an Additional
Borrower). However, notwithstanding the immediately preceding
sentence to the contrary, none of the following will be a
Permitted Acquisition: (a) a hostile acquisition; (b) an
acquisition as a result of which any Borrower, without Required
Lenders' prior consent, will be directly or indirectly incurring,
assuming or becoming otherwise obligated for any Indebtedness
which is secured by the Target Company's accounts, inventory,
general intangibles, chattel paper, instruments, leases,
securities, real property, or any material item or items of
equipment; (c) an acquisition of a Target Company which has
indebtedness secured by a Lien on any of the Target Company's
working capital assets unless, within 180 days after the closing
of the acquisition, the Target Company's working capital assets
become and thereafter remain unencumbered other than by a Lien in
favor of Agent; or (d) an acquisition which is not a Permitted
Investment (as defined in the Senior Notes Indenture).
"Permitted Liens" means the liens and interests in favor of
Agent, for the benefit of Lenders, granted or provided under the
Loan Documents and, to the extent reflected on a Borrower's books
and records and not impairing the operations of a Borrower or any
performance under, or contemplated by, the Loan Documents: (i)
Liens arising by operation of law for taxes not yet due and
payable; (ii) Liens of mechanics, materialmen, shippers and
warehousemen for services or materials for which payment is not
yet due; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (iv)
Liens, if any, specifically permitted by Required Lenders from
time to time in writing, including Liens on Borrowers' cash to
secure the Indebtedness described in Exhibit 10.10, to the extent
that such Indebtedness is permitted hereunder, which Liens are
hereby permitted; (v) Liens on equipment securing Indebtedness
under capitalized leases or purchase money Indebtedness if the
total amount of obligations secured by the purchase money
security interests or the subject of capitalized leases during
any period does not, together with any other capital expenditures
made by Borrowers for the applicable period, exceed the maximum
amount permitted during such period for capital expenditures
pursuant to Section 5 of Exhibit 10.29, provided that (a) any
Liens relating to such purchase money Indebtedness or capitalized
lease Indebtedness shall not extend to or cover any property of
any Borrower other than the property so acquired, and (b) the
principal amount of such capitalized lease or purchase money
Indebtedness shall not, at the time of the incurrence thereof,
exceed the value of the property so acquired; (vi) Liens for
taxes, assessments and other similar charges to the extent
payment thereof shall not at the time be required to be made in
accordance with the provisions of Section 10.9; (vii) those Liens
described on Schedule 3; and (viii) Liens arising from the claims
or demands of materialmen, mechanics, carriers, warehousemen,
landlords, bailees and other like Persons ("Third Party Claims")
if each of the following conditions is met: (a) the validity or
amount of the Third Party Claim is being contested in good faith
and by appropriate and lawful proceedings promptly initiated and
diligently conducted, (b) Borrowers have given prior notice to
Agent of the Third Party Claim, (c) Borrowers have established
appropriate reserves (in Agent's reasonable discretion exercised
in good faith) for the Third Party Claim, (d) levy and execution
on the Third Party Claim have been and continue to be stayed, (e)
the Third Party Claim does not prevent Agent, for the benefit of
Lenders, from having a perfected first priority security interest
in, or a first priority mortgage lien on, the Loan Collateral or
with respect to future advances made under this Agreement, (f) no
Borrower's title to, and its right to use, any of the Loan
Collateral are, in Agent's reasonable judgment, materially
affected thereby, and (g) the amount of all Third Party Claims do
not exceed, as of any date, $1,000,000 in the aggregate; and,
provided, further, that Borrowers must promptly pay each such
Third Party Claim when the dispute is finally settled.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, limited liability company, corporation, institution,
entity, party or Governmental Authority.
"Prime Rate" means the rate of interest per annum announced
by Star Bank from time to time as its prime lending rate (for
reference purposes only) with any change thereto being effective
as of the opening of business on the date of change (or if not a
Business Day, the beginning of the day). The Prime Rate is
determined solely by Star Bank pursuant to market factors and its
own operating needs and is not necessarily Star Bank's best or
most favorable rate for commercial or other loans.
"Reportable Event" means an event described in Section 4043
of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30 day notice
to the Pension Benefit Guaranty Corporation under such
regulations).
"Required Lenders" means at any time Lenders whose
Commitments (or, if after the Commitments have been terminated,
outstanding Loans and Letter of Credit Exposure) constitute
greater than two-thirds of the then aggregate amount of
Commitments (or, if after the Commitments have been terminated,
the total outstanding principal amount of the Loans and Letter of
Credit Exposure).
"Reserve Amount" means, as of any date of determination, the
amounts that Agent, in its discretion exercised in good faith
(including in the manner described in this definition), may from
time to time establish in determining the Borrowing Base based on
such credit and collateral considerations as Agent deems
appropriate from time to time, based on market conditions, or to
reflect contingencies or risks which may affect any or all of the
Loan Collateral, the business, operations, financial condition or
business prospects of a Borrower or the security of the Loans.
For purposes of this definition and determining the Borrowing
Base and without limiting Agent's other discretion, Agent will be
deemed to have acted in good faith if reserves are established in
respect of any one or more of the following: (a) the occurrence
of an Event of Default; (b) the payment of Obligations then due
and payable and unpaid; (c) for price adjustments, damages,
unearned discounts, returned Inventory, credit memoranda (issued
or unissued), credits, contras and other similar offsets to a
Borrower's accounts receivable except to the extent any of the
foregoing have been dealt with by Agent by designating a specific
Receivable or Receivables as being ineligible pursuant to the
terms of this Agreement as opposed to the establishment of a
reserve general in nature; (d) for any claims, interests, or
rights (including Liens) of any Person which (1) (A) as of the
date Agent learns or is notified of the existence of the
applicable Priming Interest, has priority over the Liens of Agent
or Lenders on any or all of the Loan Collateral or (B) will have
priority over the Liens of Agent or Lenders on any or all of the
Loan Collateral after any required notice or filing, the passage
of time, the satisfaction of any other condition, or otherwise
and (2) pertain to, arise from, or secure indebtedness,
obligations, or liabilities in excess, as of any date, of
$500,000 in the aggregate; (e) for aged credits maintained by any
Borrower in respect of its accounts receivable; or (f) for any
amounts expended by Agent to protect or preserve any Loan
Collateral or the rights Agent or Lenders under the Loan
Documents which have not been reimbursed by Borrowers.
"Revolving Loans" has the meaning ascribed thereto in
Section 2.2.
"Revolving Loan Availability" means, as at any time, an
amount, in Dollars, equal to:
(i) an amount equal to the lesser of (a) the then
Borrowing Base or (b) $35,000,000;
less (ii) the sum of (a) then aggregate outstanding
principal amount of all Revolving Loans and all due but unpaid
interest on the Loans, and all fees, commissions, expenses and
other charges posted to each Borrower's loan account with Agent
plus (b) the then Letter of Credit Exposure.
"Security Agreement" means the Amended and Restated Security
Agreement dated as of the date of this Agreement between
Sabreliner, Midcoast, Little Rock, SabreTech, Dimension,
Turbotech and Agent, for the benefit of Lenders, which amends and
restates in their entirety, and consolidates, (i) the Security
Agreement dated as of February 13, 1995 between Sabreliner,
Midcoast, Little Rock and Star Bank, (ii) the Security Agreement
dated as of January 26, 1996 between SabreTech and Star Bank,
(iii) the Security Agreement dated as of February 14, 1997
between Dimension and Star Bank, and (iv) the Security Agreement
dated as of February 14, 1997 between Turbotech and Star Bank.
"Senior Notes Indenture" means the Indenture dated as of
June 25, 1993, entered into between Sabreliner and IBJ ▇▇▇▇▇▇▇▇
Bank & Trust Company, a New York banking corporation, as trustee
(the "Trustee"), as supplemented as of November 2, 1994.
"Senior Notes" means the $90,000,000 aggregate principal
amount of Sabreliner's 12 1/2% Senior Notes Due 2003, Series A and
12 1/2% Senior Notes Due 2003, Series B.
"Senior Notes Default" means the occurrence of any of the
following (or any combination of the following): (i) a default or
breach of any of the Senior Notes, (ii) any event or circumstance
that would become a default or breach of any of the Senior Notes
on a Holder's (as defined in the Senior Notes Indenture) election
or would become a default or breach after notice, the lapse of
time, or on the satisfaction of any other condition, or all of
the foregoing, or (iii) a Default, as defined in the Senior Notes
Indenture.
"Settlement Date" means, as applicable, a Weekly Settlement
Date or a Daily Settlement Date, both as defined in Section 4.2,
whichever is, as of any date, in effect under this Agreement.
"Solvent" means, with respect to any Person, that (i) the
Person is not insolvent as defined or construed under any and all
applicable laws. In computing the amount of contingent
liabilities at any time, it is intended that they be computed at
the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Subsidiary" means any Person as to which any Borrower owns,
directly or indirectly, at least 50% of the outstanding shares of
capital stock or other interests having ordinary voting power for
the election of directors, officers, managers, trustees or other
controlling Persons or an equivalent controlling interest in
Agent's judgment.
"Unreimbursed Drawings" has the meaning ascribed thereto in
Section 4.3.
"Unused Commitment" means, as to any Lender at any time, an
amount equal to the excess, if any, of (i) the amount of Lender's
Commitment at that time over (ii) the sum of (a) the aggregate
principal amount at that time of all Revolving Loans made by that
Lender plus (b) the Lender's participation at that time of the
then aggregate Letter of Credit Exposure.
1.2 Environmental Definitions.
"Environmental Activity" means any actual, proposed or
threatened storage, holding, Use, Release, emission, discharge,
generation, processing, abatement, removal, disposition,
handling, transportation or disposal of any Hazardous Substance
from, under, in or on any of Borrower's property or any Use of
any of Borrower's property which is regulated by or for which
standards of conduct or liability are imposed by any
Environmental Requirements.
"Environmental Law" means the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
9601 et seq., the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. 6901 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. 1802 et seq., the Toxic Substances
Control Act, 15 U.S.C. 2601 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. 1251 et seq., the Clean Water Act, 33
U.S.C. 1321 et seq., the Clean Air Act, 42 U.S.C. 7401 et seq.,
regulations promulgated thereunder, and any other federal, state,
county, municipal, local or other statute, law, ordinance or
regulation, or any common law (including common law that may
impose strict liability), which may relate to or deal with human
health, the environment, natural resources, or Hazardous
Substances, all as may be from time to time amended or modified.
"Environmental Liability" means any liability, obligation,
indebtedness, or duty of, any claim or demand against, any
requirement imposed on, or any amount owed by or payable from, a
Borrower, which is based on, results from, is in connection with
or arises out of any Environmental Activity, whether the
foregoing described liability now exists or arises in the future,
is contingent or absolute, primary or secondary, liquidated or
unliquidated, due or to become due, and however created,
incurred, acquired, owing or arising.
"Environmental Requirements" means all present and future
laws, including Environmental Laws, authorizations, approvals,
judgments, injunctions, decrees, concessions, grants, orders,
franchises, agreements and other restrictions and requirements
(whether or not arising under statutes or regulations) relating
to any Hazardous Substances or Environmental Activity.
"Hazardous Substances" means, at any time, (i) any
"hazardous substance" as defined in 101(14) of CERCLA (42 U.S.C.
9601(14)) or regulations promulgated thereunder; (ii) any "solid
waste" as defined in RCRA or regulations promulgated thereunder
or any "hazardous waste" or "infectious waste," as such terms are
defined in any Environmental Law at such time; (iii) asbestos,
urea-formaldehyde, polychlorinated biphenyls ("PCBs"), nuclear
fuel or material, chemical waste, radioactive material,
explosives, known carcinogens, petroleum products and by-products
and other dangerous, toxic or hazardous pollutants, contaminants,
chemicals, materials or substances listed or identified in, or
regulated by, any Environmental Law; and (iv) any additional
substances or materials which at such time are classified or
considered to be hazardous or toxic under any Environmental Law.
"Release" includes spilling, leaking, pumping, emitting,
discharging, injecting, contaminating, leaching, disposing,
releasing or dumping into the environment.
"Use" includes, but is not limited to, use, ownership,
development, construction, maintenance, management, operation or
occupancy.
1.3 Other Definitional Provisions; Construction. Unless
otherwise specified:
(i) All terms defined in this Agreement, whether or
not defined in this Section 1, have the defined meanings provided
in this Agreement when used in this Agreement, in any other of
the Loan Documents, or any other certificate, instrument or other
document made or delivered pursuant to this Agreement or any
other Loan Document, unless otherwise defined therein.
(ii) References in this Agreement to a Borrower's
knowledge shall be deemed to be references to the knowledge of ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or ▇▇▇▇▇ ▇.
▇▇▇▇▇, all of whom are officers of Borrowers, or their respective
successors as such officers.
(iii) As used in this Agreement, in any other of
the Loan Documents, or in any other certificate, instrument or
document made or delivered pursuant hereto or thereto, accounting
terms relating to Borrowers not defined in this Agreement have
the respective meanings given to them in accordance with
generally accepted accounting principles in the United States of
America as in effect at the time any determination is made or
financial statement or information is required or furnished under
this Agreement ("GAAP").
(iv) References to the Uniform Commercial Code, or UCC,
mean as enacted in the particular jurisdiction(s) encompassed by
the reference.
(v) The definition of any document or instrument
includes all schedules, attachments and exhibits thereto and all
renewals, extensions, supplements, restatements and amendments
thereof.
(vi) "Hereunder," "herein," "hereto," "this Agreement"
and words of similar import refer to this entire document;
"including" is used by way of illustration and not by way of
limitation, unless the context clearly indicates the contrary;
the singular includes the plural and conversely; and any action
required to be taken by Borrowers is to be taken reasonably
promptly, unless the context clearly indicates the contrary.
(vii) All of the uncapitalized terms contained in
the Loan Documents which are defined under the Code will, unless
defined in the Loan Documents or the context indicates otherwise,
have the meanings provided for in the Code.
(viii) All Exhibits and Schedules attached to this
Agreement are incorporated into, made and form an integral part
of, this Agreement for all purposes.
(ix) The definition of any term which is made by
reference to a definition in the Senior Notes Indenture shall be
without regard to any modification, waiver or amendment of the
Senior Notes Indenture as to which Required Lenders have not
given prior consent.
(x) The term "good faith" means honesty in fact in the
conduct or transaction concerned, without regard to whether
reasonable commercial standards have been observed.
2. LOANS AND OTHER FINANCIAL ACCOMMODATIONS.
2.1 Total Facility. Subject to the terms and conditions of
this Agreement, Lenders, in the discretion of Agent exercised in
good faith, may make up to $35,000,000 in total credit (the
"Credit Facility") available to Borrowers, which Credit Facility
shall be comprised of (i) revolving loans and (ii) a letter of
credit facility as a subfacility of the revolving loan facility,
all as more particularly described below. The obligations of
Lenders to Borrowers in respect of the Credit Facility shall be
several and not joint, and the portion of the Credit Facility to
be made available by each Lender, subject to the terms and
conditions of this Agreement, shall be limited to the Commitment
of such Lender.
2.2 Revolving Loans.
2.2.1 Amount of Revolving Loans. During the period
from the Closing Date until the termination of this Agreement
pursuant to Section 11, and subject to the other terms and
conditions of this Agreement, each Lender, severally and not
jointly, will make revolving loans ("Revolving Loans") to
Borrowers, which Revolving Loans may be lent and relent from time
to time, in an amount, as of any date, not exceeding the Lender's
Percentage Share of the Revolving Loan Availability then in
effect. Whether a Lender will exceed its Percentage Share of the
Revolving Loan Availability with respect to a particular advance
of Revolving Loans requested by Borrowers will be determined
after giving effect to all Revolving Loans requested as if each
Lender had funded its respective Revolving Loan in accordance
with the terms of this Agreement. Subject to the terms of
Section 15.1.1(i), Agent, in its discretion, may elect, on behalf
of Lenders, to exceed the limits of the Borrowing Base (and
thereby increase the Revolving Loan Availability) on one or more
occasions (an "Overadvance"), but if it does so, neither Agent
nor any of Lenders will be deemed thereby to have changed the
limits of the Revolving Loan Availability or to be obligated to
make Overadvances on any other occasion.
2.2.2 Evidence of Revolving Loans. The Revolving
Loans will be evidenced by this Agreement and notations made by
Agent on its books and records, including computer records. In
addition, each Lender is authorized, at its option, to note the
date and amount of each advance or repayment of principal of the
Lender's Revolving Loans in its books and records, including
computer records. Agent's books and records and each Lender's
books and records will constitute presumptive evidence, absent
manifest error, of the accuracy of the information contained in
those books and records, including correct recordations of the
Revolving Loans. Failure by Agent or any Lender to make any
notation or record of the date and amount of each advance or
repayment of principal of the Revolving Loans or any error in any
notation or recordation made will not affect the obligations of
Borrowers to each Lender with respect to the Revolving Loans.
2.3 Letters of Credit.
2.3.1 Standby Letter of Credit Subfacility. During
the period from the Closing Date until the termination of this
Agreement pursuant to Section 11, and subject to the other terms
and conditions of this Agreement, Borrowers may request Issuing
Lender to issue a Letter of Credit by delivering to Issuing
Lender: (i) a Letter of Credit Application completed to the
satisfaction of Issuing Lender, together with the proposed form
of the Letter of Credit (which, in all respects, must comply with
the applicable requirements of Section 2.3.2), (ii) a Borrowing
Base Certificate (as defined in Section 8.3) which calculates the
Letter of Credit Availability by giving effect to the proposed
Letter of Credit, and (iii) such Letter of Credit Documents that
Issuing Lender then requires. Issuing Lender, in addition to the
other terms of this Agreement, will have no obligation to issue
any such proposed Letter of Credit if, after giving effect to
such proposed Letter of Credit, the Letter of Credit Availability
will be less than zero.
2.3.2 Terms of Letter of Credit. Each Letter of
Credit issued under this Agreement will, among other things, (i)
be in such form requested by a Borrower as is acceptable to
Issuing Lender in its discretion exercised in good faith and (ii)
except for the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOC, have an expiry date
occurring not later than one year after the date of issuance of
the Letter of Credit; however, in no event will any expiry date
be later than the earlier of (a) February 13, 2001 or (b) such
earlier termination date of this Agreement which has resulted
from the delivery to Agent by Borrowers of a Termination Notice
as provided in Section 11.3. Each Letter of Credit Application
and each Letter of Credit will be subject to the Uniform Customs
and Practices for Documentary Credits, 1993 Revision, ICC
Publication No. 500 and, to the extent not inconsistent
therewith, the laws of the State of Ohio.
2.3.3 Advice of Issuance or Non-Issuance. Upon
receipt of a request from a Borrower to open any Letter of Credit
and of all attendant Letter of Credit Documents satisfactorily
completed, Issuing Lender, within three Business Days, may either
(i) issue the requested Letter of Credit to the beneficiary
thereof and transmit a copy to the applicable Borrower, or (ii)
elect, in its discretion exercised in good faith, not to issue
the proposed Letter of Credit. If Issuing Lender elects not to
issue such Letter of Credit, Issuing Lender will communicate in
writing with the applicable Borrower the reason(s) why Issuing
Lender has declined such request. Promptly after the issuance of
a Letter of Credit, Agent will notify each Lender of the issuance
of the Letter of Credit.
2.3.4 Payment of Drafts; Issuing Lender
Obligations.
(i) Subject to the terms of Section 14.3, each
Borrower hereby irrevocably instructs Agent to reimburse Issuing
Lender for any drawing, expenditure or other payment made, or
cost or expense incurred, by Issuing Lender in respect of any
Letter of Credit by making an advance of the Revolving Loans
pursuant to Section 3.8.2. If the advance of a Revolving Loan to
reimburse Issuing Lender for any drawing, expenditure or other
payment made, or cost or expense incurred, by Issuing Lender in
respect of any Letter of Credit results (or to the extent that it
results) in any Deficiency, then Borrower will immediately
eliminate any Deficiency in accordance with the terms of Section
2.4.
(ii) In determining whether to pay under any
Letter of Credit, Issuing Lender will be responsible only to
confirm that any documents required to have been delivered under
a Letter of Credit appear to comply on their face with the
requirements of the Letter of Credit, and any action taken or
omitted by Issuing Lender under or in connection with any Letter
of Credit will not (a) subject Issuing Lender to any liability to
any other Lender or any Borrower or (b) relieve any Lender of its
obligations under this Agreement to Issuing Lender; however,
nothing in this Section 2.3.4(ii) will relieve Issuing Lender of
any liability it may have to Borrowers to the extent, but only to
the extent, of any direct, as opposed to consequential, damages
suffered by Borrowers from Issuing Lender's gross negligence or
willful misconduct.
2.3.5 Letter of Credit Obligations. All Letter of
Credit Obligations will constitute part of the Obligations and be
secured by the Loan Collateral.
2.3.6 Increased Costs. If (i) any law, treaty,
rule, regulation, guideline or determination of a central bank or
a Governmental Authority or interpretation or application thereof
by a central bank or Governmental Authority or (ii) compliance by
Issuing Lender or any other Lender with any request or directive
(whether having the force of law) from, or compliance by Issuing
Lender or any other Lender with any official pronouncement or
statement of, or as a result of any audit, investigation, or
enforcement action (whether or not against Issuing Lender or any
other Lender) by, a central bank or other Government Authority
shall either (a) impose, modify, deem or make applicable any
reserve, special deposits, assessment or similar requirement
against letters of credit issued by Issuing Lender or (b) impose
on Issuing Lender or any other Lender any other condition
regarding this Agreement or any Letter of Credit, and, in the
applicable Lender's judgment exercised in good faith, the result
of any event referred to in clause (a) or (b) above is the
increase of the cost to Issuing Lender or any other Lender of
issuing or maintaining any Letter of Credit, then, on demand by
Issuing Lender, Borrowers will immediately pay to Issuing Lender
and, as applicable, each other affected Lender, from time to time
as specified by Issuing Lender and, as applicable, each other
affected Lender, additional amounts sufficient to compensate
Issuing Lender and, as applicable, each other affected Lender for
such increased cost, together with interest on each such amount
from the date demanded until payment in full thereof at a rate
per annum equal to the then applicable interest rate on the
Revolving Loans. A certificate as to such increased cost
incurred by Issuing Lender and, as applicable, each other
affected Lender, submitted by Issuing Lender and, as applicable,
each other affected Lender to Borrowers, shall be conclusive,
absent manifest error, as to the amount thereof.
2.3.7 Unconditional Obligations. All Letter of
Credit Obligations and Obligations in respect of any and all
Letters of Credit issued by Issuing Lender shall be unconditional
and irrevocable and will be paid strictly in accordance with the
terms of this Agreement and the Letter of Credit Documents under
all circumstances set forth in the Letter of Credit Documents,
including any or all of the following circumstances: (i) the
existence of any claim, set-off, defense or other right which any
Borrower may have at any time against any beneficiary, or any
transferee, of any Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), Issuing
Lender, any other Lender or any other Person, whether in
connection with this Agreement or the other Loan Documents, the
transactions contemplated in this Agreement, or any unrelated
transaction; (ii) any statement or any other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; (iii) payment by
Issuing Lender under any Letter of Credit against presentation of
a draft or certificate which does not comply with the terms of
such Letter of Credit; (iv) the invalidity or unenforceability of
the Letter of Credit; or (v) any other circumstances or happening
whatsoever, whether or not similar to any of the foregoing;
however, nothing in this Section 2.3.7 will relieve Issuing
Lender of any liability it may have to a Borrower to the extent
resulting from Issuing Lender's gross negligence or willful
misconduct.
2.4 No Deficiency. Notwithstanding anything in this
Agreement to the contrary, but subject to each Lender's
obligations to Issuing Lender pursuant to Section 4.3 and to
Agent pursuant to Section 4.2, a Lender may refuse to make any
requested Revolving Loan and Issuing Lender may refuse to issue
any requested Letter of Credit if, after giving effect to the
requested Revolving Loan or Letter of Credit, a Deficiency would
occur, unless the Deficiency results from an Overadvance elected
to be made by Agent pursuant to Section 2.2.1. If, as of any
date, a Deficiency occurs or exists, Borrowers will immediately,
without demand or notice, reduce the sum of the then outstanding
balance of the Revolving Loans and the Letter of Credit Exposure
so that such Deficiency shall no longer exist, unless the
Deficiency results from an Overadvance elected to be made by
Agent pursuant to Section 2.2.1; however, if such Deficiency was
caused solely by the good faith exercise of Agent's discretion
hereunder, Borrowers will be entitled to a grace period of 5
Business Days (or for such longer time, subject to Section
15.1.1(i), as Agent may elect in its discretion), after the
occurrence of such Deficiency to reduce the then outstanding
balance of the Revolving Loans and the Letter of Credit Exposure
so that such Deficiency will no longer exist.
2.5 Procedures for Advancing and Funding Revolving Loans.
2.5.1 Revolving Loan Requests. Borrowers hereby
authorize Agent, without any further written or oral request of
Borrowers, to make Revolving Loans to Borrowers in amounts
necessary for the payment of checks and other items drawn on the
Controlled Disbursement Accounts as such checks and other items
are presented to Agent for payment if Agent elects to make
advances of the Revolving Loans in accordance with this
Agreement. In addition to Revolving Loans made pursuant to
Agent's controlled disbursement account system, a Borrower may
request a Revolving Loan by giving written notice to Agent in the
form of Exhibit 2.5 by not later than 12:00 noon, Cincinnati,
Ohio time, on the Borrowing Date that the advance is requested.
Each request submitted by a Borrower in the form of Exhibit 2.5
for an advance of a Revolving Loan (other than via Agent's
controlled disbursement account system) will: (i) specify the
amount of the requested advance, (ii) not be revocable by
Borrowers, and (iii) be from an authorized officer or employee of
a Borrower who is listed on the most current signature
authorization letter received by Agent from the Borrower;
however, Agent will, in all cases, be authorized to act on the
request of any person that Agent, in good faith, believes to be
an authorized officer or employee of a Borrower. If Agent
receives a request from a Borrower in the form of Exhibit 2.5 for
a Revolving Loan after 12:00 noon, Cincinnati, Ohio time, on a
Business Day, then the notice will be treated as having been
received at the opening of business on the next Business Day
which will then become the applicable Borrowing Date.
2.5.2 Funding of Revolving Loans.
(i) Controlled Disbursement Borrowings. If Agent
has, as of any Business Day, not elected a Daily Settlement Date
(as defined and provided for in Section 4.2.2), then Agent will,
subject to the terms of this Agreement, make disbursements of
proceeds of Revolving Loans to Borrowers via the Controlled
Disbursement Accounts as the checks and other items are presented
to Agent on a Business Day for payment pursuant to Agent's
controlled disbursement account system, except to the extent
Agent has received a notice from a Lender pursuant to Section
2.5.3.
(ii) Other Revolving Borrowings. If (a) Agent
has, as of the applicable Borrowing Date, not elected a Daily
Settlement Date (as defined and provided for in Section 4.2.2)
and (b) Agent receives a request from a Borrower for a Revolving
Loan in the form of Exhibit 2.5 (i.e., a Revolving Loan other
than via the Controlled Disbursement Accounts), then Agent will,
subject to the terms of this Agreement, advance the requested
Revolving Loan on the applicable Borrowing Date according to the
disbursement instructions given by the Borrower to Agent (so long
as the instructions are acceptable to Agent in its discretion
exercised in a reasonable manner), except to the extent Agent has
received a notice from a Lender pursuant to Section 2.5.3.
(iii) Disbursements if Daily Settlement
Elected. If Agent has, as of the applicable Borrowing Date,
elected a Daily Settlement Date (as defined and provided for in
Section 4.2.2), then the Revolving Loan requested, whether via
the Controlled Disbursement Accounts or otherwise, will, subject
to the terms of this Agreement, be made available to Borrowers by
Agent on the applicable Borrowing Date to the extent of the
aggregate amounts of the requested Revolving Loan made available
to Agent by Lenders and in like funds as, and if, received by
Agent as of 2:30 p.m., Cincinnati, Ohio time, on that Borrowing
Date. Any amounts of that Revolving Loan requested by Borrower
which are made available to Agent by Lenders after 2:30 p.m.,
Cincinnati, Ohio time, on the applicable Borrowing Date will be
made available to Borrowers on the immediately following Business
Day in like funds received by Agent from Lenders.
2.5.3 Funding by Agent on Behalf of Lenders.
(i) Revolving Loans--Weekly Settlement. For
every advance of a Revolving Loan made by Agent on a Business Day
for which Agent had not elected a Daily Settlement Date (as
defined and provided for in Section 4.2.2), Agent may assume that
each Lender will make its Percentage Share of the applicable
Revolving Loan available to Agent as of 2:30 p.m., Cincinnati,
Ohio time, on the next subsequent Settlement Date unless Agent
has been notified by a Lender that the Lender does not intend to
make available to Agent the Lender's Percentage Share of the
applicable Revolving Loan to be funded under Section 2.5.2(ii) or
the Revolving Loan necessary for the payment of checks and other
items presented to Agent via the Controlled Disbursement Accounts
("Non-Funding Notice"). For a Non-Funding Notice to be effective
as against Agent for (a) the Borrowing Date of any Revolving Loan
to be funded under Section 2.5.2(ii) or (b) any Business Day on
which any Revolving Loan will be made to a Borrower via its
Controlled Disbursement Account (the applicable Borrowing Date
being, the "Applicable Funding Date"), Lender must deliver a Non-
Funding Notice to Agent: (1) at or before 8:00 a.m., Cincinnati,
Ohio time, on the Business Day that is at least one Business Day
before the Applicable Funding Date of any Revolving Loan to be
funded under Section 2.5.2(ii) or (2) at or before 2:30 p.m.,
Cincinnati, Ohio time, on the Business Day that is at least two
Business Days before the Applicable Funding Date of any Revolving
Loan to be made to a Borrower via its Controlled Disbursement
Account. Any Non-Funding Notice received after 8:00 a.m. or, as
applicable, 2:30 p.m., Cincinnati, Ohio time, will be treated as
having been received at the opening of business on the next
Business Day. Notwithstanding anything to the contrary in this
Section 2.5.3, Agent may assume that each Lender will, under all
circumstances, make its Percentage Share of all Revolving Loans
made pursuant to Sections 2.3.4 or 3.8.2 available to Agent as of
2:30 p.m., Cincinnati, Ohio time, on the next subsequent
Settlement Date.
(ii) No Modification of Lender's Obligations.
Nothing in this Section 2.5.3 may be deemed to relieve any Lender
of its obligation, if any, under this Agreement to make a
Revolving Loan to a Borrower on the applicable Borrowing Date.
2.5.4 Pro Rata Lending; Commitment Default by a
Lender. All Revolving Loans (including any Overadvances elected
to be made by Agent pursuant to Section 2.2.1) and all
participations in Letters of Credit will be made simultaneously
by Lenders pro rata on the basis of their respective Commitments,
and any reduction of the Commitments of Lenders effected pursuant
to the terms of this Agreement will be allocated by Agent pro
rata according to the relevant Percentage Shares of Lenders. No
Lender will be responsible for, or be subject to any liability
because of, any default by any other Lender in its obligation to
make Revolving Loans under this Agreement nor will any Commitment
of any Lender be increased or decreased as a result of any
failure by any other Lender to fulfill its Commitment under this
Agreement. Each Lender will be obligated to make the Revolving
Loans provided to be made by it under this Agreement, regardless
of the failure of any other Lender to fulfill its Commitment
under this Agreement.
2.5.5 Funding Sources. Nothing in this Agreement
may be treated as obligating any Lender to obtain its funds in
any particular place or manner to make any Revolving Loan under
this Agreement, and nothing in this Agreement may be deemed to be
a representation by any Lender that it has obtained or will
obtain funds in any particular place or manner.
2.6 No Limitation on Liens. The limits on outstanding
advances against the Borrowing Base are not intended and shall
not be deemed to limit in any way Agent's or Lenders' security
interest in, or other Liens on, the Receivables, Inventory,
General Intangibles, or any other Loan Collateral.
2.7 Discretionary Nature of Facility. NOTHING CONTAINED IN
THIS AGREEMENT SHALL, AT ANY TIME, REQUIRE LENDERS TO MAKE LOANS
OR OTHER EXTENSIONS OF CREDIT (INCLUDING LETTERS OF CREDIT) TO
ANY BORROWER, AND THE MAKING AND AMOUNT OF ANY LOANS OR OTHER
EXTENSIONS OF CREDIT (INCLUDING LETTERS OF CREDIT) HEREUNDER
SHALL AT ALL TIMES BE IN AGENT'S DISCRETION TO BE EXERCISED IN
GOOD FAITH. ALL OUTSTANDING LOANS AND OTHER EXTENSIONS OF CREDIT
(INCLUDING LETTERS OF CREDIT) SHALL AT ALL TIMES BE SUBJECT TO
THE TERMS OF SECTION 11 AND SECTION 14, INCLUDING THE TERMS
THEREOF RELATING TO REPAYMENT. Without limiting the generality
of the foregoing, and subject to Section 15, Borrowers
acknowledge that (i) Agent, from time to time in its discretion
exercised in good faith, may increase or decrease the percentage
advance rates and dollar limits on outstanding advances against
the Borrowing Base and (ii) the covenants set forth in this
Agreement are not (and are not intended to be) an exclusive
listing of all the elements of a Borrower's condition which are
material to Agent or Lenders, from time to time, in determining
whether credit should be advanced hereunder. Accordingly,
compliance by Borrowers with all of the covenants set forth in
this Agreement shall not be deemed to affect, in any manner,
Agent's discretion pursuant to Section 2 with respect to the
making and amount of any Loans or other extensions of credit
hereunder.
2.8 General Conditions. In addition to any other
provisions contained in this Agreement, the making of any
Revolving Loan by a Lender or the issuance of any Letter of
Credit by Issuing Lender will be subject to the continued
existence or fulfillment to the satisfaction of Agent of each of
the following conditions throughout the term of this Agreement:
(i) No Event of Default has occurred and is
continuing;
(ii) No law or regulation prohibits, and no order,
judgment or decree of any arbitrator or Governmental Authority
enjoins or restrains any Lender, from making the requested
advance; and
(iii) Borrowers' representations and warranties
contained in this Agreement are complete and correct as of the
date of this Agreement and continue to be true and correct in all
material respects throughout the term of this Agreement with the
same effect as though such representations and warranties had
been made again on and as of each day of the term of this
Agreement subject to such changes as are not prohibited hereby or
do not constitute Events of Default under this Agreement.
2.9 One General Obligation; Cross-Collateralized. All
advances of credit by Lenders to, or for the benefit of, any
Borrower under this Agreement and under any other Loan Document
constitute one loan, and all of the Obligations constitute one
obligation. The Loans, the Letters of Credit and all other
advances or extensions of credit to, or for the benefit of, any
Borrower under this Agreement or the other Loan Documents are
made on the security of all of the Loan Collateral.
3. INTEREST CHARGES; MINIMUM LOAN CHARGE; FEES.
3.1 Interest on Loans. Borrowers promise to pay interest
on the Loans as follows:
(i) All Revolving Loans will bear interest on the
daily unpaid principal amount thereof from the date made until
paid in full at a rate per annum equal to the Prime Rate, as in
effect from day to day as interest accrues, plus 1.25% (the
"Revolving Loan Margin").
(ii) The principal balance of all other outstanding
Obligations (except that portion of the Obligations, if any,
arising under any agreement other than this Agreement if such
other agreement provides for the payment of interest at a rate
specified therein) will bear interest on the daily unpaid
principal amount thereof from the date made until paid in full at
a rate per annum equal to the Prime Rate, as in effect from day
to day as interest accrues, plus 1.25% (the "Other Margin").
(iii) Any adjustment in the rate of interest
resulting from a change in the Prime Rate will become effective
on the date of such change in the Prime Rate made by Agent.
(iv) The Revolving Loan Margin and the Other Margin
each is subject to reduction by 0.250% per annum if (a) Borrowers
have met each of the financial tests set forth on Exhibit 3.1 as
of the end of their fiscal years ending June 30, 1998 and (b) no
Event of Default is existing as of the end of that fiscal year,
or exists as of the effective date of reduction as provided
below. Each of the Revolving Loan Margin and the Other Margin is
subject to one additional reduction (whether or not the reduction
applicable to Borrowers' fiscal year ending June 30, 1998
occurred) by 0.250% per annum if (x) Borrowers have met each of
the financial tests set forth on Exhibit 3.1 as of the end of
their fiscal years ending June 30, 1999 and (y) no Event of
Default is existing as of the end of that fiscal year, or exists
as of the effective date of reduction as provided below. The
total reduction to each of the Revolving Loan Margin and the
Other Margin, assuming Borrowers meet all of the conditions of
this clause (iv) of Section 3.1 for both of their fiscal years
ending June 30, 1998 and June 30, 1999, is 0.500% per annum. The
foregoing rate reductions, if applicable, will become effective
on and after the first day of the first calendar month following
delivery of Borrowers' annual financial statements required to be
delivered to Agent pursuant to Section 8.7 for, as applicable,
the fiscal year ending June 30, 1998 and June 30, 1999. Each of
the financial statements required to be delivered to Agent (1)
must be in compliance with Section 8.7 and (2) must have been
reviewed by Agent to its satisfaction for all purposes of this
Agreement.
(v) The per annum rate of interest applicable at all
times after the occurrence and during the continuance of an Event
of Default shall be the applicable rate of interest set forth
above in clauses (i) and (ii) of this Section 3.1 plus an
additional 2.000% per annum.
3.2 Increased Costs. If (i) there occurs any change in law
or any rules, regulations, guidelines or orders (or any
interpretations thereof) of a Governmental Authority or any new
laws, regulations or guidelines are promulgated, enacted, issued,
or made or any request, requirement or directive (whether having
the force of law) from any central bank or other Governmental
Authority is imposed or made effective (including a requirement
which affects the manner in which a Lender allocates capital
resources to any of its credit facilities, including its
Commitment hereunder) and (ii) as a result of such change,
enactment, or issuance a Lender, in its discretion exercised in
good faith, determines that (a) the rate of return on such
Lender's capital as a consequence of its credit facilities
hereunder is reduced to a level below that which such Lender
could have achieved but for such circumstances (taking into
consideration such Lender's policies with respect to capital
adequacy and capital maintenance) by an amount deemed by such
Lender to be material or (b) such Lender is subjected to any tax
of any kind whatsoever with respect to this Agreement or any loan
or other credit advanced under this Agreement or the basis of
taxation of payments to such Lender of principal, fees, interest
or other amounts payable under this Agreement is changed (except
a tax on the overall net income or capital of such Lender,
including "doing business," franchise and other similar taxes),
then, and in each such case, such Lender may charge Borrowers an
additional fee which will compensate such Lender for such
reduction in the rate of return caused by such requirements or
for such tax ("Additional Fee") so long as additional fees (with
respect to capital adequacy, capital maintenance and such taxes)
are being charged by such Lender to its other similarly situated
borrowers to the extent such Lender is legally empowered to do
so. In the event any Additional Fee is charged to Borrowers by a
Lender under this Section 3.2, Borrowers may prepay the
Obligations in full without payment of the termination fee under
Section 11.3 so long as such prepayment in full is tendered to
Agent within 120 days following the date a Lender either first
imposed the Additional Fee or subsequently increased such
Additional Fee for a reason other than a change in the balance of
the Loans or the interest rates under Section 3.1.
3.3 Closing Fee. On the Closing Date, Borrowers will pay
to Agent a closing fee in the total amount of $175,000.
3.4 Unused Commitment Fee. Commencing on the first
Business Day of the first calendar month immediately following
the Closing Date and continuing on the first Business Day of each
and every calendar month thereafter until the Obligations are
fully paid and satisfied, Borrowers will pay to Agent, for the
account of each Lender, a fee ("Unused Commitment Fee") in an
amount equal to (i) the average daily Unused Commitment of each
Lender, as determined by Agent, during the preceding calendar
month (or portion thereof during which any portion of any
Revolving Loans, including the Letter of Credit Exposure, were
outstanding) for which the Unused Commitment Fee is being
determined multiplied by (ii) the result obtained (expressed as a
percentage) by multiplying 0.375% by a fraction, the numerator of
which is the sum of days in such calendar month during which this
Agreement is outstanding and the denominator of which is 360.
3.5 Letter of Credit Fees. Borrowers will to pay to Agent,
for the account of Lenders, with respect to each Letter of
Credit, a fee ("LOC Fee") of 1.50% per annum on the amount
available to be drawn under each Letter of Credit. Borrower will
pay to Agent, for the account of Issuing Lender, Issuing Lender's
then current issuance, opening, closing, transfer, amendment,
draw, renewal, negotiation and other letter of credit
administration fees and charges with respect to each Letter of
Credit. The LOC Fee is due and payable in advance on the issuance
of each Letter of Credit.
3.6 Interest Rate Protection. Subject to Section 10.10,
Borrowers may, at Borrowers' cost, obtain and maintain interest
rate protection to protect against future increases in the Prime
Rate ("Interest Rate Agreements").
3.7 Calculation of Certain Charges. Accrued interest
charges and the fees and charges set forth in Sections 3.4 and
3.5 shall be computed on the basis of a year of 360 days and
applied to actual days elapsed. Except the fees and expenses set
forth in Sections 3.3 and 3.5 (which will be paid in accordance
with such Sections), all such charges and other fees hereunder
shall be paid in arrears, and Borrowers will pay all such charges
and other fees monthly to Agent, for the benefit of Lenders, on
the first Business Day of each month hereafter, beginning on
October 1, 1997.
3.8 Payments; Charging Loan Account.
3.8.1 Payments. Borrowers promise to pay and to
perform, observe and comply with when due all of the Obligations.
All payments to be made by Borrowers on account of the
Obligations will be made by Borrowers without setoff, deduction,
offset, recoupment or counterclaim in Dollars and in immediately
available funds and must be made before 2:00 p.m., Cincinnati,
Ohio time, on the due date thereof to Agent at Agent's
Cincinnati, Ohio main branch located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇. Funds received by Agent after that time
will be deemed to have been paid on the next succeeding Business
Day. If any payment under this Agreement becomes due and payable
on a day other than a Business Day, the maturity of the payment
will be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon will be
payable at the then applicable rate during that extension.
3.8.2 Charging of Loan Account; Advances of
Revolving Loans. Borrowers hereby irrevocably authorize Agent,
at Agent's option, to charge any account of Borrowers at Agent or
charge or increase the Revolving Loans for the payment or
repayment of any Obligations. On the next subsequent Settlement
Date, Lenders will make their respective Percentage Shares of the
Revolving Loans made by Agent under authority granted by this
Section 3.8.2 available to Agent in accordance with the
procedures and subject to the conditions specified in Section
4.2.
3.9 Maximum Rate. It is the intent of each Borrower,
Agent, Lenders, and all persons and entities primarily or
secondarily liable under this Agreement and the other Loan
Documents to conform strictly to those applicable laws (including
binding judicial or administrative interpretations or
determinations of those laws) ("Applicable Laws") regarding the
contracting for, and charging and receiving of, interest for the
use, forbearance and detention of money. Agent and Lenders will
have no right to claim, charge or receive, and no Borrower will
have any obligation to pay, any Interest (as defined below) in
excess of the maximum amount permitted by the Applicable Laws
(the "Maximum Amount") or in excess of the maximum rate permitted
by the Applicable Laws (the "Maximum Rate") on principal which is
outstanding and unpaid from time to time. Any Interest
contracted for, charged or received in excess of the Maximum Rate
or the Maximum Amount ("Excess Interest") will be deemed a result
of a bona fide error and a mistake. Each Borrower, and all
persons and entities primarily or secondarily liable under this
Agreement and of the other Loan Documents, recognize that with
fluctuations in the Prime Rate and the Maximum Rate, such a bona
fide error and a mistake could inadvertently occur. The
determination of whether the rate or amount of interest charged
under this Agreement or under the other Loan Documents is
usurious under the Applicable Laws will be made by amortizing,
prorating, allocating and spreading in equal parts during the
term of this Agreement, all interest or other sums deemed to be
interest ("Interest") at any time contracted for, charged or
received from a Borrower (or on its behalf) in connection with
this Agreement or any other Loan Document. Notwithstanding
anything to the contrary in this Agreement or any other Loan
Document, if Excess Interest is charged or received, each
Borrower stipulates that any Excess Interest will be, first,
applied to reduce then unpaid principal balance of the
Obligations; second, applied to any other unpaid Obligations
other than Interest which is Excess Interest; and, third,
returned to Borrower if all of the Obligations (determined
exclusive of Excess Interest) have been satisfied. By signing
this Agreement, each Borrower agrees that (a) the credit or
return of any Excess Interest to it will constitute acceptance by
it of the payment or credit of the Excess Interest, and (b) it
will not seek or pursue any other remedy, legal or equitable,
against Agent or any Lender based, in whole or in part, on the
charging or receiving of any interest in excess of the Maximum
Amount or the Maximum Rate. In no event will Agent or any Lender
be subject to any of the penalties provided by the Applicable
Laws for contracting for, charging or receiving any Excess
Interest. Any Excess Interest which is unpaid will be deemed
canceled.
3.10 Monthly Loan Activity Accountings. Agent will provide
Borrowers monthly with a statement of advances, charges and
payments made pursuant to this Agreement, and such account
rendered by Agent shall be conclusive evidence of the amount of
the Obligations owing and unpaid by Borrowers and shall be deemed
to be an account stated and binding as against Borrowers unless
such statement contains manifest errors.
4. APPORTIONMENTS OF PAYMENTS; SETTLEMENTS AMONG LENDERS;
PARTICIPATIONS IN LETTERS OF CREDIT.
4.1 Apportionment of Payments; Pro Rata Treatment.
4.1.1 Apportionment of Payments. Subject to
Sections 4.2 and 4.4: (i) aggregate principal and interest
payments received by Agent in finally collected funds on account
of the Loans will be apportioned by Agent pro rata among all
Lenders (apportioned according to the daily, average unpaid
principal balance held by each Lender of the applicable Loan with
respect to which the payment was received); however, for purposes
of this Section 4.1, the aggregate principal amount of any
Overadvances will be deemed paid first; (ii) unless otherwise
agreed to by Agent and Lenders, aggregate payments received by
Agent in finally collected funds of all fees and other amounts to
be paid by Borrowers under the terms of this Agreement to Agent
for the account of Lenders will be apportioned by Agent pro rata
among all Lenders according to their respective Percentage
Shares; and (iii) aggregate principal and interest payments
received by Agent in finally collected funds on account of
Unreimbursed Drawings will be apportioned by Agent pro rata among
all Lenders which have paid their respective Percentage Share of
any Unreimbursed Drawings to Issuing Lender (apportioned
according to the daily, average unpaid principal balance of the
Unreimbursed Drawings held by each Lender with respect to which
the payment was received). Notwithstanding anything to the
contrary in this Section 4.1.1, the foregoing provisions in this
Section 4.1.1, except as provided in clause (i) with respect to
Overadvances, do not constitute an ordering of priority of
payments.
4.1.2 Pro Rata Treatment. If any Lender (a
"benefited Lender") at any time receives any payment of all or
part of its Loans owing to it or its Letter of Credit Exposure,
any interest on those amounts, or any collateral in respect of
any or all of the foregoing (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Sections 12.1(i)(d) or 12.1(i)(e), or
otherwise), in a greater proportion than any payment to or
collateral received by any other Lender, if any, in respect of
the other Lender's Loans owing to it or its Letter of Credit
Exposure, as the case may be, or any interest on those amounts,
the benefited Lender will (i) purchase for cash from the other
Lenders a participating interest in that portion of each other
Lender's Loans owing to each of them and each of their Letter of
Credit Exposure, as the case may be, or (ii) provide the other
Lenders with the benefits of any collateral, or the proceeds of
any collateral obtained by the benefited Lender, as is necessary
to cause the benefited Lender to share the excess payment or
benefits of the applicable collateral or proceeds ratably with
each of the other Lenders; however, if all or any portion of that
excess payment or benefits is thereafter recovered from the
benefited Lender, the purchase by the benefited Lender from the
other Lenders will be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without
interest unless the benefited Lender is obligated to pay interest
to the applicable Person in which case the other Lenders will pay
their pro rata share of the interest payment.
4.2 Settlements.
4.2.1 Weekly Settlement. If Agent has elected
weekly settlement procedures, Agent will advise each Lender by
telephone (confirmed by telecopier), telex or telecopy by 12:00
noon, Cincinnati, Ohio time, on Thursday (or, upon notice to
Lenders, some other day of the week elected by Agent) of each
week (the "Weekly Settlement Date") of the amount of each
Lender's pro rata share of (i) all Revolving Loans made by Agent,
for the benefit of Lenders, since the immediately preceding
Weekly Settlement Date; (ii) all payments of principal with
respect to Revolving Loans received by Agent in finally collected
funds since the immediately preceding Weekly Settlement Date;
(iii) the amount of any payments of interest on the Revolving
Loans and any payment of fees and other amounts to be paid by
Borrowers under the terms of this Agreement to Agent for the
account of Lenders which have been received by Agent in finally
collected funds since the immediately preceding Weekly Settlement
Date; and (iv) the Letter of Credit Exposure of all Letters of
Credit issued and, as applicable, canceled since the immediately
preceding Weekly Settlement Date. On each Weekly Settlement
Date, the party from whom payment is due will make the amount due
available to the other party, in immediately available funds, by
wire transfer to the other party's account, not later than 2:30
p.m., Cincinnati, Ohio time, so long as the party to whom payment
is being made has made all payments required to be made by it
under this Agreement to the other party.
4.2.2 Daily Settlement. Notwithstanding the weekly
settlement procedures in Section 4.2.1, Agent may, at its option
at any time, including whenever Agent is asked to make an advance
of a Revolving Loan (whether via the Controlled Disbursement
Account or otherwise), elect to have a daily settlement with
respect to any requested advance of a Revolving Loan. If Agent
elects to have a daily settlement, (i) it must promptly (but in
no event later than 12:00 noon, Cincinnati, Ohio time, on the
proposed Borrowing Date) advise each Lender by telephone
(confirmed by telecopier), telex or telecopy of the requested
Borrowing Date (the applicable date being, the "Daily Settlement
Date"), the amount of the requested advance, and the amount of
each Lender's Percentage Share and (ii) each Lender will pay to
Agent the amount of the Lender's Percentage Share of the
requested Revolving Loan, in immediately available funds, before
2:30 p.m., Cincinnati, Ohio time, on the proposed Borrowing Date.
Whenever Agent has elected a Daily Settlement Date, and as long
as Agent's election remains in effect, Agent will pay to each
Lender its pro rata share of all payments, if any, described in
Section 4.2.1, which were received by Agent in finally collected
funds on or before 2:30 p.m., Cincinnati, Ohio time, on the next
Business Day following receipt by Agent, so long as a Lender has
made all payments required to be made by it under this Agreement.
4.2.3 Interest on Unpaid Settlements. If any
payment required under Sections 4.2.1 or 4.2.2 is not, in fact,
made by the party from whom payment is due ("Paying Party") when
due, the party to whom payment is due ("Receiving Party") will be
entitled to recover the applicable amount on Receiving Party's
demand (which must be promptly made), together with interest on
the applicable amount at the Federal Funds Rate, for each day
from the applicable Settlement Date on which the applicable
amount was due until that amount is paid. A certificate of
Receiving Party submitted to Paying Party with respect to any
amounts owing under this Section 4.2.3 will be binding and
conclusive in the absence of manifest error.
4.3 Letter of Credit Participations by Lenders.
4.3.1 Participation. Issuing Lender irrevocably
agrees to grant and hereby grants to each Lender, and, to induce
Issuing Lender to issue Letters of Credit under this Agreement,
each Lender irrevocably agrees to accept and purchase and hereby
accepts and purchases from Issuing Lender, on the terms and
conditions stated in this Section 4.3.1, for each Lender's own
account and risk, an undivided interest equal to each Lender's
Percentage Share (determined on the date of issuance of each
Letter of Credit) in the Letter of Credit Exposure. Each Lender
unconditionally and irrevocably agrees with Issuing Lender that,
if a draft is paid under any Letter of Credit for which Issuing
Lender is not reimbursed in full by Borrowers in accordance with
Section 2.3.4, each Lender will pay to Issuing Lender an amount
equal to each Lender's Percentage Share of the amount of that
draft or any part of that draft which is not so reimbursed under
all applicable Letters of Credit (each drawing so unreimbursed by
Borrowers being called an "Unreimbursed Drawing"). The
obligations of Lenders to make payments to Issuing Lender with
respect to Letters of Credit is not subject to any qualification
or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances,
including any of the circumstances described in Section 2.3.7.
4.3.2 Payment of Unreimbursed Drawing. Each Lender
will pay to Issuing Lender the amount of the Lender's Percentage
Share of all Unreimbursed Drawings under any Letters of Credit
for which there are any Unreimbursed Drawings, in immediately
available funds, by the end of the Business Day which immediately
follows the Business Day on which Lender received notice from
Issuing Lender by telephone, telex or telecopy of the
Unreimbursed Drawing or Drawings. If any amount required to be
paid by any Lender to Issuing Lender pursuant to this Section
4.3.2 in respect of any Unreimbursed Drawings is not paid by a
Lender when due in accordance with the immediately preceding
sentence, the applicable Lender will pay to Issuing Lender on
Issuing Lender's demand an amount equal to the applicable
Percentage Share of the Unreimbursed Drawing together with
interest on the applicable amount at the Federal Funds Rate for
each day from the original due date until that applicable amount
is paid to Issuing Lender. A certificate of Issuing Lender
submitted to any Lender with respect to any amounts owing under
this Section 4.3.2 will be binding and conclusive in the absence
of manifest error.
4.3.3 Recovery of Unreimbursed Drawings. Whenever,
at any time after Issuing Lender has made payment under any
Letter of Credit and has received from a Lender its Percentage
Share of any Unreimbursed Drawings in accordance with Section
4.3.2, Issuing Lender receives any payment related to any
Unreimbursed Drawing (whether directly from Borrowers or
otherwise, including proceeds of Loan Collateral applied to the
applicable Unreimbursed Drawings by Agent pursuant to Section
4.1), or any payment of interest from Borrowers on account of any
Unreimbursed Drawings, Issuing Lender will distribute to each
Lender its pro rata share of the applicable amount received by
Issuing Lender on the Business Day immediately following the
Business Day on which Issuing Lender received the applicable
amount in finally collected funds; however, if any amount
received by Issuing Lender is required to be returned by Issuing
Lender, each Lender will return to Issuing Lender the portion of
the amount previously distributed to it by Issuing Lender, but
without interest unless Issuing Lender is obligated to pay
interest to the applicable Person in which case the other Lenders
will pay their pro rata share of the interest payment.
4.4 Allocation of Payments Following Acceleration.
Aggregate cash proceeds received by Agent in finally collected
funds from the sale or other disposition, collection,
liquidation, or realization of any or all of the Loan Collateral,
following the occurrence of any Event of Default and acceleration
of the Obligations, will be allocated, subject to the provisions
of this Agreement, to the Obligations in the following order:
first, to interest due with respect to all Loans;
second, to principal of the Revolving Loans and to pay
drawings under, or provide cash collateral in respect of, Letters
of Credit to the extent contemplated in Section 14.3;
third, to any fees, expense reimbursements or
indemnities then due to Agent or Issuing Lender from Borrowers or
from any Lender under this Agreement;
fourth, to any fees, expense reimbursements or
indemnities then due to Lenders from Borrowers; and
fifth, to the payment of any other Obligations due to
Agent or Lenders from Borrowers.
Agent will distribute to each Lender at its address set forth on
the applicable signature page of this Agreement, or at any other
address as a Lender may request in writing, the amount of funds
as the Lender may be entitled to receive in accordance with the
terms of this Agreement and the settlement procedures set forth
in Section 4.2.
4.5 No Third Party Beneficiary. The provisions of this
Section 4 are solely for the benefit of Agent and Lenders, and
none of Borrowers nor any Additional Borrower will have any
rights as a third party beneficiary of any of the provisions of
this Section 4.
5. NATURE OF BORROWERS' OBLIGATIONS; GUARANTY.
5.1 Joint, Several and Primary Obligations. The Obligations
of Borrowers under this Agreement and the other Loan Documents
are joint, several and primary. No Borrower will be or be deemed
to be an accommodation party with respect to any of the Loan
Documents. For purposes of advancing funds, issuing Letters of
Credit, rendering statements, receiving requests from, or
otherwise communicating with Borrowers or in Agent's
administration of this loan transaction, Midcoast, Little Rock,
SabreTech, Dimension and Turbotech each hereby authorize Agent to
treat Sabreliner as the sole agent for all of them under the Loan
Documents and to deal with it exclusively, and any act done or
omitted or any document, certificate, or instrument executed or
delivered by Sabreliner for Midcoast, Little Rock, SabreTech,
Dimension, Turbotech or any one or more of them, will be binding
on each of them.
5.2. Consolidated Borrowings. To induce Agent and Lenders
to enter into this Agreement and to make advances of the Loans,
and issue the Letters of Credit in the manner set forth in this
Agreement, each Borrower hereby represents, warrants, covenants
and states to Agent and Lenders that:
(i) Sabreliner is the sole shareholder of Midcoast,
SabreTech, Dimension, and Turbotech, Midcoast is the sole
shareholder of Little Rock, and Midcoast, Little Rock, SabreTech,
Dimension and Turbotech are substantially dependent upon
Sabreliner for their respective working capital, strategic
management, financial needs and technology;
(ii) Borrowers desire to utilize their borrowing
potential on a consolidated basis, to the extent(s) possible as
if they were merged into a single corporate entity and,
consistent with realizing such potential, to make available to
Agent and Lenders security commensurate with the amount and
nature of their aggregate borrowings;
(iii) each of Sabreliner and its Subsidiaries has
determined that it will benefit specifically and materially from
the advances of credit contemplated by this Agreement and that
under a joint and several loan facility it is able to obtain
financing on terms more favorable than otherwise available to it
separately; and
(iv) Sabreliner and its Subsidiaries have requested and
bargained for the structure and terms of and security for the
advances contemplated by this Agreement.
5.3. Guaranties. It is both a condition precedent to the
obligations of Agent and Lenders under this Agreement and a
desire of Borrowers that Borrowers execute and deliver to Agent,
for the benefit of Lenders, this Agreement, the Security
Agreement, and to the extent required thereunder, the other Loan
Documents, and also execute and deliver to Agent, for the benefit
of Lenders, an irrevocable and unconditional cross-guaranty of
the full and prompt payment of the Obligations and performance of
the Loan Documents by each of them in accordance with the terms
of a Guaranty in the form of Exhibit 5.3.
6. SECURITY. The Obligations shall be secured (for application
in such order as may be determined by Agent in its discretion
exercised in good faith) by a first priority security interest in
all of the (i) Collateral pursuant to the Security Agreement and
accompanying financing statements, and (b) other Loan Collateral
given from time to time as security for the Obligations.
7. RECEIVABLES; INVENTORY; COLLECTION OF RECEIVABLES; DISPUTED
RECEIVABLES; PROCEEDS OF INVENTORY.
7.1 Agreements Regarding Receivables. No Borrower may
backdate, postdate or redate any of its invoices or make any
sales on extended dating or credit terms beyond that (i)
customary in Borrower's industry and (ii) approved by Agent.
Borrowers shall notify Agent promptly on a Borrower's learning
thereof if any Eligible Receivable becomes ineligible for any
reason, other than the aging of such Receivable, and of the
reasons for such ineligibility. Each Borrower will also notify
Agent promptly of all material disputes and claims with respect
to its Receivables, and Borrowers will settle or adjust such
material disputes and claims at no expense to Agent; however, no
Borrower may, without Agent's consent grant (i) any discount,
credit or allowance in respect of its Receivables outside the
ordinary course of business or (ii) any materially adverse
extension, compromise or settlement to any customer or account
debtor. Nothing permitted by this Section 7.1 or Section 7.2,
however, may be construed to alter in any way the criteria for
Eligible Receivables or Eligible Inventory provided in Section
1.1.
7.2 Agreements Regarding Inventory. Each Borrower shall
notify Agent promptly of all material returns and recoveries of
Inventory. Without Agent's prior consent and compliance with the
applicable terms of the Security Agreement, no Borrower will (i)
accept any returns of Inventory outside the ordinary course of
business, (ii) enter into any agreement, practice, arrangement,
or transaction under which title to, or ownership of, any
Inventory which is being sold by a Borrower is, or purports to
be, transferred to, or held by, a Person other than the
applicable Borrower before such Inventory is delivered to such
Person by the Borrower, (iii) make a sale of Inventory to any
customer on a ▇▇▇▇-and-hold, guaranteed sale, sale or return,
sale on approval, consignment or any other repurchase or return
basis, or (iv) store any Inventory with, or place any Inventory
in the possession or control of, any bailee, processor,
warehouseman, consignee or any other Person not a party to a
bailee or warehouseman's or similar agreement with Agent under
any arrangement, practice or agreement (oral or written).
7.3 Locked Boxes. Borrowers have rented and shall continue
to rent the post office boxes identified in Exhibit 7.3, or such
other post office boxes as Agent may notify Borrowers from time
to time (individually, a "Locked Box," and, collectively, the
"Locked Boxes"). Borrowers shall notify all of their customers
and account debtors to forward all remittances of every kind due
Borrowers ("Remittances") to the Locked Boxes (such notices to be
in such form and substance as Agent may require from time to
time), and immediately upon receipt thereof, Borrowers shall
deposit all other proceeds of Receivables or other Loan
Collateral into the Locked Box (or into a Special Account, as
defined in Section 7.4). Agent shall have sole access to the
Locked Boxes at all times, and Borrowers shall take all action
necessary to grant Agent such sole access. At no time shall any
Borrower remove any item from any Locked Box without Agent's
prior written consent, and no Borrower shall notify any customer
or account debtor to pay any Remittance to any other place or
address without Agent's prior written consent. If any Borrower
should neglect or refuse to notify any customer or account debtor
to pay any Remittance to the Locked Boxes, Agent shall be
entitled to make such notification. Each Borrower hereby grants
to Agent an irrevocable power of attorney, coupled with an
interest, to take in each Borrower's name all action necessary
(a) to grant Agent sole access to the Locked Boxes, (b) to
contact account debtors to pay any Remittance to the Locked Boxes
in the event that any such account debtor is not paying any such
Remittance to the Locked Boxes, (c) to contact account debtors
for any reason upon the occurrence of an Event of Default, and
(d) to endorse each Remittance delivered to the Locked Boxes for
deposit to a Special Account.
7.4 Special Account and Blocked Account. Upon collection
of Remittances and other proceeds of Receivables and other Loan
Collateral from the Locked Boxes, Agent shall deposit the same in
the special accounts of the respective Borrowers at Agent as
identified in Exhibit 7.4 (each a "Special Account"). In order
to provide for collection and forwarding to Agent of Remittances
and other proceeds of Receivables and other Loan Collateral that
continue to be sent on and after the date of this Agreement to
the Borrowers' respective blocked account banks as identified in
Exhibit 7.4 (each such bank being called a "Blocked Account
Bank"), each Borrower and Agent are (or will be prior to any
funding hereunder) parties to a Blocked Account Agreement in form
and substance satisfactory to Agent (a "Blocked Account
Agreement") with the applicable Blocked Account Bank pursuant to
which the blocked accounts identified in Exhibit 7.4 are
established and maintained by the applicable Blocked Account Bank
(each a "Blocked Account"). Upon collection of Remittances from
a Blocked Account, Agent shall deposit the same in the transfer
account of the applicable Borrower at Agent as identified in
Exhibit 7.4 (a "Transfer Account"). Any Remittance or other
proceeds of Receivables or other Loan Collateral received by any
Borrower shall be deemed held by Borrowers in trust and as
fiduciary for Agent, and Borrowers immediately shall deliver the
same, in its original form, to Agent into the Locked Boxes.
Pending such deposit, each Borrower agrees that it will not
commingle any such Remittance or other proceeds of Receivables or
other Loan Collateral with any of a Borrower's other funds or
property, but will hold it separate and apart therefrom in trust
for Agent until deposit is made into the Locked Boxes, or
applicable Special Account or Transfer Account. All deposits to
a Special Account, the Locked Boxes, a Blocked Account or a
Transfer Account shall be Agent's property and shall be subject
only to the signing authority designated from time to time by
Agent, and no Borrower shall have any interest therein or control
over such deposits or funds. Agent shall have sole access to
each Special Account and Transfer Account, and no Borrower shall
have any access thereto nor to any Blocked Account. Agent and
Lenders shall have, and each Borrower hereby grants to Agent and
Lenders, a security interest in all funds held in each Special
Account, Blocked Account and Transfer Account as security for the
Obligations. Each Special Account, Blocked Account and Transfer
Account shall not be subject to any deduction, set-off, banker's
lien or any other right in favor or any person or entity other
than Agent. Deposits to each Special Account, Blocked Account
and Transfer Account shall be applied first to the principal and
interest of the Revolving Loans, and second to the other
Obligations in such order and method of application as may be
elected by Agent in its discretion exercised in good faith. Any
funds in a Special Account, Blocked Account or Transfer Account
remaining after the applications set forth in the preceding
sentence may, at Agent's option, be paid over by Agent to
Borrowers or retained in a Special Account, Blocked Account
and/or Transfer Account as continuing security for the
Obligations. Each Borrower hereby indemnifies and holds Agent
and Lenders harmless from and against any loss or damage with
respect to any Remittance deposited in a Special Account, Blocked
Account, Transfer Account, or any or all of them, which is
dishonored or returned for any reason. If any Remittance
deposited in a Special Account, Blocked Account, Transfer Account
(or any or all of them) is dishonored or returned unpaid for any
reason, Agent, in its discretion, may charge the amount of such
dishonored or returned Remittance directly against Borrowers and
any account maintained by any Borrower with Agent and such amount
shall be deemed part of the Obligations hereunder. Agent shall
not be liable for any loss or damage resulting from any error,
omission, failure or negligence on the part of Agent under this
Agreement, but shall be liable for any such loss or damage
resulting from Agent's gross negligence or willful misconduct.
Until a payment is received by Agent for Agent's account in
Cincinnati, Ohio in finally collected funds, all risks associated
with such payment, including risks associated with the failure of
a Blocked Account Bank at which a Blocked Account is located,
will be borne solely by Borrowers.
7.5 Crediting of Remittances. For the purpose of
calculating interest, all Remittances and other proceeds of
Receivables and other Loan Collateral shall be credited to
Borrowers (conditional upon final collection) two Business Days
after Agent's Structured Capital Division receives notice of
deposit of the same into a Special Account or Transfer Account;
provided, however, in the event that Agent's Structured Capital
Division receives notice of such deposit later than 12:00 noon on
any Business Day, such Remittance deposited shall be credited to
Borrowers (conditional upon final collection) two Business Days
after such deposit; and provided, further, that the time for
crediting Remittances by the United States of America shall be
one Business Day shorter than provided above in this sentence.
For the purpose of determining the aggregate loan availability
and the Unused Commitment Fee under Section 3.4, all such
Remittances shall be credited on the Business Day on which
Agent's Structured Capital Division receives notice of such
deposit into a Special Account or Transfer Account. From time to
time, Agent may adopt such regulations and procedures as it may
deem reasonable and appropriate with respect to the operation of
a Special Account, the Locked Boxes, a Blocked Account, a
Transfer Account and the services to be provided by Agent under
this Agreement so long as the adoption of such regulations and
procedures will not change the material terms of this Agreement.
7.6 Cost of Collection. All reasonable costs of collection
of any Borrower's Receivables, including attorneys' fees, out-of-
pocket expenses, administrative and recordkeeping costs, and all
service charges and costs related to the establishment and
maintenance of the Locked Boxes, a Special Account, a Blocked
Account and a Transfer Account, shall be the sole responsibility
of Borrowers, whether the same are incurred by Agent or a
Borrower, and Agent, at its discretion, may charge the same
against Borrowers and any account maintained by any Borrower with
Agent and the same shall be deemed part of the Obligations
hereunder.
8. EXAMINATION OF LOAN COLLATERAL; REPORTING.
8.1 Maintenance of Books and Records. Each Borrower shall
keep and maintain complete books of account, records and files
with respect to its business in accordance with GAAP consistently
applied and shall accurately and completely record all
transactions therein. Each Borrower will maintain a perpetual
inventory system in respect of its Inventory.
8.2 Access and Inspection. Agent and Lenders may at all
times during normal business hours have (i) access to, and the
right to examine and inspect, all of each Borrower's real and
personal property and (ii) access to, and the right to inspect,
audit and make extracts from, all of each Borrower's records,
files and books of account, and Borrowers shall execute and
deliver at the request of Agent such instruments as may be
necessary for Agent or Lenders to obtain such information
concerning the business of each Borrower as Agent or Lenders may
reasonably require from any Person; however, unless an Event of
Default has occurred or exists, Agent and Lenders will give a
Borrower reasonable notice before it makes the inspections and
examinations at any Borrower's Facility. Each Borrower shall
furnish Agent or Lenders at reasonable intervals with such
statements and reports regarding each Borrower's financial
condition and the results of its operations, in addition to those
hereinafter required, and such other information as Agent or
Lenders may reasonably request from time to time.
8.3 Reporting Regarding Receivables. Not less frequently
than monthly, and more frequently if Agent shall require or a
Borrower shall so elect, Borrowers shall deliver to Agent a
borrowing base certificate in the form of Exhibit 8.3 (a
"Borrowing Base Certificate") and acceptable supporting
documentation thereto. Not less frequently than weekly, and more
frequently if Agent shall require or a Borrower shall so elect,
Borrowers will deliver to Agent a report listing all of each
Borrower's Receivables which arise out of a contract with a
Governmental Authority or are otherwise subject to an Assignment
of Claims Law. By no later than the 25th day after the end of
each calendar month, or sooner if available, each Borrower shall
deliver to Agent monthly agings, broken down by due date or
invoice date, as applicable, of Receivables, in each case
reconciled to the Borrowing Base Certificate for the end of such
month and each Borrower's general ledger, and setting forth any
changes in the reserves made for bad accounts or any extensions
of the maturity of, any refinancing of, or any other material
changes in the terms of any Receivables, together with such
further information with respect thereto as Agent may require.
8.4 Reporting Regarding Inventory. Each Borrower will
undertake a physical count of its Inventory at least once each
fiscal year in accordance with procedures approved by Borrowers'
independent certified public accountants and Agent. By no later
than the 25th day after the end of each calendar month, each
Borrower shall submit to Agent an inventory report reconciled to
(i) the Borrowing Base Certificate for the end of such month,
(ii) each Borrower's inventory records, and (iii) each Borrower's
general ledger, broken down into such detail and with such
categories as Agent shall reasonably require (including, but not
limited to, a report indicating the type, location, and dollar
value of each Borrower's Raw Materials, Work-in-Process, Pre-
Owned Aircraft and Finished Goods Inventory, and all other
information deemed necessary by Agent to determine levels of that
which is and is not Eligible Inventory). Values shown on reports
of Inventory shall be at the lower of cost or market value
determined on the basis of average cost. Not less frequently
than monthly, and more frequently if Agent shall require or a
Borrower shall so elect, each Borrower shall deliver to Agent a
Borrowing Base Certificate, and acceptable supporting
documentation thereto, reporting the value of each Borrower's
Inventory as of the end of the immediately preceding calendar
month period for which any Borrower has provided an inventory
report in accordance with this Section 8.4.
8.5 Monthly Financial Statements; Payable Information.
Promptly when available and in any event not later than 30 days
after the end of each month occurring after the Closing Date,
Borrowers shall furnish to Agent monthly consolidating financial
statements, (a) showing each Borrower's financial condition and
the results of each Borrower's operations for the periods covered
by such statements in such detail as Agent may from time to time
require, (b) prepared in accordance with GAAP consistently
applied (except the omission of footnotes and as otherwise
disclosed to Agent to the extent such exceptions are acceptable
to Agent), and (c) containing all disclosures required to fully
and accurately present the financial position and results of
operations of each Borrower (subject to normal year-end
adjustments and the omission of footnotes) and to make such
statements not misleading under the circumstances. By no later
than the 30th day after the end of each calendar month, or sooner
if available, each Borrower shall deliver to Agent monthly agings
of accounts payable listed by invoice date, in each case
reconciled to each Borrower's general ledger.
8.6 Annual Projections. At least 30 days prior to the end
of each of Borrower's fiscal years, each Borrower shall furnish
to Agent detailed projections for the next 12 months setting
forth projected income and cash flow for each month, the monthly
operating budget, the monthly balance sheet, and the monthly
borrowing availability of each Borrower, in each case accompanied
by a certificate of such Borrower's chief financial officer,
countersigned by such Borrower's chief executive officer, stating
(i) the assumptions on which the projections were prepared, (ii)
that the assumptions, except as otherwise noted, were prepared on
a consistent basis with the operation of the Borrower's business
during the immediately preceding fiscal year and with factors
known to exist as of the date of the certificate or reasonably
anticipated to exist during the periods covered by the
projections, and (iii) that the officers signing the certificate
have no reason to believe that the projections are incorrect or
misleading in any material respect.
8.7 Audited Annual Financial Statements. Promptly when
available and in any event not later than 90 days after the end
of each of Borrower's fiscal years, Borrowers shall submit to
Agent consolidated financial statements prepared in a
consolidating manner, showing Borrowers' financial condition, the
results of operations, a balance sheet and related statements of
income, shareholders' equity, and changes in cash flows and
financial position for the year then ended. Such annual
consolidated financial statements, prepared in a consolidating
manner, shall be audited in accordance with generally accepted
auditing standards by an independent certified public accountant
reasonably acceptable to Agent and shall be prepared and
presented in accordance with GAAP consistently applied.
8.8 Management Reports. Each Borrower shall furnish to
Agent promptly upon receipt copies of all management letters and
any other material reports provided by Borrowers' independent
accountants. Each Borrower hereby authorizes Agent to
communicate directly with Borrowers' independent accountants to
discuss each Borrower's financial statements.
8.9 Comparisons to Financials; Certificates. With each
monthly or annual financial statement submitted by Borrowers to
Agent under Sections 8.5 and 8.7, each Borrower will accompany
each of such financial statements with: (i) a comparison prepared
by each Borrower of the projected financial position and results
of operations of a Borrower provided for in Section 8.6 with the
actual financial position and results of operations of Borrowers
for the applicable period and an explanation of any material
variations between them; and (ii) a comparison prepared by each
Borrower between actual calculated results for the applicable
period and the covenanted results for each of the Financial
Covenants (as defined in Section 10.29). Each Borrower shall
also furnish Agent together with all materials required pursuant
to Section 8.5, Section 8.6, and Section 8.7, a certificate
signed by the chief financial officer of a Borrower in the form
of Exhibit 8.9.
8.10 Tax Returns; Consolidated Information; Additional
Information. Promptly when available and in any event not later
than 10 Business Days after the filing of its tax returns with
each applicable Governmental Authority, Borrowers shall deliver
to Agent a copy of all tax returns and schedules filed by
Borrowers in respect of each fiscal year ending on and after June
30, 1996. Each Borrower shall furnish all other information as
Agent may reasonably request from time to time.
9. WARRANTIES, REPRESENTATIONS AND COVENANTS. In order to
induce Agent and Lenders to enter into this Agreement and to
induce Lenders to make Loans hereunder, each Borrower warrants,
represents and covenants that, as of the date hereof, any date
upon which a Loan is made hereunder, and until the Obligations
are fully paid, performed and satisfied, the representations,
warranties and covenants set forth below are and shall remain
true.
9.1 Corporate Status. Each Borrower (i) is duly organized
and is and shall remain validly existing and in good standing
under the laws of the State of its respective incorporation as
shown on Exhibit 9.1, and is and shall remain qualified to do
business as a foreign corporation under the laws of the States
listed on Exhibit 9.1 and of each other jurisdiction in which the
failure to be so qualified and in good standing would have a
Material Adverse Effect, and (ii) has and shall maintain all
requisite power and authority, corporate or otherwise, to conduct
its business, to own its property, to execute, deliver and
perform all of its obligations under this Agreement and each of
the other Loan Documents, and to grant the Liens on the Loan
Collateral.
9.2 Due Authorization; Validity. The signing and delivery
of the Loan Documents, the performance by each Borrower of its
Obligations under the Loan Documents and the grant of the Liens
on or security interests in the Loan Collateral to Agent have
been duly authorized by all requisite corporate or other action
of each Borrower. This Agreement and each of the other Loan
Documents to which they are a party have been duly executed and
delivered by each Borrower, and each will constitute, upon the
due execution and delivery thereof, the legal, valid, and binding
obligations of each Borrower enforceable in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally or by equitable principles of general
applicability (regardless of whether considered in a proceeding
at law or in equity).
9.3 No Violation. The execution, delivery and performance
by each Borrower of this Agreement and the other Loan Documents
to which they are a party, and the grant of the Liens on or
security interests in the Loan Collateral to Agent, does not and
will not (i) constitute a violation of any applicable law, (ii)
constitute a breach of any provision contained in any Borrower's
Articles or Certificate of Incorporation or By-Laws or contained
in any order of any court or other Governmental Authority or in
any Applicable Agreement, or (iii) result in the creation or
imposition of any Lien on any of any Borrower's properties (other
than in favor of Agent hereunder).
9.4 Use of Loan Proceeds. Each Borrower's uses of the
proceeds of the Loans made by Agent to any Borrower pursuant to
this Agreement are, and will continue to be, legal and proper
corporate uses (duly authorized by each Borrower's Board of
Directors). Such uses do not and shall not violate any
applicable laws or statutes as in effect as of the date hereof or
hereafter. The Loans are not and shall not be secured, directly
or indirectly, by any stock for the purpose of purchasing or
carrying any margin stock or for any purpose which would violate
either Regulation U, 12 C.F.R. Part 221, or Regulation X, 12
C.F.R. Part 224, promulgated by the Board of Governors of the
Federal Reserve System.
9.5 Management; Ownership of Assets; Licenses; Patents.
Each Borrower employs and shall continue to employ active, full-
time, professional management adequate to handle its affairs, and
each Borrower has, and will continue to have, adequate employees,
assets, governmental approvals, licenses, patents, copyrights,
trademarks and trade names to continue to conduct its business as
heretofore and hereafter conducted by it, and all such licenses,
patents, copyrights, trademarks and trade names existing as of
the Closing Date are described in Exhibit 9.5.
9.6 Indebtedness. Except for (i) Indebtedness disclosed in
the Financials, (ii) the Obligations, (iii) Indebtedness (a)
which is unsecured, (b) which is not for borrowed money, (c)
which has been incurred in the ordinary course of business, (d)
which is not otherwise prohibited under any provision of this
Agreement, and (e) the nonpayment of or other default under which
would not have a Material Adverse Effect, and (iv) other
Indebtedness permitted to be incurred or paid by a Borrower
pursuant to Section 10.10, no Borrower has any Indebtedness.
Except as otherwise set forth or reflected in the Financials, no
Borrower has guaranteed the obligations of any Person (except by
endorsement of negotiable instruments payable at sight for
deposit or collection or similar banking transactions in the
usual course of a Borrower's business).
9.7 Title to Property; No Liens. Each Borrower has (i)
good and indefeasible title to, and ownership of, all of its
personal property, including the Collateral and (ii) a validly
existing leasehold estate in all real property used in its
business, except the real property located at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in which Sabreliner owns good and
marketable fee simple title, in each case free and clear of all
Liens except to the extent of Permitted Liens.
9.8 Restrictions; Labor Disputes; Labor Contracts. Except
as described in Exhibit 9.8, no Borrower is a party or subject to
any charge, corporate restriction, judgment, decree or order, for
which any Borrower's compliance or non-compliance could have a
Material Adverse Effect. Except as described on Exhibit 9.8, no
Borrower is (i) a party to any written employment contract or
labor contract or (ii) the subject of any labor dispute.
9.9 No Violation of Law. Except as described on Exhibit
9.9, no Borrower is in violation of any applicable statute,
regulation or ordinance of any Governmental Authority (including,
but not by way of limitation, any such statute, regulation or
ordinance relating to ecology, human health or the environment),
which violation could reasonably be expected to have a Material
Adverse Effect. All Inventory manufactured and produced by each
Borrower has been manufactured and produced in compliance with
all applicable requirements of Sections 6, 7 and 12 of the Fair
Labor Standards Act, as amended, and all regulations and orders
of the United States Department of Labor.
9.10 Hazardous Substances. Except as described on Exhibit
9.10, (i) no investigations, inquiries, orders, hearings, actions
or other proceedings by or before any court or governmental
agency are pending or, to the knowledge of any Borrower,
threatened in connection with any Environmental Activity; (ii) to
the best knowledge of any Borrower, no asbestos has been
integrated into any Borrower's property, or any component thereof
in such manner or quantity as may reasonably be expected to or in
fact does pose a threat to human health or the value of any
Borrower's property; (iii) the Use of any Borrower's property
will not result in any Environmental Activity in material
violation of any applicable Environmental Requirements; (iv) to
the best knowledge of any Borrower, no occurrence or condition on
any real property adjoining any of any Borrower's property exists
which could cause any of a Borrower's property or any part
thereof to be subject to any restrictions on ownership,
occupancy, transferability or operation under any Environmental
Requirements; (vi) to the best knowledge of any Borrower, none of
any Borrower's property has been used for the disposal of
Hazardous Substances or has been the site of any Release in a
reportable quantity (as defined under applicable Environmental
Law) of Hazardous Substances; (vii) to the best knowledge of any
Borrower, none of any Borrower's business operations have
contaminated lands, waters or other property of others with
Hazardous Substances; (viii) to the best knowledge of any
Borrower, no underground or above ground storage tank (regardless
of contents) has been in the past, or is now, located on, at or
beneath any of a Borrower's property; and (ix) to the best
knowledge of any Borrower, none of any Borrower's property has
been used for the production, treatment, storage, generation,
disposal or Release of any Hazardous Substance other than in
material accordance with applicable Environmental Law, except to
the extent that any material non-compliance with applicable
Environmental Law arising from the past production, treatment,
storage, generation, disposal or Release of any Hazardous
Substance has been cured in accordance with applicable
Environmental Law.
9.11 Absence of Default. Except as described on Exhibit
9.11, no Borrower is in default under any Applicable Agreement
and has not received any notice of breach, termination or
acceleration or demand for adequate assurances under any
Applicable Agreement, which default, breach, termination,
acceleration or demand has, or can reasonably be expected to
have, a Material Adverse Effect.
9.12 Accuracy of Financials; No Material Changes. The
Financials have been prepared in accordance with GAAP
consistently applied and fairly present in all material respects
each Borrower's assets, liabilities and financial condition and
results of operations and those of such other Persons described
therein as of the date thereof (subject in each case to normal
year-end adjustments and the lack of footnotes in the case of
interim or proforma Financials). There are no omissions from the
Financials or other facts or circumstances not reflected in the
Financials which are or may be material, and there has been no
material and adverse change in any Borrower's assets, liabilities
or financial condition since the date of the most recent
Financials nor has there been any material damage to or loss of
any of any Borrower's assets or properties since such date. Each
Borrower's outstanding advances to any Person do not constitute
any equity or long term investment in any Person which is not
reflected in the Financials.
9.13 Pension Plans. Except as described on Exhibit 9.13,
neither any Borrower nor any Controlled Group member has ever
sponsored, maintained, or contributed (or become obligated to
sponsor, maintain, or contribute) to a Pension Plan subject to
Title IV of ERISA. To any Borrower's knowledge, no "prohibited
transaction," as defined by the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") for which no exemption
exists under Sections 407 or 408 of ERISA or Sections 4975(c)(2)
or 4975(d) of the Internal Revenue Code, has occurred or is
continuing as to any Pension Plan of any Borrower or any
Controlled Group member, which poses a threat of the imposition
of taxes or penalties against such Pension Plans (or trusts
related thereto), the imposition or payment of which could have a
Material Adverse Effect. Each Pension Plan that is intended to
meet the requirements of qualified pension benefit plans under
Section 401(a) of the Internal Revenue Code has received a
favorable determination letter to that effect under the Internal
Revenue Code or application for such determination letter has
been made with respect thereto, and neither any Borrower nor, to
any Borrower's knowledge (after making due inquiries), any
Controlled Group member has violated such requirements with
respect to any Pension Plan.
9.14 Taxes and Other Charges. Each Borrower has filed all
federal, state and local tax returns and other reports which it
is required by law to file. Each Borrower has paid all taxes,
assessments and other similar charges that are due and payable
except for any such taxes, assessments or charges which are being
contested in good faith in accordance with the terms of Section
10.9. Each Borrower has withheld all employee and similar taxes
which it is required by law to withhold and has maintained
adequate reserves for the payment of all taxes and similar
charges. Except as set forth in Exhibit 9.14, no tax Liens have
been filed with respect to any Borrower and, to the knowledge of
each Borrower (after due inquiry), no claims are being asserted
with respect to any such taxes, assessments or charges (and
Borrower is not aware of any reasonable basis for any such
claims).
9.15 No Litigation. Except as set forth in Exhibit 9.15,
there is not any litigation, action or proceeding pending or, to
any Borrower's knowledge (after due inquiry), threatened, against
any Borrower, which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.
9.16 No Brokerage Fee. No brokerage, finder's or similar
fee or commission is due to any Person by reason of any Borrower
entering into this Agreement or by reason of any of the
transactions contemplated hereby, and each Borrower shall
indemnify and hold Agent and Lenders harmless from all such fees
and commissions.
9.17 Affiliates. All Persons who are Borrower's Affiliates
are identified in Exhibit 9.17. Other than Midcoast, Little-Rock,
Sabreliner International Corporation, Sabreliner Realty, Inc.,
Midcoast Realty, Inc., SabreTech, Dimension, and Turbotech,
Sabreliner has no Subsidiaries. Other than Little Rock, Midcoast
has no Subsidiaries. None of Little Rock, Sabreliner
International Corporation, SabreTech, Dimension, or Turbotech has
any Subsidiaries.
9.18 Capitalization; Warrants. Exhibit 9.18 sets forth,
with respect to each Borrower, the number of shares of capital
stock which are authorized and the number of such shares which
are outstanding. Each outstanding share of capital stock is a
common share and is duly authorized, validly issued, fully paid
and nonassessable. Set forth in Exhibit 9.18 is a complete and
accurate list of all Persons who are record and beneficial owners
of the capital stock of Borrowers. All warrants, subscriptions,
options, instruments and agreements under which any shares of
capital stock of any Borrower are or may be redeemed, retired,
encumbered, bought, sold or issued are described in Exhibit 9.18.
9.19 Noncompetition Agreements. No Borrower is subject to
any contract or agreement containing a covenant not to compete in
any line of business with any Person.
9.20 Deposit and Other Accounts. All of the accounts
maintained by any Borrower with any bank, brokerage house or
other financial institution are set forth in Exhibit 9.20, and
none of such other accounts (other than accounts designated as
"Payroll Accounts" or "Disbursement Accounts") is subject to
withdrawal other than by transfers of amounts therein to the
Locked Boxes, a Transfer Account, a Special Account, or a Blocked
Account.
9.21 Solvency. Each Borrower and each of its Affiliates
(other than a Borrower's officers and directors and, in the case
of Sabreliner, its officers, directors, or shareholders), as the
case may be, will be Solvent after (i) receipt and application of
the Loans in accordance with the terms of this Agreement, (ii)
the execution and delivery of this Agreement and the other Loan
Documents to which any of them is a party, and (iii) the filing
of any financing statements or other perfecting notices or
actions in connection with this Agreement.
9.22 Full Disclosure. The representations and warranties
made by Borrowers or their Affiliates in this Agreement, any
other Loan Document, or in any other document furnished from time
to time in connection herewith or therewith do not contain and
will not contain, at the time the representations and warranties
are made or such document furnished, any untrue statement of a
material fact and do not omit and will not omit to state any
material fact necessary to make the statements herein or therein
not misleading. There is no fact known to any Borrower or any of
its Affiliates which is not set forth in the Loan Documents which
could reasonably be expected to have a Material Adverse Effect.
9.23 Casualties. Except as set forth on Exhibit 9.23,
neither the business nor the properties of any Borrower are
affected by any fire, explosion, accident, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty loss (whether or not covered by insurance) which has any
Material Adverse Effect.
9.24 Leases. Except as listed on Exhibit 9.24, no Borrower
is a party to any lease, assignment, sublease, or other agreement
relating to any real property or leasehold interest in real
property or any material equipment or other material personal
property. Exhibit 9.24 correctly sets forth each lease,
assignment, sublease and other agreement, existing as of the
Closing Date to which any Borrower is a party relating to (i) any
real property or leasehold interest in real property or (ii) any
material equipment or other material personal property.
9.25 Insurance Policies. Exhibit 9.25 correctly sets forth
all of the insurance policies maintained by each Borrower,
including the carriers thereof, and the types of coverage and
insured amounts covered thereby.
9.26 Consents. No authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority,
regulatory body, or any other Person is required for the due
execution, delivery and performance by any Borrower of any Loan
Document to which it is or will be a party, other than notices
under the Assignment of Claims Law.
9.27 Updating Representations and Warranties. To the extent
necessary to cause the representations and warranties set forth
in Section 9 to remain true, complete and accurate as of the date
hereof and as of each day on which a Loan is made hereunder, each
Borrower shall update in writing any Exhibits provided for in
Section 9 promptly upon learning of any circumstance which has
the effect of making any such representation or warranty
contained in Section 9 untrue or misleading. The requirement of
each Borrower to update any Exhibit provided for herein is not,
and may not be construed to be, a cure of any Event of Default
occurring prior to any such update or existing at the time of any
such update without the written waiver of such Event of Default
by Required Lenders; provided, however, that no Event of Default
shall arise or be deemed to have arisen with respect to any event
occurring after the date hereof which is the subject of any
update of any Exhibit, other than events which constitute a
breach or other violation of a covenant set forth in Section 10
or an Event of Default set forth in Section 13.1 (other than
Section 13.1(i)(e)(i)), so long as Borrowers shall have provided
such an update to Agent and Lenders on or prior to the earlier of
(i) 10 days after the occurrence of any such event and (ii) the
advance by Lenders of Revolving Loans, net of repayments of
Revolving Loans, in an aggregate amount in excess of $2,000,000
or the request by any Borrower for the issuance by Issuing Lender
of a Letter of Credit.
10. COVENANTS. Until the Obligations are fully paid, performed
and satisfied and this Agreement is terminated, each Borrower
will observe, perform, and comply with each of the covenants set
forth below in this Section 10.
10.1 Payment of Certain Expenses. Each Borrower will pay to
Agent immediately any and all fees, costs and expenses which
Agent pays to a bank or other similar institution arising out of
or in connection with (i) the forwarding to any Borrower or any
other Person on any Borrower's behalf, by Agent of proceeds of
Loans made by Lenders to any Borrower pursuant to this Agreement,
and (ii) the depositing for collection by Agent of any check or
item of payment received or delivered to Agent on account of the
Obligations. Each Borrower will reimburse Agent, immediately,
for any claims asserted by any bank at which a Blocked Account is
established for the deposit of proceeds of the Loan Collateral in
connection with such Blocked Account or any returned or
uncollected checks received by such bank as proceeds of the Loan
Collateral.
10.2 Notice of Litigation. Each Borrower will notify Agent
in writing, promptly on a Borrower's learning thereof, of any
litigation, suit or administrative proceeding (i) if any
Borrower, as of any date, has pending any claims, suits,
proceedings or litigation which seeks more than $1,000,000 in the
aggregate or (ii) that seeks (a) more than $250,000 in monetary
damages, fines or civil awards or (b) any relief other than a
monetary award (e.g., criminal sanctions or an injunction),
whether any Borrower considers any of such matters to be covered
by insurance or to have no Material Adverse Effect; provided,
however that a Borrower will not be required to give Agent such
notice with respect to corrosion claims which are covered by
insurance and which the Borrower does not reasonably expect will
have a Material Adverse Effect.
10.3 Notice of ERISA Events. Each Borrower will notify
Agent in writing (i) within 30 days of the adoption by any
Borrower or any Controlled Group member of any Pension Plan
subject to Title IV of ERISA; (ii) within 30 days of the
occurrence of any Reportable Event, and (iii) 90 days prior to
any termination, partial termination or merger of a Pension Plan
subject to Title IV of ERISA or a transfer of assets from a
Pension Plan subject to Title IV of ERISA.
10.4 Notice of Labor Disputes. Each Borrower will notify
Agent in writing (i), promptly on a Borrower's learning thereof,
of (a) any labor dispute to which any Borrower may become a party
and which may have a Material Adverse Effect or (b) any strikes,
walkouts, or lockouts relating to any of its plants or other
facilities, and (iii) the entering into of any labor contract
relating to any of its plants or other facilities.
10.5 Compliance with Laws. Each Borrower will comply with
the requirements of all applicable laws, statutes, regulations,
rules or ordinances of any Governmental Authority, the
noncompliance with which would have a Material Adverse Effect.
10.6 Notice of Violations of Law, Tax Assessments. Each
Borrower will notify Agent in writing, promptly on a Borrower's
learning thereof, of any violation of any law, statute,
regulation, rule or ordinance of any Governmental Authority, and
of the imposition of any federal, state or local tax withholding
or assessment, applicable to any Borrower, the violation or
imposition of which would have a Material Adverse Effect. Each
Borrower will (i) provide Agent with copies of all material
communications between a Borrower and any governmental agencies
or other authorities which relate to Environmental Activities,
Environmental Requirements, or Hazardous Substances affecting
Borrowers; and (ii) notify Agent immediately after obtaining
knowledge of a Release or alleged Release in a reportable
quantity (as defined under applicable Environmental Law) of any
Hazardous Substance on, in, under or affecting any Borrower's
property or any surrounding area, and any material noncompliance
with any Environmental Requirement.
10.7 Notice of Certain Matters Under Applicable Agreements.
Each Borrower will notify Agent in writing (i) within three
Business Days after the earlier of when a Borrower learns or is
notified of the occurrence, of (a) any material breach by any
Borrower of, a notice of termination or acceleration or demand
for adequate assurances under, any Applicable Agreement (other
than the Senior Notes Indenture or any of the Senior Notes) or
(b) any Senior Notes Default, and (ii) of any modification,
waiver or amendment of any terms or provisions under, or
applicable to, any of the Senior Notes or the Senior Notes
Indenture within three Business Days after the applicable
modification, waiver or amendment of any of the Senior Notes or
the Senior Notes Indenture, subject to Section 10.16, and will
promptly provide copies thereof to Agent.
10.8 Notice of Customer Defaults. Each Borrower will notify
Agent in writing, promptly upon the later of the occurrence
thereof and Borrower's obtaining knowledge thereof, of any
default by any obligor under any note or other evidence of debt
payable to any Borrower in an aggregate amount in excess of
$25,000 or of anything which could reasonably be expected to have
a material adverse effect on the credit of a customer of a
Borrower.
10.9 Taxes and Charges. Each Borrower will (i) file all
federal, state and local tax returns and other reports which it
is required by law to file, (ii) pay all taxes, assessments and
other similar charges that are due and payable, (iii) withhold
all employee and similar taxes which it is required by law to
withhold, and (iv) maintain adequate reserves for the payment of
all taxes and similar charges; provided, however, that no such
taxes, assessments or charges need be paid during such period as
they are being contested in good faith by a Borrower, in
appropriate proceedings promptly commenced and diligently
prosecuted, if adequate reserves in accordance with GAAP have
been set aside on a Borrower's books, and the continuance of such
contest does not (a) result in any part of the Loan Collateral or
any other property of Borrower being made the subject of (1) any
proceeding in foreclosure, (2) any levy or execution (which shall
not have been stayed or dismissed), or (3) any seizure or other
loss and (b) prevent Agent from having a perfected first priority
security interest in the Loan Collateral or with respect to
future advances made hereunder; and provided, further, that a
Borrower will promptly pay such tax, assessment or charge when
the dispute is finally settled.
10.10 Indebtedness; Guaranties. (i) Other than the
Obligations and as set forth in Exhibit 10.10, no Borrower will
incur any Indebtedness other than:
(a) Indebtedness reflected in the Financials so
long as such Indebtedness shall not be secured by any of the Loan
Collateral, which Indebtedness includes the Senior Notes and any
guarantees thereof;
(b) Indebtedness (1) which is unsecured, (2)
which is not for borrowed money, or the issuance of any letter of
credit, acceptance transaction, or similar credit instrument or
facility (exclusive of Interest Rate Agreements), (3) which is
incurred in the ordinary course of business, (4) which is not
otherwise prohibited under any provision of this Agreement, and
(5) for which the incurrence of which would not have a Material
Adverse Effect;
(c) Indebtedness in respect of taxes, assessments
or governmental charges to the extent that payment thereof shall
not at the time be required to be made in accordance with the
provisions of Section 10.9;
(d) Indebtedness under capitalized leases or
purchase money financing if the total amount of such Indebtedness
during any period does not exceed the maximum amount permitted
during such period for capital expenditures pursuant to Section 5
of Exhibit 10.29; or
(e) Indebtedness in respect of judgments or
awards which (1) have been vacated, discharged or stayed within
10 days of the entry thereof or have been in force for less than
the applicable appeal period so long as execution is not levied
thereunder (or in respect of which (A) a Borrower shall at the
time in good faith be prosecuting an appeal or proceedings for
review and (B) a stay of execution shall have been obtained
pending such appeal or review), and (2) (A) are not, in the
aggregate, in an amount in excess of $750,000 (and individually
in excess of $150,000) over any available insurance coverage, as
determined by Agent in its discretion exercised in good faith, in
effect to satisfy such judgments or award for which the insurer
has admitted in writing its liability for the full amount thereof
and (B) do not have a Material Adverse Effect;
(f) Refinancing Indebtedness, as defined in the
Senior Notes Indenture, which is unsecured;
(g) Indebtedness which is unsecured and in
respect of performance, completion, guarantee, surety and similar
bonds provided by Borrowers in the ordinary course of business;
(h) Indebtedness consisting of obligations in
respect of purchase price adjustments, guarantees or indemnities
in connection with the acquisition or disposition of assets;
(i) Interest Rate Agreements covering
Indebtedness (which Indebtedness (I) bears interest at
fluctuating interest rates and (II) is otherwise permitted to be
incurred under this Section 10.10), in each case, only if the
notional principal amount of such Interest Rate Agreement does
not exceed the principal amount of the Indebtedness to which such
Interest Rate Agreement relates;
(j) Indebtedness represented by foreign currency
exchange agreements; provided that (I) such agreements are
related to contracts with customers entered into in the ordinary
course of business; (II) such agreements cover an amount of
foreign currency not in excess of the amount receivable under
such customer contracts; and (III) such agreements are entered
into in good faith for the purpose of protecting a Borrower
against changes in foreign exchange rates and not for
speculation;
(k) Indebtedness of a Borrower to and held by
another Borrower that is unsecured and subordinated in right of
payment to the Obligations; provided, however, that the terms of
such subordination shall prohibit any payment in respect of such
Indebtedness (I) upon distribution of any assets of a Borrower or
in a bankruptcy or similar proceeding relating to a Borrower and
(II) during the continuance of an Event of Default or an event
which, with the giving of notice or the passage of time would be
an Event of Default;
(l) Any Sale Leaseback Transaction, as defined in
the Senior Notes Indenture, which is permitted under the terms of
the Senior Notes Indenture, without regard to any modification,
waiver or amendment of the Senior Notes Indenture as to which
Required Lenders do not give prior consent;
(m) To the extent permitted by the Senior Notes
Indenture (without regard to any modification, waiver or
amendment of the Senior Notes Indenture as to which Required
Lenders do not give prior consent), Indebtedness of any
Subsidiary issued and outstanding on or prior to the date on
which such Subsidiary was acquired by a Borrower (other than
Indebtedness issued as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate,
the transaction or series of related transactions pursuant to
which such Subsidiary became a Subsidiary or was acquired by a
Borrower or otherwise in contemplation thereof), provided that
such Indebtedness, and the security therefor, does not prevent
the acquisition of the Subsidiary from being a Permitted
Acquisition; and
(n) in addition to any other Indebtedness, up to
$5,000,000 aggregate principal amount of Indebtedness at any one
time outstanding, so long as such Indebtedness is not secured by
any of the Loan Collateral;
provided, that no Indebtedness otherwise permitted under this
Section 10.10 to be incurred shall be permitted to be incurred
if, after giving effect to the incurrence thereof, any Event of
Default shall have occurred and be continuing.
(ii) No Borrower will guaranty or enter into any
agreements of guaranty or indemnity of the obligations of any
Person other than another Borrower (except by endorsement of
negotiable instruments payable at sight for deposit or collection
or similar banking transactions in the usual course of a
Borrower's business), except to the extent that guaranty or
indemnity, and the Indebtedness relative to the guaranty or
indemnity, are both (a) permitted under the provisions of Section
10.10(i) and (b) permitted under the Senior Notes Indenture
(without regard to any modification, waiver or amendment of the
Senior Notes Indenture as to which Required Lenders do not give
prior consent).
10.11 Restrictions. No Borrower will become a party or
subject to any charge, corporate restriction, judgment, decree or
order or enter into any contract, agreement or arrangement,
which, in any case, could have a Material Adverse Effect.
10.12 Pension Plans. No Borrower will permit any
Reportable Event or "prohibited transaction" (as defined by
ERISA) for which no exemption exists under Sections 407 or 408 of
ERISA or Sections 4975(c)(2) or 4975(d) of the Internal Revenue
Code to occur or to continue as to any Pension Plan of any
Borrower or any Controlled Group member, which poses a threat of
(i) termination of such Pension Plans (or trusts related
thereto), which termination could have a Material Adverse Effect
or (ii) the imposition of taxes or penalties against such Pension
Plans (or trusts related thereto), the imposition or payment of
which could have a Material Adverse Effect. With respect to each
Pension Plan that is intended to meet the requirements of
qualified pension benefit plans under Section 401(a) of the
Internal Revenue Code, each Borrower and the applicable
Controlled Group members shall continue to maintain the qualified
status of such Pension Plans, and all contributions to Pension
Plans which each Borrower or any member of the Controlled Group
is obligated to make shall be timely made when due, unless the
failure to do so would not have a Material Adverse Effect. No
Borrower will, and each Borrower will not permit any Controlled
Group member to, incur any liability to the Pension Benefit
Guaranty Corporation, other than the liability for premium
payments under Section 4007 of ERISA, in connection with any
Pension Plan, the incurrence of which could have a Materially
Adverse Effect.
10.13 Solvency. Each Borrower will continue to be, and
will cause its Affiliates (other than a Borrower's officers and
directors and, in the case of Sabreliner, its officers,
directors, or shareholders) to continue to be, Solvent.
10.14 Property Insurance. Each Borrower will insure all
of its real and personal property, including the Loan Collateral,
against loss or damage by fire, theft, burglary, pilferage, loss
in transit and such other hazards as Agent shall specify in
amounts and under policies by insurers reasonably acceptable to
Required Lenders. The policies or a certificate thereof signed
by the insurer evidencing that such insurance coverage is in
effect for periods of not less than one year shall be delivered
to Agent within 5 Business Days after the issuance of the
policies to Borrower and after each renewal thereof. All
premiums thereon shall be paid when due so as to keep such
insurance in full force and effect at all times. Each such
policy shall name Agent and Lenders (and no other party) as loss
payee with respect to Inventory under a clause acceptable to
Agent and shall provide that such policy may not be amended or
canceled without 30 days' prior written notice to Agent and
Lenders. If a Borrower fails to do so, Agent may (but shall not
be required to) procure such insurance and charge the cost to
Borrowers' account as part of the Obligations payable on demand
and secured by the Loan Collateral.
10.15 Liability Insurance. Each Borrower will, at all
times, maintain in full force and effect such liability insurance
with respect to its activities and business interruption, product
liability and other insurance as may be reasonably required by
Required Lenders, such insurance to be provided by insurer(s)
reasonably acceptable to Required Lenders. If requested by
Agent, such insurance shall name Agent and Lenders (and no other
party) as an additional insured containing a severability of
interest/cross-liability endorsement acceptable to Agent.
10.16 Changes to Senior Notes Documents. Without the
prior consent of Required Lenders, no Borrower may directly or
indirectly permit the modification, waiver or amendment of (i)
any of the terms of payment (including, but not limited to,
interest or premium provisions) of or applicable to, or the
provisions governing the priority of or security for the payment
and performance of the obligations under or applicable to, or
acceleration provisions of or applicable to, the Senior Notes
Indenture or any of the Senior Notes or (ii) any other material
term of or applicable to the Senior Notes Indenture or any of the
Senior Notes. For purposes of this Section 10.16, "material"
means any modification, waiver, or amendment of the Senior Notes
Indenture or any of the Senior Notes which, in Agent's and
Lenders' judgment exercised in good faith, could (a) adversely
affect Agent's or Lenders' rights or remedies under the Loan
Documents, the value of the Loan Collateral, or Agent's and
Lenders' security interest in or other Lien on the Loan
Collateral (including the priority of Agent's or Lenders'
interests) or (b) create or result in an Event of Default.
10.17 Merger. No Borrower, without the prior consent of
Required Lenders, may merge or consolidate or be merged or
consolidated with or into any other corporation (other than with
or into another Borrower or in a Permitted Acquisition), or
otherwise reorganize, liquidate or wind-up or dissolve itself.
No Borrower will (i) purchase or otherwise acquire (a) all or
substantially all of the assets of any Person or (b) any
partnership, joint venture or limited liability company interest
in or with any Person or (ii) purchase the securities of, create,
form or invest in any Subsidiary without the prior written
consent of Required Lenders, except that, so long as an Event of
Default does not then exist and is not created thereby, a
Borrower may make Permitted Acquisitions. Borrowers will sign
all amendments to the Loan Documents which are required by Agent
in connection with any Permitted Acquisition.
10.18 Investments. Other than as disclosed in Exhibit
10.18, no Borrower will invest in or purchase any stock or
securities of any Person except (i) any evidence of indebtedness
issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of
America is pledged in support thereof); (ii) certificates of
deposit or acceptances of any financial institution that is a
member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000;
(iii) commercial paper issued by a corporation that is not an
Affiliate of a Borrower and is organized under the laws of any
state of the United States or the District of Columbia and rated
at least A by Standard & Poor's or at least P-1 by ▇▇▇▇▇'▇; (iv)
as permitted by Section 10.17; and (v) investments in or
purchases of any stock or securities of any Person, which Person
is not, and does not thereby become, a Subsidiary, in an
aggregate amount not to exceed $7,500,000 at any one time
outstanding.
10.19 Distributions; Loans; Fees.
10.19.1 Sabreliner Restrictions. Sabreliner will not
directly or indirectly (i) declare or pay cash or stock
distributions or dividends upon any of its stock (including any
preferred stock) now or hereafter issued by Sabreliner, (ii) make
any distributions of Sabreliner's assets, (iii) incur, permit, or
make any loans, advances or extensions of credit to any Person,
including any of Sabreliner's Affiliates, officers or employees,
or (iv) pay any consulting, management or directors' fees to or
for the account of any shareholder, director, or officer of
Sabreliner except: (a) that Sabreliner may take the actions
described in the foregoing clauses 10.19.1(i) through (iv) with
the prior consent of Required Lenders; (b) that Sabreliner may
take the actions described in the foregoing clause 10.19.1(i) to
the extent permitted or not prohibited by Section 4.03 of the
Senior Notes Indenture (without regard to any modification,
waiver or amendment of the Senior Notes Indenture as to which
Required Lenders do not give prior consent); (c) that Sabreliner
may make cash loans, cash advances, or cash extensions of credit
to any Subsidiary of Sabreliner ("Subsidiary Loans") if each of
the following conditions is met: (1) an Event of Default has not
occurred or is continuing and (2) all Subsidiary Loans to all
Subsidiaries of Sabreliner which are not a Borrower or an
Additional Borrower do not exceed, as of any date, $2,500,000 in
the aggregate; and (d) as permitted by Section 10.22.
10.19.2 Other Borrowers Restrictions. None of
Midcoast, Little Rock, SabreTech, Dimension, Turbotech or any
Additional Borrower ("Other Borrowers") will directly or
indirectly (i) transfer or make any distributions of any of its
properties or assets except to Sabreliner (exclusive of any Loan
Collateral), (ii) incur, permit, or make any loans, advances or
extensions of credit to any Person, including any of any Other
Borrower's Affiliates, officers or employees, or (iii) pay any
consulting, management or directors' fees to or for the account
of any shareholder, director, or officer of any Other Borrower
except that (a) any Other Borrower may take the actions described
in the foregoing clauses 10.19.2(i) through (iii) with the prior
consent of Required Lenders; or (b) any Other Borrower may make
any loans or advances to Sabreliner; or (c) as permitted by
Section 10.22.
10.20 Stock Rights. No Borrower will (i) change the
rights or obligations associated with, or the terms of, any class
of stock now issued by a Borrower or (ii) issue any new class of
stock of a Borrower without the prior written consent of Required
Lenders.
10.21 Capital Structure; Fiscal Year. No Borrower will
make any change (i) in its capital structure or (ii) in any of
its business objectives, purposes and operations which might in
any way have a Material Adverse Effect. No Borrower will change
its fiscal year without the prior consent of Required Lenders,
which consent will not be unreasonably withheld.
10.22 Affiliate Transactions; Management Fees. No
Borrower will enter into, or be a party to, any transaction with
any of a Borrower's Affiliates except (i) those transactions
meeting the following conditions: transactions (a) in the
ordinary course of business pursuant to the reasonable
requirements of a Borrower's business and (b) on fair and
reasonable terms which are fully disclosed to Agent and are no
less favorable to a Borrower than a Borrower could obtain in a
comparable arm's length transaction with a Person who is not any
Borrower's Affiliate and (ii) as permitted by Section 10.19. No
Borrower will pay any consulting, management or directors' fees
to or for the account of any shareholder, director, or officer of
any Borrower, other than in the ordinary course of business as
presently conducted.
10.23 Operating Account. At all times until the
Obligations are fully paid and satisfied, each Borrower will
maintain its primary operating account with Agent.
10.24 Compensating Balance. Except at such times that
Sabreliner is using Agent's investment management services for
investing Sabreliner's excess cash, Borrowers shall maintain a
compensating balance in an account with Agent in an aggregate
amount not less than $1,000,000; provided that Borrowers may use
the cash in such account to the extent necessary to cure any
Deficiency.
10.25 Sale of Assets. No Borrower will sell, lease or
otherwise dispose of or transfer, whether by sale, merger,
consolidation, liquidation, dissolution, or otherwise, any of its
assets, including the Loan Collateral except (i) the transfers of
any properties or assets of any Other Borrower (as defined in
Section 10.19) to Sabreliner (exclusive of Loan Collateral); (ii)
the sale of inventory in the ordinary course of business;
however, a sale in the ordinary course of business will not
include a transfer in total or partial satisfaction of
Indebtedness; (iii) the sale of equipment as permitted by clauses
(ii) or (iii) in the definition of Permitted Asset Sale in the
Senior Notes Indenture (without regard to any modification,
waiver or amendment of the Senior Notes Indenture as to which
Required Lenders do not give prior consent); and (iv) the sale of
the fixed base operations facility at ▇▇▇▇▇▇▇ Field to the City
of St. Louis. All of the proceeds from any disposition of any
equipment will be delivered to Agent to be applied by Agent to
the repayment of the Obligations in any order thereof Agent may
elect and, upon satisfaction of the Obligations, may be applied
in accordance with the Senior Notes Indenture.
10.26 Intervention by Governmental Authority. No
Borrower will permit to occur any seizure by, or the vesting of
or intervention by or under the jurisdiction of, any Governmental
Authority by which any Borrower's management is displaced or its
authority in the conduct of its business is materially curtailed.
10.27 Levy Against Loan Collateral. No Borrower will
permit (i) any attachment or distraint of any of the Loan
Collateral to occur or (ii) any of the Loan Collateral to become
subject, at any time, to any mandatory court order or other legal
process.
10.28 Judgments. No Borrower will permit any judgment
or award to be rendered against it (i) (a) in excess of $100,000
(or any number of judgments in excess of $250,000 in the
aggregate) over any available insurance coverage, as determined
by Agent in its discretion exercised in good faith, in effect to
satisfy such judgments or award for which the insurer has
admitted in writing its liability for the full amount thereof and
(b) which has a Material Adverse Effect, and (ii) which have not
been vacated, discharged or stayed within 30 days of the entry
thereof.
10.29 Financial Covenants. Borrowers will observe,
perform and comply with all of the financial covenants contained
in Exhibit 10.29 (the "Financial Covenants").
10.30 No Prepayment of Senior Notes. Sabreliner will
not directly or indirectly prepay, in whole or in part, any
principal of, or premium or interest on, any of the Senior Notes,
except as may be required under the Senior Notes Indenture.
11. TERMINATION.
11.1 Termination Date. Unless this Agreement is terminated
earlier under Sections 11.3 or 11.4 or renewed as provided in
Section 11.2, this Agreement shall terminate on February 13,
2001.
11.2 Renewal by Lenders. Unless Borrowers have delivered a
Termination Notice to Agent, this Agreement may be extended by
Lenders beyond February 13, 2001 for successive one year periods
by written notice given by Agent and Lenders to Borrowers of
Lenders' intent to so extend this Agreement at least 30 days
prior to February 13, 2001, or 30 days prior to February 13th of
the calendar year in which this Agreement is to terminate. If
Borrowers have not received the notice from Agent and Lenders as
set forth in the immediately preceding sentence, this Agreement
shall terminate on February 13th of the applicable calendar year.
11.3 Voluntary Termination by Borrowers. Borrowers may
terminate this Agreement (i) by giving Agent and Lenders written
notice ("Termination Notice") of the date on which this Agreement
is to terminate ("Voluntary Termination Date"), and (ii) by
paying on any such Voluntary Termination Date (a) all Obligations
and (b) as compensation to Lenders for loss of bargain with
respect to the credit advanced hereunder, and not as a penalty, a
termination fee in amounts as set forth below:
Voluntary Termination Date Termination Fee
On or before February 13, 2000 $250,000
After February 13, 2000 $0
11.4 Acceleration upon Termination. Upon the effective date
of termination under Section 11.1 or Section 14.1, (i) all Loans
and all other Obligations will automatically and immediately
become due and payable, and (ii) the obligations of Agent and
Lenders to Borrowers under this Agreement will automatically
terminate immediately, without notice or demand, which each
Borrower hereby expressly waives.
11.5 Borrowers Remain Liable. Notwithstanding any
termination of this Agreement, until all of the Obligations have
been fully performed, paid and satisfied, each Borrower shall
remain liable for the full and prompt performance and payment of
the Obligations and the indemnification set forth in Sections
16.7 and 16.9, and Agent and Lenders shall retain all of their
rights and privileges under the Loan Documents, including the
retention of its Liens on and interest in and to all of the Loan
Collateral.
12. AGENT
12.1 Appointment. Each Lender hereby irrevocably designates
and appoints Star Bank as agent of each Lender under this
Agreement and the other Loan Documents. Each Lender irrevocably
authorizes Star Bank, as agent for each Lender, to take any and
all actions on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise any and all powers
and perform any and all duties as are expressly delegated to
Agent by the terms of this Agreement and the other Loan Documents
together with any and all other powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, Agent will not have any
duties or responsibilities except those expressly set forth in
this Agreement or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties,
obligations or liabilities may be read into this Agreement or any
other Loan Document or otherwise exist against Agent. Each
Lender affirms the authority of Agent, on behalf Lenders, to have
entered into each of the Loan Documents executed on or after the
Original Closing Date and before the Closing Date and hereby
authorizes and directs Agent to enter into the Loan Documents
entered into on the Closing Date and thereafter.
12.2 Delegation of Duties. Agent may execute any of its
duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and will be entitled to
advice of counsel concerning all matters pertaining to those
duties. Agent will not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it in
good faith.
12.3 Exculpatory Provisions. Neither Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
Affiliates may be (i) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection
with this Agreement or any other Loan Document (except for its or
such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any Lender (a) for any recitals,
statements, representations or warranties made by any Borrower or
any officer of any Borrower contained in this Agreement or any
other Loan Document or in any certificate, report, statement or
other document referred to, or provided for in, or received by
Agent under or in connection with, this Agreement or any other
Loan Document, (b) for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, (c) the value of the Loan Collateral,
the perfection or priority of any interest of Agent or Lenders in
the Loan Collateral purported to be created or perfected by the
Loan Documents, or with respect to rights and interests
pertaining to the Loan Documents, (d) for any failure of any
Borrower to perform its obligations under this Agreement or any
other Loan Document, (e) for any loss or depreciation of, lack of
insurance on, or failure to realize on, any Loan Collateral or
for the failure or delay in collecting or receiving payment of
any sums from any Borrower, or for any mistake, omission, or
error of judgment in passing upon or accepting any Loan
Collateral, or in the making of any examination, or for granting
extensions or indulgences to any Borrower permitted to be made
hereunder, or (f) with respect to the income or withholding tax
status with respect to any interest on, or fees in respect of,
the Loans or the Letters of Credit. Agent will not be under any
obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of any Borrower.
12.4 Reliance by Agent. Agent will be entitled to rely, and
will be fully protected in relying, on any agreement,
instrument,, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and on advice and statements of
legal counsel (including counsel to Borrowers), independent
accountants and other experts selected by Agent. Agent may deem
and treat each Lender as the owner of its Loans and
participations in the Letter of Credit Exposure for all purposes
unless an assignment thereof has been made in accordance with the
terms of this Agreement. Agent will be fully justified as
between itself and Lenders in failing or refusing to take any
action under this Agreement or any other Loan Document unless
Agent has first received such advice or concurrence of Required
Lenders as Agent deems appropriate or Agent has been first
indemnified to its satisfaction by Lenders against any and all
liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Agent will in all
cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance
with a request of Required Lenders, and such request and any
action taken or failure to act pursuant to that request will be
binding on all Lenders and all future holders of the Obligations.
12.5 Notice of Default. Agent will not be deemed to have
knowledge or notice of the occurrence of any Event of Default
unless (i) Agent has received notice from a Lender or a Borrower
referring to this Agreement, describing the Event of Default and
stating that the notice is a "notice of default", or (ii) Agent
has actual knowledge of the occurrence of any Event of Default.
If Agent receives such a notice or otherwise obtains such actual
knowledge, Agent will give notice thereof to Lenders. Subject to
the terms of this Agreement, Agent will take such action
reasonably promptly with respect to such Event of Default as is
reasonably directed by Required Lenders; however, unless and
until Agent has received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking
such action, with respect to such Event of Default as it believes
advisable in the best interests of Lenders. Notwithstanding
anything to the contrary in this Section 12, at no time will
Agent be required under any circumstance to take any action that,
in its sole and absolute judgment, (i) is contrary to the terms
of the Loan Documents or applicable law, or (ii) would expose
Agent to liability.
12.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to any
Lender and that no act by Agent in the future taken, including
any review of the affairs of Borrowers, will be deemed to
constitute any representation of warranty by Agent to any Lender.
Each Lender represents to Agent that the Lender has,
independently and without reliance on Agent or any other Lender,
and based on such documents and information as the Lender has
deemed appropriate, made its own appraisal of and investigation
into the business, operations, property, financial and other
condition and creditworthiness of Borrowers and made its own
decision to make its Loans under this Agreement and enter into
this Agreement. Each Lender also represents that it will,
independently and without reliance on Agent or any other Lender,
and based on such documents and information as each Lender deems
appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrowers.
Notwithstanding the foregoing in this Section 12.6, Agent will
(i) promptly provide each Lender with copies of (a) each audit
report of an auditor of Agent, (b) any reconciliations of a
Borrower's Receivables, Inventory, or payables requested by a
Lender that are in Agent's possession and (c) each report,
certificate, notice or other document delivered to Agent by
Borrower pursuant to Section 8 or Section 10 and requested by a
Lender, and (ii) make available, on a Lender's request, the
applicable working papers of Agent's auditors (to the extent
available) for inspection at Agent's office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇. Except for notices, reports and other
documents expressly required to be furnished to Lenders by Agent
under this Agreement, Agent will not have any duty or
responsibility to provide any Lender with any credit or other
information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness
of Borrowers which may come into the possession of Agent or any
of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates.
12.7 Indemnification. Lenders will indemnify Agent in its
capacity as such (to the extent not reimbursed by Borrowers and
without limiting the obligation of Borrowers to do so), ratably
according to their respective Percentage Shares in effect on the
date on which indemnification is sought under this Section 12.7
(or, if indemnification is sought after the date on which this
Agreement has terminated and the Loans have been paid in full,
ratably in accordance with their Percentage Shares immediately
before that date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including at any time following the
payment of the Obligations) be imposed on, incurred by or
asserted against Agent in any way relating to or arising out of
this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to in this Agreement or in any of the
other Loan Documents or the transactions contemplated by this
Agreement or by any of the other Loan Documents or any action
taken or omitted by Agent under or in connection with any of the
foregoing; provided that a Lender will not be liable for the
payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements if resulting solely from Agent's gross negligence
or willful misconduct and the Lender had no part in such action
or omission by Agent and did not receive any benefit from such
action or omission by Agent. The agreements in this Section 12.7
will survive the payment of the Obligations.
12.8 Agent in Its Individual Capacity. Agent and its
Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with Borrowers as though Agent
were not the agent under this Agreement and under the other Loan
Documents. With respect to its Loans made or renewed by it and
with respect to any Letter of Credit issued or participated in by
it, Agent will have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not Agent, and the terms
"Lender" and "Lenders" will include Agent in its individual
capacity.
12.9 Loan Collateral Matters.
12.9.1 Perfection/Enforcement Actions. Except as may
be limited by this Agreement, Agent is hereby authorized on
behalf of all of Lenders, without the necessity of any notice to
or further consent from any Lender, from time to time, to take
any action with respect to any Loan Collateral which may be
necessary or desirable to perfect and maintain perfected the
security interest in and Liens on the Loan Collateral granted
pursuant to the Loan Documents. Payment and performance of the
Obligations under this Agreement and the Security Agreement may
be enforced only by the action of Agent, and no Lender will have
any right individually to seek to enforce or to enforce payment
or performance of the Obligations or any of those agreements, it
being understood and agreed that such rights and remedies may be
exercised only by Agent, for the benefit of Agent and Lenders,
upon the terms of those agreements and this Agreement.
12.9.2 Release of Loan Collateral. Lenders hereby
authorize Agent, at its option and in its discretion, to release
any Lien granted to or held by Agent on any Loan Collateral (i)
on termination of this Agreement and payment and satisfaction of
all of the Obligations at any time arising under or in respect of
this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby, or (ii) if approved, authorized
or ratified in writing by Required Lenders, unless such release
is authorized under this Agreement or any of the Loan Documents
with the consent only of Agent. On request by Agent at any time,
Lenders will confirm in writing Agent's authority to release
particular types or items of Loan Collateral pursuant to this
Section 12.9. In the event of any sale or transfer of Loan
Collateral, or any foreclosure with respect to any of the Loan
Collateral, Agent is authorized to deduct all of the expenses
incurred by Agent from the proceeds of any such sale, transfer or
foreclosure.
12.9.3 Automatic Release of Loan Collateral. Lenders
hereby agree that the Liens granted to Agent, for the benefit of
the Agent and Lenders, in any property sold or disposed of in
accordance with the provisions of Section 10.25(iii) will, if no
Event of Default then exists, be automatically released.
12.9.4 Execution of Release Documents. To the extent,
pursuant to the provisions of Sections 12.9.2 and 12.9.3, Agent's
execution of a release is required to release the Liens granted
to Agent on any sale and transfer of Loan Collateral which is
expressly permitted pursuant to the terms of this Agreement, or
consented to in writing by Required Lenders or by all of Lenders,
as applicable, and on at least five (5) Business Days prior
written request by Borrower, Agent will (and is hereby
irrevocably authorized by Lenders to) execute such documents as
may be necessary to evidence the release of the Liens granted to
Agent in the Loan Documents on the Loan Collateral that was sold
or transferred; provided that (i) Agent will not be required to
execute any such document on terms which, in Agent's opinion,
would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Liens
without recourse or warranty and (ii) such release will not in
any manner discharge, affect or impair the Obligations or any
Liens on (or obligations or Borrowers in respect of) all
interests retained by Borrowers, including the proceeds of the
sale, all of which will continue to constitute part of the Loan
Collateral.
12.9.5 Agency for Perfection by Possession. Each
Lender hereby appoints each other Lender as agent for the purpose
of perfecting Lender's security interests in property which, in
accordance with the UCC or other applicable law, can be perfected
only by possession. Should any Lender (other than Agent but
inclusive of any Lender's Participant) obtain possession of any
collateral or security for the Obligations, Lender will notify
Agent and, promptly on Agent's request, Lender will deliver the
security or collateral to Agent in accordance with Agent's
instructions.
12.9.6 Expenditures by Agent. Agent, without the
prior consent of Lenders, will have the right (but not the
obligation) to make expenditures, whether before or after the
occurrence of an Event of Default, that Agent deems appropriate
or necessary to protect or preserve the Loan Collateral, to
collect any of the Obligations, to sell, liquidate, dispose of,
or otherwise realize on, any of the Loan Collateral, to preserve,
interpret, enforce, or defend any rights or remedies of Agent,
Lenders, or any of them, conferred by the Loan Documents, or to
pay any amounts chargeable to, or payable by, Borrowers pursuant
to the Loan Documents (the foregoing expenditures being, "Agent
Advances"). Each Lender will reimburse Agent on its demand, to
the extent of the Lender's Percentage Share, for all Agent
Advances (including legal fees and disbursements) which have not
been reimbursed by Borrowers within 10 days after Agent's demand
on Borrowers therefor. If any payment required under this
Section 12.9.6 is not, in fact, made by a Lender when due, Agent
will be entitled to recover the applicable amount on Agent's
demand together with interest on the applicable amount at the
Federal Funds Rate, for each day from the date due until the date
the applicable amount is paid.
12.10 No Third Party Beneficiary. The provisions of
this Section 12 are solely for the benefit of Agent and Lenders,
and none of Borrowers will have any rights as a third party
beneficiary of any of the provisions of this Section 12 (except
to the extent of its rights under Section 12.9). In performing
its functions and duties as Agent under this Agreement and the
other Loan Documents, Agent acts solely as the agent of Lenders
and does not assume and will not be deemed to have assumed any
agency obligation toward, or relationship of agency or trust with
or for, any Borrower or any Affiliate of any Borrower.
13. EVENTS OF DEFAULT
13.1 Events of Default. (i) Each of the following events,
whether or not caused by or within the control of any Borrower,
will constitute an "Event of Default" under this Agreement:
(a) Any Borrower does not pay, when due, any of
the Obligations owing to Agent or any Lender, including any
amounts required to be paid to Agent under Section 2.4;
(b) Any Borrower does not observe, perform, or
comply with Section 2.4 or any of the Financial Covenants;
(c) Any Borrower does not observe, perform, or
comply with any term or provision of this Agreement or of any of
the other Loan Documents (exclusive of those defaults covered by
clauses (a), (b) and (d) through (v) of this Section 13.1(i));
(d) A Borrower fails to make any payment due to
any Affiliate of Agent, materially breaches any agreement between
the Borrower and any Affiliate of Agent, or makes any material
misrepresentation to any Affiliate of Agent;
(e) Any representation, warranty or statement
made by or on behalf of any Borrower, (1) in this Agreement, in
connection with this Agreement, in connection with any
transaction relating to this Agreement or in any of the other
Loan Documents was false in any material respect, in the good
faith judgment of Agent, when made or furnished or when treated
as being made or furnished or (2) to induce any Lender to make
any Loan was false in any material respect, in the good faith
judgment of Agent, when made or furnished or when treated as
being made or furnished;
(f) Any Borrower: (1) is not Solvent, (2) becomes
generally unable to pay its respective debts as they become due,
(3) makes a general assignment for the benefit of creditors, or
(4) calls a meeting of creditors for the composition of debts; or
the Board of Directors of a Borrower (or any committee thereof)
adopts a resolution authorizing or has otherwise authorized the
actions described in subitems (3) or (4) of this clause (f);
(g) There is filed by or against any Borrower,
(1) any case, petition, proceeding or other action under any
existing or future bankruptcy, insolvency, reorganization,
liquidation or arrangement or readjustment of debt law or any
similar existing or future law of any applicable jurisdiction, or
(2) a custodian, receiver, trustee, sequestrator, or agent is
appointed or authorized to take charge of any of its properties;
(h) Required Lenders, in their judgment exercised
in good faith, determine that there has occurred any material and
adverse change in the business operations or condition, financial
or otherwise, of any Borrower adversely affecting Borrowers'
ability to perform any of their payment or other material
Obligations under this Agreement or any of the other Loan
Documents;
(i) Any Borrower or Additional Guarantor defaults
under its Guaranty or proper demand is made on any such Borrower
or Additional Guarantor thereunder;
(j) There occurs a casualty loss in excess of
$1,500,000 with respect to any of the Loan Collateral which is
not covered by insurance;
(k) Required Lenders, in their judgment exercised
in good faith, determine that there has occurred any material and
adverse change in the aggregate value of, or Agent's or Lenders'
rights or interests in, the Loan Collateral with the result that
Agent's or Lenders' security for the Obligations is materially
diminished;
(l) (1) Except as provided in clauses (q) and (r)
below of this Section 13.1(i), any default occurs under the terms
applicable to any Indebtedness of any Borrower in an aggregate
amount exceeding $1,000,000 which represents any borrowing or
financing or arising under any other Applicable Agreement from,
by or with any Person or (2) there occurs a material breach by
any Borrower under any Applicable Agreement (other than the ones
described in subitem (1) of this clause (l) or clauses (q) and
(r) of this Section 13.1(i)), the result of which breach is the
suspension of the other parties' performance thereunder, the
delivery of a notice of acceleration, or the termination of such
Applicable Agreement;
(m) A contribution failure occurs with respect to
any Pension Plan sufficient to give rise to a lien under Section
302(f) of ERISA;
(n) A Borrower is enjoined, restrained or in any
way prevented by order of any Governmental Authority from
conducting any material part of its business affairs and such
order is not completely stayed, to the sole satisfaction of
Agent, or dissolved within one Business Day from the effective
date of such order;
(o) Any Borrower shall voluntarily dissolve or
cease to exist, or any final and nonappealable order or judgment
shall be entered against a Borrower decreeing its involuntary
dissolution;
(p) There occurs a change in the ownership of (1)
Midcoast, SabreTech, Dimension or Turbotech such that Midcoast,
SabreTech, Dimension or Turbotech, as applicable, shall cease to
be the wholly-owned Subsidiary of Sabreliner; (2) Little Rock
such that Little Rock shall cease to be the wholly-owned
Subsidiary of Midcoast or Sabreliner (other than a merger of
Midcoast and Little Rock); (3) an Additional Borrower such that
the Additional Borrower shall cease to be the wholly-owned
Subsidiary of a Borrower; or (4) Sabreliner such that ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ shall cease to own directly or indirectly at least 39%,
on a fully diluted basis, of the beneficial interest in the
issued and outstanding voting securities of Sabreliner, in each
case free and clear of all Liens;
(q) A Senior Notes Default shall have occurred
and be continuing, and, as a result of such Senior Notes Default,
the unpaid principal (or any part thereof) of any of the Senior
Notes shall have been declared to be due and payable;
(r) A Senior Notes Default consisting of the
failure to make a payment when due under the Senior Notes shall
have occurred and be continuing;
(s) Except as otherwise contemplated hereunder or
in the Senior Notes Indenture, any fact, event, condition or
circumstance (or any set of facts, events, conditions or
circumstances) exists, has occurred or is applicable which allows
the Holder (as defined in the Senior Notes) of any of the Senior
Notes or, as applicable, the Trustee under the Senior Notes
Indenture, to require that Sabreliner purchase or repurchase any
of the Senior Notes prior to the scheduled maturity date of April
15, 2003;
(t) In addition to Required Lender's rights under
clauses (h) and (k) of this Section 13.1(i) and under the other
clauses of this Section 13.1, Required Lenders, in their judgment
exercised in good faith, determine that any Environmental
Liability has been incurred, exists, or is applicable (1) which
has a Material Adverse Effect or (2) by which any Borrower's
title to, or its right to use or have access to, its property,
including the Loan Collateral, are, in Agent's judgment exercised
in good faith, materially affected thereby;
(u) There is enacted any legislation (federal,
state or local) which allows any Person to obtain a Lien on the
Loan Collateral which is superior to the Liens and interests of
Agent or Lenders on and in such property, and, in Agent's
discretion exercised in good faith, there are not sufficient
measures in place to protect Agent or Lenders against the
imposition of such a superior Lien; or
(v) The audit report required pursuant to Section
8.7 is not an unqualified audit report, unless the reason for
qualification is not material to Borrowers' financial condition,
taken as a whole, in Required Lenders' judgment exercised in good
faith.
(ii) Each Event of Default will be deemed continuing
until it is waived in writing by Required Lenders or cured.
13.2 Cure Periods. (i) Subject to Section 13.2(ii), any
Borrower's failure to comply with the terms of any of Sections
8.3 through, and including, 8.10 will be considered an Event of
Default for purposes of Section 14.1 only if Borrowers fail to
cure the default within ten (10) days after the earlier of (a)
the date on which any Borrower has knowledge of the existence of
such event or condition or (b) the date on which Agent notifies
Borrowers of the existence of such event or condition.
(ii) Section 13.2(i) will not be applicable with regard
to (a) any default which by its nature is not susceptible of
cure, (b) a default if, within the 12 calendar months immediately
preceding the occurrence of such default, any Borrower has
previously breached the same provision of this Agreement, or (c)
any default, as a result of which Agent believes, in good faith,
that there exists an immediate risk, threat, or danger to the
value of the Loan Collateral, Agent's or Lenders' interests in
the Loan Collateral, or the collectibility of the Obligations.
(iii) Notwithstanding any period of cure as
provided in Section 13.2(i), all of Agent's and Lenders' rights
under the Loan Documents during the continuance of an Event of
Default (subject to Section 13.2(i)), including the interest rate
described in Section 3.1 applicable during the continuance of an
Event of Default, will, at the option of Required Lenders, be
applicable until any such event is cured to the written
satisfaction of Required Lenders.
14. LENDERS' RIGHTS AND REMEDIES.
14.1 Acceleration. Upon the occurrence of any Event of
Default, in addition to all other rights and remedies provided in
the Loan Documents or available at law or in equity, Agent,
without further notice or demand but subject to Section 13.2, (i)
may, and will if directed by Required Lenders, declare the Loans
and all other Obligations to be immediately due and payable
(except that with respect to any Event of Default under Section
13.1(i)(f) or Section 13.1(i)(g), such acceleration of the Loans
shall be automatic), (ii), to the extent that the maximum amount
of the Credit Facility has not yet been used or fully drawn on by
Borrowers, may, and will if directed by Required Lenders,
terminate Commitments, (iii) may, and will if requested by
Required Lenders, terminate this Agreement, and (iv) will have
all rights to realize upon, and exercise its rights with respect
to, the Loan Collateral pursuant to this Agreement and the other
Loan Documents, and as otherwise provided by applicable law.
Agent's and Lenders' rights and remedies under this Agreement
shall be cumulative and not exclusive of any other right or
remedy which Agent or Lenders have.
14.2 Fees and Expenses. Borrowers shall pay to Agent,
immediately and as part of the Obligations, all reasonable costs
and expenses, including court costs, Attorneys' Fees and costs of
sale, incurred by Agent or any Lender in exercising any of its or
their rights or remedies under the Loan Documents.
14.3 Actions in Respect of the Letters of Credit. If any
Event of Default shall have occurred and be continuing, Agent
may, and will if requested by Required Lenders, whether in
addition to taking any of the actions described in Section 14.1
or otherwise, if any Letters of Credit shall have been issued,
make demand upon Borrowers to, and forthwith upon such demand
Borrowers will, pay to Issuing Lender in same day funds at
Issuing Lender's office designated in such demand, for deposit in
a special interest bearing cash collateral account (the "Letter
of Credit Collateral Account") to be maintained at such office of
Issuing Lender, an amount equal to the Letter of Credit Exposure
from time to time in existence. The Letter of Credit Collateral
Account shall be in the name of Borrowers (as a cash collateral
account), but under the sole dominion and control of Issuing
Lender (with sole right of withdrawal) and subject to the terms
of this Agreement and the other Loan Documents. On each drawing
under a Letter of Credit, Issuing Lender shall seek reimbursement
from any amounts then on deposit in the Letter of Credit
Collateral Account; however, if (i) no amounts are then on
deposit in the Letter of Credit Collateral Account, (ii) the
amount then on deposit in the Letter of Credit Collateral Account
is insufficient to pay the amount of such drawing, or (iii)
Issuing Lender is legally prevented or restrained from
immediately applying amounts on deposit in the Letter of Credit
Collateral Account, then the amount of each unreimbursed drawing
under such Letter of Credit and payment required to be made under
this Section 14.3 shall automatically be converted into a
Revolving Loan made on the date of such drawing for all purposes
of this Agreement. To the extent that Issuing Lender applies
amounts on deposit in the Letter of Credit Collateral Account as
provided in this Section 14.3, and, thereafter, such application
(or any portion thereof) is rescinded or any amount so applied
must otherwise be returned by Issuing Lender upon the insolvency,
bankruptcy or reorganization of a Borrower or otherwise, then the
amount so rescinded or returned shall automatically be converted
into a Revolving Loan made on the date of such drawing for all
purposes of this Agreement.
15. AMENDMENTS; WAIVERS; ASSIGNMENTS; PARTICIPATIONS.
15.1 Amendments and Waivers.
15.1.1 Amendments Permitted by Consent of Required
Lenders. Neither this Agreement, any other Loan Document, nor
any terms of this Agreement or any other Loan Document may be
amended, supplemented or modified except in writing and in
accordance with the provisions of this Section 15.1. Required
Lenders may, or, with the written consent of Required Lenders,
Agent may, from time to time, (i) enter with Borrowers into
written amendments, supplements or modifications to this
Agreement and the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or
changing in any manner of rights or obligations of Lenders or
Borrowers under this Agreement or under any of the other Loan
Documents or (ii) waive at Borrowers' request, on the terms and
conditions as Required Lenders or Agent, as the case may be, may
specify in the applicable instrument, any of the requirements of
this Agreement or the other Loan Documents or any Event of
Default and its consequences. However, no proposed waiver and no
amendment, supplement or modification of this Agreement or any of
the other Loan Documents may be agreed to if the waiver,
amendment, supplement or modification would:
(i) (a) reduce the amount of, or extend the time
for payment of, (1) any payment of principal or interest due
under this Agreement or any Letter of Credit Document or (2) any
Unused Commitment Fee or any LOC Fee, (b) reduce the stated rate
of any interest or any Unused Commitment Fee or LOC Fee payable
under this Agreement, (c) extend the expiration date of this
Agreement, or (d) increase the Commitment of any Lender over the
amount of the applicable Commitment then in effect exclusive of
any increase which may result from a Permitted Overadvance (as
defined below) (it being understood that a waiver of an Event of
Default will not constitute a change in the terms of any
Commitment of any Lender), in each case without the consent of
each Lender affected thereby. Notwithstanding anything to the
contrary in this Section 15.1, Agent will have the right, in its
discretion and without the consent of any Lender, to make
Overadvances (as defined in Section 2.2.1) from time to time on
behalf of all Lenders so long as each Overadvance is not for a
period longer than 45 days and all Overadvances outstanding as of
any date do not exceed an amount equal to ten percent (10%) of
the sum of (a) the then Eligible Inventory plus (b) the then
Eligible Receivables (Overadvances meeting those conditions
being, "Permitted Overadvances");
(ii) (a) increase the advance rate with respect to
Eligible Receivables above 85%, (b) increase the advance rate
with respect to Eligible Inventory, exclusive of Pre-Owned
Aircraft and Work in Process, above 55%, (c) increase the advance
rate with respect to Eligible Inventory of Sabreliner which is
Work in Process consisting of work on aircraft engines above 30%,
(d) increase the advance rate with respect to Eligible Inventory
of Sabreliner which is Work in Process other than work on
aircraft engines above 20%, (e) increase the advance rate with
respect to those items of Eligible Inventory which are Pre-Owned
Aircraft above 80%, or (f) increase the maximum dollar amount
under the express terms of this Agreement attributable to
Eligible Receivables or Eligible Inventory (exclusive of any
increase which, in any instance, may result from a Permitted
Overadvance), in each case without the consent of each Lender
affected thereby;
(iii) amend, modify or waive any provision of
this Section 15.1 or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or
transfer by a Borrower of any of its rights and obligations under
this Agreement and the other Loan Documents, in each case without
the written consent of all Lenders;
(iv) release from the Liens created by the Loan
Documents all or substantially all of the Loan Collateral (except
as expressly permitted in the respective Loan Documents) without
the consent of all Lenders;
(v) without limiting clause (i) above of this
Section 15.1.1, amend, modify or waive any provision of Section
2.3 without the written consent of Issuing Lender; or
(vi) amend, modify or waive any provision of
Section 12 or of any other provision relating to the rights or
obligations of the then Agent without, in each case, the written
consent of the then Agent and Lenders.
15.1.2 Consent Matters.
(i) If (a) Agent requests a Lender's written
consent to any proposed waiver (including any waiver of any Event
of Default), amendment, supplement or modification of this
Agreement or any of the other Loan Documents pursuant to Section
15.1.1 or for any other matter relating to the Obligations or any
of the Loan Documents and (b) the Lender does not notify Agent of
the Lender's refusal to grant the consent requested by Agent
within 10 days after receipt of Agent's request for the Lender's
consent, then the Lender's consent will be treated as having been
granted, and Agent and the other Lenders will thereafter be
permitted to take the actions described in the request for
consent as though the Lender had affirmatively consented to the
requested actions.
(ii) If (a) Agent requests a Lender's written
consent to any proposed waiver (including any waiver of any Event
of Default), amendment, supplement or modification of this
Agreement or any of the other Loan Documents pursuant to Section
15.1.1 or for any other matter relating to the Obligations or any
of the Loan Documents and (b) the Lender refuses to give its
consent, Agent, at its option, may, at any time within 45 days
after the Lender notifies Agent of the Lender's refusal to grant
the requested consent, acquire on notice to the applicable Lender
(a "Buy-Out Notice") all, but not less than all, of that Lender's
Percentage Share of the Loans and its Letter of Credit Exposure
by paying to that Lender an amount equal to the unpaid principal
balance of the Loans and any Unreimbursed Drawings held by that
Lender plus all accrued interest and fees then due to the Lender
as set forth in this Agreement. From and after the date on which
Agent delivers a Buy-Out Notice to a Lender, Agent and the other
Lenders may amend, modify and supplement the Loan Documents or
waive any of the provisions of the Loan Documents (including any
Event of Default), or all of the foregoing, as though the non-
consenting Lender had, in fact, affirmatively consented to the
requested actions.
15.1.3 Binding Effect. Any waiver and any
amendment, supplement or modification pursuant to this Section
15.1 will apply to each Lender and shall be binding on Borrowers,
Lenders, Agent and all future holders of the Obligations. No
waiver by Agent or any Lender will be effective unless it is in
writing and then only to the extent specifically stated.
15.1.4 No Waiver. Failure by Agent or any Lender to
exercise any right, remedy or option under this Agreement or in
any Loan Document or delay by Agent or any Lender in exercising
the same shall not operate as a waiver by Agent or any Lender of
its right to exercise any such right, remedy or option.
15.2 Assignment.
15.2.1 Borrower Assignments. No Borrower may
assign, transfer or otherwise dispose of any of its rights or
obligations hereunder, by operation of law or otherwise, and any
such assignment, transfer or other disposition without Lenders'
written consent shall be void.
15.2.2 Lender Assignments. The rights and
obligations of a Lender under this Agreement may not be assigned
by any Lender without the prior consent of Borrowers, Agent, and
Required Lenders. If any Lender assigns, sells or otherwise
transfers all or any portion of its rights or obligations under
this Agreement except as permitted by this Section 15.2, that
Lender's assignee, purchaser or transferee will not acquire any
rights or obligations under this Agreement or any of the other
Loan Documents and the assigning, selling or transferring Lender
will remain obligated as a "Lender" in all respects.
15.2.3. Benefit; Binding Effect. All of the rights,
privileges, remedies and options given to Lenders under the Loan
Documents shall inure to the benefit of each Lender's successors
and assigns, and all the terms, conditions, covenants, provisions
and warranties herein shall inure to the benefit of and bind the
permitted successors and assigns of Borrowers and Lenders,
respectively.
15.3 Participations.
15.3.1 Permitted Participations. Notwithstanding
anything to the contrary in Section 15.2, each Lender may grant
participations in the Lender's Commitment to other financial
institutions (each, a "Participant"); however, regardless of any
participation,
(i) The Lender granting the participation will remain
solely liable under this Agreement and the other Loan Documents
for the observance, performance and compliance with all of the
terms and conditions of this Agreement and the Loan Documents,
and no Participant will acquire any rights or interests against
Agent or any Lender (other than the Lender granting the
Participant's participation) arising out of, under, or in
connection with this Agreement or the other Loan Documents or the
transactions contemplated by this Agreement or the other Loan
Documents, including any rights to approve any amendment to or
waiver of this Agreement or any other Loan Document;
(ii) Each Participant authorizes Agent and Lenders to
deal exclusively with the Lender granting the participation; and
(iii) Each Lender granting a participation will
remain the owner of the Obligations held by it.
15.3.2 Set Off Right. Borrowers agree that if
amounts outstanding under this Agreement are due and unpaid or
have been declared or have become due and payable, each
Participant, to the extent permitted by applicable law, will be
deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement;
provided that any Participant exercising that right will be
obligated to share with Lenders, as if such participant were a
"Lender" under this Agreement, the amount of any such setoff; and
provided, further, that if all or any portion of such excess
payment or other recovery is thereafter recovered from the
Participant by or on behalf of a Borrower, the Participant's
obligation to share such excess payment will be rescinded and
such payment shall be returned to Participant to the extent of
such recovery. No Participant may exercise any such right of
setoff except with the consent of Required Lenders.
15.3.3 Disclosure of Information. Borrowers
authorize each Lender granting a participation to disclose to any
Participant any and all financial information in the Lender's
possession concerning Borrowers which has been delivered to the
Lender by Borrowers or Agent pursuant to the Loan Documents or in
connection with the Lender's credit evaluation of Borrowers or
which has been obtained independently by the Lender in its credit
evaluation or audit of Borrowers. Each Participant must agree to
keep confidential the information received by it from a Lender
regarding Borrowers (i) in the same manner that it keeps
confidential the business and financial information of its other
commercial customers and (ii) as required by law.
15.4 Law Requirements. Nothing in the Loan Documents will
prohibit any Lender from pledging or assigning its interests in
the Loans to any Federal Reserve Bank in accordance with
applicable law.
16. GENERAL.
16.1 Severability. If any term of this Agreement is found
invalid under Ohio law or laws of mandatory application by a
court of competent jurisdiction, the invalid term will be
considered excluded from this Agreement and will not invalidate
the remaining terms of this Agreement.
16.2 Governing Law. THIS AGREEMENT HAS BEEN DELIVERED AND
ACCEPTED AT AND SHALL BE DEEMED TO HAVE BEEN MADE AT CINCINNATI,
OHIO. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF OHIO (WITHOUT
REFERENCE TO OHIO CONFLICTS OF LAW PRINCIPLES).
16.3 WAIVER OF JURISDICTION. AS A SPECIFICALLY BARGAINED
INDUCEMENT FOR AGENT AND LENDERS TO ENTER INTO THIS AGREEMENT AND
FOR LENDERS TO EXTEND CREDIT TO BORROWERS, EACH BORROWER AGREES
THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT
OF THIS AGREEMENT, ITS VALIDITY OR PERFORMANCE, AT THE SOLE
OPTION OF REQUIRED LENDERS, THEIR SUCCESSORS AND ASSIGNS, AND
WITHOUT LIMITATION ON THE ABILITY OF AGENT OR LENDERS OR THEIR
SUCCESSORS AND ASSIGNS, TO EXERCISE ALL RIGHTS AS TO THE LOAN
COLLATERAL OR INITIATE AND PROSECUTE IN ANY APPLICABLE
JURISDICTION ACTIONS RELATED TO REPAYMENT OF THE OBLIGATIONS,
SHALL BE INITIATED AND PROSECUTED AS TO ALL PARTIES AND THEIR
SUCCESSORS AND ASSIGNS AT CINCINNATI, OHIO. AGENT, LENDERS AND
BORROWERS EACH CONSENTS TO AND SUBMITS TO THE EXERCISE OF
JURISDICTION OVER ITS PERSON BY ANY COURT SITUATED AT CINCINNATI,
OHIO HAVING JURISDICTION OVER THE SUBJECT MATTER, AND CONSENTS
THAT ALL SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL DIRECTED TO
AGENT, LENDERS AND BORROWERS AT THEIR RESPECTIVE ADDRESSES SET
FORTH IN SECTION 16.8 OR AS OTHERWISE PROVIDED UNDER THE LAWS OF
THE STATE OF OHIO. EACH BORROWER WAIVES ANY OBJECTION BASED ON
FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
16.4 Survival and Continuation of Representations and
Warranties. All of each Borrower's representations and
warranties contained in this Agreement shall (i) survive the
execution, delivery and acceptance hereof by the parties hereto
and the closing of the transactions described herein or related
hereto and (ii) remain true until the Obligations are fully
performed, paid and satisfied, subject to such changes as may not
be prohibited hereby, do not constitute Events of Default
hereunder, and have been consented to by Required Lenders in
writing.
16.5 Additional Rights Regarding Loan Collateral. Agent
may, in its discretion exercised in good faith, (i) enforce and,
to the extent set forth in this Agreement, waive or release any
Loan Collateral or portion thereof, (ii) apply such security and
direct the order or manner of sale thereof as Required Lenders
may, from time to time, determine, and (iii) settle, compromise,
collect or otherwise liquidate any such security in any manner,
in each case following the occurrence of any Event of Default
without affecting or impairing its right to take any other
further action with respect to any security or any part thereof.
16.6 Application of Payments; Revival of Obligations. Agent
shall have the continuing right to apply or reverse and reapply
any payments to any portion of the Obligations. To the extent
any Borrower makes a payment or payments to Agent or a Lender, or
Agent or any Lender receives any payment or proceeds of the Loan
Collateral or any other security for any Borrower's benefit,
which payment(s) or proceeds or any part thereof are subsequently
voided, invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy act, state or federal law,
common law or equitable cause, then, to the extent of such
payment or proceeds received, the Obligations or part thereof
intended to be satisfied shall be revived and shall continue in
full force and effect, as if such payment or proceeds had not
been received by Agent or a Lender.
16.7 Fees and Expenses. (i) Each Borrower shall reimburse
Agent for all reasonable costs, fees, expenses and obligations
incurred by Agent or any Lender or for which Agent or any Lender
becomes obligated ("Expenses") in connection with, arising out
of, or related to:
(a) the entering into, negotiation, preparation,
closing and enforcement of this Agreement or any of the other
Loan Documents and any of Agent's or any Lender's rights
hereunder and thereunder;
(b) any loans or advances made by a Lender
hereunder;
(c) any transaction contemplated by this
Agreement;
(d) any inspection, audit, appraisal, or
verification of the Loan Collateral or any Borrower or any
proposed Permitted Acquisition (Agent currently charges $450 per
diem based on an 8 hour day plus out-of-pocket expenses per
auditor or field examiner for the services of its auditors and
field examiners and a potentially greater amount if the auditor
is not a Star Bank employee); provided, however, that Borrowers
shall not be obligated to reimburse any Lender (other than Star
Bank) for any Expenses arising out of any inspection, audit,
appraisal, or verification of the Loan Collateral or any Borrower
or any proposed Permitted Acquisition; however, such Lender shall
be permitted to participate, at its cost and expense, with Agent
or Star Bank in any such inspection, audit, appraisal, or
verification of the Loan Collateral or any Borrower or any
proposed Permitted Acquisition;
(e) any liability under Section 3505 of the
Internal Revenue Code and all other local, state and federal
statutes of similar import; and
(f) with respect to any or all of (1) enforcing
any Obligation or in foreclosing against any of the Loan
Collateral or exercising or enforcing any other right or remedy
available by reason of any Event of Default, (2) 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, (3) commencing, defending or intervening
in any litigation or in filing a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating to any
Borrower and related to or arising out of the transactions
contemplated hereby or by any of the Loan Documents, (4) taking
any other action in or with respect to any suit or proceeding
(whether in bankruptcy or otherwise), (5) protecting, preserving,
collecting, leasing, selling, taking possession of, or
liquidating any of the Loan Collateral, or (6) attempting to
enforce or enforcing any lien on or security interest in any of
the Loan Collateral or any other rights under the Loan Documents.
(ii) The Expenses (a) will include Attorneys' Fees and
reasonable fees of other professionals, all lien search and title
search fees, all filing and recording fees and all reasonable
travel expenses and (b) are part of the Obligations, payable upon
Agent's demand, and will be secured by the Loan Collateral.
(iii) The Obligations described under this Section
16.7 shall survive any termination of this Agreement.
16.8 Notices. Any notice required, permitted or
contemplated hereunder shall be in writing and addressed to the
party to be notified at the address set forth below or at such
other address as each party may designate for itself from time to
time by notice hereunder, and shall be deemed validly given (i)
three days following deposit in the U.S. certified mails (return
receipt requested), with proper postage prepaid, or (ii) the next
Business Day after such notice was delivered to a regularly
scheduled overnight delivery carrier with delivery fees either
prepaid or an arrangement satisfactory with such carrier, made
for the payment thereof, or (iii) upon receipt of notice given by
telecopy, mailgram, telegram, telex or personal delivery:
To Agent: Star Bank, National Association
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
To a Lender: At its address set forth on the
applicable signature page of
this Agreement
To Borrowers: Sabreliner Corporation
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16.9 Indemnification. In consideration of the execution and
delivery of this Agreement by Agent and Lenders and the making of
any Loan hereunder, each Borrower hereby indemnifies, exonerates
and holds Agent, Lenders and each of their officers, directors,
employees, Affiliates, and agents (collectively the "Indemnified
Parties" and, individually, as "Indemnified Party") free and
harmless from and against any and all actions, causes of action,
suits, demands, investigations, obligations, judgments, losses,
costs, liabilities, damages, and expenses (irrespective of
whether such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (the "Indemnified
Liabilities"), which are incurred by, accrued, asserted, made or
brought against, charged to, or recoverable from the Indemnified
Parties or any of them as a result of, or arising out of, or
relating to, or as a direct or indirect result of:
(i) any transaction financed or to be financed in
whole or in part or directly or indirectly with the proceeds of
any Loan;
(ii) any Remittance deposited into any Blocked Account
or Transfer Account which is dishonored or returned for any
reason;
(iii) the entering into and performance of this
Agreement and the other Loan Documents by any of the Indemnified
Parties;
(iv) any breach by any Borrower of any term, provision,
representation, warranty or covenant of this Agreement or the
other Loan Documents; and
(v) any Environmental Law (but only if and to the
extent that the Indemnified Liabilities resulting from such
Environmental Law are related to a Borrower or to the business,
operations or assets of a Borrower), regardless of whether or not
caused by, or within the control of, any Borrower;
except to the extent that such Indemnified Liabilities are based
on an Indemnified Party's gross negligence or willful misconduct.
If and to the extent that the foregoing undertaking may be
unenforceable for any reason, each Borrower hereby agrees to make
the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under
applicable law, except to the extent that such Indemnified
Liabilities have arisen by reason of the Indemnified Party's
gross negligence or willful misconduct. The Obligations
described under this Section 16.9 shall survive any termination
of this Agreement.
16.10 Additional Waivers by Borrowers. Each Borrower
waives presentment and protest of any instrument and notice
thereof, and, except as expressly provided in the Loan Documents,
demand, notice of default, notice of intent to accelerate, and
notice of acceleration of maturity, and all other notices to
which any Borrower might otherwise be entitled.
16.11 Equitable Relief. Each Borrower recognizes that,
in the event any Borrower fails to perform, observe or discharge
any of its obligations or liabilities under this Agreement, any
remedy of law may prove to be inadequate relief to Agent and
Lenders; therefore, each Borrower agrees that Lenders, if
Required Lenders so request, shall be entitled to temporary and
permanent injunctive relief in any such case without the
necessity of proving actual damages.
16.12 Entire Agreement; Consents; Counterparts. Subject
to Section 2.8, this Agreement and the other Loan Documents set
forth the entire agreement of the parties with respect to its
subject matter and supersede all previous understandings, written
or oral, in respect thereof. Any request from time to time by
any Borrower for Agent's or any Lender's consent under any
provision in the Loan Documents must be in writing, and any
consent to be provided by Agent or any Lender under the Loan
Documents from time to time must be in writing in order to be
binding; however, neither Agent nor Lender will have any
obligation to provide any consent requested by any Borrower, and
Agent and Lenders may, for any reason in their discretion
exercised in good faith, elect to withhold the requested consent.
Two or more duplicate originals of this Agreement may be signed
by the parties, each of which shall be an original but all of
which together shall constitute one and the same instrument. Any
documents delivered by, or on behalf of, any Borrower by fax
transmission (i) may be relied on by Agent and Lenders as if the
document were a manually signed original and (ii) will be binding
on each Borrower for all purposes of the Loan Documents.
16.13 Headings. Section headings in this Agreement are
included for convenience of reference only and shall not relate
to the interpretation or construction of this Agreement.
16.14 Cumulative Remedies. The remedies provided in
this Agreement and the other Loan Documents are cumulative and
not exclusive of any remedies provided by law. Exercise of one
or more remedy(ies) by Agent or any Lender does not require that
all or any other remedy(ies) be exercised and does not preclude
later exercise of the same remedy.
16.15 Further Assurances. Each Borrower agrees to
execute and deliver or cause to be executed and delivered any and
all further documents and instruments and to take any and all
further actions as may be determined by Agent or Required Lenders
to be necessary or appropriate to the transactions contemplated
herein or in the other Loan Documents.
16.16 WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED
INDUCEMENT FOR AGENT AND LENDERS TO ENTER INTO THIS AGREEMENT AND
FOR LENDERS TO EXTEND CREDIT TO BORROWERS, BORROWERS, AGENT AND
LENDERS EACH WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION,
CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS
AGREEMENT OR THE CONDUCT OF THE RELATIONSHIP BETWEEN AGENT AND
BORROWERS AND BETWEEN LENDERS AND BORROWERS.
IN WITNESS WHEREOF, this Agreement has been duly executed by
Borrowers, Agent and Lenders as of September 25, 1997.
BORROWERS:
ATTEST: SABRELINER CORPORATION
By:
Assistant Secretary Name:
Title:
ATTEST: MIDCOAST AVIATION, INC.
By:
Assistant Secretary Name:
Title:
ATTEST: MIDCOAST-LITTLE ROCK, INC.
By:
Assistant Secretary Name:
Title:
ATTEST: SABRETECH, INC.
By:
Assistant Secretary Name:
Title:
ATTEST: DIMENSION AVIATION, INC.
By:
Assistant Secretary Name:
Title:
ATTEST: TURBOTECH REPAIRS, INC.
By:
Assistant Secretary Name:
Title:
AGENT:
STAR BANK, NATIONAL
ASSOCIATION, as Agent
By:
Name:
Title:
LENDERS:
STAR BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
Address: Structured Capital
Division
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Attn: ▇▇▇▇▇▇ ▇.
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Telecopy No.: (513) 632-
2040
CONGRESS FINANCIAL
CORPORATION (CENTRAL)
By:
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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Attn: ▇▇▇▇▇▇▇ ▇.
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
0173701.06
